BingEx Limited American Depositary Shares 2026 Q2 Earnings Call

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During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC. The non-GAAP financial measures we provide are for comparison purpose only. The definition of these measures and the reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the BingEx company's IR website at ir.ishansong.com. Furthermore, throughout the call, we will constantly use the company brand name, FlashEx, to refer to its publicly listed entity, BingEx Limited.

Joining us today from FlashEx senior management are Mr. Adam Xue, Founder, Chairman of the Board, and Chief Executive Officer, Mr. Hongjian Yu, Co-founder, Director, and Executive President, and Mr. Luke Tang, Chief Financial Officer. I will now turn the call over to Mr. Adam Xue.

Thank you, Yidan. Hello, everyone, and welcome to FlashEx second quarter 2026 earnings call. The on-demand delivery industry continued to evolve in the second quarter. Users today expect more than speed alone, placing growing weight on the entire service experience from the moment they place an order to the moment it arrives. At the same time, AI is advancing quickly, and low-altitude airspace is opening up, creating new ways to fulfill orders in our industry. This plays to the on-demand dedicated courier model FlashEx has been building all along, as well as the technology work we have been advancing over the past several quarters. The operating approach we have followed over the past several quarters translated into real results in the second quarter, with scale and delivery efficiency improving together.

Total order volume grew 8.9% quarter-over-quarter, and average delivery time shortened from 25.7 minutes in the first quarter to 25.3 minutes in the second quarter, even as volume rose. Behind this is the rider base and service network that keep expanding. As of the end of the second quarter, registered Flash-Riders reached 3.23 million, and our service coverage expanded to 299 cities. Our user base also grows steadily, with registered users up 4 million from the end of the first quarter to 124 million. Turning to our financial performance, total revenue from the second quarter were CNY 940.3 million, with a gross margin of 10.2%. Non-GAAP income from operations was CNY 10.8 million, and non-GAAP net income was CNY 11.4 million. Our cash position stood at CNY 853.4 million as of the end of the second quarter, reflecting a healthy overall financial position.

Looking at the order mix by category, volume recovery in the second quarter came from across source. Fresh flowers, a core category we have cultivated for years, grew 29.2% quarter-over-quarter in order volume. Food, cakes, and electronics all posted order volume growth both year-over-year and quarter-over-quarter, leaving our overall order mix more balanced. Several major categories moving up in turns tell us how well our on-demand dedicated courier model fits high-value scenarios, and it also spreads our order composition more widely, reducing our reliance on any one category. On the merchant side, we set out to simultaneously grow our merchant base and improve its quality in the second quarter. Newly signed merchants grew 18% quarter-over-quarter, and the share of high-value, high-stickiness merchants rose meaningfully as our merchant base expanded.

Enterprise clients stood out in particular, with new signing up 53.1% quarter-over-quarter, moving our merchant structure in a healthier direction. This came partly from optimizing our sales team assessment framework and partly from a dedicated effort to develop key accounts pursuing enterprise clients through a separate track, given their longer sales cycles and more complex decision-making. What we have observed is that delivery demand from these clients comes out of the day-to-day business processes, such as transferring inventory between stores, sending client documents back and forth, or dispatching after-sale parts urgently. These demands run more continuously, and the relationships last longer, making our revenue more stable. On the individual user side, the role FlashEx plays for our users continues to expand from delivering an item to completing a task.

Compared with first quarter, luggage delivery order volume grows 37.5%, food pickup grew 25%, parcel pickup grew 7.2%, and assisted purchasing grew 6.7%. Growth across these scenarios came from delivery, developing new service formats around what users actually need, and from reaching out to them at the specific moments those needs arise. Round-trip orders, which we launched recently, as one example. They combine delivery, waiting, and the return trip to a single order handled by the same Flash-Rider, designed for tasks that require a round trip, such as document and contract signing. These are exactly the tasks a dedicated courier model handles well, and they bring FlashEx further into our users' everyday routine. Our AI work in the second quarter centered on two priorities, making our service easier for users to reach and putting AI to work across the company's daily operations.

Starting with users, we saw notably more users placing orders through our quick app entry point in the Huawei HarmonyOS ecosystem during the second quarter. Order volume through this entry grew 27.6% quarter-over-quarter, and the number of users ordering through it grew 20.9%. This lightweight entry point made our service easier to access, driving both new user acquisition and higher order frequency. In June, we launched AI-powered ordering in the FlashEx apps. Users simply describe what they need by voice, and the system identifies and matches the pickup and drop-off addresses and other order details, completing the order in a single exchange.

How to finish without switching to another interface. Whether the order is an urgent document, flowers, or medicine, AI can quickly match the right delivery option. Along with the CLI tool, we open-sourced in the second quarter, developers and individual users can now reach FlashEx AI-powered service directly. Across all of our AI work, we keep coming back to one question: What does the user actually end up with? Whether an order is placed through our APP or a voice assistant or an AI agent, it is fundamentally irrelevant to the user. What shapes the experience is whether FlashEx arrives on time and completes the job to a high standard, and whether we can respond to the user concern properly. That stays at the core of how we develop and deploy AI. Now to our internal operations.

We established an organizationally innovation committee in the second quarter, letting each business unit propose and implement its own AI projects. In customer service, our AI system now independently handles 85% of the scenarios it covers, addressing routine inquiries and complaints the moment they are submitted. In marketing, compliance review of MCN content previously conducted manually now goes through a first pass by a self-developed AI reviewing system. In regional operations, the time required to model capacity plans for new city launches and holiday peaks has come down from several days to a few hours. Across these areas, operating efficiency improved by roughly 30%. We see AI as a compounding effort rather than a single leap. It builds gradually with the grains adding up over quarters.