ATRenew NYSE: RERE reported second-quarter 2026 revenue and non-GAAP operating profit that reached record highs, supported by growth in its first-party, or 1P, pre-owned consumer electronics business and demand tied to China’s trade-in programs and the June 18 shopping festival.
Total net revenue rose 32.4% year over year to CNY 6.61 billion, exceeding the high end of the company’s guidance. Net product revenue increased 35.9% to CNY 6.19 billion, primarily driven by online sales of pre-owned consumer electronics. Non-GAAP operating income climbed 70.1% to CNY 210 million, while non-GAAP operating margin expanded to 3.1% from 2.4% a year earlier.
1P Retail and Recycling Drive Growth
Management said ATRenew’s strategy has centered on expanding its 1P business, in which it sources devices through consumer-to-business channels, refurbishes products and sells curated pre-owned goods to consumers. The company said this model improves transaction trust, operational efficiency and its ability to provide recycling customers with pricing informed by its retail operations.
Revenue from 1P refurbished products increased 87.8% from a year earlier. Revenue from 1P-to-consumer retail, or 1P2C, rose 92.4%, reaching 48.8% of product revenue, up 3.6 percentage points sequentially. ATRenew said higher new-device prices, stable pre-owned market sentiment and refined pricing and operations supported the expansion.
During the promotional period from May 13 through June 18, recycling value for mobile phones and consumer electronics at AHS Recycle rose 57% year over year. Both door-to-door and in-store recycling orders increased 45%, and face-to-face transactions represented 80% of recycling orders across all channels.
The company expanded its nationwide door-to-door fulfillment team, including flexible capacity, to nearly 3,000 people by the end of June. It also operated 2,117 AHS stores at quarter-end. Management said it subsequently adjusted door-to-door staffing after the promotional peak to control front-end operating costs.
Margins Improve as Retail Mix Expands
Merchandise costs rose 31.9% to CNY 5.22 billion, broadly in line with product-sales growth. However, 1P gross profit margin improved to 15.7% from 13.2% in the prior-year quarter. Chief Financial Officer Rex Chen said the improvement reflected more efficient consumer-to-business recycling, fulfillment capabilities integrated into the supply chain and a greater mix of higher-margin retail sales.
Non-GAAP fulfillment expenses increased 30.5% to CNY 530 million, though they declined as a percentage of revenue to 8.1% from 8.2%. Non-GAAP selling and marketing expense rose 29.9% to CNY 500 million, but fell to 7.6% of revenue from 7.8%. Non-GAAP general and administrative expense represented 1.3% of revenue, down from 1.5%, while non-GAAP research and development expense represented 1.1%, compared with 1.2% a year earlier.
As of June 30, ATRenew held CNY 2.16 billion in cash and cash equivalents, restricted cash, short-term investments and funds receivable from third-party payment service providers. During the quarter, the company repurchased about 1 million American depositary shares for approximately $4.2 million. Its board extended a $50 million share repurchase authorization for another 12 months beginning June 30, 2026; ATRenew had repurchased approximately $14.8 million under the program as of that date.
Service Revenue Declines Amid Merchant Incentives
Net service revenue declined 4.2% year over year to CNY 410 million. Chen attributed the decrease to subsidies for merchants, including logistics support and incentives for new users as PJT Marketplace expanded into fragmented markets, as well as service-fee discounts and waivers for Paipai merchants during the extended 618 promotion.
PJT Marketplace had more than 20.27 million registered merchants at the end of June. Its third-party warehousing and inspection penetration rate reached 84.4%, up about 11.5 percentage points from a year earlier. Paipai’s consignment business increased 22.4% sequentially, while Paipai platform service revenue declined due to merchant subsidies and lower service fees.
In multi-category recycling, service revenue grew more than 30% year over year, according to management. Gold service revenue fell 35% amid volatile, lower gold prices and the company’s decision to provide more value to users. Luxury recycling service revenue increased 77.3%, and ATRenew said it plans to open additional themed multi-category stores, including luxury and sports-focused locations.
International Expansion and Outlook
Founder, Chairman and Chief Executive Officer Kerry Chen said the company’s overseas business is centered on business-to-business transactions, which account for about 90% of overseas revenue. ATRenew reported HK$120 million in monthly export sales in June and launched FoneSquare, an international B2B marketplace intended to build on PJT Marketplace’s domestic model.
The company said it aims to develop FoneSquare into a global version of PJT Marketplace over three years, expanding supply and buyer networks while introducing its automated inspection technology overseas. ATRenew has a B2B system in Hong Kong and plans to begin developing regional capabilities in Dubai in the second half of 2026. It also plans gradual expansion into markets including Dubai and Malaysia. Its consumer-facing overseas brand, ReRe, remains in an early exploratory phase through kiosks in Europe and a recently opened Hong Kong store.
For the third quarter, ATRenew forecast total revenue of CNY 6.34 billion to CNY 6.44 billion, representing year-over-year growth of 23.1% to 25.1%. Management said the outlook incorporates potential effects from major flagship smartphone launches and that it expects to maintain strong revenue and profit growth for the full year.
About ATRenew (NYSE:RERE)
ATRenew Inc, through its subsidiaries, operates pre-owned consumer electronics transactions and services platform in the People's Republic of China. It primarily sells mobile phones, laptops, tablets, drones, digital cameras; and vintage bags, watches, liquor, gold, and various household goods through its online platforms and offline stores, as well as provides services to third-party merchants to sell the products through its platforms. The company was formerly known as AiHuiShou International Co Ltd.
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