RERE ATRenew Inc.

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ATRenew Inc. Q2 F2026 Earnings Call Transcript

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Operator
Conference Call Operator
Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to AT Renew Inc.'s second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. We will be hosting a question and answer session after management's prepared remarks. Please note today's event is being recorded. I will now turn the call over to the first speaker today, Ms. Jenny Jin, Head of Investor Relations. Please go ahead, ma'am. Thank you.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Hello, everyone, and welcome to ATRenew's second quarter 2026 earnings conference call. Speaking first today is Kerry Chen, our founder, chairman, and CEO, and he will be followed by Rex Chen, our CFO. After that, we will open the call to questions from the analysts. The second quarter 2026 financial results were released earlier today. The earnings press release and investor slides accompanying this call are now available at our IR website, ir.atrenew.com. There will also be a transcript following this call for your convenience. For today's agenda, Kerry will share his thoughts of our quarterly performance and business strategy, followed by Rex, who will address the financial highlights. Both Kerry and Rex will participate during the Q&A session. Please note our safe harbor statements. Some of the information you will hear during our discussion today will consist of forward-looking statements, and I refer you to our safe harbor statements in the earnings pressure release. Any forward-looking statements that management makes on this call are based on assumptions as of today, and that IT Renew does not take any obligations to operate our assumptions on the statements. Also, this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings press release, which contains a reconciliation of non-GAAP measures to GAAP measures. Finally, please note that unless otherwise stated, All figures mentioned during this conference call are in RMB, and all comparisons are on a year-over-year basis. I'd now like to turn the call over to Kerry for business and strategy updates.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
OK. Hello, investors and analysts. Welcome to the second quarter of the 2026 Group of Tencent Group. We are very happy to share with you the results of this quarter, and share our thoughts on the industry trend and company strategy.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Hello everyone, and thank you for joining AT Renew's second quarter 2026 earnings conference call. We are pleased to review our operating results for the quarter and share our views on industry trends and our strategy.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
In the second quarter, AT Renew's total revenue exceeded Ziyin's previous high. The growth rate of 32.4% to 66.1 billion yuan is the same as before. Among them, we have prioritized the strategy of one batch of industrial chain to the end, and continued to realize the rapid growth of product revenue. In the second quarter, the growth rate increased by 35.9% to 61.9 billion yuan. The operating profit of Nungap increased by 70.1% to 2.1 billion yuan. The operating profit rate of Nungap increased by 69 points to 3.1%.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
In the second quarter, total net revenues exceeded the high end of our guidance, increasing 32.4% year-over-year to 6.61 billion RMB. Our continued focus on 1P has strengthened our end-to-end capabilities and driven rapid growth in product revenue, up 35.9% year-over-year to 6.19 billion RMB. Non-GAAP operating profit grew 70.1% year-over-year to 210 million RMB. Well, non-GAAP operating profit margin expanded by 69 basis points year-over-year to 3.1%.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
First of all, I would like to share with you the changes and trends of the four external environments that we have seen recently. The first change is that the sales of new machines have decreased equally.
Rex Chen
Chief Financial Officer, AT Renew Inc.
