ATRenew Inc.

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to AT Renew, Inc. fourth quarter and full year 2025 earnings conference call. At this time, all participants are in only mode. We will be hosting a question and answer session after management's prepared remarks. Please note, today's event is being recorded. I will now turn the call over to the first speaker today, Ms. Jessie Jin. Head of Investor Relations. Please go ahead, Moon.

Thank you. Hello, everyone, and welcome to HRE News fourth quarter and full year 2025 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 fourth quarter and the full year 2025 financial results were released earlier today. The earnings price 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 quality 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 this 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 AT Renews does not take any obligation to update our assumptions on these statements. Also, the 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. I'd now like to turn the call over to Kerry for business and strategy updates.

Hello, investors and analysts. Hello everyone and thank you for joining HRE News 4th Quarter and 4th Year 2025 Earnings Conference Call.

We are pleased to review our rapidly improving quarterly operating results and share our outlook for 2026 in alignment with our long-term development strategy.

首先,感谢我们团队在2025年的奋斗和坚持, 坚持坚定不移地做好能力建设,不断提升用户体验, 抓住国内市场二手手机3C回收和以旧换新需求增长带来的机会, 最终实现了集团强劲的业绩增长。 At the financial and data level of the fourth quarter, the Group has again achieved a rapid increase in income and profits. The total income of the Group of the fourth quarter reached 6.25 billion yuan, with a growth of 29%. The operating profit of Nungap reached 180 million yuan, with a growth of 38.1%. The total income of the whole year in 2025 was 210.5 billion yuan, with a growth of 28.9%. Nungap's operating profit is 5.6 billion yuan, with a growth of 35.5%. Income and profit have exceeded the internal goal set by the group in the beginning of the year.

I would like to begin by expressing my gratitude to our team for their hard work and dedication throughout 2025. By that, firstly, strengthening our core capabilities and enhancing the user experience. we successfully seized upon the growing domestic demand for secondhand consumer electronics recycling and trade-in services, delivering robust growth across the company. In the fourth quarter, we once again achieved strong growth in both revenue and profit. Total net revenues reached 6.25 billion RMB, representing a 29% year-over-year growth. Non-GAAP operating profits reached 180 million RMB, up 38.1% year-over-year. For the full year 2025, total net revenues grew 28.9% year-over-year to 21.05 billion RMB, while non-GAAP operating profit reached 560 million RMB, up 35.5% year-over-year. Both revenue and profit exceeded the expectations we set internally at the beginning of the year.

具体来看,第四季度持续贯彻优先EP的发展策略, The product revenue has achieved a rapid growth of 30.7%. In cooperation with the brand's flagship model of new machines and e-commerce big companies, we are ready to recover and still change the heart. In the process, Kangshi's offline scene and contract delivery capabilities combine 2,195 e-recovering stores and 2,154 top employees. to further expand the coverage of face-to-face delivery. Compared to the previous half of the year, the delivery ratio of Jindong Resuscitation Center has increased significantly. We have invested in Jindong in various aspects, including price, cost-effectiveness, and efficiency, to continue to build the best resuscitation center in the industry and strengthen users' desire to resuscitate. In terms of efficiency and experience,

Looking closer at our fourth quarter performance, we continue to prioritize our 1P strategy, which drove a robust 30.7% growth in net product revenue. By coordinating with major flagship device launches and the e-commerce promotional campaigns, we effectively carried out recycling and trade-in programs. Throughout this period, we further strengthened our offline presence and fulfillment capabilities, expanding our face-to-face reach through a network of 2,195 AHS stores and a team of 2,154 two-door service members. Notably, the proportion of offline fulfillment for JD.com's trade-in program increased compared to the first half of the year. Together with JD.com, we made joint efforts across multiple dimensions, including recycling prices, negotiated rates, and fulfillment timeliness. Those efforts continued to define the industry best-in-class trade-in practices and reinforce consumer mindshare. Furthermore, our two-door fulfillment timeliness improved during both peak and off-peak periods. While customer satisfaction metrics, including compliance rates, were further optimized,

Based on the greater potential of the front end, we have been able to use our own supply chain's thick advantage to create more integrated and new products for the middle end users. In the fourth quarter, the revenue of integrated and new products has increased by 90.8%. Among them, the sales optimization strategy has contributed 32% of the performance ratio to the mobile mobile retail business, and expanded the virtual storage of retail. to provide more abundant product options for demand users. With the priority of retail overhaul strategy, EP2C's product revenue has increased by 88%, and EP2C's share has increased by 12.7% to 41.7%, which is historically high. This has further verified our C-end-sum and C-end-sum-sell-constrained industrial chain capabilities. In the future, 我们可以附用EP2C零售的价格能力,反补到回收端的定价,形成更好的动态价格机制,反向拉动回收业务的增长。 Leveraging our enhanced front-end supply access, we further utilize our deep supply chain capabilities to deliver a broader range of combined refurbishment products to our retail users.

