RLX

This article first appeared on GuruFocus. Net Revenues: RMB1.01 billion in Q2 2026, a 14.8% increase year-over-year from RMB880 million. Gross Profit: RMB357.8 million, up 47.8% year-over-year. Gross Margin: 35.4%, expanding 790 basis points year-over-year and 360 basis points sequentially. Non-GAAP Income from Operations: RMB149.6 million, up 28.8% year-over-year. Non-GAAP Net Income: RMB238.8 million for the quarter. International Revenue Mix: Approximately 70% of total net revenues. Total Capital Resources: RMB13.9 billion as of June 30, 2026, including cash, cash equivalents, restricted cash, short-term bank deposits, and liquid investment securities. Warning! GuruFocus has detected 5 Warning Signs with RLX. Is RLX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 14.8% year-over-year to RMB1.01 billion, driven by international expansion. Gross profit increased 47.8% year-over-year, with gross margin expanding to 35.4%. Delivered 11th consecutive quarter of positive non-GAAP operating profit, up 28.8% year-over-year. Strategic investments in European distribution enhance route-to-market and shelf space control. Strong balance sheet with RMB13.9 billion in capital resources supports disciplined capital allocation and M&A. Revenue and gross profit moderated sequentially due to trade inventory normalization after Q1 shipment pull-forward. Gross margin expected to settle back to a healthy balanced range as product mix normalizes. Consolidation of Western European distribution platform will lower percentage gross margins due to structural mix shift. Mainland China sales expected to be broadly flat year-over-year due to conservative regulatory approval timelines. US market strategy remains cautious, with no large-scale capital commitment until regulatory clarity improves. Q: What is the company's capital allocation strategy given its strong cash balance, and what are the criteria for future acquisitions? A: Sam Tsang, Head of Investor Relations, stated that capital is allocated across three core priorities: 1) organic growth and high-ROI initiatives like multi-category R&D and supply chain localization; 2) selective, highly accretive M&A that boosts strategic capabilities; and 3) direct shareholder returns through share repurchases and dividends. For M&A, the company does not have a specific valuation cap but requires a clear timeline for cash payback, non-dilutive structure, and EPS accretion. They focus on larger-scale opportunities that can meaningfully enhance global infrastructure. Q: What is the outlook for overseas growth and margins in the second half of 2026, especially considering the recent acquisition? A: Sam Tsang explained that the company is prioritizing retail sell-through velocity and channel inventory health over pushing volume. The consolidation of the newly acquired Western European distribution platform starting in Q3 will deliver a step-change increase in reported international revenue. While gross margins will normalize from the temporary Q2 mix shift, the acquisition will lower percentage margins due to the nature of distribution businesses, but will meaningfully expand operating profit and net profit on an absolute dollar basis. Q: What is the company's strategy for the US market, and what is the impact of stricter domestic regulations in China? A: Sam Tsang noted that the company's stance on the US is disciplined and ROI-driven. While non-listed affiliates have PMTA applications in advanced stages, RLX will not commit large-scale capital until the regulatory pathway is clear. Instead, capital is directed to transparent markets in Europe and Asia. Regarding China, the crackdown on illegal products is seen as a positive long-term development. However, due to more conservative approval timelines, the company expects Mainland China sales for the full year to be broadly flat year over year. Q: How does the company view competition in Europe, and what is the strategic plan for new categories like oral nicotine pouches? A: Sam Tsang highlighted RLX's competitive advantages as a pure-play non-cigarette business with strong supply chain efficiency and deep specialty vape retail relationships. The company is strengthening route-to-market control through strategic investments. For oral nicotine pouches, they are a principal growth driver. RLX has embedded specialized pouch production lines into its new Southeast Asia manufacturing hub and will plug this line directly into its strengthened European distribution network to gain immediate retail access. Q: Can you elaborate on the strategic rationale and financial details of the Western European distribution investment? A: CFO Lu Chao detailed that in July 2026, the company made a controlling investment in a leading Western European distributor of next-generation smoke-free products and FMCG goods. This entity brings an offline network serving over 30,000 retail endpoints and a proprietary B2B platform connecting over 20,000 independent merchants. The company expects to unlock significant operational and supply chain synergies, and the entity's results will be fully consolidated starting in Q3 2026. Q: What drove the significant gross margin expansion in the second