Many people's first reaction is that the sales of new machines have decreased, and the recovery will not be good.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
But there is a counter-consistent phenomenon here. First of all, I'd like to share four key external shapes and trends.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The first dynamic is the year-over-year decline in new device sales. The intuitive thinking is that this could drag our recycling business. But counter-intuitively, when new devices are selling well, recycling and trading programs are just supplementary value-added services and are not a top priority. Conversely, when new device sales soften, trading programs become the most critical and effective promotional tool. Major manufacturers and platforms place greater emphasis on and allocate more resources to trade-in initiatives. We have seen this clearly in our business trends over the past few years.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
第二个变化是消费大环境承压。 用户对于低价格高品质的二手手机以及其他二手产品的需求在显著增长。 这个情况从我们的严选B2C业务的持续高速增长可以看到。
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Second is microeconomic headwinds in consumption and significant growth in demand for high-quality affordable pre-owned smartphones and other second-hand products. This is clearly reflected in the sustained robust growth of our curated B2C business.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
第三个变化是行业合规越来越严格,包括税务合规,三星合规。
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The third shift is increasingly strengthening regulation, including taxation and device refurbishment. AHS has always been committed to compliant operations, while tighter regulations disproportionately impact fragmented small-scale and non-compliant operators. They benefit from our business. They benefit of our 1P business.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
The fourth change is that the export of domestic goods is obvious. With the improvement of domestic exchange rate and recovery penetration rate, domestic goods are more and more. China has become an export country from the import country of second-hand mobile phones in the past. The trend of export is becoming more and more obvious. It has formed a high-end machine sales.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The fourth shift is the accelerating trend of exporting domestic pre-owned devices. As the penetration rate of trading and recycling programs continues to rise in China, domestic supply is expanding rapidly. China has shifted from a net importer to a net exporter of pre-owned smartphones. Establishing a clear industry trend where high-end modules are sold domestically while mid- to high-end and low-end modules are exported. With that, let us now move to our business update.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
近年来,基于二手手机三星行业对于信任与效率要求高的特质, 我们坚定优先发展EP。 In recent years, we have firmly prioritized 1P business because trust and efficiency are critical in the second-hand consumer electronics industry.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Our 1P model starts with first-hand supply from C2B channels. We add depth to the value chain through compliant refurbishment, strengthen B2C retail for premium curated products, and leverage B2C retail pricing capabilities to offer better pricing and user experience on the recycling side. Together, those efforts enhance our end-to-end capabilities across the value chain.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
At the recovery stage, we focus on brand, e-commerce platform, and offline channels and JiaDai to increase the opportunity for resale and resale. Through a more intensive resale and resale network, we strive to make the user experience better. Combined with the resale and resale needs of the users during the 6.18 pandemic, as of the end of June, the total number of resale and resale in the state of Tansi, including in the country, is nearly 3,000, which is a significant increase by the end of March. In addition, the addition of 2,117 resale stores allows us to achieve and others. In the mainstream of May 13th to June 18th, the recovery rate of mobile phone 3G products has increased by 57%, and the number of orders received by door-to-door delivery has achieved a 45% increase. The number of orders received by all channels has reached more than 80%, and the number of user experience indicators has continued to improve.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
On recycling, we capitalized on opportunities as brand e-commerce platforms and offline retailers prioritize and invest in trading programs. Leveraging AHS recycles increasingly extensive fulfillment network to enhance the user experience. Trading and recycling demand was strong during the June 18th Shopping Festival. In response, we expanded our nationwide two-door fulfillment team including flexible capacity to nearly 3,000 by the end of June. up sharply from the end of March. Together with our 2,117 AHS stores, this gave us strong advantages in sourcing and customer service over industry peers. During the major promotional period from May 13th through June 18th, the recycling value of mobile phones and consumer electronics at AHS Recycling increased 57% year-over-year. Both two-door and in-store recycling orders grew 45% year-over-year. While face-to-face orders accounted for 80% of recycling orders across all channels, multiple user experience matrix also continued to improve.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
供应链和用户增值方面,合规翻新业绩加速发展。 EP 的翻新收入同比增长,同比提升87.8%, 结合新机价格上涨,二手行业稳定,操盘, Our compliant refurbishment business also continues to accelerate.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Revenue from 1P refurbished products increased 87.8% year-over-year. With higher new device prices, stable pre-owned market sentiments, and more refined pricing strategies and operations, 1P2C retail revenue grew 92.4% year-over-year in the second quarter. As a percentage of product revenue, 1P2C retail revenue increased 3.6 percentage points sequentially to 48.8%. allowing us to meet user demand better for curative on phones, computers, smart devices, and other products.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
In terms of platform business, the service income of the second quarter has dropped by 4.2%. In particular, we continue to maintain the leading advantage of the industry in the B2B field. In terms of B2C, the three-party business is indeed facing some challenges of platform business. Renew Inc., Jeremy Ji, Chen Chen, Yongliang Wang, Xuefeng Chen
Jenny Jin
Head of Investor Relations, AT Renew Inc.