This led to a mighty 0.8% year-over-year surge in compliant refurbishment product revenue in the fourth quarter. Notably, our on-demand refurbishment strategy contributed to 32% of refurbishment revenue for phones, expanding our retail virtual inventory, and offering a diverse array of product options for our on-demand customers. Driven by our retail-first strategy, 1P2C retail revenue increased by 88% year-over-year, and its share of total product revenues rose 12.7 percentage points year-over-year to a record high of 41.7%. This milestone further validates the ability of our end-to-end circular ecosystem to efficiently source from and resell back to consumers at scale. Moving forward, we will leverage the pricing capabilities developed through 1P2C retail to optimize pricing strategies at the resecting end, creating a more effective dynamic pricing mechanism and in turn driving growth of our resecting business.

在此前介绍的国际化战略方面,我们的海外业务主要以EP模式开展,拓宽出口通路,连接一手货源与全球更高价格的购买需求 The export process is gradually mature. In 2025, four consecutive seasons will maintain a steady growth. The single-month performance is more than RMB50 million. In the process, we adopt the business logic of the state-of-the-art goods. Only one inspection is needed to achieve the unified up-to-date sales of export products. We continue to promote overseas business online, effectively improve stock management, and business efficiency, and create a foundation for the future construction of overseas business platforming capabilities. At the same time, we insist on the concept of regulatory operation, and we are invited to participate in the design of cross-border standards for second-hand goods and the consultation of opinions in various places. We insist on standardized operation, and we enhance the cooperation efficiency with the regulatory departments such as customs, and we guarantee the long-term control of the export process.

as discussed in previous quarters, our overseas business primarily operates under a 1P business model, allowing us to broaden our export channels and connect first-hand supplies with higher-priced global demand. Our self-operated export channels continue to mature steadily, delivering sequential growth for four consecutive quarters in 2025, with peak monthly revenue recently reaching 50 million RMB. We have adopted an integrated inventory system for all China source supplies. This allows products to undergo a single inspection before being listed and sold across export markets. The continued online transformation of our overseas business has significantly improved inventory management and operational efficiency, establishing a solid foundation for further platformization. Meanwhile, compliance remains central to our approach. We have been invited to participate in developing cross-border standards for secondhand goods and policy consultations in multiple regions. Our adherence to standardized operations paired with increased efficiency in our cooperation with regulation authorities, such as customs, ensures a controllable export process timeline and continuously optimizes overseas restocking efficiency and capital utilization.

In terms of platform business, the service income of the fourth quarter increased by 8.8%, and the comprehensive fee rate of the platform was 4.79%, which meets the expectations of stable development. Among them, Tai Chi Tang's business maintained a solid growth rhythm. Tai Chi Tang provides a better sales experience for its customers during the tactical transformation to the selling mode. 多品的业务再次实现了亮眼的规模与收入增长.

Regarding our platform business, service revenue increased by 8.8% year-over-year in the fourth quarter, with an overall take rate of 4.79%, in line with expectations. PGT marketplace maintained a solid pace of growth, while PiPi enhanced the retail experience for merchants during its strategic shift toward the confinement model. Our multi-category recycling services once again achieved impressive growth in both scale and revenue.

B2B交易平台,拍机糖延续了三季度的策略, 继续落实商家服务,让利与创新服务能力建设。 四季度的拍机糖3P收费率环比稳定。 一方面,拍机糖作为行业最大的B2B平台, 为商家提供销售效率的保障。 Baomai's business has driven industry merchants to actively sell their products. The increase in the number of entrants to the platform has increased to 81%, which is further increased by 2%. We have also selected telecommunications markets in multiple cities and landed nine pre-checkpoints at the city's end, providing local merchants with a more easy-to-reach paid service network. Through face-to-face trading, face-to-face communication, we can reduce the standard and increase efficiency. In addition, we have also found a phenomenon and trend. Paiji Tang's extremely cost-effective reputation has gained many lower-level market users, especially college students' tolerance and self-promotion. More and more individual users will log in to Paiji Tang or use professional service. In B2B, PJT Marketplace continues to strengthen merchant services and economic benefits and build innovative capabilities.

staying firmly on course with its strategic roadmap, with take rate unchanged compared with the third quarter. First of all, as the largest B2B marketplace in the industry, BJT ensures sales efficiency for merchants. Our guaranteed sales service incentivized merchants to actively list products, driving the platform's warehousing inspection penetration rate to 81%, up two percentage points quarter over quarter. Additionally, we launched nine front-end inspection nodes in key communication markets to provide local merchants with easier access to pre-sale support and align inspection standards face-to-face for higher efficiency. We also observed a key trend. PG&T's value for money reputation is gaining traction in many lower-tier markets, especially among college students. Fueling strong organic growth, Increasingly, individuals are buying second-hand phones featuring cost-optimized performance on the platform, either directly or through dedicated purchasing agents. Thanks to the surge in retail demand, as of the end of 2025, the total number of registered users on PJD Marketplace exceeded 1.66 million, growing at scale both year-over-year and quarter-over-quarter.