quarter, and is it sustainable? A: CFO Lu Chao reported that gross margin expanded to 35.4%, up 790 basis points year-over-year and 360 basis points sequentially. This was driven by supply chain optimization, manufacturing yield improvement, and a favorable geographic and product mix shift. However, the company expects gross margin to settle back to a healthy, balanced range as product mix and shipment flows normalize. Q: What were the key financial highlights for the second quarter of 2026? A: CFO Lu Chao reported net revenues of RMB1.01 billion, a 14.8% year-over-year increase. Gross profit rose 47.8% year-over-year to RMB357.8 million. The company delivered its 11th consecutive quarter of positive non-GAAP operating profit, with non-GAAP income from operations reaching RMB149.6 million, up 28.8% year-over-year. Non-GAAP net income for the quarter was RMB238.8 million. Total capital resources stood at RMB13.9 billion as of June 30, 2026. Q: How is the company's strategy evolving in mature markets like Europe, and what role does the acquisition play? A: CEO Kate Wang explained that traditional wholesaling models are no longer sufficient in mature environments. The company is aggressively upgrading its distribution architecture through direct channel investments, strategic alliances, and channel innovation. In Europe, they are expanding through capital-efficient strategic partnerships and equity investments, combining their world-class supply chain with local distribution leaders to secure direct sell-out visibility and dedicated retail shelf space. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in RLX Technology Inc. Sponsored ADR? Here are five stocks we like better. Q2 revenue rose 14.8% year over year to RMB1.01 billion, with international markets contributing about 70% of total revenue. Management attributed sequential moderation to distributor inventory normalization rather than weaker underlying demand. Profitability strengthened, with gross profit up 47.8% and gross margin expanding to 35.4%, while non-GAAP operating profit increased 28.8%. RLX cautioned that some margin gains reflected temporary product and geographic mix factors. RLX will begin consolidating a Western European distributor in Q3, expanding access to more than 30,000 retail endpoints and over 20,000 independent merchants. The deal is expected to increase international revenue and profit scale, although its lower-margin distribution model may reduce percentage gross margins. RLX Technology (NYSE:RLX) reported second-quarter 2026 revenue growth of 14.8% year over year, supported primarily by international expansion, while management outlined plans to deepen its European distribution footprint and broaden its portfolio of smoke-free products. Net revenue for the quarter reached RMB1.01 billion, compared with RMB880 million a year earlier. International markets accounted for approximately 70% of total revenue, Chief Financial Officer Chao Lu said. Revenue moderated sequentially from the first quarter, which management said had benefited from shipments pulled forward ahead of regulatory export adjustments. → Lumentum Just Delivered the AI Growth Investors Wanted Chief Executive Officer Kate Wang said the sequential moderation did not reflect weaker end-market demand. Rather, she attributed it to trade inventory normalization after distributors pre-stocked in the first quarter. Because distribution partners manage multi-brand portfolios, the earlier stocking activity temporarily reduced visibility into sellout rates, she said. “Underlying demand across our key international markets remains healthy and resilient,” Wang said, adding that the company is prioritizing retail execution and upgrades to its global operating infrastructure. → Ryman Checks Into a $1.38B Hospitality Upgrade Gross profit increased 47.8% year over year to RMB357.8 million. Gross margin was 35.4%, rising 790 basis points from the prior-year period and 360 basis points sequentially. Lu attributed the improvement to supply-chain optimization, higher manufacturing yields, and favorable shifts in geographic and product mix. The company recorded its 11th consecutive quarter of positive non-GAAP operating profit. Non-GAAP income from operations rose 28.8% year over year to RMB149.6 million, while non-GAAP net income totaled RMB238.8 million. → Joby’s Defense Pivot Accelerates With $500M Resonant Sciences Deal Management cautioned that second-quarter gross-margin expansion was partly influenced by temporary product and revenue mix factors. As product mix and shipment flows normalize, the company expects gross margin to return to what it described as a healthy and balanced range. The company also noted that interest-rate movements and foreign-exchange effects could create fluctuations in reported results. RLX said it made a controlling investment in July 2026 in a Western European distributor of next-generation smoke-free products and fast-moving consumer goods. The acquired platform directly serves more than 30,000 retail endpoints through its offline network and operates a B2B digital commerce platform connected to more than 20,000 independent merchants, according to Lu. The investment follows RLX’s