In multi-category consulting, we navigated the headwinds from gold price fluctuations and continue to focus on more refined operations.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
具体来看,拍机堂的平台继续推进分散下沉, 向区域市场的小币,夫妻,老婆店,代陶达人等用户拓展。 截至6月末,拍机堂的注册商家总数超过227万人, In the process of expanding the platform for sellers, we adopted the pre-sale free of charge and pre-order standard matching methods to reduce the sales cost of new and small coins and the market door. In terms of buyer expansion, we launched a platform for Douyin to shoot the topic of Taoji. The number of video broadcasts has increased rapidly, and the Taoji business can be developed quickly. Combined with one-piece equipment, we can reduce the entry threshold of small coins buyers in many ways. After the first deal, we see that the number of users is gradually increasing, and the number of VIP members, volume factories, and so on, has matured. The transaction annuality has been steadily improved. In the above user expansion and support process, the entry and discount ratio of 3P in this quarter has reached 84.4%, with an increase of about 11.5% in the same ratio. Business size, rapid growth, platform service income, solid growth.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Specifically, TJT marketplace continues to expand into fragmented markets, reaching more small-sized merchants, mom-and-pop shops, and specialty buyers. By the end of June, total registered merchants on the platform exceeded 2.27 million. For sellers, we offered free shipping on the first three orders and aligned inspection standards upfront, lowering selling costs and barriers to trial and error for new small-sized merchants. For buyers, we launched a PJT-themed campaign on Douyin and other platforms. Video views rose sharply, driving rapid growth in our specialty buyer model. Together with one-piece minimum quantity ordering, this initiative made it easier for small merchants to start buying on the platform. After their first transaction, buyers gradually become more engaged on the platform through repeat purchases, VIP membership, and participation in the Like New Device marketplace. showing consistent improvement in transaction stickiness. Throughout this process of user expansion and support, PJT's 3P warehousing inspection penetration rate reached 84.4% this quarter, up around 11.5% year-over-year, delivering rapid-scale expansion with solid growth in service revenue.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
For the platform business of PiPi, the service income of the platform in the second quarter decreased by the same ratio. The main reason is that we have reduced the cost of service during the POP business activities. At the same time, we have polished the sales model and updated the three-party business supply model, which has improved the competitiveness of the price, improved the sales, and optimized the warehouse model. The scale of sales sales has increased to 22.4%.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
For PiPi, platform service revenue decreased year-over-year in the second quarter, mainly due to subsidies provided to pop merchants to boost activity during the promotional campaign and our strategic reduction of service fees. Meanwhile, we continue to refine the consignment model by introducing warehousing capabilities for third-party merchants, improving price competitiveness and sell-through, and optimizing financial economics. Pipeline's consignment business grew 22.4% sequentially.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
We are planning to open more multi-threaded theme stores this year, including luxury theme stores, sports theme stores, and so on, to provide more users with better experiences and more interesting recovery and purchase experiences.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
In multi-category recycling services, service revenue maintained a year-over-year growth of over 30%. Gold prices were volatile and trended lower in the second quarter. We also chose to give more back to users. Together, these factors led to a 35% year-over-year decline in gold service revenue. During the quarter, we upgraded a select number of AHS stores to luxury-themed stores, with improvements to store design and functional areas. Together with more refined tiered pricing and enhanced category-specific service capabilities, luxury recycling service revenue grew 77.3% year-over-year. Building on those positive results and experience, we plan to open more themed multi-category stores this year, including luxury themed stores and sports themed stores. This will give more users a better and more engaging experience when recycling and buying pre-owned products.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
We will continue to re-establish the company's three-level development strategy. The first level continues to encourage the health growth of AUSO mobile phone 3G business. In 2026, the smart mobile consumer electronics market faced the challenge of rising oil supply chain prices. Brand manufacturers actively adjust product regulations and pay attention to resale. E-commerce platforms also actively adopt supplementary solutions to support resale. Our long-term strategy has remained focused and consistent.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Here, we would like to reiterate our three-stage development strategy. Stage one, we continue to solidify the healthy growth of our core secondhand consumer electronics business. In 2026, the smartphone and consumer electronics market has faced substantial price hikes across the upstream supply chain. Brand manufacturers are actively adjusting their product portfolios and placing greater emphasis on trade-in programs. At the same time, e-commerce platforms are also introducing subsidy programs to support device upgrades. Against this backdrop, we have captured these opportunities through our 1D model. Leveraging our front-end fulfillment capabilities and targeted trading scenarios, we drove market growth in our core second-hand consumer electronics business. At the same time, we are strengthening merchant capabilities with a decentralized strategy to penetrate fragmented markets Well, leveraging the AI-powered automated inspection to reinforce the infrastructure we have built for the industry.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
In the second stage, we continue to strengthen the positioning of Ai Huizhou, the national first recycling brand. In the second-hand industry, the brand that Shu Lengxiang relies on is still in short supply. Ai Huizhou maintains a deep investment in brand construction. Combined with the foundation of the 15th anniversary, we have invited Wu Lei, the global spokesperson of Ai Huizhou, to live with youth. Stage 2, we are strengthening AHS Recycle's position as China's leading recycling brand.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
In the pre-owned industry, word-of-mouth brand names remain scarce. We continue to make prudent investments in building the AHS Recycle brand. As A3New marks its 15th anniversary, we invited Liu Wu to serve as AHS Recycle's global brand ambassador. Through his useful, energetic, stylish, and environmentally conscious image, we encourage users to embrace a simpler lifestyle and choose high-quality pre-owned products. This initiative has generated broad positive feedback and engagement from users. From second-hand consumer electronics recycling to multi-category recycling and further into consumer retail, we aim to leverage the AHS Recycle brand name to provide users with other recycling and purchasing experiences.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
第三集,推进海外业务发展,做出有中国特色的循环经济模式。 We continue to advance breakthroughs in our overseas strategy. Over the past year, our overseas export business has grown rapidly
Jenny Jin
Head of Investor Relations, AT Renew Inc.
