111(YI) - 2024 Q3 - Quarterly Report

Financial Performance - Net revenues for Q3 2024 were RMB3.6 billion (US $513.1 million), a decrease of 1.8% from RMB3.7 billion in the same quarter last year[5]. - Income from operations was RMB2.4 million (US$ 0.3 million), compared to a loss of RMB80.4 million in the same quarter last year, marking operational profitability for the third consecutive quarter[3][7]. - Gross segment profit increased by 10.5% year-over-year to RMB210.6 million (US $30.0 million)[3]. - Non-GAAP income from operations was RMB7.1 million (US$ 1.0 million), compared to a non-GAAP loss of RMB54.0 million in the same quarter last year[7]. - Net loss attributable to ordinary shareholders improved by 82% to RMB17.1 million (US $2.4 million), accounting for 0.5% of net revenues, down from 2.5% in the same quarter last year[9]. - The company reported a net loss of RMB 3,462 for the three months ended September 30, 2024, significantly improved from a net loss of RMB 83,478 in the same period of 2023[27]. - Non-GAAP net loss attributable to ordinary shareholders for the nine months ended September 30, 2024, was RMB 29,780 million, compared to RMB 107,509 million for the same period in 2023, indicating a reduction of approximately 72.3%[31]. - The loss per ADS for the three months ended September 30, 2024, improved to RMB 0.20 from RMB 1.10 in the same period of 2023[31]. - Non-GAAP loss per ADS for the nine months ended September 30, 2024, was RMB 0.34, down from RMB 1.28 in the same period of 2023, reflecting a 73.4% improvement[31]. - The total loss from operations for the three months ended September 30, 2024, was RMB 2,371 million, compared to a loss of RMB 80,422 million in the same period of 2023[31]. Operating Expenses and Cash Flow - Total operating expenses decreased by 23.2% year-over-year to RMB208.2 million (US$ 29.7 million), representing 5.8% of net revenues, down from 7.4% in the same quarter last year[3][5]. - The company achieved positive operating cash flow for three consecutive quarters, with net cash from operating activities at RMB109.9 million (US $15.7 million)[3]. - Fulfillment expenses were RMB100.0 million (US$ 14.2 million), a decrease of 1.6% from the same quarter last year, maintaining 2.8% of net revenues[11]. - Operating costs and expenses for the three months ended September 30, 2024, were RMB 3,598,304, a decrease from RMB 3,745,667 in the same period of 2023[27]. - The company generated RMB 109,865 in net cash from operating activities for the three months ended September 30, 2024, compared to RMB 35,208 in the same period of 2023[29]. - Share-based compensation expenses for the three months ended September 30, 2024, were RMB 4,756 million, down from RMB 26,402 million in the same period of 2023[31]. Assets and Liabilities - As of September 30, 2024, cash and cash equivalents totaled RMB614.4 million (US$87.6 million), down from RMB673.7 million at the end of 2023[11]. - Cash and cash equivalents, and restricted cash at the end of the period were RMB 564,411, down from RMB 766,218 at the beginning of the period[29]. - Total current assets increased slightly to RMB 2,886,888 as of September 30, 2024, compared to RMB 2,933,331 as of December 31, 2023[26]. - The company’s total liabilities were RMB 2,722,172 as of September 30, 2024, compared to RMB 2,812,932 as of December 31, 2023, indicating a reduction in liabilities[26]. - The company’s inventories decreased to RMB 1,532,170 as of September 30, 2024, from RMB 1,419,396 as of December 31, 2023[26]. Strategic Initiatives - The company is investing in AI and digital technologies to enhance operational efficiency and adapt to industry changes, focusing on digital transformation and out-of-hospital drug distribution[4]. - The company plans to continue expanding its online healthcare services and enhance its digital marketing capabilities to improve market competitiveness[22]. - 111, Inc. aims to maintain compliance with Nasdaq listing criteria and manage growth effectively amid evolving regulatory requirements[21]. - The company aims to continue improving its financial performance and reducing losses in the upcoming quarters[31].