May 2025 acquisition of an established European e-vapor company with retail and online operations. Wang said the company is using a combination of acquisitions, partnerships and organic channel development to expand in Europe, which she called a cornerstone of RLX’s global strategy. The Western European distribution business will be fully consolidated into RLX’s financial statements beginning in the third quarter. Management said the transaction is expected to provide a step-change increase in reported international revenue in the second half, while supporting longer-term supply-chain and commercial synergies. However, Lu said the addition of a downstream distribution business will affect percentage gross margin because such businesses generally have lower gross-margin profiles than proprietary branded products. He said management expects the deal to expand operating-profit and net-profit scale on an absolute basis. RLX said it does not intend to convert the acquired distributor into an exclusive channel for its own products. Instead, it plans to maintain the platform as an open, multi-brand marketplace while seeking to reduce distribution costs and improve sourcing terms through its supply-chain scale and brand relationships. As of June 30, RLX had RMB13.9 billion in total capital resources, including cash equivalents, restricted cash, short-term bank deposits and liquid investment securities. In response to an analyst question on capital allocation, management said it is prioritizing three areas: Organic growth investments, including multi-category research and development, Southeast Asian manufacturing capacity and product launches; Selective acquisitions that add capabilities in areas such as research and development, local manufacturing, brands and distribution; and Direct shareholder returns through share repurchases and dividends, subject to board approval and market conditions. Management said it has no fixed valuation ceiling or revenue threshold for acquisitions. Instead, it said potential transactions must be benchmarked against comparable deals and RLX’s public valuation, offer a clear cash-payback timeline, be structurally non-dilutive and provide earnings-per-share accretion. RLX is expanding beyond e-vapor products into oral nicotine pouches and heat-not-burn products. Wang said the company has commercialized an oral nicotine pouch line and is increasing manufacturing capacity and distribution. It has also developed heat-not-burn technologies and market-ready products, though commercial launches will depend on market and regulatory conditions. The company is constructing a manufacturing hub in Southeast Asia that will support multiple product categories, including pouch production lines. Management said the facility is intended to improve tariff positioning, streamline logistics and reduce exposure to trade friction and geopolitical uncertainty. In the U.S., RLX said its non-listed affiliates have submitted PMTA applications that are in advanced stages and awaiting regulatory decisions. Management said it will not make large-scale commercial investments in the U.S. until regulatory pathways and enforcement standards become more predictable. For mainland China, management said tighter enforcement against illegal and non-compliant e-cigarette products should benefit compliant operators over the long term. Still, RLX expects full-year mainland China sales to be broadly flat year over year as approval timelines have become more conservative amid heightened regulatory oversight. RLX Technology Inc (NYSE:RLX) is a China-based company specializing in electronic nicotine delivery systems. The company develops, manufactures and markets closed-pod vaping devices and prefilled cartridges, positioning its products as an alternative to traditional combustible tobacco. RLX emphasizes consistent nicotine delivery, flavor variety and convenience through its proprietary e-liquid formulations and device design. RLX operates a vertically integrated business model that encompasses research and development, production, quality control and sales. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RLX Technology Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

SHENZHEN, China, Aug. 14, 2026 /PRNewswire/ -- RLX Technology Inc. ("RLX Technology" or the "Company") (NYSE: RLX), a leading global branded e-vapor company, today announced its unaudited financial results for the second quarter ended June 30, 2026. Second Quarter 2026 Financial Highlights Net revenues were RMB1,010.5 million (US$148.9 million) in the second quarter of 2026, increasing by 14.8% from RMB880.0 million in the same period of 2025. Gross margin was 35.4% in the second quarter of 2026, compared with 27.5% in the same period of 2025. Non-GAAP income from operations[1] was RMB149.6 million (US$22.0 million) in the second quarter of 2026, increasing by 28.8% from RMB116.2 million in the same period of 2025. U.S. GAAP net income was RMB222.0 million (US$32.7 million) in the second quarter of 2026, increasing by 1.6% from RMB218.5 million in the same period of 2025. Non-GAAP net income[1] was RMB238.8 million (US$35.2 million) in the second quarter of 2026, compared with