Operator: Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to ATRenew Inc.’s First Quarter 2026 Earnings Conference Call. Please note, today’s event is being recorded. I will now turn the call over to the first speaker today, Ms. Jesse Jin, Head of Investor Relations. Please go ahead, ma’am.

Unknown Executive: [Interpreted] Thank you. Hello, everyone, and welcome to ATRenew’s First Quarter 2026 Earnings Conference Call. Speaking first today is Kerry Chen, our Founder, Chairman and CEO; and he will be followed by Rex Chen, our CFO. After that, we will open the call to questions from the analysts. The first quarter 2026 financial results were released earlier today. The earnings press release and investor slides accompanying this call are now available at our IR website, ir.atrenew.com. There will also be a transcript following this call for your convenience. For today’s agenda, Kerry will share his thoughts of our quarterly performance and business strategy, followed by Rex, who will address the financial highlights.

Both Kerry and Rex will participate during the Q&A session. Please note our safe harbor statement. Some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer to you our safe harbor statement in the earnings press release. Any forward-looking statements that management makes on this call are based on assumptions as of today, and thatiQRenew does not take any obligations to upgrade our assumptions on these statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in RMB and all comparisons are on a year-over-year basis.

Now I’d like to turn the call over to Kerry for business and strategy updates.

Xuefeng Chen Kerry: [Interpreted]. Hello, everyone, and thank you for joining Rene’s First Quarter 2026 Earnings Conference Call. We are pleased to review our operating results and share our latest perspective regarding capability building in the second-time industry this year. At the beginning of the year, we maintained an interrupted services during the Chinese New Year holiday, achieving a strong start and delivering accelerated overall growth in the first quarter. Total net revenues reached RMB 6.6 billion, representing an accelerated growth rate of 32.4%. This momentum was primarily driven by net Broadcast revenue, which surged 34.4% year-over-year, while 3G service revenue maintained a healthy 10.4% year-over-year growth rate.

Profitability also improved — non-GAAP operating profit grew 7.2% year-over-year to RMB 190 million, while the non-GAAP operating profit margin expanded by 69 basis points to 3.1%. Amid overall revenue and scale expansion, we continue to advance our IP-centric strategy, strengthening our core foundation in the resulting and trading of secondhand consumer electronics to drive greater value for retail users we optimized our 12C ratio by securing first-hand supply sources and enhancing compliant refurbishment. On the supply side, we capitalize on industry trends by prioritizing trading scenarios that deliver superior user experiences while shifting more fulfillment to offline wire 2-door services. In 2026, the government maintained strong support for trading and further along fiscal and financial coordination.

Against this backdrop, AHS recycle continues to work closely with JD.com to create industry-leading trading solutions. Providing a seamless one-stop trading experience at highly competitive prices to meet diverse consumer needs. As a result, within the JD sourcing channel, trading orders outpaced overall growth with volume share further expanding year-over-year to about 70%. Throughout reflecting fulfillment process, we actively guide users towards face-to-face transactions in offline setting. In the first quarter, we expanded beyond our network of 2,156 stores across major cities and scaled up our door-to-door service team to 2,248 professionals. Bringing our services directly to user store sets. This strategy has lifted our face-to-face fulfillment ratio to 80%, fostering deep connection and truck through AHS recycled fulfillment capabilities and brand presence.

Looking ahead to peak seasons like major promotional campaigns and flagship device launches, — we will further implement flexible workforce solutions to income face-to-face fulfillment time lines and user experience even during the busiest time. During the first quarter, we leveraged our proprietary compliant refurbishment business to add depth to our supply chain with compliant refurbished product revenue increasing 76.1% year-over-year. Our on-demand refurbishment model was a standout performer, growing by roughly 180% in revenues. Our compliant refurbishment capabilities allowed us to provide more quality secondhand devices directly to consumers. In terms of retail channels, we expanded across pipeline selection on our official website and new media channels, which drove nearly 150% year-over-year growth in 1 B2C retail revenue from refurbished devices.

March marked a significant breakthrough with monthly retail sales of compliant refurbished products topping RMB 200 million — as a result, 1 B2C accounted for 45.1% of our product revenue in the first quarter of 2026, rising 12.1 percentage points from year-on-year and 3.5% — excuse me, 3.4 percentage points from 41.7% quarter-over-quarter. This strategic pivot towards direct-to-consumer sales allows us to align our recycling prices of real-time retail trends, ensuring we offer better recycling prices. maintain a strong price advantage and create greater value for end users. Regarding high-quality products from order generation, specifically minus 3 and minus 4 models, we targeted differentiated demand for device generations in the international markets to drive compliant exports.