在B2C平台业务方面,电商行业的 The POP model has been challenged in 2025. Fortunately, we have implemented the deployment of sales capability in advance to create convenience and easy-to-use direct to C-end capabilities for small and medium-sized merchants who are engaged in second-hand luxury retail. Under the sales mode, the POP team provides customers with customer service, inspection, shop operation, traffic management, and after-sales support. The non-standard second-hand business has become standardized, making second-hand business easier, and increasing the online supply of second-hand business. It also makes it easier for western users to choose good products. In the fourth quarter, the growth of GMV, which is the second-hand business, increased by 253%, while the growth of GMV, which is the platform business, increased by 24%.

In terms of our B2C marketplace business, the POP model faced challenges in 2025. Fortunately, we proactively deployed consignment capabilities to help small and medium-sized merchants reach consumers directly with convenient and easy-to-use capabilities. Under this model, the PiPi team provides merchants with end-to-end support, including customer service, quality inspections, door operations, traffic management, and after-sales services, standardizing the non-standard pre-owned business. This simplifies operations for second-hand sellers, increases the online supply of free-owned goods, and makes it easier for users to discover high-quality items. In the fourth quarter, GMV from consignment increased by 253%. In terms of innovative business, we have been

The multi-segment business that began to deteriorate internally in 2022 continues to deliver beyond expectations. It is recorded that users' enthusiasm for multi-segment recovery has skyrocketed, and the overall recovery of GMV has increased by 125.7%. All categories have achieved a large-scale acceleration growth, which is due to the transparent price system and convenient service scalability. The GMV of gold recovery has increased by 136.3% At the same time, through the optimization of the 7-degree payment mode, the gold recovery tech rate has achieved a small-scale return improvement. In addition, based on our unique business model and continuous improvement recovery experience, our second-hand luxury product recovery business has continued to grow rapidly in the fourth quarter, and based on the optimization of demand growth and pricing logic, Tick rate, Huanbi, increased by 1.2%.

In driving innovation, our multi-category business, which has been internally incubated since 2022, continues to exceed expectations. In the fourth quarter, users' enthusiasm for multi-category recycling surged, driving overall recycling GMV up by 125.7% year-over-year, with accelerated growth across all categories. Among them, gold recycling GMV rose by 136.3% year-over-year, benefiting from transparent pricing and convenient service accessibility. Through the optimization of tiered fee structures, the take rate of gold recycling achieved a modest sequential improvement. In addition, recycling services for second-hand luxury products continued with robust growth in the fourth quarter, thanks to its unique business model and improving recycling experiences. its take rate expanded by 1.2 percentage points quarter over quarter, mainly due to increasing demand in the peak season and our improved pricing strategy.

进入2026年,外部的市场环境发生了明显的变化。 近期,内存价格持续上涨,直接推动了新机的售价走高。 这一趋势也为二手行业带来了新的发展机遇。 is mainly reflected in the following three aspects. First, the price of second-hand products has also increased. The overall market price is stable, which is beneficial for the long-term health development of the second-hand industry. Second, the increase in memory is more beneficial to the market share of Apple products, and Apple products are the core driving force of our business. Third, there are still In the context of the rising price of new machines, all major manufacturers and platforms will pay more attention to saving and replacing new businesses and continue to invest more. Based on the above analysis, we judge that the market environment in 2026 is greater than ever for the whole of the second-hand industry, which is conducive to the continuous stable and healthy development of the industry.

As we move into 2026, we are seeing meaningful changes in the external market environment. Recently, the continued rise in memory prices is directly pushing up new device prices, and this trend is creating new opportunities for the pre-owned industry. We see this playing out in three ways. First, pre-owned product prices are rising alongside new devices, keeping overall market pricing firm and healthy, which supports the long-term development of the industry. Second, memory price increases actually work more in favor of Apple's market share, and Apple products are the core drivers of our business. Third, trade-in penetration still has significant room to grow. With new device prices going up and national subsidies in place, manufacturers and e-commerce players will place even greater emphasizes on trade-in programs and continue to increase their investment. Taking all of these together, our view is that the 2026 market environment is not positive for the pre-owned industry and supports continued steady and healthy industry development.

With 2026 underway, we have clear expectations for our full-year growth

Guided by AT Renew's three-stage development strategy, we are carrying forward.

