RLX Technology Announces Unaudited First Quarter 2025 Financial Results

Core Viewpoint - RLX Technology Inc. reported strong financial results for Q1 2025 despite challenges in the e-vapor industry, driven by international expansion and effective cost management strategies [2][3][10]. Financial Performance - Net revenues reached RMB808.3 million (US$111.4 million) in Q1 2025, a 46.5% increase from RMB551.6 million in Q1 2024, primarily due to international expansion [3][10]. - Gross profit was RMB231.0 million (US$31.8 million) in Q1 2025, up from RMB142.8 million in the same period of 2024 [3]. - Gross margin improved to 28.6% in Q1 2025 from 25.9% in Q1 2024, attributed to a favorable revenue mix and cost optimization initiatives [4]. Operating Expenses - Operating expenses decreased to RMB153.5 million (US$21.2 million) in Q1 2025 from RMB194.4 million in Q1 2024, mainly due to fluctuations in share-based compensation expenses [5]. - Selling expenses increased to RMB59.0 million (US$8.1 million) in Q1 2025 from RMB52.9 million in Q1 2024, driven by higher branding expenses [6]. - General and administrative expenses fell to RMB67.5 million (US$9.3 million) in Q1 2025 from RMB110.0 million in Q1 2024, primarily due to reduced share-based compensation expenses [7]. Income and Profitability - U.S. GAAP income from operations was RMB77.4 million (US$10.7 million) in Q1 2025, compared to a loss of RMB51.6 million in Q1 2024 [8]. - Non-GAAP income from operations surged to RMB105.8 million (US$14.6 million) in Q1 2025 from RMB23.3 million in Q1 2024 [8]. - U.S. GAAP net income was RMB222.7 million (US$30.7 million) in Q1 2025, up from RMB132.6 million in Q1 2024 [9][10]. Cash Flow and Balance Sheet - As of March 31, 2025, the company had cash and cash equivalents totaling RMB16,159.6 million (US$2,226.9 million), an increase from RMB15,870.8 million as of December 31, 2024 [13]. - Net cash generated from operating activities was RMB207.2 million (US$28.5 million) in Q1 2025 [13]. Market Dynamics - The e-vapor industry is facing challenges due to regulatory changes, including bans on disposable products and excise taxes, which are expected to impact the market throughout 2025 [2]. - There is a global trend towards larger-volume e-liquid products, reflecting consumer demand for convenience and cost-effectiveness [2].