This strategy allows us to steadily expand our global scale and unlock an additional over 4% gross profit margin. Turning to our 3G business. PJT Marketplace also delivered healthy and rapid growth in both scale and revenue, further reinforcing its position as industry infrastructure. As we onboarded more new users, we offer free shipping on the first 3 orders to those new users on PJT Marketplace. We are also replicating the operational capabilities PJT Marketplace has built in serving large clients and expanding them to small- and medium-sized merchants. By streamlining platform processes, we have lowered the barrier to using platform and improved both transaction petitioned and convenience, enabling small- and medium-sized merchants to sell their products at better prices.

Long [indiscernible] marketplace robust supply chain capabilities as the industry’s leading B2B platform, we deliver high-quality supplies to those merchants while reaching fragmented markets through the user base — by the end of the first quarter, the number of total registered merchants on PJT Marketplace nearly doubled year-over-year to almost $2 million. Notely, the number of registered contracted buyers surged by over 120% as an inflator small and micro buyers seeking high-quality value-for-money products came up to the platform. This validates the effective implementation of our PJT Marketplace supply chain strategy to penetrate fragmented markets. 3P business model, pipeline continues to shift towards the consignment model under this model, the pipeline team provides merchants with standardized operational services, making the pre-owned retail easier for them to manage.

Since the second quarter of last year, pipeline consignment has continued to provide merchants with broader access to curated retail channels. In the first quarter, the consignment business maintained a rapid double-digit growth helping bring own retail merchants move closer to consumers. Multi-category, resulting sustained rapid growth in the first quarter with overall restructuring GMV up 81.5% year-over-year, Among them, gold recycling GMV grew 83.3% and secondhand luxury reflecting GMV grew 58.8%, both showing solid growth momentum. By the end of March, we launched multi-category recycling services across 966 at stores, adding nearly 300 stores compared to the end of March last year. Looking ahead, we expect to roll out this capacity to more self-operated AHS stores through the rest of the year while also working with more franchisees to build some restructuring service capabilities.

Alongside the growth of our multicustomer business, we are also upgrading the locations and layout of our stores, creating a better fulfillment experience and conveying greater brand value to both new and existing users. In summary, the overall 3G service take rate was 4.92% in the first quarter, in line with our expectations. These results validated the effectiveness of the 3-stage development strategy we previously shared. Based on 2026 market dynamics, let me revisit the long-term nature of our strategy. Stage 1, we continue to solidify the healthy growth of our core secondhand consumer electronics business. In our category assessment within the secondhand industry, we identified secondhand customer electronics as a category with both scale and enormous room for further penetration.

As national trading policies from a consumption and industry upgrades — we are actively positioning ourselves in recycling and trading scenarios. — strengthening the brand recognition of agnecycle to serve broader user replacement and upgrade needs enabling more electronic products to achieve a second life cycle and creating greater value for society. Throughout this process, we are set firstly building our 1P business capabilities increasing our use of AI tools, optimizing pricing experiences and end user services and supply chain efficiency while expanding our industry value chain through compliant refurbishment and creating more value to retail users through a higher portion of retail sales. Stage 2, we are strengthening AHS recycled position as China’s leading recycling brand — we believe that in the secondhand service industry, pricing trust and convenience are the 3 core pillars that define the long-term user experience and the industry’s long-term development part, brand equity hold enduring value, young trade in scenario, we maintain independent and prudent brand investments in agents recycle across [indiscernible] combined with the revised initiative, Asias Recycle has partnered with an increasing number of consumer brands to penetrate more mainstream commercial districts from local communities to shopping districts from campuses to workplaces.