第一级战略,继续夯实我们二手手机3C业务基本盘的健康增长。 在国股延续,新机涨价,二手行业健康繁荣的大背景之下, 我们将坚定不移地做好回收纽约交付专的用户体验,拉通一盘货。 to increase the underlying capacity of the overclocking to a new level. Combined with the integration of the core value, the power generation, the selection, and the sales, we will achieve a higher proportion of C-end-sum and C-end-bind industrial chain bonds, and form a positive non-wheel effect. Moreover, we will continue to invest in AI pricing, AI overclocking, and AI self-sufficiency, and continue to reduce the positive effect. Stage 1, we will continue to solidify the healthy growth of our core second-hand consumer electronics business.

Against the backdrop of extended government subsidies, rising prices for new devices and a thriving healthy second-hand market, We remain unwavering in our commitment to optimizing the user experience in recycling fulfillment and delivery. We will leverage our integrated sources of supply, further strengthen our underlying pricing capabilities, together with our combined refurbishment capabilities to drive more retail sales. We aim to achieve a higher proportion of direct engagement with consumers at the front of recycling and retailing. forming a closed-loop value chain and creating a self-reinforcing flywheel effect. Furthermore, we will continue to invest in AI-driven pricing, operations, and quality inspection to further reduce costs and enhance efficiency. Pursuing accelerated growth externally while striving for lower costs and higher efficiency internally is the core driver of our second-hand consumer electronics business.

The second strategy. We continue to strengthen the positioning of the first national recycling brand. On the one hand, in the past two years, we have quickly built the ability of new media brand marketing, and in Douyin and Xiaohongshu, two important user marketing platforms have actively built a recycling brand. From a wide consumer group, there are two mobile phone 3C product construction, brand new products, from more concerned about the quality of life in the user community to build a brand new brand with luxury products. Brand marketing is still a strategic investment in the early stages of the second-hand industry development, but considering that second-hand mobile 3C and other high-end products are still a relatively low-end business, we maintain a good investment in brand marketing costs and maintain our own rhythm. On the other hand, the second recovery platform has been integrated into the community scene of the country through the ecological enterprise iFenLay. With the help of iFenLay's 50,000 smart recovery machines operated in the community, 245 consumer brands have been expanded throughout the year to build collaborative ecosystems and jointly guide green consumption in the new era. iFenLay is not only an important and unique community infrastructure, stage two, we will continue to strengthen AHS Recycle's position as China's leading recycling brand.

Over the past two years, we have rapidly built strong new media brand marketing capabilities, and cultivated the AHS Recycle brand on two user engagement platforms, Douyin and Xiaohongshu. Through these efforts, we have strengthened brand awareness for pre-owned consumer electronics among a broader consumer base, and our luxury goods recycling identity resonated with users who prioritize quality lifestyles. While brand marketing remains a strategically important investment in the early stage of second-hand industry development, we will remain prudent with brand marketing investments and progress at our own pace. given that free-owned consumer electronics and other high-value categories remain relatively low-frequency businesses. At the same time, we will drive penetration of the AHS Recycle brand into communities nationwide through Loverie, the ecosystem extension of AHS Recycle. Loverie drew more than 50,000 Loverie recycling shops across communities. We expanded partnerships with 245 consumer brands to co-establish a collaborative ecosystem and jointly pioneer green consumption. Loverie is not only a critical and unique community infrastructure. Furthermore, by leveraging our user operations and strategies tailored for high-frequency community scenarios, we are confident that it will increasingly become a key growth driver for our core business.

第三季战略,后季播发,努力实现海外战略的突破。 This is based on the industry experience, standard capabilities, automation capabilities, and platform capabilities that we have accumulated in China over the past 15 years. Starting from export and export business and accumulating capabilities, we will step by step improve the level of overseas platformization, improve industry efficiency, and open up space for future development. In addition, based on our ability and experience in the manufacturing recycling machine, Stage 3, we will leverage our accumulated strength in China to achieve strategic breakthroughs in international markets.

This builds on the deep industry experience, along with strong standardization, automation, and platform capabilities we have built over the past 15 years in China. Starting from our export business and the capabilities we've built along the way, we expect to improve our overseas platform capabilities to enhance industry efficiency and unlock new avenues for future growth. Furthermore, building on our experience with recycling kiosks, We are actively working with partners to develop localized recycling solutions overseas, bringing the technology and supply chain capabilities we have filled at home to global markets. We look forward to bringing more news to you.

展望2026年,我们保持对二手行业和集团业务的健康发展的信心。 下面,请CFO Rex对财务数据进行解读。

In conclusion, we remain confident in healthy development of the point-on industry and the continued growth of our business in 2026. Now, I'd like to turn the call to our CFO Rex for financial updates.

各位投资者和分析师大家好,我很高兴向大家分享2025年第四季度及权力业绩, 我们的收入与盈利水平均创下历史新高。 过去一年里,我们成功抓住了中国以求换新政策所推动的行业机会, Good day, everyone.

