EX-99.1 2 tm2515061d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

ZKH Group Limited Announces First Quarter 2025 Unaudited Financial Results

 

SHANGHAI, May 20, 2025 – ZKH Group Limited (“ZKH” or the “Company”) (NYSE: ZKH), a leading maintenance, repair and operations (“MRO”) procurement service platform in China, today announced its unaudited financial results for the first quarter ended March 31, 2025.

 

First Quarter 2025 Operational and Financial Highlights

 

   First Quarter 
    2024    2025    Change
   (in thousand RMB, except for number of customers, percentage and basis points (“bps”)) 
GMV1   2,348,640    2,171,997    -7.5%
GMV by Platform               
ZKH Platform   2,137,614    1,966,210    -8.0%
GBB Platform   211,026    205,787    -2.5%
GMV by Business Model               
Product Sales (1P)   1,775,732    1,901,196    7.1%
Marketplace (3P)2   572,908    270,800    -52.7%
Number of Customers3   46,135    60,102    30.3%
ZKH Platform   31,706    35,135    10.8%
GBB Platform   14,429    24,967    73.0%
Net Revenues   1,860,409    1,935,372    4.0%
Gross Profit   334,076    332,118    -0.6%
% of Net Revenues   18.0%   17.2%   -79.7bps
Operating Loss   (129,613)   (80,813)   -37.7%
% of Net Revenues   -7.0%   -4.2%   279.1bps
Non-GAAP EBITDA4   (70,048)   (51,959)   -25.8%
% of Net Revenues   -3.8%   -2.7%   108.0bps
Net Loss   (90,901)   (66,723)   -26.6%
% of Net Revenues   -4.9%   -3.4%   143.9bps
Non-GAAP Adjusted Net Loss5   (43,459)   (50,176)   15.5%
% of Net Revenues   -2.3%   -2.6%   -25.7bps

 

Mr. Eric Long Chen, Chairman and Chief Executive Officer of ZKH, stated, “Our robust first-quarter performance in 2025 underscores our leadership position in the MRO industry and clearly demonstrates our path towards profitability. We have achieved significant momentum in our international expansion, particularly in the U.S., where both revenue and customer base have nearly doubled each month since January 2025. Looking ahead, our international growth efforts will prioritize enriching our product offerings and enhancing our supply chain capabilities overseas. Simultaneously, integrating digitalization and big data analytics empowers us to better anticipate and address evolving customer needs, fostering top-line growth, operational efficiency, and workforce productivity. We remain committed to investing in our products, supply chain, AI capabilities, and global footprint to drive sustainable growth and reinforce our industry leadership.”

 

 

1 GMV is the total transaction value of orders placed on the Company’s platform and shipped to customers, excluding taxes, net of the returned amount.

2 The proportion of GMV generated by the marketplace model was 24.4% and 12.5% for the first quarter of 2024 and 2025, respectively.

3 Customers are customers that transacted with the Company during the reporting period, mainly comprised of enterprise customers in various industries.

4 Non-GAAP EBITDA is defined as net loss before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses.

5 Non-GAAP adjusted net loss is defined as net loss excluding share-based compensation expenses.

 

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Mr. Max Chun Chiu Lai, Chief Financial Officer of ZKH, added, “We are pleased with our solid financial results this quarter, as our focus on high-quality revenue streams and operational efficiencies continued to yield positive results. Our business quality has strengthened, as reflected in the year-over-year growth of both our product sales model’s gross margin and our marketplace model’s take rate. Notably, our net operating loss margin and net loss margin narrowed by 279.1 and 143.6 basis points, respectively. With a strong cash position, continuously disciplined execution and improving profitability trajectory, we are confidently positioned for long-term value creation and enhanced returns for our shareholders.”

 

First Quarter 2025 Financial Results

 

Net Revenues. Net revenues were RMB1,935.4 million (US$266.7 million), representing an increase of 4.0% from RMB1,860.4 million in the same period of 2024. This growth was mainly attributable to an increase in revenues from the product sales model, partially offset by a decrease in revenues from the marketplace model due to the prior year’s high base, which included low-margin businesses with long customer credit terms that have since been optimized.