By securing these unique scenarios and locations, AHS recycle encourages more younger users to participate in retesting and green consumption. Stage 3, we continue to advance breakthroughs in our overseas strategy. The B2B business in overseas market represents a business model we are familiar with. By accumulating reputation and capabilities of export of China store supplies. We continue to explore a global version of PJT Marketplace and product development while systematically building capabilities to directly serve end consumers. Now let me share a few thoughts on the 2026 market environment. Industry data shows that new device shipments in China have dipped slightly this year by about 4%. However, if we look at the rent mix, Apple and Huawei remain mainstream brands in the print on market.

both grew against a broader trend in the new device market, supported by their supply chain capabilities and pricing advantages. This has validated the 3 opportunities we previously identified. First, pricing trends in the print owned market remained value stable and resilient, laying a solid foundation for the long-term healthy development for the industry. Second, Apple products, which are closely tied to our core business drivers, have demonstrated market share advantages. Third, brand and platforms continue to place greater emphasis on trading forward. their increased investment here supports our efficiency of acquiring first-hand recycling supply. Taking this together, we expect to deliver robust and rapid growth this year by leveraging our efficient automated quality inspection technology and value-added supply chain capabilities, we will further unlock economies of net scale.

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

Chen Chen: [Interpreted]. Good day, everyone. I’m pleased to share our financial performance for the first quarter of 2026. Our revenues grew rapidly and profits reached a record high. As China’s circle economy continues to advance and trade-in programs for consumer electronics remain ongoing, we sustained strong growth momentum in the first quarter. During the quarter, we leveraged our direct-to-customer respecting scenarios and face-to-face fulfillment capabilities, enhance our supply chain and retail capabilities and further strengthen our user mind share of the trans recycled brand. In the first quarter, total revenue exceeded the high end of our guidance, increasing by 32.4% to RMB 6.16 billion, while non-GAAP operating income surged by 70.2% to over RMB 190 million.

Before we review the financials in detail, please note that all figures are in RMB and all comparisons are on a year-over-year basis unless otherwise stated. In the first quarter, total revenue growth was primarily driven by continued growth in net product revenue. Net product revenues increased by 34.4% to RMB 5.73 billion, largely attributable to the growth in online sales of freight on consumer electronics. Net service revenues were $430 million in the first quarter, representing an increase of 10.4%. The increase was largely driven by PJT Marketplace and market cap recycling business. The overall take rate of our market sales was 4.92% for the first quarter of 2026. During the quarter, our multicat recycling business contributed over RMB 83 million revenue, accounting for 19.3% for service revenues.

Now let’s discuss operating expenses. To provide greater clarity on the trends of our actual operating base expenses, we will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results. The reconciliations of GAAP to non-GAAP results are available in our earnings release and the corresponding Form 6-K furnished with the U.S. SEC. Merchandise costs increased by 33.2% to CNY 4.82 billion, in line with the growth in product sales. Gross profit margin for our 1P business was 15.9%, and compared with 15.2% in the same period last year. The gross margin improvement in our 1P business, this was primarily driven by high efficiency C2B recycling scenarios compliant refurbishment capabilities incorporated in our supply chain and an increasingly diversified retail channel mix.

This allowed us to increase the proportion of higher-margin retail sales with 1 PTC revenue accounting for 45.1% of product revenue in the first quarter of 2026, up from 33% in the same period last year. Fulfillment expenses increased by 22.5% to RMB 520 million. Non-GAAP fulfillment expenses increased by 20.7% to RMB 520 million. Under the non-GAAP measures — the increase was mainly driven by higher personnel costs, driven by the growth of our business compared to the same period in 2025. Additionally, operating center-related expenses rose along with the increasing volumes of right reflecting and transactions. Non-GAAP fulfillment expenses as a percentage of total revenues decreased to 8.5% from 9.1%. Selling and marketing expenses increased by 17.9% to $490 million.

Non-GAAP selling and marketing expenses increased by 27% to RMB 490 million, primarily driven by an increase in commission expenses in relation to channel service fees. Non-GAAP selling and marketing expenses as a percentage of total revenues decreased to 8% from 8.3%. General and administrative expenses increased by 25.9% to $79.8 million. Non-GAAP G&A expenses also increased by 33% to RMB 79 million primarily due to an increase in personnel costs. Non-GAAP G&A expenses as a percentage of total revenues remained flat year-over-year at 1.3%. Research and development expenses increased by 33.5% to $73.4 million. Non-GAAP R&D expenses increased by 36.4% to $72.3 million, primarily due to an increase in personnel costs. Non-GAAP R&D expenses as a percentage of total revenues increased to 1.2% from 1.1%.