I'm pleased to report our fourth quarter and four-year results of 2025, marked by both revenue and profits reaching record highs. Over the past year, we effectively leveraged strategic opportunities arising from China's trade-in programs and industry dynamics. By consistently enhancing fulfillment capabilities, we delivered best-in-class trade-in experiences, while solidifying our brand presence as China's leading recycling brand, further reinforcing our market leadership.

第四季度收入超出资金区间高端, 同比增长29%至62.5亿元, 能GAAP经营利润超1.8亿元, 同比增长38.1% 全年营收210.5亿元, 同比增长28.9% 能GAAP经营利润近5.6亿元,

In the fourth quarter, our total revenue exceeded the high end of our guidance, increasing by 29% to 6.25 billion RMB, while NAMGAP operating income surged by 38.1% to over 180 million RMB. For the full year, revenue grew by 28.9% to 21.05 billion RMB, while non-GAAP operating income rose by 35.5% to nearly 560 million RMB. These results underscore our robust fulfillment capabilities on the recycling side and the growing influence of our brand, which have been pivotal amid the rapid development of China's circular economy.

在解读财务数据之前,请注意,除非另有说明,所有金额均以人民币为单位,

所有增速数据均为同比。 Before taking a detailed look at the financials, please note that all amounts are in RMB and all comparisons are on a year-over-year basis unless otherwise stated.

第四季度,集团总收入的增长动力持续来自产品收入的稳健提升。 产品收入增长30.7%至58.3亿元, 主要得益于公司线上渠道二手消费电子产品销售的增长。 2025年全年产品收入193.8亿元。

In the fourth quarter, total revenue growth was firmly driven by continued net product revenue growth. Net product revenues increased by 30.7% to 5.83 billion, largely attributable to the growth in online sales offering on consumer electronics. Net product revenue for the full year reached 19.38 billion, representing a year-over-year increase of 30.6%.

第四季度,服务收入为4.2亿元。 8.8% of the total revenue. The main benefit is the service income growth contributed by the Pagetang business and the multi-segment recovery business in the platform model. The comprehensive fee rate of the four-level platform is 4.79%. The multi-segment service income of this quarter is nearly 80 million yuan, accounting for 18.8% of the service income. The service income of the whole year is 16.7 billion yuan, with a total revenue growth of 12.4%. The multi-segment recovery business of the whole year is 2.5 billion yuan, with a total revenue growth of 93.4%.

That service revenues were 420 million in the fourth quarter, representing an increase of 8.8%. The increase was largely driven by PJT Marketplace and the multi-category recycling business. The overall take rate of our marketplaces was 4.79% for the fourth quarter of 2025. During the quarter, our multi-category recycling business contributed nearly 80 million of revenue accounting for 18.8% of service revenues. Net service revenue for the full year reached 1.67 billion, representing an increase of 12.4%. Our multicultural recycling business contributed 250 million, representing an increase of 93.4% year-over-year. This accounted for 14.9% of total service revenues in 2025, compared to 8.6% in 2024.

在运营费用方面,我们主要讨论Nangap Coaching的费用分析,以展示管理团队视角的费用趋势。 关于Nangap和Nangap Coaching之间的调整,请参考我们的财务报告与成交给美国证券交易委员会的6K表格。 Now let's discuss our operating expenses.

To provide greater clarity on the trends of our actual operating-based expenses, we will mainly discuss our Nangap operating expenses, which better reflect how management views our operating results. The reconciliations of GABA to NANGAP measures are available in our earnings release and are corresponding for all 6K furnished with US SEC.

第四季度商品成本增加28.9%至50.3億元, 與產品銷售的增長一致。 我們EP業務的毛利率為13.7%, 而上年同期為12.5%。 EP毛利率的改善主要得益於我們發揮C2B回收場景, 供應鏈中的合規範型整備能力, the advantage of diversified selection of retail channels, and the increase in the share price of QC retail. In the fourth quarter, the share price of EP2C and its product revenue reached 41.7%, which was 29% in the same period last year. The share price of EP2C was 36.8% last year, and it was 27.2% in 2024. The cost of all-year goods was 16.7 billion yuan, which was 27.6% in total. The share price of all-year EP was 13.8%, and it was 11.8% in the previous year.

In the fourth quarter of 2025, merchandise costs increased by 28.9% to $5.03 billion, in line with the growth in product sales. Growth profit margins for our 1P business was 13.7% compared with 12.5% in the same period last year. The growth margin improvement in our 1P business was primarily driven by high-efficiency C2B recycling scenarios, compliant refurbishment capabilities incorporated in our supply chains, and then increasingly diversified retail channel mix. This allowed us to increase the proportion of higher margin retail sales with 1P2C revenue accounting for 41.7% of product revenue in the fourth quarter of 2025, up from 29% in the same period of last year. 1P2C revenue accounts for 36.8% of product revenue in the full year of 2025, up from 27.2% in 2024. Merchandise costs for the full year increased by 27.6% to 16.7 billion, with a 1P growth margin of 13.8% compared to 11.8% in 2024.