 

   First Quarter 
   2024   2025   Change 
    (in thousand RMB, except for percentage) 
Net Revenues   1,860,409    1,935,372    4.0%
Net Product Revenues   1,775,019    1,884,860    6.2%
From ZKH Platform   1,563,502    1,679,343    7.4%
From GBB Platform   211,517    205,517    -2.8%
Net Service Revenues   66,654    37,894    -43.1%
Other Revenues   18,736    12,618    -32.7%

 

·Net Product Revenues. Net product revenues were RMB1,884.9 million (US$259.7 million), representing an increase of 6.2% from RMB1,775.0 million in the same period of 2024, primarily due to an increase in revenues from the product sales model.

 

·Net Service Revenues. Net service revenues were RMB37.9 million (US$5.2 million), a decrease of 43.1% from RMB66.7 million in the same period of 2024, primarily due to the prior year’s high base, which included revenues from low-margin businesses with long customer credit terms under the marketplace model that have since been optimized.

 

·Other Revenues. Other revenues were RMB12.6 million (US$1.7 million), a decrease of 32.7% from RMB18.7 million in the same period of 2024, mainly due to lower revenues from warehousing and logistic services, as well as operating lease services for certain types of machinery and equipment.

 

Cost of Revenues. Cost of revenues was RMB1,603.3 million (US$220.9 million), representing an increase of 5.0% from RMB1,526.3 million in the same period of 2024. The increase was outpaced by the growth in product revenues, mainly due to the effectiveness of the Company’s initiatives to reduce overall product procurement costs.

 

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Gross Profit and Gross Margin. Gross profit was RMB332.1 million (US$45.8 million), representing a decrease of 0.6% from RMB334.1 million in the same period of 2024. Gross margin was 17.2%, compared with 18.0% in the same period of 2024. The decrease was mainly due to lower revenue contribution from the marketplace model, which yields a 100% gross margin, while both the gross margin of the product sales model and the take rate of the marketplace model increased, driven by business optimization and higher proportion of GMV from higher-margin private label products.

 

   First Quarter 
   2024   2025   Change 
    (in thousand RMB, except for percentage and basis points (“bps”)) 
Gross Profit   334,076    332,118    -0.6%
% of Net Revenues   18.0%   17.2%   -79.7bps
Under Product Sales (1P)               
ZKH Platform   250,326    278,618    11.3%
% of Net Product Revenues from ZKH Platform   16.0%   16.6%   58.0bps
GBB Platform   11,630    12,687    9.1%
% of Net Product Revenues from GBB Platform   5.5%   6.2%   67.5bps
Under Marketplace (3P)   66,654    37,894    -43.1%
% of Net Service Revenues   100.0%   100.0%   - 
% of GMV from the Marketplace Model (Take Rate)   11.6%   14.0%   235.9bps
Others   5,466    2,918    -46.6%
% of Other Revenues   29.2%   23.1%   -604.8bps

 

Operating Expenses. Operating expenses were RMB412.9 million (US$56.9 million), a decrease of 10.9% from RMB463.7 million in the same period of 2024, with decreases across all categories of operating expenses. Operating expenses as a percentage of net revenues were 21.3%, compared with 24.9% in the same period of 2024. Excluding share-based compensation expenses, operating expenses as a percentage of net revenues were 20.5%, compared with 22.4% in the same period of 2024.

 

·Fulfillment Expenses. Fulfillment expenses were RMB93.3 million (US$12.9 million), a decrease of 4.2% from RMB97.3 million in the same period of 2024. The decrease was primarily attributable to lower employee benefit expenses and warehouse rental costs. Fulfillment expenses as a percentage of net revenues were 4.8%, compared with 5.2% in the same period of 2024.

 

·Sales and Marketing Expenses. Sales and marketing expenses were RMB136.8 million (US$18.9 million), a decrease of 16.6% from RMB164.1 million in the same period of 2024. The decrease was primarily attributable to lower employee benefit expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 7.1%, compared with 8.8% in the same period of 2024.

 

·Research and Development Expenses. Research and development expenses were RMB39.6 million (US$5.5 million), a decrease of 0.6% from RMB39.8 million in the same period of 2024. The decrease was primarily attributable to lower employee benefit expenses, partially offset by higher expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 2.0%, compared with 2.1% in the same period of 2024.

 

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·General and Administrative Expenses. General and administrative expenses were RMB143.2 million (US$19.7 million), a decrease of 11.8% from RMB162.4 million in the same period of 2024. The decrease was primarily attributable to lower share-based compensation expenses, partially offset by higher employee benefit expenses. General and administrative expenses as a percentage of net revenues were 7.4%, compared with 8.7% in the same period of 2024.

