ATRenew Inc. American Depositary Shares (every three of which representing two Class A ordinary shares) 2026 Q2 Earnings Call

Hello, everyone, and welcome to ATRenew's second 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 second 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 statements.

Some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer you to our safe harbor statements in the earnings press release. Any forward-looking statements that management makes on this call are based on assumptions as of today, and that ATRenew does not take any obligations to operate our assumptions on the 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 CNY and all comparisons are on a year-over-year basis. I'd now like to turn the call over to Kerry for business and strategy updates. Hello everyone and thank you for joining ATRenew's second quarter 2026 earnings conference call.

We are pleased to review our operating results for the quarter and share our views on industry trends and our strategy. Hello everyone, and thank you for joining ATRenew's second quarter 2026 earnings conference call. We are pleased to review our operating results for the quarter and share our views on industry trends and our strategy. In the second quarter, total net revenues exceeded the high end of our guidance, increasing 32.4% year-over-year to CNY 6.61 billion. Our continued focus on 1P has strengthened our end-to-end capabilities and driven rapid growth in product revenue of 35.9% year-over-year to CNY 6.19 billion. Non-GAAP operating profit grew 70.1% year-over-year to CNY 210 million. While non-GAAP operating profit margin expanded by 69 basis points year-over-year to 3.1%. First of all, I'd like to share four key external shifts and trends.

The first dynamic is the year-over-year decline in new device sales. The intuitive thinking is that this could drag our recycling business. But counterintuitively, when new devices are selling well, recycling and trade-in programs are just supplementary value-added services and are not a top priority. Conversely, when new device sales soften, trade-in programs become the most critical and effective promotional tool. Major manufacturers and platforms place greater emphasis on and allocate more resources to trade-in initiatives. We have seen this clearly in our business trends over the past few years. Second is microeconomic headwinds in consumption, and significant growth in demand for high-quality, affordable pre-owned smartphones and other secondhand products. This is clearly reflected in the sustained, robust growth of our curated B2C business.

第三个变化是行业合规越来越严格，包括税务合规、翻新合规。爱回收长期秉承合规经营。行业合规对于行业的分散的小商家或不合规商家影响较大，但是有利于爱回收的1P自营业务发展。 The third shift is increasingly strengthened regulation, including taxation and device refurbishment.

AHS has always been committed to compliant operations, while tighter regulations disproportionately impact fragmented small-scale and non-compliant operators. They benefit our 1P business.

第四个变化是国内的货源出口趋势明显。随着国内以旧换新和回收的渗透率的提升，国内的货源越来越多。中国已经从过去的二手手机的进口国逐步成为了出口国，出口的趋势越来越明显，已经形成了高端机型内销，次高端和低端机型出口的行业趋势。接下来我们来讲一下我们业务的各项进展。 The fourth shift is the accelerating trend of exporting domestic pre-owned devices.

As the penetration rate of trade-in and recycling programs continues to rise in China, domestic supply is expanding rapidly. China has shifted from a net importer to a net exporter of pre-owned smartphones, establishing a clear industry trend where high-end models are sold domestically, while mid-to-high-end and low-end modules are exported. With that, let us now move to our business update.

近年来，基于二手手机3C行业对于信任与效率要求高的特质，我们坚定优先发展一批业务，以C2B一手货源为基础，通过合规翻新增加产业链的厚度，加强B2C严选的零售，并反哺回收端的价格和用户体验，以此深耕产业链端到端。 In recent years, we have firmly prioritized 1P business because trust and efficiency are critical in the secondhand consumer electronics industry.

Our 1P model starts with first-hand supply from C2B channels. We add depth to the value chain through compliant refurbishment, strengthen B2C retail for premium curated products, and leverage B2C retail pricing capabilities to offer better pricing and user experience on the recycling side. Together, those efforts enhance our end-to-end capabilities across the value chain.

在回收端，我们抓住品牌方、电商平台和线下渠道重视和加大以旧换新的行业机会，通过更加密集的爱回收的履约交付网络，力争做好用户体验。结合618大促期间用户旺盛的以旧换新和回收的需求，截止6月末，全国包含弹性运力在内的上门交付总人数近3,000名，较3月末大幅增长。此外，叠加2,117间爱回收门店，让我们实现远超行业的货源获取能力和用户服务能力。在5月13日到6月18日的主流大促期间，爱回收手机3C品类的回收额同比增长57%，上门和到店的回收订单量均实现了45%的同比增长。全渠道回收的面对面订单量占比达到80%以上，多项用户体验指标持续优化。 On recycling, we capitalize on opportunities as brand e-commerce platforms and offline retailers prioritize and invest in trading programs.

Leveraging AHS Recycle's increasingly extensive fulfillment network to enhance the user experience. Trade-in and recycling demand was strong during the June 18th Shopping Festival. In response, we expanded our nationwide to-door fulfillment team, including flexible capacity to nearly 3,000 by the end of June, up sharply from the end of March. Together with our 2,117 AHS stores, this gave us strong advantages in sourcing and customer service over industry peers. During the major promotional period from May 13th through June 18th, the recycling value of mobile phones and consumer electronics at AHS Recycle increased 57% year-over-year. Both to-door and in-store recycling orders grew 45% year-over-year, while face-to-face orders accounted for 80% of recycling orders across all channels. Multiple user experience metrics also continued to improve.

在供应链和用户增值方面，合规翻新业绩加速发展，1P的翻新收入同比增长87.8%。结合新机价格上涨、二手行业稳定、标盘定价精细度提高等因素，二季度1P2C零售收入同比增长92.4%。1P2C占比环比增加3.6%至48.8%，进一步满足用户对于严选二手手机、电脑、智能设备等产品的购买需求。 Our compliant refurbishment business also continued to accelerate.