Inc. Announces Fourth Quarter and Fiscal Year 2025 Financial Results Continuing Transition to an Asset-Light Business Model to Improve Overall Efficiency Delivered Non-GAAP Operating Profitability in Both Q4'25 and FY'25

111, Inc. Announces Fourth Quarter and Fiscal

Year 2025 Financial Results

SHANGHAI, April 9, 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 fourth quarter and fiscal year ended December 31, 2025.

2025 Executing Strategic Optimization: Embraces

Asset-Light Partnership Network Growth

In 2025, the Company proactively implemented strategic

structural optimization by divesting its 100% equity interests in several subsidiaries. While this structural optimization created a temporary

headwind for top-line revenue, these facilities have now joined our ecosystem as fulfillment partners and are dedicated to serving our

customers exclusively. Through the divestiture of these entities and our transition to a warehouse partnership model-where

we generate recurring commission income rather than bearing the operational and capital burdens-we

have successfully driven continued margin expansion. By optimizing our network and selectively exiting underperforming fulfillment centers,

we have strengthened our ability to further improve our profitability and liquidity profile in the future.

Quarter 2025 Highlights

Fiscal Year 2025 Highlights

(1) Gross segment profit represents net revenues

less cost of goods sold.

(2) Non-GAAP income (loss) from operations represents

income (loss) from operations excluding share-based compensation expenses.

Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of

111, commented, "2025 marked a pivotal year for 111, as we steadily advanced our transition to a warehouse partnership model and

achieved a key profitability milestone. We delivered non-GAAP operating profitability and positive operating cash flow for both the quarter

and the full year. These results underscore the strength of our platform and validate the strategic direction we have set for the Company."

"In 2025, we proactively implemented strategic structural optimization

by divesting 100% equity interests in several subsidiaries. Through the divestiture of these entities and our transition to a warehouse

partnership model-where we generate recurring commission income rather than bearing operational and capital burdens-we achieved

sustained gross margin expansion for the B2B business. We believe this initiative reinforces our focus on pursuing asset-light, profitable

growth, strengthening our ability to scale the warehouse partnership network efficiently while maintaining a healthier financial structure."

"Our strategic initiatives are yielding significant results. Promotional

products are rapidly reaching pharmacies nationwide through the 111 digital marketing platform. Revenue from all marketing-promoted products

increased by 76.2% and gross profit rose 81.7% compared to the same quarter last year. As a notable promotional product, "Cravit"

has become our flagship star product, whose monthly sales volume rose sharply from 20,000 boxes at launch in March to a monthly peak of

290,000 boxes in November 2025. GMV generated by the product in 2025 also increased by 368.2% on a year-over-year basis. This success

underscores our unique marketing capabilities and has delivered strong momentum to both our upstream and downstream partners."

"Looking ahead, with our solid foundation and strategic optimization,

we are well positioned for sustainable, high-quality growth. We have deeply integrated AI applications across our operations to drive

meaningfully enhanced efficiency, and will continue to focus on leading the Company's evolution from a digital to an intelligent ecosystem-creating

durable long-term opportunities for our partners, customers, and shareholders. Through a more streamlined and intelligent operating model,

we aim to drive consistent margin expansion, improve profitability, and deliver enduring value to all stakeholders."

Quarter 2025 Financial Results

revenues were RMB2.8 billion (US$403.3 million), representing a decrease of 26.7% from RMB3.8 billion in

the same quarter of 2024.

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.

costs and expenses were RMB2.8 billion (US$403.3 million), representing a decrease of 26.8% from RMB3.9

billion in the same quarter of 2024.

from operations was RMB0.3 million (US$0.05 million), representing a significant 95.6% narrowing compared to a loss of RMB7.3

million in the same quarter of 2024. As a percentage of net revenues, loss from operations accounted for 0.01% in the quarter, down

from 0.2% in the same quarter of 2024.

income from operations was RMB0.2 million (US$0.03 million), compared to a non-GAAP loss from operations of RMB2.3 million

in the same quarter of 2024, marking a year-over-year turnaround from loss to profit.

loss was RMB6.5 million (US$0.9 million), representing an improvement of 48.3% from RMB12.5 million in the same

quarter of 2024. As a percentage of net revenues, net loss accounted for 0.2% in the quarter, down from 0.3% in the same quarter of 2024.

net loss (4) was RMB5.9 million (US$0.9 million), representing an improvement of 20.9% from RMB7.5 million in

the same quarter of 2024. As a percentage of net revenues, non-GAAP net loss accounted for 0.2% in the quarter, consistent with the same

loss attributable to ordinary shareholders was RMB16.2 million (US$2.3 million), representing an improvement of 18.2%

from RMB19.8 million in the same quarter of 2024. As a percentage of net revenues, net loss attributable to ordinary shareholders

accounted for 0.6% in the quarter as compared to 0.5% in the same quarter of 2024.

net loss attributable to ordinary shareholders (5) was RMB15.7 million (US$2.2 million), compared to RMB14.8 million in

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

0.6% in the quarter as compared to 0.4% in the same quarter of 2024.

(4) 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, 2025, non-GAAP net loss is used as a meaningful measurement of the operation performance of

Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based

compensation expenses, net of tax.

Year 2025 Financial Results

revenues were RMB12.6 billion (US$1.8 billion), representing a decrease of 12.8% from RMB14.4 billion in the previous

costs and expenses were RMB12.6 billion (US$1.8 billion), representing a decrease of 12.8% from RMB14.4

Loss from operations was RMB2.4

million (US$0.3 million), compared to income from operations of RMB2.1 million in 2024.

income from operations was RMB7.7 million (US$1.1 million), compared to RMB22.3 million in 2024. As a percentage of

net revenues, non-GAAP income from operations accounted for 0.1% in 2025 as compared to 0.2% in 2024.

loss was RMB22.5 million (US$3.2 million), compared to RMB20.8 million in 2024. As a percentage of net revenues,

net loss accounted for 0.2% in 2025 as compared to 0.1% in 2024.

net loss was RMB12.5 million (US$1.8 million), compared to RMB0.6 million in 2024. As a percentage of net revenues,

non-GAAP net loss accounted for 0.1% in 2025 as compared to 0.004%

loss attributable to ordinary shareholders was RMB66.4 million (US$9.5 million), compared to RMB64.7 million in 2024.

As a percentage of net revenues, net loss attributable to ordinary shareholders accounted for 0.5% in

2025 as compared to 0.4% in 2024.

net loss attributable to ordinary shareholders was RMB56.3 million (US$8.1 million), compared to RMB44.6 million in 2024. As

a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders accounted for

0.4% in 2025, up from 0.3% in 2024.

2025, the Company held cash and cash equivalents, restricted cash and short-term investments totaling RMB611.3 million (US$87.4 million),

compared to RMB518.3 million as of December 31, 2024. To date, amount of RMB1.12 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, the Company has further reached agreements with, or received commitment letters from, all investors to reschedule the

repayments, allowing for phased repayments at extended periods, if the investors exercise their redemption rights. In February 2026, the

Company made repayments of approximately RMB189.0 million (US$27.0 million) to all investors of 1 Pharmacy Technology. For further details

about such investors' investments in 1 Pharmacy Technology, please see "Item 4. Information on the Company-A. History and