第四季度,旅游费用增长21.7%至4.8亿元, 能盖本旅游费用增长22.4%至4.8亿元, 能盖本旅游费用增长的主要原因有, 与2024年同期相比, The second point is that the fourth quarter of 2025 will expand the online payment network and operating capacity. Operating expenses will increase accordingly. The rate of fees from 8.1% to 7.7% will decrease. The rate of fees from 8.1% to 7.7% will decrease. The rate of fees from 8.1% to 7.7% will decrease. The rate of fees from 8.1% to 7.7% will decrease.

In the fourth quarter of 2025, fulfillment expenses increased by 21.7% to $480 million. Nangat fulfillment expenses increased by 22.4% to $480 million. Under the Nangat measures, the increase was mainly driven by higher personnel and logistics expenses, reflecting a greater volume of recycling and transaction activities compared to the same period in 2024. Additionally, operation-related costs rose as we expanded our store network and enhanced operation center capacity in the fourth quarter of 2025. Non-GAAP fulfillment expenses as a percentage of total revenues decreased to 7.7% from 8.1%. Non-GAAP fulfillment expenses for the full year increased by 28.3% to $1.75 billion. while the non-GAAP fulfillment expenses as a percentage of total revenues remain stable at 8.3%.

第四季度销售费用增加23.3%至4.6亿元, non-GAAP销售费用增加44.1%至4.6亿元, 主要原因为与渠道服务相关的佣金费用的增加, non-GAAP销售费用率从6.6%上升至7.4%, 全年non-GAAP销售费用为16亿元同比增长47.3%,

In the fourth quarter of 2025, selling and marketing expenses increased by 23.3% to $460 million. Non-GAAP selling and marketing expenses increased by 44.1% to $460 million. The increase was firmly driven by an increase in commission expenses associated with channel service fees. As a result, our non-GAAP selling and marketing expenses as a percentage of total revenues increased to 7.4% from 6.6%. Non-GAAP selling and marketing expenses for the full year increased by 47.3% to 1.6 billion, while non-GAAP selling and marketing expenses as a percentage of total revenues increased to 7.6% from 6.6%.

第四季度管理费用下降,34.1%至6千万元。 In the fourth quarter of 2025, general and administrative expenses increased by 34.1% to $16 million.

Non-GAAP G&A expenses also decreased by 25.6% to 57.6 million, primarily due to a decrease in personnel costs. Non-GAAP G&A expenses as a percentage of total revenue decreased to 0.9% from 1.6%. Non-GAAP G&A expenses increased by 4.1% to 260 million, while non-GAAP G&A expenses as a percentage of total revenues decreased to 1.2% from 1.5%.

in 2025.

In the fourth quarter of 2025, the search and development expenses increased by 9.8% to $62.6 million. Non-GAAP R&D expenses increased by 14% to $60.3 million. The increase was primarily driven by elevated personnel expenses. Non-GAAP R&D expenses as a percentage of total revenues decreased from 1.1%. Non-GAAP R&D expenses for the full year increased by 21.4% to $230 million, while non-GAAP R&D expenses as a percentage of total revenues decreased to 1.1% from 1.2%.

利润层面,第四季度能改革经营利润超1.8亿元, 去年同期能改革经营利润为1.3亿元,同比增长38.1%, 本季度能改革经营利润率为2.9%, 去年同期为2.7%, As a result, our non-GAAP operating income exceeded $180 million in the fourth quarter of 2025.

compared to NANGAP operating income of $130 million in the fourth quarter of 2024, representing an increase of 38.1%. NANGAP operating profit margin was 2.9% for the quarter, compared to 2.7% in the fourth quarter of 2024, representing an increase of 19 basis points. Our NANGAP operating income for the full year was nearly $560 million, compared to Nanga operating income of 410 million for the full year of 2024, representing an increase of 35.5%. Nanga operating profit margin was 2.6% in 2025 compared to 2.5% in 2024, representing an increase of 13 basis points.

第四季度,我们使用了约580万美元回购近130万个VDS,

During the fourth quarter of 2025, we repurchased a total of approximately 1.3 million ADSs for approximately 5.8 million U.S. dollars. Today, along with our earnings release, we announced the fiscal year 2025 cash dividend in the amount of 0.1 USD per ADF. The total amount is expected to be approximately 23.5 million USD.