In June this year, we hit a milestone with HK$120 million in monthly sales. Building on our solid progress, on July 28th, we held our overseas strategy launch event in Hong Kong and updated our global expansion strategy.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
First of all, we see that in the global scope, Hong Kong, Dubai, and Miami are key points. There is a large market for second-hand mobile phones with a scale of US$1 billion. China is turning from the demand side to the output side. With this opportunity, based on the successful experience of the domestic auction platform, we see a greater opportunity for a million-dollar auction. Therefore, we released the overseas version of B2B trading platform Foursquare. The development of this platform is based on two core capabilities. One is the ability to export a batch of goods that are growing day by day. The other is the ability to automate and reduce technology. Based on domestic experience, we will gradually build global standards from one batch to three batches, and improve the efficiency of the transaction by automating and reducing the cost. We will build a B2B trading platform that is different from the existing traditional trading form and is more efficient to achieve the goal of making second-hand goods circulate around the world. Of course, the Foursquare platform still needs more time to polish and develop, and we also hope to get your patience and support. At the same time, we also released the overseas C-end brand IEEE. Using the value of technology to recover the home in the hands of consumers, the second-hand user can choose to update the options when buying. In the form of IEEE mobile phone manufacturing recycling machine, IEEE store, a small amount of resources are invested to carefully explore the overseas C-end business model. We will gradually synchronize the progress of overseas business.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
First, we see a huge pre-owned phone market globally, with a scale of over 100 billion US dollars in Hong Kong, Dubai, and Miami as key hubs. As China is changing from a consumer to a supplier of pre-owned phones globally, we see a chance to build an international B2B marketplace, leveraging PJT's success domestically. As such, we launched PhoneSquare. It relies on two core strengths of ours, Growing 1PX for supply and automated quality inspection technology. We will follow our domestic experience and gradually expand from 1P to 3P supply while establishing global standards. We will also optimize cost and efficiency through automated quality inspections and improve transaction transparency, building a more efficient B2B marketplace than traditional trading platforms, aiming to give pre-owned goods a second life globally. Well, exports are growing fast. Some squares do need time to improve, and we appreciate your patience and support. We also launched our overseas consumer brand, ArrayRay, named R-E-R-E. That is, we value what you own, renew the way you choose. We will cautiously explore the 2C business model through recycling kiosks and physical stores with a small amount of investment. We will share more updates on our overseas business as appropriate.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Looking at 2026 as a whole, we will continue to enhance supply sourcing, customer mindshare, merchant services, and operating efficiency.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
We look forward to giving users a better experience, more choices, and more value in pre-owned transactions.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Now, I'd like to turn the call over to our CFO Rex for financial updates.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
各位投資者和分析師大家好。 我很高興向大家分享公司2026年第二季度亮眼的業績表現。 我們收入和盈利水平均創下歷史新高,
Rex Chen
Chief Financial Officer, AT Renew Inc.
Good day, everyone. I'm pleased to share our outstanding financial performance for the second quarter of 2026.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Both revenues and profits reached record highs. During the quarter, the ongoing rollout of China's trading programs for consumer electronics, together with the June 18th shopping festival, further boosted consumer demand for device upgrades and expanded the supply of first-hand devices available for recycling. We actively captured these market opportunities, continued to support recycling and trading scenarios, and fully leveraged the synergies between our supply chain and retail capabilities. As a result, we sustained solid growth momentum over the quarter.