 

Loss from Operations. Loss from operations was RMB80.8 million (US$11.1 million), compared with RMB129.6 million in the same period of 2024. Operating loss margin was 4.2%, compared with 7.0% in the same period of 2024.

 

Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB52.0 million (US$7.2 million), compared with negative RMB70.0 million in the same period of 2024. Non-GAAP EBITDA margin was negative 2.7%, compared with negative 3.8% in the same period of 2024.

 

Net Loss. Net loss was RMB66.7 million (US$9.2 million), compared with RMB90.9 million in the same period of 2024. Net loss margin was 3.4%, compared with 4.9% in the same period of 2024.

 

Non-GAAP Adjusted Net Loss. Non-GAAP adjusted net loss was RMB50.2 million (US$6.9 million), compared with RMB43.5 million in the same period of 2024. Non-GAAP adjusted net loss margin was 2.6%, compared with 2.3% in the same period of 2024.

 

Basic and Diluted Net Loss per ADS6 and Non-GAAP Adjusted Basic and Diluted Net Loss per ADS7. Basic and diluted net loss per ADS were RMB0.41 (US$0.06), compared with RMB0.56 in the same period of 2024. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.31 (US$0.04), compared with RMB0.27 in the same period of 2024.

 

Balance Sheet and Cash Flow

 

As of March 31, 2025, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1.80 billion (US$248.1 million), compared with RMB2.06 billion as of December 31, 2024.

 

Net cash used in operating activities was RMB97.1 million (US$13.4 million) in the first quarter of 2025, compared with RMB224.3 million in the same period of 2024.

 

Exchange Rate

 

This announcement contains translations of certain Renminbi (“RMB”) amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ were made at a rate of RMB7.2567 to US$1.00, the exchange rate in effect as of March 31, 2025, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all.

 

 

6 ADSs are American depositary shares, each of which represents thirty-five (35) Class A ordinary shares of the Company.

7 Non-GAAP adjusted basic and diluted net loss per ADS is a non-GAAP financial measure, which is calculated by dividing non-GAAP adjusted net loss attributable to the Company’s ordinary shareholders by the weighted average number of ADSs.

 

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Conference Call Information

 

The Company’s management will hold a conference call on Tuesday, May 20, 2025, at 8:00 A.M. U.S. Eastern Time or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the first quarter of 2025.

 

United States (toll free): +1-888-317-6003
International: +1-412-317-6061
Mainland China (toll free): 400-120-6115
Hong Kong (toll free): 800-963-976
Hong Kong: +852-5808-1995
Access Code: 0116526

 

The replay will be accessible through May 27, 2025 by dialing the following numbers:

 

United States: +1-877-344-7529
International: +1-412-317-0088
Replay Access Code: 1341836

 

A live and archived webcast of the conference call will also be available on the Company’s investor relations website at https://ir.zkh.com.

 

About ZKH Group Limited

 

ZKH Group Limited (NYSE: ZKH) is a leading MRO procurement service platform in China, underpinned by robust supply chain capabilities and dedicated to serving customers globally through a product-led, agentic AI-driven approach. Through its primary online platforms, the ZKH platform and the GBB platform, along with innovative technology and extensive industry expertise, the Company provides bespoke MRO procurement solutions to a diverse and loyal customer base. These solutions encompass hyper-personalized product curation from a comprehensive selection of quality products at competitive prices. Additionally, the Company ensures timely and reliable product delivery through professional fulfillment services. By focusing on reducing procurement costs and addressing management efficiency challenges, ZKH is transforming the opaque MRO procurement process and empowering all stakeholders across the value chain.

 

For more information, please visit: https://ir.zkh.com.

 

Use of Non-GAAP Financial Measures

 

This press release contains the following non-GAAP financial measures: non-GAAP adjusted net loss, non-GAAP adjusted net loss per ADS, basic and diluted, and non-GAAP EBITDA. The non-GAAP financial measures should not be considered in isolation from or construed as alternatives to their most directly comparable financial measures prepared in accordance with accounting principles generally accepted in the United States of America. Investors are encouraged to review the historical non-GAAP financial measures in reconciliation to their most directly comparable GAAP financial measures.

 

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The Company defines non-GAAP adjusted net loss for a specific period as net loss in the same period excluding share-based compensation expenses. The Company defines non-GAAP EBITDA as net loss before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses. Non-GAAP adjusted net loss per ADS is calculated by dividing adjusted net loss attributable to the Company’s ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods and then multiplied by 35.