RMB291.2 million in the same period of 2025. "We delivered solid second quarter results as we continued to strengthen our global business with a focus on quality, stability, and long-term resilience," said Ms. Ying (Kate) Wang, Co-founder, Chairperson, and Chief Executive Officer of RLX Technology. "As our industry matures, competitive advantage is increasingly defined not only by product innovation but also by retail execution and shelf-space leadership. We have refined our global route-to-market strategies accordingly – deepening store-level execution in Asia while advancing a dual-engine approach in Europe that balances strategic investment in top-tier local partners with organic growth. At the same time, we are expanding beyond our leadership in e-vapor into a broader portfolio of smoke-free products, scaling our newly launched modern oral nicotine pouches and building our presence across other smokeless categories. Supported by a rock-solid balance sheet and disciplined capital management, we are confident that pairing greater channel autonomy with user-centric products and multi-category innovation will continue to drive sustainable growth." Mr. Chao Lu, Chief Financial Officer of RLX Technology, commented, "Second quarter net revenues were RMB1.01 billion, up 14.8% year over year, with gross profit rising 47.8% year over year to RMB357.8 million. As expected, revenues and gross profit moderated from the first quarter, which included a disclosed one-time benefit due to the change of export related regulation. In July 2026, we acquired a 51% equity interest in one of Western Europe's largest distributors of next-generation smoke-free and FMCG products, deepening our presence in the region. The entity brings an extensive offline distribution footprint and a proprietary B2B digital marketplace serving a broad base of retail merchants, supporting long-term regional development. Moving forward, we remain dedicated to disciplined capital allocation, balancing strategic growth investments with ongoing shareholder returns to maximize long-term shareholder value." Second Quarter 2026 Financial Results Net revenues were RMB1,010.5 million (US$148.9 million) in the second quarter of 2026, increasing by 14.8% from RMB880.0 million in the same period of 2025. The increase was primarily due to the Company's international expansion and contributions from the Company's May 2025 acquisition. Net revenues from international business represented 68.5% of net revenues for the period. Gross profit was RMB357.8 million (US$52.7 million) in the second quarter of 2026, increasing by 47.8% from RMB242.1 million in the same period of 2025. Gross margin increased to 35.4% in the second quarter of 2026 from 27.5% in the same period of 2025, primarily due to a favorable change in the revenue mix and further supply chain optimization. Operating expenses were RMB227.5 million (US$33.5 million) in the second quarter of 2026, compared with RMB203.1 million in the same period of 2025. The increase was driven by higher salary and welfare expenses primarily related to the Company's May 2025 acquisition, partially offset by a significant decrease in share-based compensation expenses. Selling expenses were RMB123.7 million (US$18.2 million) in the second quarter of 2026, compared with RMB84.6 million in the same period of 2025, primarily due to an increase in salary and welfare expenses, branding expenses, depreciation and amortization expenses related to the Company's May 2025 acquisition, partially offset by a decrease in share-based compensation expenses. General and administrative expenses were RMB74.4 million (US$11.0 million) in the second quarter of 2026, compared with RMB88.4 million in the same period of 2025, primarily due to a significant decrease in share-based compensation expenses, partially offset by an increase in legal and other consulting fees. Research and development expenses were RMB29.4 million (US$4.3 million) in the second quarter of 2026, compared with RMB30.1 million in the same period of 2025. The slight decrease was primarily due to a decrease in share-based compensation expenses. U.S. GAAP income from operations was RMB130.4 million (US$19.2 million) in the second quarter of 2026, increasing by 234.7% from RMB39.0 million in the same period of 2025. Non-GAAP income from operations was RMB149.6 million (US$22.0 million) in the second quarter of 2026, increasing by 28.8% from RMB116.2 million in the same period of 2025. Income tax expense was RMB24.8 million (US$3.7 million) in the second quarter of 2026, compared with RMB28.5 million in the same period of 2025. U.S. GAAP net income was RMB222.0 million (US$32.7 million) in the second quarter of 2026, increasing by 1.6% from RMB218.5 million in the same period of 2025. Non-GAAP net income was RMB238.8 million (US$35.2 million) in the second quarter of 2026, compared with RMB291.2 million in the same period of 2025. U.S. GAAP basic and diluted net income per American depositary share ("ADS") were RMB0.178 (US$0.026) and RMB0.167 (US$0.025), respectively, in the second quarter of 2026, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.178 and RMB0.166, respectively, in the same period of 