RLX Technology Q3 2025 Earnings Report

RLX Technology EPS Results

• Actual EPS: $0.02
• Consensus EPS: $0.03
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

RLX Technology Revenue Results

• Actual Revenue: $158.63 million
• Expected Revenue: $139.99 million
• Beat/Miss: Beat by +$18.64 million
• YoY Revenue Growth: N/A

RLX Technology Announcement Details

• Quarter: Q3 2025
• Date: 11/14/2025
• Time: Before Market Opens
• Conference Call Date: Friday, November 14, 2025
• Conference Call Time: 7:00AM ET

RLX Technology (NYSE:RLX) Inc. (NYSE:RLX) is a China-based company specializing in electronic nicotine delivery systems. The company develops, manufactures and markets closed-pod vaping devices and prefilled cartridges, positioning its products as an alternative to traditional combustible tobacco. RLX emphasizes consistent nicotine delivery, flavor variety and convenience through its proprietary e-liquid formulations and device design.

RLX operates a vertically integrated business model that encompasses research and development, production, quality control and sales. Its product portfolio includes rechargeable pod devices paired with disposable cartridges available in multiple nicotine strengths and flavor profiles. The company has built an omnichannel distribution network combining self-owned retail outlets, third-party stores and e-commerce platforms to serve consumers in major urban markets across mainland China.

Founded in 2018 and headquartered in Shanghai, RLX Technology completed its initial public offering on the New York Stock Exchange in mid-2020. Since then, the company has focused on expanding its market share through product innovation, brand building and adherence to evolving regulatory standards for electronic nicotine delivery systems. RLX continues to invest in consumer insights and technical capabilities to navigate a dynamic regulatory environment.

RLX’s management team comprises seasoned professionals with expertise in consumer electronics, manufacturing and regulated industries, supported by specialists in chemistry, materials science and device engineering. The company aims to leverage its technological strengths and distribution infrastructure to address shifting consumer preferences and regulatory requirements in China’s vaping market.

RLX Technology Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Net revenues grew 49% YoY to about RMB 1.1 billion and non‑GAAP operating profit reached RMB 188 million, with expanded gross margins and the eighth consecutive quarter of positive non‑GAAP operating profit.
• Positive Sentiment: International markets now account for 70–80% of revenues, helped by consolidation of a European vape business and an Asia‑Pacific franchise retail model that drove meaningful same‑store sales.
• Negative Sentiment: Mainland China remains a significant headwind — revenue was RMB 320 million this quarter (about 13% of Q2 2021 levels), with an unregulated illicit vape market and uneven enforcement constraining volume recovery.
• Positive Sentiment: The company reported strong liquidity and shareholder returns — total financial assets of RMB 16.4 billion (~USD 2.2 billion), Q3 operating cash flow of RMB 358 million, ~US$330 million of share repurchases to date, and a US$0.10 per‑ADS cash dividend.
• Positive Sentiment: Management emphasized R&D and category expansion as growth drivers, citing a breakthrough East Asia product launch, roll‑out of modern oral products, and focus on localized flavors, device ergonomics and design.

Presentation

[Operator]

Hello, ladies and gentlemen. Thank you for standing by for RLX Technology's third quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After management's remarks, there will be a question-and-answer session. Today's conference call is being recorded and is expected to last for about 40 minutes. I will now turn the call over to your host, Mr. Sam Tsang, Head of Capital Markets for the company. Please go ahead, Sam.

[Sam Tsang, Head of Capital Markets at RLX Technology]

Thank you very much. Hello everyone and welcome to RLX Technology's third quarter 2025 earnings conference call. The company's financial and operational results were released through PL&E's wire services earlier today and have been made available online. You can also view the earnings press release by visiting our IR website at irl.rlxtech.com. Participants on today's call include our Chief Executive Officer, Ms. Kate Wang, our Chief Financial Officer, Mr. Chao Lu, and me, Sam Tsang, Head of Capital Markets. Before we continue, please note that today's discussion will contain further information made under the safe harbor positions of the U.S. Private Securities Certification Reform Act of 1995. These statements typically contain words such as may, will, expect, anticipate, aim, estimate, intend, plan, believe, potential, continue, or other similar expressions. Further statements involve inherent risks and uncertainties.