Rex Chen
Chief Financial Officer, AT Renew Inc.
In the second quarter, total revenue exceeded the high end of our guidance, increasing by 32.4% year-over-year to 6.61 billion RMB.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
While Nungap operating income surged by 70.1% to over 200 million RMB. Before we review the financials in detail, please note that all figures are in RMB and all comparisons are on a year-over-year basis unless otherwise stated.
Rex Chen
Chief Financial Officer, AT Renew Inc.
In the second quarter, total revenue growth was primarily driven by continued growth in net product revenue. Net product revenues increased by 35.9% to 6.19 billion, largely attributable to the growth in online sales of pre-owned consumer electronics. Service revenues were 410 million in the second quarter, representing a decrease of 4.2%.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The decrease was primarily due to the discretionary discounts on service fees provided to merchants during the extended June 18th grant promotion event period.
Rex Chen
Chief Financial Officer, AT Renew Inc.
Now let's discuss operating expenses to provide greater clarity on the trends of our actual operating-based expenses. We will mainly discuss our non-GAAP operating expenses, which better reflect how management views our operating results.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The reconciliations of gap to non-gap results are available in our earnings release and the corresponding form 6K furnished with the U.S. SEC.
Rex Chen
Chief Financial Officer, AT Renew Inc.
商品成本增加31.9%至52.2億元, 與產品銷售的增長一致。 我們EPO的毛利率為15.7%, 而上年同期為13.2%。 EP毛利率的改善主要得益於我們發揮C2B回收場景, 供應面中的合規翻新準備能力, 多樣化的嚴選零售渠道優勢。 Merchandise costs increased by 31.9% to 5.22 billion, in line with the growth in product sales. Growth profit margin for all 1P business was 15.7%, compared with 13.2% in the same period last year.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The growth margin improvement in our 1P business was primarily driven by high-efficiency C2B resecting scenarios, compliant refurbishment capabilities incorporated in our supply chains, and an increasingly diversified retail channel mix. This allowed us to increase the proportion of higher-margin retail sales, with 1P2C revenue accounting for 48.8% of product revenue in the second quarter of 2026. Up from 34.4% in the same period last year.
Rex Chen
Chief Financial Officer, AT Renew Inc.
履约费用增长31.1%至5.4亿元 冷盖的履约费用增长30.5%至5.3亿元 冷盖的履约费用增长主要原因有 于2025年同期相比回收和交易量的增加 导致人力费用增加 第二点物流费伴随业务量增长而增长 第三2026年运营中心相关费用 水回收与交易业务量增加而增长 Non-GAAP agreement rate fell from 8.2% to 8.1%.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Fulfillment expenses increased by 31.1% to 514 million. Non-GAAP fulfillment expenses increased by 30.5% to 513 million. Under the Non-GAAP measures, its increase was primarily driven by higher personnel costs resulting from the growth of our business compared to the same period in 2025, as well as higher logistics expenses in line with the increased product sales. Additionally, operating center-related expenses rose along with the increasing volumes of recycling and transactions. Non-GAAP fulfillment expenses as a percentage of total revenues decreased to 8.1% from 8.2%. Selling and marketing expenses increased by 24.8% to $510 million. Non-GAAP selling and marketing expenses increased by 29.9% to $500 million, primarily driven by an increase in commission expenses in relation to channel service fees. Non-GAAP selling and marketing expenses as a percentage of total revenues decreased to 7.6% from 7.8%.
Rex Chen
Chief Financial Officer, AT Renew Inc.
General and administrative expenses increased by 23.5% to 95.7 million. Non-GAAP G&A expenses also increased by 13.6% to 85.3 million.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Primarily due to an increase in personnel costs, Nungap G&A expenses as a percentage of total revenues decreased to 1.3% from 1.5%. 研发费用上升23.5%至7720万元, Nungap研发费用上升24.2%至7230万元, 主要由于能源成本增加, Nungap研发费用率从1.2%下降至1.1%, Research and development expenses increased by 23.5% to 77.2 million. Non-GAAP R&D expenses increased by 24.2% to 72.3 million, primarily due to an increase in personnel costs. Non-GAAP R&D expenses as a percentage of total revenues decreased to 1.1% from 1.2%. 利润層面,第二季度是能夠經歷的超兩億元。
Rex Chen
Chief Financial Officer, AT Renew Inc.