2025. Non-GAAP basic and diluted net income per ADS[2] were RMB0.190 (US$0.028) and RMB0.178 (US$0.026), respectively, in the second quarter of 2026, compared with non-GAAP basic and diluted net income per ADS of RMB0.234 and RMB0.218, respectively, in the same period of 2025. Balance Sheet and Cash Flow As of June 30, 2026, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, net, short-term investments, long-term bank deposits, net, and long-term investment securities, net, of RMB13,883.4 million (US$2,046.2 million), compared with RMB14,529.7 million as of March 31, 2026. In the second quarter of 2026, net cash used in operating activities was RMB63.2 million (US$9.3 million). Strategic Investment In July 2026, RLX Technology acquired a 51% equity interest and board control in a leading Western European distributor of next-generation smoke-free and FMCG products. With its multi-channel logistics network and a proprietary B2B digital ordering platform, the entity provides an established and highly efficient route-to-market across key European territories. Through this strategic investment, RLX Technology intends to leverage its global supply chain capabilities and capital resources to drive deep commercial collaboration with this entity, aiming to optimize costs and capture cross-selling synergies. Its financial results will be consolidated into RLX Technology's financial statements beginning in the third quarter of 2026. Conference Call The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 14, 2026 (8:00 PM Beijing/Hong Kong Time on August 14, 2026). Dial-in details for the earnings conference call are as follows: Participants may choose between the English and Chinese simultaneous interpretation options above when joining the conference call. Please note that the Chinese simultaneous interpretation option is in listen-only mode. Participants should dial in 10 minutes before the scheduled start time and ask to be connected to the call for "RLX Technology Inc." using the appropriate English or Chinese Participant Code above. Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.relxtech.com. A replay of the conference call will be accessible approximately two hours after the conclusion of the call until August 21, 2026, by dialing the following telephone numbers: About RLX Technology Inc. RLX Technology Inc. (NYSE: RLX) is a leading global branded e-vapor company. The Company leverages its strong in-house technology, product development capabilities and in-depth insights into adult smokers' needs to develop superior e-vapor products. For more information, please visit: http://ir.relxtech.com. Non-GAAP Financial Measures The Company uses non-GAAP net income, non-GAAP income from operations and non-GAAP basic and diluted net income per ADS, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP net income represents net income excluding share-based compensation expenses, amortization and depreciation of assets arising from fair value step-up in business acquisitions, and tax effects on non-GAAP adjustments. Non-GAAP income from operations represents net income from operations excluding share-based compensation expenses and amortization and depreciation of assets arising from fair value step-up in business acquisitions. Non-GAAP basic and diluted net income per ADS is computed using non-GAAP net income attributable to RLX Technology Inc. and the same number of ADSs used in the U.S. GAAP basic and diluted net income per ADS calculation. The Company presents these non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company believes that they help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net income. The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance, as they could provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by the management in its financial and operational decision making. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. They should not be considered in isolation or construed as an alternative to net income, basic and diluted net income per ADS or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review its historical non-GAAP financial measures against the most directly comparable U.S. GAAP measures. The non-GAAP financial measures here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure. For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB6.7851 to US$1.00, the exchange rate on June 30, 2026, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred to could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" and similar statements. Among other things, quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's growth strategies; its future business development, results of operations and financial condition; trends and competition in the global e-vapor market; changes in its revenues and certain cost or expense items; governmental policies, laws and regulations across various jurisdictions relating to the Company's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is current as of the date of this press release, and the Company does not undertake any obligation to update such information, except as required under applicable law. For more information, please contact: In China: RLX Technology Inc.Head of Capital MarketsSam TsangEmail: [email protected] Piacente Financial CommunicationsJenny CaiTel: +86-10-6508-0677Email: [email protected] In the United States: Piacente Financial CommunicationsBrandi PiacenteTel: +1-212-481-2050Email: [email protected] View original content:https://www.prnewswire.com/news-releases/rlx-technology-announces-unaudited-second-quarter-2026-financial-results-302851705.html