[Sam Tsang, Head of Capital Markets at RLX Technology]

The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, many of which are factors beyond our control. The company, its affiliates, advisors, and representatives do not undertake any obligation to update its forward-looking information except as required under the applicable law. Please note that RLX Technology's earnings press release and this conference call will include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. RLX press release contains a reconciliation of the unaudited non-GAAP financial measures to the unaudited GAAP financial measures. For today's call, management will use English as the main language. They will also provide simultaneous interpretation on the Chinese line. Please note that the Chinese line is in listen-only mode and Chinese interpretation is for convenience purposes only.

[Sam Tsang, Head of Capital Markets at RLX Technology]

In case of any discrepancy, management statements in the original language will prevail. I will now turn the call over to Ms. Kate Wang. Please go ahead.

[Kate Wang, CEO at RLX Technology]

Thank you, Sam, and thank you all for joining today's call. This quarter, we once again delivered robust results in a challenging global environment. Our net revenues surged 49% year-over-year to RMB 1,129 million with non-GAAP operating profits reaching RMB 188 million. This performance underscores the strength of our industry-leading portfolios and our excellent execution across international markets, bolstered by a gradual recovery in mainland China. It also validates the scalability of our globalization strategy and the outstanding technological innovations that secure our leadership in the e-vapor sector. Turning to mainland China, regulatory enforcement strengthened market late, yielded positive shifts in market dynamics. For instance, enhanced customer inspections have curtailed illegal returns of exported products, channeling customers back to legitimate brands from non-compliant alternatives. During this quarter's modest mainland China revenue recovery.

[Kate Wang, CEO at RLX Technology]

That said, the persistence of an unregulated latent e-vapor market remains a significant headwind, distorting competition and restraining volume recovery. Our revenue from Mainland China stands at RMB 320 million this quarter, or approximately 13% of Q2 2021's level, illustrating the scale of ongoing challenges. True market order can only be achieved through consistent enforcement action, particularly against illegal online sales. As a leading compliance player, we continue to advocate for strict enforcement and remain committed to providing adult smokers in China with a superior diversified portfolio of quality tobacco alternatives. We are also advocating for regulatory adjustments around tobacco flavor formulation. This could align public policy with consumer preference, helping to foster a more transparent orderly market. Internationally, our strategy continues to gain momentum with 70-80% of our revenues now derived from international markets.

[Kate Wang, CEO at RLX Technology]

Amid various headwinds, including the big positive effect, disciplined execution, quality products, and deep legal insights continue to drive success. Our new Asia-Pacific franchise retail model exemplifies this strategic and execution excellence. By uniting independent vape stores under a cohesive brand to enhance retail execution, amplify visibility, and elevate user experience, we generated meaningful same-store sales growth. Furthermore, our robust R&D capabilities remain a core differentiator in international markets, enabling rapid innovation and local market adaptation. Notably, our recent East Asia product launch set industry benchmarks of disposable e-vapor product for design excellence, barring category growth and exceptional demand. Our expansion into adjacent categories with the debut of our modern oral product further strengthened our portfolio and pipeline, unleashing growth potential as we capture demand from previously untapped user segments. Beyond APAC, Europe remains a critical growth market, distinguished by regulatory maturity and an involved user base.

[Kate Wang, CEO at RLX Technology]

Our strategic equity investment in a leading European e-vapor firm enhances our market intelligence and positions us to capitalize on future opportunities effectively. In the United Kingdom, where the government implemented a ban on disposable e-vapor products in June 2025, we demonstrated strong business adaptability. Through our proactive strategy to migrate consumers to reusable and sustainable product formats, reinforced by robust retail execution and strategic category management, we not only safeguarded our market position but also sustained top-line strength amid a sharp industry contraction. In summary, this quarter's results reflect our growing strength, resilience, and leading innovation amid a complex macro environment. We are building more than financial value. We are cultivating a global brand with quality and sustainable leadership. Looking forward, we remain confident in our ability to shape the smokeless industry and deliver lasting value to our stakeholders.

[Kate Wang, CEO at RLX Technology]

Now, I will hand it over to Chao for a detailed review of our financial performance.