As a result, our non-GAAP operating income exceeded 200 million in the second quarter of 2026 compared to non-GAAP operating income of 120 million in the second quarter of 2025.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
representing an increase of 70.1% year-over-year increase. Nungap operating profit margin was 3.1% for the quarter, compared to 2.4% in the second quarter of 2025, representing an increase of 69 basis points. As of June 30, 2026, cash and cash equivalents restricted cash short-term investments and funds receivable from third-party payment service providers totaled $2.16 billion. Our financial reserves are sufficient to support reinvestment in business development and shareholder returns.
Rex Chen
Chief Financial Officer, AT Renew Inc.
第二季度,我们使用了约420万美元回购了近100万股ADS, 自2025年6月30日经董事会批准, During the second quarter of 2026, we repurchased a total of approximately 1 million ADSs for approximately 4.2 million US dollars.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
On June 30th, 2025, the board has authorized a share repurchase program under which the company may repurchase up to 50 million US dollars of our shares over 12 months. The board has authorized the extension of this share repurchase program for 12 months from June 30th, 2026 with key terms unchanged. As of June 30th, 2026, we repurchased approximately 14.8 million US dollars under this program. Now turning to the business outlook, for the third quarter of 2026, we anticipate total revenues to be between 6.34 billion RMB to 6.44 billion RMB, representing an increase of 23.1% to 25.1% year-over-year. Please note that this focus may only reflect our current and preliminary views on the market and operational conditions
Rex Chen
Chief Financial Officer, AT Renew Inc.
which are subject to change.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
This concludes our prepared remarks. Operator, we are now ready to take questions.
Operator
Conference Call Operator
Thank you. We will now begin the question and the answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. At this time, we will pause momentarily to assemble our roster. The first question today comes from Mandy Lu with UBS. Please go ahead.
Mandy Lu
Analyst, UBS
Hello, everyone. Thank you for the opportunity to ask this question. First of all, congratulations to the company. The second quarter has continued to show a very bright performance in terms of income and profits. I would like to take this opportunity to ask you about the current situation of the company. How do you judge the performance of the next half of the year's iPhone 18 series? And at this time, are there any adjustments to the expectations of annual income and profits? Thank you very much for the opportunity to raise questions. And congrats on another strong quarter in terms of both revenue and profits. Well, my question is that as the launch of Apple's iPhone 18 is around the corner, how would you expect the impact towards our financial performance ahead? Also, is there any updates on your three-year revenue and margin guidance? Thank you very much.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Okay. Thank you very much for the question. Before we get back to the question, let's start from a consensus point of view. When a new machine is selling well, Renew Inc. and Renew Inc. are just a political service. But when a new machine is not selling well, Renew Inc. is the most important and most effective way to sell. All manufacturers and all brands will pay more attention to Renew Inc. and invest more. This year, in a large environment where new machines are under pressure, Renew Inc. has acquired a large number of products and services Thank you for the question. Here, I'd like to reiterate a counter-intuitive view
Jenny Jin
Head of Investor Relations, AT Renew Inc.
When new devices are selling well, recycling and trading programs are just supplementary value-added services. But when new devices sell softened, trading programs become the most critical and effective promotional tool. Major manufacturers and platforms place greater emphasis on and allocate more resources to trade-ins. This year, against new device sales, headwinds, e-commerce platforms, brand manufacturers, and recyclers have all increased their investments in trading scenarios, making C2B recycling for pre-owned consumer electronics more efficient. With strong sourcing channels and convenient recycling fulfillment, we have built an industry-leading supply base and further strengthened our supply-side advantage in the pre-owned value chain.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
This is in line with the performance of the main flagship mobile phone of this year. Take the iPhone 18 series as an example. Currently, the market generally expects that Apple will release higher-end models, and some regular models may be switched to be released in the spring of next year. Then the week of batch export of new products of the 18 series will be prolonged, and the Q4 and Q1 of next year may be delayed. Therefore, we will keep an eye on it. Well, the third quarter guidance, we take into account this year's major flagship smartphone launches.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Take the iPhone 18 lineup as an example. Current market expectations are that Apple may introduce more premium models and some standard modules could shift to next spring. This could extend iPhone 18's volume treatment cycle into the fourth quarter and the first quarter of next year. We monitor this closely. Our third quarter guidance has already factored in the all potential impact.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
If new products increase in price due to oil storage, then the second-hand recovery can create greater value for users.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Should new device prices rise due to higher upstream memory costs, trading and resecting could be more valuable for users, and prices for high-quality pre-owned products will have room for upside. The second quarter already saw a year-over-year increase in the average order volume of our 1P business.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
利润方面,今年二季度我们对语言能力和C端品牌营销持续进行有节制的投入, 并通过规模效应和精细化的运营, 如期实现了NetGap经营利润率的同比提升。 综合以上战略,市场环境,运营策略等因素,
Jenny Jin
Head of Investor Relations, AT Renew Inc.