SHENZHEN, China, May 20, 2026 /PRNewswire/ -- RLX Technology Inc. ("RLX Technology" or the "Company") (NYSE: RLX), a leading global branded e-vapor company, today announced its unaudited financial results for the first quarter ended March 31, 2026. First Quarter 2026 Financial Highlights Net revenues were RMB1,585.8 million (US$229.9 million) in the first quarter of 2026, increasing by 96.2% from RMB808.3 million in the same period of 2025. Gross margin was 31.8% in the first quarter of 2026, compared with 28.6% in the same period of 2025. Non-GAAP income from operations[1] was RMB310.3 million (US$45.0 million) in the first quarter of 2026, increasing by 187.9% from RMB107.8 million in the same period of 2025. U.S. GAAP net income was RMB294.2 million (US$42.6 million) in the first quarter of 2026, increasing by 32.1% from RMB222.7 million in the same period of 2025. Non-GAAP net income[1] was RMB357.3 million (US$51.8 million) in the first quarter of 2026, increasing by 41.4% from RMB252.7 million in the same period of 2025. "We began this year with robust first-quarter results, underpinned by a highly scalable global ecosystem and our ability to capture emerging market opportunities," said Ms. Ying (Kate) Wang, Co-founder, Chairperson, and Chief Executive Officer of RLX Technology. "We continued to accelerate our international expansion and broaden our global operations. Notably, we refined our user-first approach through highly localized strategies and deep engagement with trusted regional business partners to ensure superior product-market fit, strengthening our global competitiveness. We also integrated our R&D, manufacturing, and commercial operations into Nexus, our cutting-edge hub that is driving greater supply chain efficiencies while allowing us to seamlessly meet rising demand. Looking ahead, we will build on this momentum by focusing on innovative and user-centric products, strengthening our distribution and retail capabilities, and deepening our presence in Europe. Our uncompromising commitment to responsibility and adult-user harm reduction remains the core engine of our long-term growth." Mr. Chao Lu, Chief Financial Officer of RLX Technology, commented, "In the first quarter, we delivered rapid top-line growth, with net revenues increasing to RMB1.59 billion, up 96.2% year over year and 38.9% quarter over quarter. This acceleration was fueled by momentum across our international operations, accretion from our acquired European entity, and steady progress in our mainland China business, as well as a one-time impact from changes in China's export policies. The operating leverage from this growth translated into significant profitability, with non-GAAP operating income surging 187.9% to RMB310.3 million. We also structurally enhanced our margin profile through strict cost discipline and scale efficiencies across our comprehensive, broadly appealing product portfolio. Supported by a strong balance sheet, we enter the remainder of the year with the financial flexibility to execute our next phase of growth, accelerate our market penetration in Asia and Europe, and generate sustainable, long-term value for our shareholders." First Quarter 2026 Financial Results Net revenues were RMB1,585.8 million (US$229.9 million) in the first quarter of 2026, increasing by 96.2% from RMB808.3 million in the same period of 2025. The increase was primarily due to the Company's international expansion and contributions from the Company's May 2025 acquisition. Net revenues from international business represented 72.3% of net revenues for the period. Gross profit was RMB504.3 million (US$73.1 million) in the first quarter of 2026, increasing by 118.3% from RMB231.0 million in the same period of 2025. Gross margin increased to 31.8% in the first quarter of 2026 from 28.6% in the same period of 2025, primarily due to a favorable change in the revenue mix and further supply chain optimization. Operating expenses were RMB259.6 million (US$37.6 million) in the first quarter of 2026, compared with RMB153.5 million in the same period of 2025. The increase was driven by higher salary and welfare expenses related to the Company's May 2025 acquisition and an increase in share-based compensation expenses. Selling expenses were RMB122.0 million (US$17.7 million) in the first quarter of 2026, compared with RMB59.0 million in the same period of 2025, primarily due to an increase in salary and welfare expenses, as well as depreciation and amortization. General and administrative expenses were RMB107.2 million (US$15.5 million) in the first quarter of 2026, compared with RMB67.5 million in the same period of 2025, primarily due to an increase in share-based compensation expenses and salary and welfare expenses. Research and development expenses