ZKH Group Limited Announces First Quarter 2025 Unaudited Financial Results
SHANGHAI, May 20, 2025 /PRNewswire/ -- 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
in thousand RMB, except for number of First Quarter
customers, percentage and basis points ("bps")
2024 2025 Change
GMV[1] 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 Customers[3] 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 EBITDA[4] (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 Loss[5] (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."
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."
[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.
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.
in thousand RMB, except for percentage
First Quarter
2024 2025 Change
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.
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.
in thousand RMB, except for percentage and
First Quarter
basis points ("bps")
2024 2025 Change
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.
-- 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 ADS([6]) and Non-GAAP Adjusted Basic and Diluted Net Loss per ADS([7]). 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.
[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.
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.
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.
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.
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
ZKH GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS, per share and per ADS data)
As of As of
December 31, 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 3,090,323 2,808,599 387,035
for credit losses of RMB145,789 and
RMB144,038 as of December 31,
2024 and March 31, 2025,
respectively)
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 365,333 350,718 48,330
liabilities
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
ZKH Group Limited shareholders' equity:
Ordinary shares (USD0.0000001 par value; 4 4 1
500,000,000,000 and 500,000,000,000
shares authorized; 5,658,952,794 and
5,658,952,794 shares issued and
outstanding as of December 31, 2024 and
March 31, 2025, respectively)
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' 3,098,491 3,037,078 418,521
equity
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, March 31, 2025
2024
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 (162,392) (143,176) (19,730)
Loss from operations (129,613) (80,813) (11,135)
Interest and investment income 18,054 13,279 1,830
Interest expense (5,695) (2,350) (324)
Others, net 26,441 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 (90,901) (66,723) (9,193)
Limited's ordinary shareholders
Net loss (90,901) (66,723) (9,193)
Other comprehensive loss:
Foreign currency translation adjustments (3,350) (3,008) (415)
Total comprehensive loss (94,251) (69,731) (9,608)
attributable to ZKH Group Limited's
ordinary shareholders
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 March 31, 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 expense 15,070 12,167 1,677
Non-GAAP EBITDA (70,048) (51,959) (7,158)
For the three months ended
March 31, 2024 March 31, 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
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SOURCE ZKH Group Limited