[Chao Lu, CFO at RLX Technology]

Thank you, Kate. Hello, everyone. Before we dive into the financial details, please note that all figures I present today are denominated in RMB unless otherwise stated. We are pleased to report another strong quarter marked by robust revenue growth and improved profitability. In quarter three of 2025, our strategic emphasis on international markets continued to drive exceptional results. Net revenues reached RMB 1.1 billion, reflecting impressive increases of 49% year-over-year and 28% quarter-over-quarter. Importantly, we reinforced our market leadership in core regions while proactively capturing organic growth and strategic investment opportunities. Selected Asian markets deliver strong organic growth fueled by successful product innovation and introductions and effective local execution. Additionally, our investment in a premier European e-vapor industry company contributed significantly this quarter. Having consolidated this entity's financials since June, its full three-month performance is now reflected in our results.

[Chao Lu, CFO at RLX Technology]

Meanwhile, a mild recovery in the Mainland China market provided a positive backdrop during this period. Let's turn to profitability. We further strengthened our profitability this quarter as a testament to our disciplined execution and operational excellence. Our gross profit margin expanded by 4 percentage points year-over-year and 3.7 percentage points quarter-over-quarter. This improvement was driven by the consolidation of our equity investment in the European market, favorable shifts in geographic revenue mix, and margin enhancements in all key international regions. Additionally, we achieved our eighth consecutive quarter of positive non-GAAP operating profit, reaching RMB 188 million. Our non-GAAP operating profit margin expanded by 6 percentage points year-over-year, reflecting both enhanced operating leverage and rigorous cost management. Looking ahead, we remain committed to driving further profitability improvement as we scale globally by relentlessly prioritizing operating efficiency and maintaining a lean organizational structure.

[Chao Lu, CFO at RLX Technology]

Moving on to financial flexibility, we maintained our strong cash position supported by solid financial fundamentals and disciplined capital allocation. Our cash flow generated from operating activities surged in quarter three, rising to RMB 358 million from RMB 157 million in the same period last year. This performance reflects our efficient working capital management, characterized by a healthy negative cash conversion cycle with inventory turnover days at 25, receivable turnover days at 11, and payable turnover days at 53. As of September 30, 2025, our total financial assets, including cash and cash equivalent, restricted cash, short-term bank deposits net, short-term investments net, long-term bank deposits net, and long-term investment securities net, stood at RMB 15.4 billion, approximately $2.2 billion.

[Chao Lu, CFO at RLX Technology]

This strong liquidity position provides ample flexibility to pursue strategic investments that accelerate our global expansion and fuel innovation, while also enabling us to enhance shareholder value through disciplined capital deployment and sustainable return. That brings me to shareholder return, which I believe is something you are focused on. With a consistent disciplined capital allocation approach, we have returned nearly all of our non-GAAP net profits to shareholders through strategic share repurchases and dividends over the past four years. As of September 30, 2025, we have repurchased approximately $330 million in ordinary shares represented by ADSs. For this quarter, we are declaring a cash dividend of $0.1 per ordinary share or ADS. Furthermore, since our IPO, including the cash dividend announced today, we have returned over $500 million to shareholders through repurchases and dividends.

[Chao Lu, CFO at RLX Technology]

Our capital framework is purpose-built to support durable profit growth while maximizing long-term returns for shareholders, balancing reinvestment in strategic growth with responsible financial stewardship. In closing, this quarter's results are a clear testament to our outstanding execution and distinctive competitive advantages across global markets. We're not just navigating challenges; we are transforming them into opportunities through innovation and tailored local strategies. As we unlock new growth avenues, we remain focused on delivering sustainable value that benefits all stakeholders today and into the future. Thank you for your attention. We now welcome your questions. Operator, please proceed.

[Operator]

We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. 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 two. For the benefit of all participants today, if you wish to ask your question in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question today comes from Lydia Singh with Citi. Please go ahead.

[Operator]

Hi, Management. Thanks for the presentation and congratulations on the results. I have two questions. The first one is, as we now enter close to the year-end, based on current progression in your international expansion, could you actually share your revenue outlook for 2026 for the company and also the industry? Could you also give us some breakdown for the international business, like how is the organic growth in the third quarter? For your invested European e-vapor business, how did it perform in the third quarter? This is my first question. The second question is, given that the e-vapor industry has matured, what areas are prioritized in the R&D to sustain your growth and differentiation? Thank you.

