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• Net Revenue: RMB808 million, a 47% year-over-year increase.

• Gross Profit Margin: Improved to 28.6%, a 2.7 percentage point increase year over year and 1.6 percentage points quarter over quarter.

• Non-GAAP Operating Profit: RMB106 million, with a 9 percentage point increase in operating profit margin year over year.

• Operating Cash Inflow: RMB207 million, up from RMB4 million in the same quarter of the previous year.

• Cash Position: Total financial assets at RMB16.2 billion as of March 31, 2025, compared to RMB15.9 billion as of December 31, 2024.

• Inventory Turnover Days: 25 days.

• Receivable Turnover Days: 13 days.

• Payable Turnover Days: 81 days.

• Warning! GuruFocus has detected 2 Warning Signs with RLX.

Release Date: May 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RLX Technology Inc (NYSE:RLX) reported a 47% year-over-year increase in net revenues to RMB808 million for the first quarter of 2025.

• The company achieved a non-GAAP operating profit of RMB106 million, marking its sixth consecutive quarter of positive non-GAAP operating profit.

• Gross profit margin improved to 28.6%, a 2.7 percentage point increase year over year, driven by a favorable revenue mix and cost optimization.

• RLX Technology Inc (NYSE:RLX) has a strong cash position with total financial assets of RMB16.2 billion as of March 31, 2025.

• The company is well-positioned to adapt to regulatory changes with advanced in-house product development capabilities and a robust inventory management system.

Negative Points

• The global e-vapor industry is facing increased regulatory scrutiny, with bans on disposable e-vapor products in key markets like the UK and New Zealand.

• Despite the increase in e-liquid consumption, the lower average selling price of big puff products has stunted revenue growth across the industry.

• RLX Technology Inc (NYSE:RLX) anticipates negative growth in industry dollar value for 2025 due to the transitional shift to big puff products.

• The company faces operational challenges due to evolving regulations and trends, which require constant adaptation and innovation.

• In Mainland China, the dominance of illegal products limits growth opportunities for RLX Technology Inc (NYSE:RLX) despite regulatory enforcement improvements.

Q & A Highlights

Q: Could you share any latest updates on the progression of RLX's overseas expansion and plans to enter or consolidate new markets? Also, how do you assess the potential impact of evolving regulatory changes on your business? A: Sam Tsang, Head of Capital Markets, explained that RLX is maintaining a prudent approach to expanding into new markets due to evolving global macro and regulatory environments. They expect to take another one to two quarters to evaluate further market expansion. Regarding regulatory changes, RLX is adapting to stricter rules and clearer guidelines in Southeast Asia and environmental concerns in Europe and Oceania. Their strong in-house product development capabilities position them well to adapt to these changes.