Full Press Release Details
111, Inc. Announces First Quarter 2026 Unaudited
SHANGHAI, June 4, 2026 /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, 2026.
Quarter 2026 Highlights
products are the Company's core promoted pharmaceuticals featuring mainstream positioning and high gross margin.
Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive
Officer of 111, commented, "During the first quarter of 2026, we continued to execute our strategic transition toward a more asset-light
and platform-oriented operating model. The 24.7% year-over-year increase in total marketplace (MP) service revenue demonstrates steady
progress of the strategic initiative and underscores our pursuit of high-quality, scalable and operationally efficient growth. Through
ongoing SKU expansion, deeper collaboration with major third-party online platforms, and enhanced brand partnership strategies, our revenue
of B2C business also achieved positive growth in this quarter."
"Our promotional products have rapidly penetrated
pharmacies nationwide via the 111 digital marketing platform, with the product lineup continuously expanding. Net revenue and gross profit
from these products posted explosive year-over-year growth. Meanwhile, we are committed to securing general distribution rights for more
pharmaceutical products like "Cravit" to consolidate market standing and maintain steady performance. This has proven to be
a highly profitable and scalable business model, positioning us for sustained growth, and I look forward to sharing further progress and
achievements in the coming quarters."
"By optimizing our network and selectively exiting
underperforming fulfillment centers, our fulfillment expenses declined by 34.6% year-over-year, outpacing the decrease in revenue. Meanwhile,
fulfillment expenses as a percentage of net revenue improved by 10 basis points year-over-year, highlighting our capacity for sustained
operational improvement and reflecting our commitment to prudent cost management."
"Looking ahead, we believe these initiatives are
gradually reshaping 111 from a transaction-driven pharmaceutical distributor into a more technology-enabled and intelligent healthcare
platform business. We will continue to integrate AI-enabled capabilities across multiple operational scenarios, including intelligent
demand forecasting, inventory optimization, fulfillment routing and merchant operation management. More importantly, we are deploying
AI agent-based solutions in pharmacies and healthcare service scenarios to help customers better manage day-to-day operations. Leveraging
a lean, intelligent operating model, we aim to expand margins, lift profitability and deliver long-term value to stakeholders."
Quarter 2026 Financial Results
revenue amounted to RMB2.4 billion (US$342.4 million), representing a decrease of 33.1% from RMB3.5 billion in
the same quarter of last year, mainly attributable to the strategic optimization.
Gross segment profit
(2) was RMB126.0 million (US$18.3 million), representing a year-over-year decrease of 35.4%.
| (In thousands RMB) | For the three months ended March 31, | |||||||||||
| 2025 | 2026 | YoY | ||||||||||
| B2B Net Revenue | ||||||||||||
| Product | 3,457,267 | 2,282,803 | -34.0 | % | ||||||||
| Service | 16,971 | 21,868 | 28.9 | % | ||||||||
| Sub-Total | 3,474,238 | 2,304,671 | -33.7 | % | ||||||||
| Cost of Products Sold (3) | 3,288,747 | 2,186,865 | -33.5 | % | ||||||||
| Segment Profit | 185,491 | 117,806 | -36.5 | % | ||||||||
| Segment Profit % | 5.3 | % | 5.1 | % |
| (In thousands RMB) | For the three months ended March 31, | |||||||||||
| 2025 | 2026 | YoY | ||||||||||
| B2C Net Revenue | ||||||||||||
| Product | 52,312 | 54,544 | 4.3 | % | ||||||||
| Service | 2,729 | 2,369 | -13.2 | % | ||||||||
| Sub-Total | 55,041 | 56,913 | 3.4 | % | ||||||||
| Cost of Products Sold | 45,437 | 48,761 | 7.3 | % | ||||||||
| Segment Profit | 9,604 | 8,152 | -15.1 | % | ||||||||
| Segment Profit % | 17.4 | % | 14.3 | % |
(2) Gross segment profit represents net revenue
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 RMB2.4 billion (US$345.3 million), representing a decrease of 32.5% from RMB3.5
billion in the same quarter of last year.
from operations was RMB20.0 million (US$2.9 million), compared with income from operations of RMB0.1 million in the same
quarter of last year.
loss from operations (4) was RMB18.8 million (US$2.7 million), compared with non-GAAP income from operations of RMB4.3
million in the same quarter of last year.
loss was RMB26.8 million (US$3.9 million), compared with RMB7.3 million in the same quarter of last year. As a percentage
of net revenue, net loss accounted for 1.1% this quarter as compared to 0.2% in the same quarter of last year.
net loss (5) was RMB25.7 million (US$3.7 million), compared with RMB3.2 million in the same quarter of last year.
As a percentage of net revenue, non-GAAP net loss accounted for 1.1% this quarter as compared to 0.1% in the same quarter of last year.
loss attributable to ordinary shareholders was RMB37.0 million (US$5.4 million), compared with RMB17.6 million in the
same quarter of last year. As a percentage of net revenue, net loss attributable to ordinary shareholders accounted for 1.6% this
quarter as compared to 0.5% in the same quarter of last year.
net loss attributable to ordinary shareholders (6) was RMB35.9 million (US$5.2 million), compared with RMB13.5 million
in the same quarter of last year. As a percentage of net revenue, non-GAAP net loss attributable to ordinary shareholders accounted for
1.5% this quarter as compared to 0.4% in the same quarter of last year.
(4) Non-GAAP income (loss) from operations represents
income (loss) from operations excluding share-based compensation expenses.
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 2026, 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.
As of March 31, 2026,
the Company held cash and cash equivalents, restricted cash and short-term investments totaling RMB396.6 million (US$57.5 million),
compared to RMB611.3 million as of December 31, 2025. Amount of RMB0.95 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 in the Company's annual report. To date, 111 had
repaid approximately RMB282.2 million to all investors in 1 Pharmacy Technology as a result of the holders exercising their redemption
rights. Following further discussions, investors representing 60.3% of the total outstanding principal amount have agreed to further restructure
the redemption obligation at extended periods, if the holders exercise their redemption rights. 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, 2025.
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.