As a result, our non-GAAP operating income exceeded $190 million in the first quarter of 2026 compared to non-GAAP operating income of $110 million in the first quarter of 2025 representing an increase of 7.2% year-over-year. Non-GAAP operating profit margin was 3.1% for the quarter compared to 2.4% in the first quarter of 2025, representing an increase of 69 basis points. As of March 31, 2026, cash and cash equivalents, restricted cash, short-term investments and funds receivable from third-party payment service providers totaled RMB 1.72 billion. Our financial reserves are sufficient to support reinvestment in business development and shareholder returns. During the first quarter of 2026, we repurchased a total of approximately 0.5 million ADS for approximately USD 2.7 million.

On June 30, 2025, the Board has authorized a share repurchase program under which the company may repurchase up to USD 50 million of our shares over 12 months. As of March 30, 2026, we repurchased approximately USD 11 million under this program. Today, the Board has authorized the extension of the existing share repurchase program for 12 months from June 30, 2026, with key terms and change. Now turning to the business outlook. For the second quarter of 2026, we anticipate total revenues to be between RMB 6,240 million to RMB 634 million, representing an increase of 25% to 27% year-over-year. Please note that this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to it. This concludes our prepared remarks.

Operator, we are now ready to take questions.

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Operator: [Operator Instructions]. The first question today comes from Rafael Fe with DBS.

Unknown Analyst: [Interpreted]. Congratulations for the brilliant first quarter results. Does management have any updated guidance on revenue and profit growth for the full year of 2026?

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

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

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

We also expect to achieve meaningful margin improvement.

Operator: The next question comes from Juan Zhao with CICC.

Wan Jiao: [Interpreted]. Congratulations for the strong results. I have 1 question. Could you please give us more color about your plan for store expansion and coal fulfillment capacity increase?

Xuefeng Chen Kerry: [Interpreted]. Thank you for the question. During the first quarter, we reviewed our nationwide store network based on factors such as location quality and traffic performance. We optimized our store footprint by phasing out certain underperforming stores while further improving the efficiency of our high-quality stores, so they can better and more efficiently capture online traffic. We also maintain focus on for quality — by expanding service categories, we continue to increase the proportion of stores capable of providing multi-category segment services. By the end of the first quarter, 841 of our 965 self-operated AHS stores have enabled market category service capabilities alongside more user-friendly store layout and upgraded in-store experiences.

Further strengthening AHS recycled brand image and fulfillment experience. We have our AHS velocity and store openings it follows a leap frog patent, opening new stores, solidifying our performance and then further ramping up for openings. We will continue to follow this rhythm. Based on our past experience, looking at the long-term goal of reaching 5,000 stores in China remains unchanged. At the same time, we added nearly 500 2-door service team nationwide year-over-year — this helped increase the proportion of face-to-face fulfillment in key service scenarios, including JVs trading services, expand fulfillment coverage improved service, speed and further reinforce our industry-leading fulfillment experience. In addition, we are also building our flexible workforce capacity liver in peak seasons such as major promotional campaigns and flagship device launches, we can quickly activate additional 2 door capacity to ensure fulfillment experience and quality while meeting face-to-face demand.

Operator: The next question comes from Brian Lanter with Zach Small Cap.

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

Chen Chen: Thank you for the question. Our Recycling & Trading business continued to gain user recognition, especially during the trading scenarios. As we build stronger user mind share, we are also enhancing the customer experience by offering more attractive pricing against the backdrop of the rising offering cost for new devices, especially memory price hikes secondhand market prices have remained relatively stable compared to past cycles, and we have seen — we have even seen price increases in some products — as a result, we are not in a hurry to reprice our high cost inventory for faster turnover. And part of it will be sold in the second quarter as inventory will normalize — in addition, the increase in inventory is consistent with our strategy of strengthening 1P2Cusales.

On average, inventory turnover days for 1 P2C retail are longer than those of falses. Therefore, as our revenue mix continues to shift towards 1 B2C inventory turnover days may increase to some extent. That said, as PJT marketplace remains as an important piece of industry infrastructure. It supports our strong pricing capabilities. Therefore, the increase in inventory is not expected to have significant impact on turnover in our core businesses. Thank you for the question.

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

Unknown Executive: Thank you all again for joining us. A replay of today’s call will be available on our IR website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to e-mail us at ir@agrenew.com. Have a good day.

Operator: This conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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ATRENEW INC

Q1 2026

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