Full Press Release Details
111, Inc. Announces First Quarter 2025 Unaudited
SHANGHAI, June 19, 2025 /PRNewswire/ - 111,
Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to reshaping
the value chain of healthcare industry by digitally empowering the upstream and downstream in China, today announced its unaudited financial
results for the first quarter ended March 31, 2025.
Quarter 2025 Highlights
Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive
Officer of 111, commented, "In the first quarter of 2025, we successfully
navigated a persistently challenging macroeconomic environment to deliver another quarter of operational profitability and positive operating
cash flow. Our net revenues remained stable at RMB 3.5 billion, demonstrating the resilience of our business model amidst market headwinds.
Our ability to sustain profitability is a direct result of the operational discipline and strategic focus we have cultivated across the
relentless focus on efficiency continues to bear fruit. We achieved a notable 4.8% year-over-year reduction in total operating expenses.
More importantly, as a percentage of net revenues, our operating expenses improved to 5.5%, a decrease of 30 basis points from the same
period last year, highlighting our capacity for continued operational improvement. This was driven by significant double-digit reductions
in both our selling and marketing expenses and technology expenses, reflecting our commitment to prudent cost management."
ahead, our strategy remains centered on leveraging technology to empower the healthcare value chain. We will continue to invest strategically
in AI and digital solutions to enhance our supply chain, deepen customer engagement, and pioneer a seamless, one-stop shopping experience
for our partners. With our fortified financial base and a clear focus on execution, we are well-positioned to capture the immense long-term
opportunities in this exciting market and build a truly defensible, next-generation platform."
Quarter 2025 Financial Results
revenues were RMB3,529 million (US$486.3 million), representing an increase of 0.02% from RMB3,528 million in
the same quarter of last year.
Gross segment profit
(2) was RMB195.1 million (US$26.9 million). Due to an unfavorable macroeconomic environment,
gross segment profit had a 6.4% decrease year-over-year.
| (In thousands RMB) | For the three months ended March 31, | |||||||||||
| 2024 | 2025 | YoY | ||||||||||
| B2B Net Revenue | ||||||||||||
| Product | 3,431,172 | 3,457,267 | 0.8 | % | ||||||||
| Service | 20,837 | 16,971 | -18.6 | % | ||||||||
| Sub-Total | 3,452,009 | 3,474,238 | 0.6 | % | ||||||||
| Cost of Products Sold (3) | 3,261,103 | 3,288,747 | 0.8 | % | ||||||||
| Segment Profit | 190,906 | 185,491 | -2.8 | % | ||||||||
| Segment Profit % | 5.5 | % | 5.3 | % |
| (In thousands RMB) | For the three months ended March 31, | |||||||||||
| 2024 | 2025 | YoY | ||||||||||
| B2C Net Revenue | ||||||||||||
| Product | 72,206 | 52,312 | -27.6 | % | ||||||||
| Service | 4,214 | 2,729 | -35.2 | % | ||||||||
| Sub-Total | 76,420 | 55,041 | -28.0 | % | ||||||||
| Cost of Products Sold | 58,793 | 45,437 | -22.7 | % | ||||||||
| Segment Profit | 17,627 | 9,604 | -45.5 | % | ||||||||
| Segment Profit % | 23.1 | % | 17.4 | % |
Gross segment profit represents net revenues less cost of goods sold.
For segment reporting purposes, purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost
of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as
shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which
are recorded in the fulfillment expenses. Cost of service revenue is recorded in the operating expense.
costs and expenses were RMB3.53 billion (US$486.3 million), representing an increase of 0.1% from RMB3.52
billion in the same quarter of last year.
from operations was RMB0.1 million (US$0.02 million), compared to RMB3.7 million in the same quarter of last year. As
a percentage of net revenues, income from operations accounted for 0.004% this quarter as compared to 0.1% in the same quarter of last
income from operations was RMB4.3 million (US$0.6 million), compared to RMB8.9 million in the same quarter of last year. As a
percentage of net revenues, Non-GAAP income from operations accounted for 0.1% this quarter as compared to 0.3% in the same quarter of
loss was RMB7.3 million (US$1.0 million), compared to RMB2.7 million in the same quarter of last year. As a percentage
of net revenues, net loss accounted for 0.2% this quarter as compared to 0.1% in the same quarter of last year.
net loss (4) was RMB3.2 million (US$0.4 million), compared to Non-GAAP net income of RMB2.5 million in the same
quarter of last year.
loss attributable to ordinary shareholders was RMB17.6 million (US$2.4 million), compared to RMB13.8 million in the
same quarter of last year. As a percentage of net revenues, net loss attributable to ordinary shareholders accounted for 0.5% this
quarter as compared to 0.4% in the same quarter of last year.
net loss attributable to ordinary shareholders (5) was RMB13.5 million (US$1.9 million), compared to RMB8.6 million in
the same quarter of last year. As a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders accounted for
0.4% this quarter as compared to 0.2% in the same quarter of last year.
Non-GAAP net loss represents net loss excluding share-based compensation expenses, net of tax. Considering the impact of accretion of
redeemable non-controlling interest for the first quarter 2025, non-GAAP net loss is used as a meaningful measurement of the operation
performance of the Company.
Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based
compensation expenses, net of tax.
of March 31, 2025, the Company held cash and cash equivalents, restricted cash and short-term investments totaling RMB556.8 million
(US$76.7 million), compared to RMB518.3 million as of December 31, 2024. To date, amount of RMB1.09 billion has been included in the balances
of redeemable non-controlling interests and accrued expenses and other current liabilities. This amount is owed to a group of investors
of 1 Pharmacy Technology pursuant to equity investments made in 2020, as previously disclosed. 111 has received redemption requests from
certain of such investors in accordance with the terms of their initial investments in 1 Pharmacy Technology. Following communication
and negotiation to date, the Company has reached agreements with or received commitment letters from
investors representing approximately 96.79% of the total amount to reschedule the repayments, allowing for
phased repayments at extended periods, if the holders exercise their redemption rights. A portion of the redemption has already been paid upon signing of these agreements. For further details on the terms of 111's arrangements
with these investors, please see "Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources"
in the Company's annual report for the fiscal year ended December 31, 2024.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers
and uses non-GAAP income from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP
loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP income from operations
as income from operations excluding share-based compensation expenses. The Company defines non-GAAP net income (loss) as net loss excluding
share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss
attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS
as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. The presentation
of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared
and presented in accordance with U.S. GAAP.
The Company believes that non-GAAP income from
operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify
underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in income from
operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management
excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation
expenses provide investors with a reasonable basis to measure the company's core operating performance, in a more meaningful comparison
with the performance of other companies. The Company believes that non-GAAP income from operations, non-GAAP net income (loss), non-GAAP
net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances
the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used
by the management in their financial and operational decision-making.
The non-GAAP financial measures are not defined
under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools.
One of the key limitations of using non-GAAP income from operations, non-GAAP net income (loss), non-GAAP net loss attributable to ordinary
shareholders, or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company's operations.
Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and
therefore their comparability may be limited.
The Company compensates for these limitations by
reconciling the non-GAAP financial measures to the most comparable U.S. GAAP measures, all of which should be considered when evaluating
the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial
Reconciliation of the non-GAAP financial measures
to the most comparable U.S. GAAP measures is included at the end of this press release.
Exchange Rate Information Statement
This announcement contains translations of certain
RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from
RMB to U.S. dollars are made at a rate of RMB7.2567 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board
of Governors of the Federal Reserve System as of March 31, 2025.
Forward-Looking Statements