关于2026年第一季度的指引, 我们预计总收入将在58.6亿元至59.6亿元, 对应同比增长25.9%至28.1%以上指引, 仅反映当前我们对市场和运营状况的初步看法, 预期有可能变化。

Now turning to business outlook. For the first quarter of 2026, we anticipate total revenues to be between 5,860 million RMB and 5,960 million RMB, representing an increase of 25.9% to 28.1% 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 change.

This concludes our prepared remarks.

Operator, we are now ready to take questions.

Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. When asking your question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. The first question today comes from Juan Giao with CICC. Please go ahead.

Good evening, Managing Director. Thank you for accepting my question. Congratulations on our long-term performance. I have a question. During the two meetings this year, we all know that the country is also very concerned about the supply and demand of consumer goods. At the same time, the price of consumer goods has continued to rise in the past several seasons. In March, I also saw some manufacturers raising the price of new products. Will the above factors be linked together? From our point of view, what is the impact on the 3G industry in the second half of this year? Will we also adjust the value of 26 years because of these factors? Congratulations for this strong quarter. I have one question. During the recent two sessions, the government confirmed the sale of national subsidies for consumer trading programs. However, storage prices have been rising for several quarters, and in March, we've seen manufacturers raising new devices prices. How do you view the impact on the pre-owned consumer electronics industry this year, and will you revise your 2016 guidance? Thank you.

Thank you for the question. Let me answer this question. First of all, in the year of 2026, we saw the country continue to invest in mobile phone, tablet, smart bracelet, and watch for the replacement of old and new. And the smart glasses are also included in the range of replacement. In the year of 2025, the drive of our old and new business mainly comes from 6,000 yuan or more in high-end mobile phone sales, and not directly enjoy the national profit. For Aosu Mobile's 3G business, we estimate that by 2026, it will be similar to that of 2025. It will still start from the realization of the old machine recovery transformation for users, and start for users to do well with the old change. Thank you. I'd like to take the first question.

For 2026, the government has extended trading subsidies for mobile phones, tablets, and smart watches. Smart glasses have now also been added to the list. In 2025, the trading subsidy has been applied to the new device cells, which were priced under 6,000 RMB, which we were not eligible to compensate this kind of national subsidy. However, as we were able to capture the upgrade the need from consumer trading process that we will benefit from the similar process in 2026. For our pre-owned consumer electronics businesses, our role hasn't been changed. We help users monetize their old devices, and we make trade-ins hassle-free. To be clear, we are not involved. But with that said, with the broader policy push, including measures, insurance subsidies for retail users, continues to strengthen public awareness of trade-ins. That growing awareness drives momentum that works directly in our favor.

In 2015, due to the large-scale construction and application industry of AI, there was a significant increase in the shortage of storage and the price of storage. On behalf of smart phones, new manufacturers are facing the challenge of invisible price increase. In the trend of 2020-2026, the price of storage . . . . . In terms of the recycling industry, opportunities are also a challenge. The opportunity is to invest heavily in renewable energy, which may become a higher priority for e-commerce and brand companies. Some of the scenarios of renewable energy can be combined with our better recycling prices, serve more users' needs for renewable energy, and thus achieve rapid growth in the recycling of raw materials.

In 2025, driven by large-scale AI deployment and applications, the industry began to see memory shortages and significant price increases. Putting components causes pressure on new device manufacturers, particularly in smartphones. In 2026, as firmware prices rose more rapidly, Android manufacturers had to raise new device prices, while Apple kept its pricing relatively stable. This widening gap has reinforced Apple's position in the pre-owned market, and we have seen the share of Apple products in our business increase on a sequential basis. More broadly, rising new device prices created both opportunities and challenges. On the one hand, trade-ins are likely to become a higher priority for e-commerce platforms and manufacturers. Certain trade-in scenarios can be combined with national subsidies and by offering more competitive recycling prices. We can serve more users trade-in needs and drive rapid growth in supply sourcing. On the other hand, competitive pricing and high quality user experiences have become even more crucial as more consumers adopt their pre-owned alternatives.

In terms of price, we will continue to actively promote the retail priority trading strategy. The ratio of retail income to EP business increases to more than 50% of the target. Try to use the sales price selected at the C-end to design a higher C-end recovery price. In terms of experience, continue the mechanism of the UEC user experience committee established last year, maintain a high level and strict inspection of the satisfaction index of multiple users, actively embrace the feedback of users, and quickly respond to the needs of users. Looking forward to the double-digit growth rhythm of total revenue maintaining faster than the industry throughout the year, through scale effects and cost control,

On pricing, we remain committed to our retail-first strategy, maintaining our target of retail revenue at 50% of our 1P business. We are exploring using 2CU curated sales prices as a benchmark to set more competitive trading prices. On experience, our user experience committee established last year will continue to run frequent and rigorous reviews across key satisfaction metrics. ensuring we remain responsive to user feedback and act on it swiftly. Looking ahead to the full year, we expect the growth of our total net revenue to continue outpacing the double-digit growth of the broader industry. Continued scale expansion and discipline cost control positions us to return margins to an upward trajectory.