On profitability, we continue to make disciplined investments in fulfillment capabilities and consumer brand marketing in the second quarter. Benefiting from economies of scale and more refined operations, we delivered the expected year-over-year improvement in non-GAAP operating profit margin. Overall, we expect to maintain strong growth in both revenue and profit this year.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Okay, thank you.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Thank you for the question.
Operator
Conference Call Operator
The next question comes from Wing Zhao with CICC. Please go ahead. Good evening, Mr. Wang.
Mandy Lu
Analyst, UBS
Thank you for accepting my question. First of all, I would like to thank you for your attention. My question is, we have observed that the revenue of our second quarter platform has dropped. I would like to ask if you can share the reasons behind this, including how the future trend will look like. Good evening, thank you very much for taking my question. Could you please elaborate on the reasons for the decline in service revenue and share your outlook? Thank you.
Rex Chen
Chief Financial Officer, AT Renew Inc.
So strategically, our 1P model will play an increasingly vital role in the pre-owned smartphones consumer electronics category.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
First, it ensures a premium transaction experience for end users and strengthens brand awareness. In addition, the industry's inevitable shift toward greater compliance will further support the development of our 1P business. In the second quarter, net service revenue decreased by 4.2% year-over-year, mainly due to two factors. First, we increased subsidies for merchants, including logistic fees incentives for new users as CJT Marketplace expanded into more augmented markets. Second, during the promotional campaign, we provided discounts or waivers on service fees to Pi Pi Pop merchants to boost their transactions.
Rex Chen
Chief Financial Officer, AT Renew Inc.
Looking ahead, we expect that as PJT continues to penetrate lower-tier markets,
Jenny Jin
Head of Investor Relations, AT Renew Inc.
More small-sized merchants will gain easier access to the national pre-owned trading market. By leveraging our quality inspection technology, platform services, and differentiated membership programs, we expect to boost PJT's operational efficiency and grow its platform service revenue in line with the healthy expansion of China's pre-owned consumer electronics and smartphone industry.
Rex Chen
Chief Financial Officer, AT Renew Inc.
The PIPPYPJC business will have a certain income adjustment in the process, For our PiPi B2C business, we're shifting towards 1P curated retail and 3P consignment models.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
which will affect revenue in the short term. Under the 1P model, we are co-building capabilities with JD.com to meet consumer demand for curated pre-owned products, helping users upgrade their devices with high-quality, affordable options. Under the confinement model, KaiPai is continuously exploring ways to support small merchants. We are expanding merchant recruitment, boosting merchant vitality, and providing robust support for their store operations, traffic management, and after-sales services.
Rex Chen
Chief Financial Officer, AT Renew Inc.
In our multi-category recycling services, we are advancing refined operations to reinforce consumer mindshare of the AHS brand through themed stores and differentiated user experiences.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
We are confident to continue growing faster than broader industry. That's it for the questions. Thank you.
Operator
Conference Call Operator
The next question comes from Brian Lanthier with Zach Small Cap Research. Please go ahead.
Brian Lanthier
Analyst, Zach Small Cap Research
Good evening and congratulations on navigating what's turned into a challenging year for the smartphone market. I wonder if you could talk a little bit about your development plans and your performance goals for the international business.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Okay, thank you for the question. Our overseas strategy includes B2B's main path and C2N's auxiliary path, two paths. From the perspective of income contribution, B2B maintains a core income contribution of more than 90%. From the construction of the global buyer network to the introduction of automated technology to the delivery of open platform The goal of the overseas B2B platform is to build Foursquare into an international version of Taiji Hall in three years We already have a mature local B2B system operating and sales system in Hong Kong It is expected that in the second half of this year, a new regional ability construction will be launched in Dubai The main part of our overseas strategy is B2B, which is complemented by our 2C business.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
B2B remains the core revenue contributor, accounting for around 90% of our overseas revenue. Our goal is to build Fung Square into a global version of PJT marketplace in three years. We will expand our supply and buyers network, bring our automation technologies overseas, and improve our open platform. We already have a mature B2B system in Hong Kong, covering inspection operations and sales. We plan to start building new regional capabilities in Dubai in the second half of this year. PhoneSquare is now officially available in Hong Kong app stores and we plan to gradually expand into Middle Eastern markets like Dubai and Southeast Asian markets like Malaysia. We continue to optimize PhoneSquare's functionality and user experience and expect to launch the next phase of our user growth initiative soon.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
In addition,
Jenny Jin
Head of Investor Relations, AT Renew Inc.