 

The Company presents these non-GAAP financial measures because they are used by the management to evaluate the Company’s operating performance and formulate business plans. The Company believes that these non-GAAP financial measures help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net loss and certain expenses that are not expected to result in future cash payments or that are non-recurring in nature. The Company also believes that the use of these non-GAAP financial measures facilitates investors’ assessment of its operating performance, enhances the overall understanding of its past performance and future prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision making.

 

The non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies. The Company’s non-GAAP financial measures do not include all income and expense items that affect the Company’s operations. They may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider the non-GAAP financial measures as substitutes for, or superior to, their most directly comparable financial measures prepared in accordance with GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

 

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Results” set forth at the end of this press release.

 

Safe Harbor Statement

 

This press release contains forward-looking statements. These statements are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expects,” “anticipates,” “aim,” “estimates,” “intends,” “plans,” “believes,” “is/are likely to,” “potential,” “continue,” and similar statements. Among other things, the quotations from management in this press release and ZKH’s strategic and operational plans contain forward-looking statements. ZKH may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press release and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about ZKH’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: ZKH’s mission, goals and strategies; ZKH’s future business development, financial condition and results of operations; the expected changes in its revenues, expenses or expenditures; the expected growth of the MRO procurement service industry in China and globally; changes in customer or product mix; ZKH’s expectations regarding the prospects of its business model and the demand for and market acceptance of its products and services; ZKH’s expectations regarding its relationships with customers, suppliers, and service providers on its platform; competition in the Company’s industry; government policies and regulations relating to ZKH’s industry; general economic and business conditions in China and globally; the outcome of any current and future legal or administrative proceedings; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ZKH’s filings with the SEC. All information provided herein is as of the date of this announcement, and ZKH undertakes no obligation to update any forward-looking statement, except as required under applicable law.

 

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For investor and media inquiries, please contact:

 

In China:

 

ZKH Group Limited

IR Department

E-mail: IR@zkh.com

 

Piacente Financial Communications

Hui Fan

Tel: +86-10-6508-0677

E-mail: zkh@thepiacentegroup.com

 

In the United States:

 

Piacente Financial Communications

Brandi Piacente

Tel: +1-212-481-2050

E-mail: zkh@thepiacentegroup.com

 

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ZKH GROUP LIMITED

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share, ADS, per share and per ADS data)

 

   As of
December 31,		   As of
March 31,		 
   2024   2025 
   RMB   RMB   US$ 
Assets            
Current assets:               
Cash and cash equivalents   1,423,943    1,136,052    156,552 
Restricted cash   92,939    116,183    16,010 
Short-term investments   543,978    547,959    75,511 
Accounts receivable (net of allowance for credit losses of RMB 145,789 and RMB 144,038 as of December 31, 2024 and March 31, 2025, respectively)   3,090,323    2,808,599    387,035 
Notes receivable   234,213    217,535    29,977 
Inventories   625,390    723,769    99,738 
Prepayments and other current assets   179,387    177,261    24,427 
Total current assets   6,190,173    5,727,358    789,250 
                
Non-current assets:               
Property and equipment, net   183,572    181,526    25,015 
Land use right   10,808    10,751    1,482 
Operating lease right-of-use assets, net   179,945    157,280    21,674 
Intangible assets, net   15,931    14,169    1,953 
Goodwill   30,807    30,807    4,245 
Total non-current assets   421,063    394,533    54,369 
Total assets   6,611,236    6,121,891    843,619 
                
Liabilities               
Current liabilities:               
Short-term borrowings   311,000    160,790    22,157 
Current portion of long-term borrowings   997    1,153    159 
Accounts and notes payable   2,553,396    2,311,127    318,482 
Operating lease liabilities   81,379    68,828    9,485 
Advance from customers   27,433    26,570    3,661 
Accrued expenses and other current liabilities   365,333    350,718    48,330 
Derivatives   -    476    66 
Total current liabilities   3,339,538    2,919,662    402,340 
                
Non-current liabilities:               
Long-term borrowings   38,887    43,803    6,036 
Non-current operating lease liabilities   109,096    97,382    13,420 
Other non-current liabilities   25,224    23,966    3,302 
Total non-current liabilities   173,207    165,151    22,758 
Total liabilities   3,512,745    3,084,813    425,098 

 

 

 

 