Okay, thank you.

Thank you. Thank you.

The next question comes from Raphael Fei with DBS. Please go ahead.

Hey, Carrie Tong, Max Tong. May I ask the management what is the store opening target in 2026? Thank you.

Looking back at 2025, we recognized early that national subsidies would accelerate point-owned industry growth.

So we invested decisively in offline fulfillment, expanding our store network and scaling up our two-door service team.

In 2025, we will continue to focus on developing standard stores, focusing on mobile 3C, and increasing the number of high-quality consumer multi-specialty recovery services. In 2025, we had a net addition of 451 AHS standard stores.

Going forward, our priority remains the extension of our standard stores with consumer electronics as the core. We will also increase the proportion of multi-category resecting services for high-value products across our stores, which will drive higher per-store profit contribution. In lower-tier cities, we will continue to grow through local franchisee partners and city partners to jointly develop the pre-owned market allowing us to extend our store coverage in an asset-light way.

在门店之外,我们在全国范围内建设了一支上门团队。 年内,日均产单人数增加超过了1000人, 为线下门店网络有效扩张了一个灵活机动的队伍, 并建设了弹性的上门运力, 快速补齐了因已就关心业务激增而带来的线下旅业交付, Young stores will also build a nationwide two-door service team.

Daily order generating headcount grew by over 1,000, effectively extending our store network with a flexible workforce. This on-demand capacity allowed us to quickly fill the fulfillment gap when trade-in volumes surged. With both our store network and two-door team working together, our face-to-face trade-in fulfillment ratio exceeded 70% and user experience continued to improve.

对于2026年,我们会沿用上述策略在高线城市加强门店质量,在中低线城市推进。 and the growth of the number of door stores, and based on the flexible adjustment of the staff of the business, the door stores that love to recover are the place of delivery and the place of the brand. The number of door stores needs to be in line with the online traffic, and the spiral rises. In the long term, the goal of our 5,000 door stores remains unchanged. For 2026, we will follow the same approach.

We will enhance store quality in high-tier cities, expand our store footprint in lower-tier cities, and flexibly adjust our two-door service team to match seasonal demand. Our AHS store serves not only as fulfillment locations, but also as important touch points for our brand. Our store network and online traffic need to grow in tandem and reinforce each other. Over the medium to long term, our target of 5,000 stores remains unchanged, but we will adjust the pace of store openings as needed based on online traffic growth and our broader brand strategy. Thank you.

The next question comes from Brian Lanter with Zach small cap research, please go ahead.

Thank you. 在消费电子星际价格上涨的周期,我们保持高优先级发展EP2C的零售策略。 预计二手回售和销售价格也往保持动态向上发展的趋势。 过程中,毛利率更高的2C销售占比提升,也会小幅度改善产品收入毛利率表现。 The pre-owned consumer electronics industry has stable fundamentals and a well-established brand landscape.

Rising new device prices reinforce our commitment to the 1P retail strategy. And we expect both restructuring and retail prices to trend upward. Meanwhile, as higher margin retail product revenue represents a growing share of our mix, we anticipate Radio 1P World's margin extension as well.

从长期角度看,更重要的是由规模效应带来的能干净利润率的提升。 其中一方面来自于自动化质检技术的应用。 单订单质检费用相比人工质检节约约30%。 Over the long term, what matters to us is the improvement in our land gap operating margin driven by economies of scale.

This plays out in several areas. One comes from our automated quality inspection technology, which can reduce quality inspection costs for order by approximately 30% compared to manual inspection. We continue to refine our automation roadmap and are scaling these capabilities at our Dongguan and Changzhou operation centers to drive efficiency gains. We are also beginning to deploy automated logistics infrastructure on a smaller scale. Together, these efforts are expected to improve our NANGAP fulfillment expense ratios.

In terms of sales revenue, due to the early development of the industry, it is necessary to include certain sales benefits in the sales environment to increase the cost of goods. At the same time, we expect to maintain a solid position in brand marketing in the mid-to-long term, and consolidate the quality of the users of the national low recovery brands. But with the establishment of mature brand users in the industry, we have confidence in promoting relative improvement in sales revenue.

On the selling and marketing side, the industry is still at an early stage, so we do need to increase our pricing attractiveness with sales vouchers. Over the medium to long term, we plan to maintain discipline spending in brand marketing to solidify HS Recycle as a top brand for recycling services in consumers' minds. As the industry matures and brand trust deepens, we see a clear opportunity to improve our selling and marketing expense ratio. Thank you for the question.

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

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, feel free to email us at ir.atrenew.com. Have a great day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.