111, Inc.

Q4 2024 net revenues were RMB3.8 billion and gross segment profit was RMB202.5 million, both down 6.3% and 5.5% YoY, respectively. Q4 total operating expenses fell 50.1% to RMB209.8 million, or 5.5% of net revenues; non-GAAP loss from operations was RMB2.3 million, and non-GAAP net loss attributable to ordinary shareholders was RMB14.8 million. For full-year 2024, net revenues were RMB14.4 billion and gross segment profit was RMB829.2 million, down 3.7% and 2.3% YoY, respectively. Full-year operating expenses decreased 31% to RMB827.1 million, operating income was RMB2.1 million versus a RMB351 million loss in 2023, non-GAAP operating income was RMB22.3 million, and the company generated RMB263 million of positive operating cash flow. Cash and cash equivalents, restricted cash, and short-term investments were RMB518.3 million as of December 31, 2024. Management did not provide formal 2025 revenue or EPS guidance on the call.

CEO Junling Liu framed 2024 as a difficult year for the industry, citing macro pressure, healthcare reforms, and weak consumer spending, but said 111 still reached a major milestone by delivering its first operating profit and positive cash flow. He emphasized that the company’s strategy is centered on digitization, AI, and a decentralized inventory model to improve efficiency, expand assortment, and support competitive pricing. His tone was confident and resilient, with repeated references to 111’s ability to compete through technology and operational execution.

CFO Luke Chen focused on the financial turnaround and expense discipline. He said Q4 operating expenses fell to 5.5% of revenue from 10.2% a year ago, with sales and marketing at 2.0%, G&A at 0.5%, and technology at 0.4% of net revenue; for the full year, operating expenses were 5.7% of revenue versus 8.0% in 2023. He also highlighted RMB518.3 million of cash and equivalents plus short-term investments, RMB263 million of annual operating cash flow, and an update on RMB1.08 billion of outstanding redemption-related liabilities, noting agreements or commitment letters covering approximately 97% of that amount to reschedule repayments. He said the company is confident it is on a path toward sustainable profitability.

Analysts pressed management on how the weak macro environment affected the business, what drove gross margin improvement, and how the company cut operating expenses so sharply. Management replied that the key drivers were better operating leverage, staffing and expense optimization, a more efficient fulfillment network, and a technology-heavy operating model. Questions also focused on 2025 growth, AI investment, and whether AI will become a new business line; management said AI will be embedded across pricing, assortment, supply chain, and customer service, but did not give a budget number. On logistics and fulfillment, management said more franchise fulfillment centers and the Kunpeng network should reduce delivery costs and improve regional fulfillment.