[Sam Tsang, Head of Capital Markets at RLX Technology]

Thank you, Lydia, for your questions. For the first question, let me address it in three parts. Regarding transference revenue outlook, we are committed to expanding our brand footprint selectively across international markets, contingent on regulatory clarity and market readiness. Although the time remains fluid, we will maintain our disciplined strategic approach. We will share detailed plans as we finalize them in coming quarters. Regarding our third quarter 2025 international growth, our international revenue grew steadily and outpaced industry averages, driven by robust organic growth in the Asia-Pacific region. This reflects the strength of our tailored product innovation and route-to-market strategy, enabling us to deepen market penetration and consumer loyalty. Finally, regarding our European investment performance, our invested e-vapor company in Europe has maintained operational stability despite recent regulatory challenges, including the U.K. disposable product ban.

[Sam Tsang, Head of Capital Markets at RLX Technology]

We are optimistic about our synergies and anticipate scaling this company as we advance market integration. Regarding your second question about product innovation and differentiation, amid a maturing industry landscape, we have sharpened our focus on meaningful product evolution that delivers value. Our R&D initiatives emphasize enhancing core user experiences, particularly in flavor authenticity, device ergonomics, and aesthetic design. We have optimized product performance through technological refinements and strengthened regional market responsiveness via localized flavor portfolio. This strategy culminated in a breakthrough product launch in East Asia this quarter, distinguished by innovative design and user appeal. We believe this R&D approach is foundational for sustained differentiation and long-term success. Thank you for your questions.

[Operator]

The next question comes from Guo Yun with CITIC. Please go ahead.

[Yun Guo, Senior Analyst at CITIC]

Thanks, Management. This is Yun Guo from CITIC, and congratulations for the results. My question is about the channel innovation in the FLAG's Asian markets. Can the Management elaborate more?

[Sam Tsang, Head of Capital Markets at RLX Technology]

Sure, definitely. Our channel innovation centers on transforming Wavestar experiences. Independent Wavestar dominates category sale but faces branding inefficiencies. Through a franchise model, we provide renovation strategies that upgrade star enhancements under unified branding. These initiatives have engaged over 450 partners in an East Asia country this year, driving significant revenue growth while enhancing our brand presence and operational control. Thank you for your question.

[Operator]

The next question comes from Zoe Zhu with CICC. Please go ahead.

[Operator]

Hi, Management. This is Zoe from CICC. My question is about our Europe business. First, could you give us some update on the U.K. with company integration, and what is the strategy for your further expansion? Thanks.

[Operator]

Thank you very much, Yufeng. Following the June consolidation, we are in the early stages of integration, currently prioritizing preservation of brand equity and operational strength. Our strategy is to transform the U.K. operations into a multi-brand retail distribution platform, leveraging supply chain and capital advantages to enhance efficiency. We are actively leveraging local expertise to expand channel development and product localization across Europe while remaining open to strategic investments that may accelerate geographic and portfolio diversification. Thank you for your question.

[Operator]

The next question comes from Ling Zhou with UBS. Please go ahead.

[Ling Zhou, Associate Analyst at UBS]

Congratulations, Management, for the strong results in Q3. My question is, what is the current expansion status of the modern oral business, and what are the subsequent promotional strategies over the last? Thank you.

[Sam Tsang, Head of Capital Markets at RLX Technology]

Sure. Thank you very much, Jolene, for your question. Modern oral is the smokeless industry's fastest-growing segment, reflecting a clear market opportunity. Our ultra-thin, fast-absorbing products launched in InterTabac Germany garnered strong industry validation. We plan to roll out this category in phases starting this quarter. At this stage, our near-term revenue expectations remain prudent as we build market data and consumer adoption. Thank you very much for your question.

[Operator]

Huge time constraints. Now, I would like to turn the call back over to the company for closing remarks.

[Chao Lu, CFO at RLX Technology]

Thank you once again for joining us today. If you have further questions, please feel free to contact RLX Technology's investor relations team through the contact information provided on the website or PSMT Financial Communication.

[Operator]

The call has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Sam Tsang, Head of Capital Markets
• Kate Wang, CEO
• Chao Lu, CFO

Analysts

• Yun Guo, Senior Analyst at CITIC
• Analyst at CICC
• Ling Zhou, Associate Analyst at UBS
• Analyst at Citi