   As of
December 31,		   As of
March 31,		 
   2024   2025 
   RMB   RMB   US$ 
ZKH Group Limited shareholders’ equity:               
Ordinary shares (USD0.0000001 par value; 500,000,000,000 and 500,000,000,000 shares authorized; 5,658,952,794 and 5,666,675,019 shares issued and outstanding as of December 31, 2024 and March 31, 2025, respectively)   4    4    1 
Additional paid-in capital   8,305,304    8,325,626    1,147,302 
Statutory reserves   6,303    6,303    869 
Accumulated other comprehensive income   4,764    1,756    242 
Accumulated deficit   (5,177,126)   (5,243,849)   (722,622)
Treasury stock   (40,758)   (52,762)   (7,271)
Total ZKH Group Limited shareholders’ equity   3,098,491    3,037,078    418,521 
Total liabilities and shareholders’ deficit   6,611,236    6,121,891    843,619 

 

 

 

 

ZKH GROUP LIMITED

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(All amounts in thousands, except share, ADS, per share and per ADS data)

 

   For the three months ended March 31, 
   2024   2025 
   RMB   RMB   US$ 
Net revenues               
Net product revenues   1,775,019    1,884,860    259,741 
Net service revenues   66,654    37,894    5,222 
Other revenues   18,736    12,618    1,739 
Total net revenues   1,860,409    1,935,372    266,702 
Cost of revenues   (1,526,333)   (1,603,254)   (220,934)
Operating expenses               
Fulfillment   (97,348)   (93,307)   (12,858)
Sales and marketing   (164,113)   (136,835)   (18,856)
Research and development   (39,836)   (39,613)   (5,459)
General and administrative   (162,393)   (143,176)   (19,730)
Loss from operations   (129,614)   (80,813)   (11,135)
Interest and investment income   18,054    13,279    1,830 
Interest expense   (5,695)   (2,350)   (324)
Others, net   26,442    3,408    470 
Loss before income tax   (90,813)   (66,476)   (9,159)
Income tax expenses   (88)   (247)   (34)
Net loss attributable to ZKH Group Limited's ordinary shareholders   (90,901)   (66,723)   (9,193)

 

 

 

 

   For the three months ended March 31, 
   2024    2025 
   RMB    RMB   US$ 
Net loss   (90,901)    (66,723)   (9,193)
Other comprehensive loss:                
Foreign currency translation adjustments   (3,350)    (3,008)   (415)
Total comprehensive loss attributable to ZKH Group Limited's ordinary shareholders   (94,251)    (69,731)   (9,608)
                 
Net loss per ordinary share attributable to ordinary shareholders                
Basic and diluted   (0.02)    (0.01)   (0.00)
Weighted average number of shares                
Basic and diluted   5,730,448,966     5,695,083,577    5,695,083,577 
                 
Net loss per ADS attributable to ordinary shareholders                
Basic and diluted   (0.56)    (0.41)   (0.06)
Weighted average number of ADS (35 Class A ordinary shares equal to 1 ADS)                
Basic and diluted   163,727,113     162,716,674    162,716,674 

 

 

 

 

ZKH GROUP LIMITED

 

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except share, ADS, per share and per ADS data)

 

   For the three months ended March 31, 
   2024   2025 
   RMB   RMB   US$ 
Net loss   (90,901)   (66,723)   (9,193)
Income tax expenses   88    247    34 
Interest expenses   5,695    2,350    324 
Depreciation and amortization expenses   15,070    12,167    1,677 
Non-GAAP EBITDA   (70,048)   (51,959)   (7,158)

 

   For the three months ended March 31, 
   2024   2025 
   RMB   RMB   US$ 
Net loss   (90,901)   (66,723)   (9,193)
Add:               
Share-based compensation expenses   47,442    16,547    2,280 
Non-GAAP adjusted net loss   (43,459)   (50,176)   (6,914)
                
Non-GAAP adjusted net loss attributable to ordinary shareholders per share               
Basic and diluted   (0.01)   (0.01)   (0.00)
Weighted average number of ordinary shares               
Basic and diluted   5,730,448,966    5,695,083,577    5,695,083,577 
                
Non-GAAP adjusted net loss attributable to ordinary shareholders per ADS               
Basic and diluted   (0.27)   (0.31)   (0.04)
Weighted average number of ADS (35 Class A ordinary shares equal to 1 ADS)               
Basic and diluted   163,727,113    162,716,674    162,716,674