Inc. Announces Fourth Quarter and Fiscal Year 2022 Financial Results SHANGHAI

111, Inc. Announces Fourth Quarter and Fiscal

Year 2022 Financial Results

23, 2023 /PRNewswire/ - 111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare

platform company committed to digitally connecting patients with medicine and healthcare services in China, today announced its unaudited

financial results for the fourth quarter and fiscal year ended December 31, 2022.

Quarter 2022 Highlights

Year 2022 Highlights

Mr. Junling Liu, Co-Founder,

Chairman, and Chief Executive Officer of 111, commented, "We are pleased to report another solid quarter and the results brought

us very close to profitability. Net revenue increased by 19.9% year-over-year to RMB 4.1 billion, marking the 18th consecutive quarter

of year-over-year growth for 111 since the company's NASDAQ IPO. Our gross segment profit for the quarter increased by 23.8% and

gross segment margin as a percentage of net revenues improved to 6.1% from 5.9% in the same quarter of last year. Non-GAAP loss from

operation narrowed to 0.96% of net revenues as compared to 2.22% in the same quarter of last year. We are also pleased to report positive

operating cash flow for the second consecutive quarter."

Mr. Liu added, "Despite

the disruption from the lockdowns across the country during the year, we managed to achieve net revenues growth at 8.8%, while significantly

improving our margin profile. Our gross segment profit for the year increased by 35.2%, which was four times of our revenue growth rate.

Gross segment margin for the year improved to 6.2% as compared to 5.0% last year. In addition, we continued to improve our operation

efficiency. Our total sales and marketing expenses, G&A expenses and technology expenses, excluding share-based compensation, decreased

by 15.5% year over year. As a result, on a full year basis, our Non-GAAP loss from operations as a percentage of net revenues decreased

to 1.6% from 4.0% last year."

from our consistent strategy to put our customers first and focus on creating value for them. We continue to strengthen our partnerships

with pharmaceutical companies. Our market coverage from both upstream and downstream is increasing and customer loyalty continues to

grow. We believe that we have achieved our initial strategic target since IPO, which is to rapidly build up suppliers and customers network

with competitive pricing in order to achieve reasonable scale to compete in this market. We are now directly working with 500+ pharmaceutical

companies and serving more than 435,000 retail pharmacies. Our revenue scale had rapidly increased 14 times in five years from RMB959

million in 2017 to RMB13.5 billion in 2022."

our efforts to achieve margin expansion, as well as to optimize our cost and improve our organizational alignment, have delivered positive

results. We reached profitability at Non-GAAP operating income level in the month of December 2022. We are confident that our strong

technology capabilities will continue to enable us to build scale, improve efficiency, and deliver profitability, maximizing values for

Quarter 2022 Financial Results

revenues were RMB4.1 billion (US$601.4 million), representing an increase of 19.9% from RMB3.5 billion in

the same quarter of last year.

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 RMB4.3 billion (US$617.2 million), representing an increase of 19.4%

from RMB3.6 billion in the same quarter of last year.

from operations was RMB108.4 million (US$15.7 million), compared to RMB104.7

million in the same quarter of last year. As a percentage of net revenues, loss from operations decreased to 2.6% in the quarter

from 3.0% in the same quarter of last year.

loss from operations was RMB39.7 million (US$5.8 million), compared to RMB76.9 million in the same quarter of

last year. As a percentage of net revenues, non-GAAP loss from operations

decreased to 0.96% in the quarter from 2.22% in the same quarter of last year.

loss was RMB104.1 million (US$15.1 million), compared to RMB101.7 million in the same quarter of last year.

As a percentage of net revenues, net loss decreased to 2.5% in the quarter from 2.9% in same quarter

net loss (4) was RMB35.4 million (US$5.1 million), compared to RMB73.9 million in the same quarter

of last year. As a percentage of net revenues, non-GAAP net loss decreased

to 0.9% in the quarter from 2.1% in same quarter of last year.

loss attributable to ordinary shareholders was RMB114.4 million (US$16.6 million), compared to RMB111.3 million in

the same quarter of last year. As a percentage of net revenues, net loss attributable to ordinary

shareholders decreased to 2.8% in the quarter from 3.2% in same quarter of last year.

net loss attributable to ordinary shareholders (5) was RMB45.7 million (US$6.6 million), compared to RMB83.5 million in

the same quarter of last year. As a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders decreased to

1.1% in the quarter from 2.4% in 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 fourth quarter and fiscal year ended December 31, 2022, non-GAAP net loss is used as a more

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.

Year 2022 Financial Results

revenues were RMB13.5 billion (US$2.0 billion), representing an increase of 8.8% from RMB12.4 billion last year.

costs and expenses were RMB13.9 billion (US$2.0 billion), representing an increase of 6.3%

from RMB13.1 billion last year.

from operations was RMB371.0 million (US$53.8 million), compared to RMB642.1

million last year. As a percentage of net revenues, loss from operations decreased to 2.7% this year from 5.2% last year.

loss from operations was RMB213.6 million (US$31.0 million), compared to RMB496.5 million last year. As

a percentage of net revenues, non-GAAP loss from operations decreased to 1.6% this year from 4.0%

loss was RMB376.1 million (US$54.5 million), compared to RMB621.0 million last year. As

a percentage of net revenues, net loss decreased to 2.8% this year from 5.0% last year.

net loss was RMB218.7 million (US$31.7 million), compared to RMB475.4 million last year. As

a percentage of net revenues, non-GAAP net loss decreased to 1.6% this year from 3.8% last year.

loss attributable to ordinary shareholders was RMB416.9 million (US$60.4 million), compared to RMB669.8 million

last year. As a percentage of net revenues, net loss attributable to ordinary shareholders decreased

to 3.1% this year from 5.4% last year.

net loss attributable to ordinary shareholders was RMB259.5 million (US$37.6 million), compared to RMB524.2 million

last year. As a percentage of net revenues, non-GAAP net loss attributable

to ordinary shareholders decreased to 1.9% this year from 4.2% last year.

of December 31, 2022, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB922.7 million (US$133.8

million), compared to RMB943.2 million as of December 31, 2021.

team will host an earnings conference call at 7:30 AM U.S. Eastern Time on Thursday, March 23, 2023 (7:30 PM Beijing Time on the same

conference call are as follows:

Inc. Fourth Quarter and Fiscal Year 2022 Unaudited Financial Results

must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each

participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique Registration ID, which can be

used to join the conference call.

minutes before the call is scheduled to begin and provide the Direct Event passcode and unique Registration ID you have received upon

registering to join the call.

of the call will be available after the conclusion of the conference call until March 30, 2023 on:

United States: +1-855-883-1031

International: +61-7-3107-6325

Conference ID: 10029260

A live and archived webcast

of the conference call will be available on the website at https://edge.media-server.com/mmc/p/f8x22fcz.