111, Inc. (NASDAQ: YI) reported its unaudited financial results for the third quarter ended September 30, 2025, marking the company’s first earnings announcement of the year. Net revenues fell 16.7% to RMB3.0 billion (US$421.5 million) from RMB3.6 billion a year earlier, a decline largely driven by the divestiture of three self‑operated subsidiaries and a challenging macroeconomic environment that dampened demand across the pharmaceutical retail segment.
Operating expenses decreased 16.5% to RMB180.3 million (US$25.3 million) from RMB208.2 million in the same quarter last year, reflecting the company’s shift to an asset‑light model. The reduction in capital‑intensive fulfillment operations has helped lower operating costs, but the company still posted a loss from operations of RMB2.3 million (US$0.3 million) due to the one‑time costs associated with the divestiture and restructuring.
Non‑GAAP income from operations was RMB0.2 million (US$0.03 million), down from RMB7.1 million in Q3 2024, while non‑GAAP net income rose to RMB1.1 million (US$0.2 million) from RMB1.3 million a year earlier. The company’s cash and cash equivalents increased to RMB557.5 million (US$78.3 million) from RMB518.3 million at the end of 2024, underscoring a continued liquidity build‑up amid the transition to a lower‑capex business model.
Management highlighted the divestiture of Shanxi Yihao Yaofang Pharmacy Co., Ltd., Liaoning Yihao Pharmacy Co., Ltd., and Tianjin Yihao Pharmacy, which will now operate as fulfillment partners. CEO Junling Liu emphasized that the move “does not reduce service capability; it simply changes the ownership structure, allowing us to maintain a robust logistics network without the associated capital burden.” He also noted that the “MANTIANXING” initiative has generated an inventory value of RMB498 million and driven a 20.5% increase in GMV and a 31.0% rise in customer count compared to Q2 2025, signaling strong momentum in the company’s core fulfillment network.
The company remains focused on achieving positive operating cash flow and maintaining a sub‑6% operating expense ratio as it adds new fulfillment centers across China. While revenue declined year‑over‑year, the company’s strategic pivot to an asset‑light model and the expansion of the MANTIANXING supply‑chain network are expected to improve profitability and operational efficiency over the long term.
The unaudited financial statements and accompanying footnotes are available on 111, Inc.’s investor relations website for investors seeking detailed disclosures.
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