ATRenew Inc. Sponsored ADR ((RERE)) has held its Q4 earnings call. Read on for the main highlights of the call.
ATRenew Inc. Reports Strong Growth Amid Strategic Investments
ATRenew Inc. recently held its earnings call, revealing a strong performance for 2024. The company reported significant revenue and profitability growth, surpassing its targets. The positive sentiment was driven by success in 1P consumer sales and multicategory recycling expansion, despite facing challenges in its overseas business and increased operating expenses. Strategic investments in brand building and market expansion have provided positive momentum for ATRenew.
Record Revenue Growth
ATRenew achieved record revenue growth in 2024, with total net revenues reaching RMB16.33 billion, marking a 25.9% year-over-year increase. The fourth quarter alone saw revenues of RMB4.85 billion, exceeding guidance and growing 25.2% year-over-year.
Significant Profitability Increase
The company reported a substantial increase in profitability, with non-GAAP income from operations for the full year 2024 at RMB410 million, a 62.8% year-on-year growth. The fourth quarter non-GAAP income was RMB130 million, reflecting a 61% year-over-year increase.
Strong 1P to Consumer Sales
ATRenew’s 1P to consumer sales demonstrated robust performance, achieving a total GNV of RMB5.5 billion in 2024. Retail revenue accounted for 29% of net product revenues in the fourth quarter, an 8 percentage point increase from the previous year.
Expansion of Multicategory Recycling
The company’s multicategory recycling services expanded significantly, with transaction volumes nearly tripling year-over-year. This growth contributed 8.6% of the total service revenue, highlighting the success of this strategic initiative.
Brand Building and Marketing Success
ATRenew invested 100 million Yuan in new media marketing, enhancing brand exposure and establishing AHS Recycle as a leading brand in the second-hand industry. This strategic investment has bolstered the company’s market presence.
Challenges in Overseas Business
Despite overall success, ATRenew faced challenges in its overseas business, leading to the closure of certain loss-making operations and a reduction in overseas product revenue.
Increase in Operating Expenses
Operating expenses saw an increase, with fulfillment expenses rising by 31.8% in the fourth quarter. Non-GAAP fulfillment expenses grew by 32.7%, driven by higher personnel and logistics costs.
Apple Trading Business Adjustments
The company adjusted its pricing and operational strategy in the Apple official trading business, impacting revenue, which was RMB1.05 billion in 2024.
Forward-Looking Guidance
Looking ahead, ATRenew provided optimistic guidance, anticipating first-quarter 2025 revenues between RMB 4,550 million and RMB 4,650 million, representing a year-over-year increase of 24.6% to 27.4%. The company plans to expand its store network and fulfillment capabilities, aiming for 5,000 stores and a 5,000-member service team over the next three years.
In conclusion, ATRenew Inc.’s earnings call highlighted a year of impressive growth and strategic advancements. The company’s strong revenue and profitability figures, coupled with successful brand building and market expansion efforts, paint a positive picture for its future trajectory. Despite challenges in overseas operations and rising expenses, ATRenew’s forward-looking guidance suggests continued growth and expansion in the coming years.