In addition, we are cautiously exploring overseas 2C opportunities under the Reway brand. Whether through Reway QX already deployed in Europe or our first Reway store in Hong Kong, recently opened in Hong Kong, our overseas 2C business is still at an early stage of exploration. We will share further updates as we make progress. Thank you.
Rex Chen
Chief Financial Officer, AT Renew Inc.
Thanks again.
Operator
Conference Call Operator
The next question comes from Rafael Tassi with DBS. Please go ahead.
Rafael Tassi
Analyst, DBS
Hey, Mr. Kerry, Mr. Wes, good evening, leaders. I'm Rafael from DBS. Congratulations to the company for its great performance again. I have a question. The number of stores in Group 2 has decreased significantly. The number of new customers has increased significantly. How do you estimate the number of stores this year? Thank you. I'll recap in English So good evening management and congratulations for the record-breaking quarter One question on my side So the group's number of stores declined quarter over quarter in the second quarter of 2026 while the number of in-store visitors increased significantly How can we estimate or forecast the change in store numbers for this year?
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Thank you Thank you, Tim First of all, I would like to say that in the business of the door shop, the team of iResolute has better business innovation ability and rhythm control ability. There are two reasons and considerations for the gradual rhythm adjustment of the number of door shops. The first reason is that after the high-speed development, a gradual way of business is needed. Therefore, we adjusted some of the points that are not in good position and closed some of the door shops with backward performance. This is a very normal action. Another reason is that we are also preparing and accumulating for our new store strategy. Our luxury theme store and basketball sports theme store have all obtained very good data verification. Part of the store will be upgraded to a special category theme store. Next, you will see more and more different categories of theme store launches. It should be emphasized here that
Jenny Jin
Head of Investor Relations, AT Renew Inc.
To begin with, I'd like to note that AHS team has solid capabilities in innovation and pacing for store operations. There are two factors to consider in making phase store account adjustments. First is the need to solidify our operations after rapid expansion. Accordingly, we have repositioned some poorly located stores and closed some underperforming ones. This is standard business practice. Secondly, we are preparing and accumulating experience for our new store strategy. Our luxury-themed and sports-themed stores have already seen good data validation. Moving forward, we will adopt a tiered store strategy, upgrading select locations into specialized category-themed stores. You will soon see us rolling out more of these theme stores across different categories. I also want to emphasize that our budget to build store-based fulfillment capabilities remains disciplined with no incremental investment. We are strengthening these capabilities by reallocating resources within our existing budget.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
In addition, this year's recovery and resumption of new performance needs are abundant. We have mechanically equipped the upper-level business team to collect more high-end-level recovery and delivery needs. Combined with the 618 e-commerce big place opened in mid-May, we flexibly use the dynamic flexibility to quickly increase the number of upper-level employees in a short period of time to nearly 3,000 people. After the peak period of the business, the supply and demand of the upper door is back to normal, effectively controlling the operating costs of the front-end business.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
The demand for recycling and trading services has been strong this year. We expanded our two-door team to meet higher fulfillment demand in top-tier cities. During the June 18th Shopping Festival, we used flexible workforce solutions to quickly expand the team to nearly 3,000 people. After the peak period, the two doors had to be adjusted back down, helping us control front and operating expenses. We will continue to strengthen our in-store and two-door fulfillment capabilities to provide users with a trusted and convenient experience.
Kerry Chen
Founder, Chairman and Chief Executive Officer, AT Renew Inc.
Thank you.
Operator
Conference Call Operator
As there are no further questions at this time, I'd like to turn the conference back to management for closing remarks.
Jenny Jin
Head of Investor Relations, AT Renew Inc.
Thank you again for joining us. A replay of today's call will be available on our IR website shortly, followed by a transcript when ready. If you have any additional questions, please feel free to email us at IR at ATRenew.com. Have a good day. Thank you.
Operator
Conference Call Operator
This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.