were RMB30.4 million (US$4.4 million) in the first quarter of 2026, compared with RMB27.1 million in the same period of 2025, primarily due to an increase in share-based compensation expenses. U.S. GAAP income from operations was RMB244.6 million (US$35.5 million) in the first quarter of 2026, increasing by 215.9% from RMB77.4 million in the same period of 2025. Non-GAAP income from operations was RMB310.3 million (US$45.0 million) in the first quarter of 2026, increasing by 187.9% from RMB107.8 million in the same period of 2025. Income tax expense was RMB45.3 million (US$6.6 million) in the first quarter of 2026, compared with RMB28.2 million in the same period of 2025. U.S. GAAP net income was RMB294.2 million (US$42.6 million) in the first quarter of 2026, increasing by 32.1% from RMB222.7 million in the same period of 2025. Non-GAAP net income was RMB357.3 million (US$51.8 million) in the first quarter of 2026, increasing by 41.4% from RMB252.7 million in the same period of 2025. U.S. GAAP basic and diluted net income per American depositary share ("ADS") were RMB0.231 (US$0.033) and RMB0.216 (US$0.031), respectively, in the first quarter of 2026, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.181 and RMB0.170, respectively, in the same period of 2025. Non-GAAP basic and diluted net income per ADS[2] were RMB0.280 (US$0.041) and RMB0.263 (US$0.038), respectively, in the first quarter of 2026, compared with non-GAAP basic and diluted net income per ADS of RMB0.205 and RMB0.193, respectively, in the same period of 2025. Balance Sheet and Cash Flow As of March 31, 2026, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, net, short-term investments, long-term bank deposits, net, and long-term investment securities, net, of RMB14,529.7 million (US$2,106.4 million), compared with RMB15,732.1 million as of December 31, 2025. In the first quarter of 2026, net cash used in operating activities was RMB68.8 million (US$10.0 million). Conference Call The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on May 20, 2026 (8:00 PM Beijing/Hong Kong Time on May 20, 2026). Dial-in details for the earnings conference call are as follows: Participants may choose between the English and Chinese simultaneous interpretation options above when joining the conference call. Please note that the Chinese simultaneous interpretation option is in listen-only mode. Participants should dial in 10 minutes before the scheduled start time and ask to be connected to the call for "RLX Technology Inc." using the appropriate English or Chinese Participant Code above. Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.relxtech.com. A replay of the conference call will be accessible approximately two hours after the conclusion of the call until May 27, 2026, by dialing the following telephone numbers: About RLX Technology Inc. RLX Technology Inc. (NYSE: RLX) is a leading global branded e-vapor company. The Company leverages its strong in-house technology, product development capabilities and in-depth insights into adult smokers' needs to develop superior e-vapor products. For more information, please visit: http://ir.relxtech.com. Non-GAAP Financial Measures The Company uses non-GAAP net income, non-GAAP income from operations and non-GAAP basic and diluted net income per ADS, each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. Non-GAAP net income represents net income excluding share-based compensation expenses, amortization and depreciation of assets arising from fair value step-up in business acquisitions, and tax effects on non-GAAP adjustments. Non-GAAP income from operations represents net income from operations excluding share-based compensation expenses and amortization and depreciation of assets arising from fair value step-up in business acquisitions. Non-GAAP basic and diluted net income per ADS is computed using non-GAAP net income attributable to RLX Technology Inc. and the same number of ADSs used in the U.S. GAAP basic and diluted net income per ADS calculation. The Company presents these non-GAAP financial measures because they are used by the management to evaluate its operating performance and formulate business plans. The Company believes that they help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that are included in net income. The Company also believes that the use of the non-GAAP measures facilitates investors' assessment of its operating performance, as they could provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects, and allow for greater visibility with respect to key metrics used by the management in its financial and operational decision making. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. They should not be considered in isolation or construed as an alternative to net income, basic and diluted net income per ADS or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review its historical non-GAAP financial measures against the most directly comparable U.S. GAAP measures. The non-GAAP financial measures here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. The Company encourages investors and others to review its financial information in its entirety and not rely on any single financial measure. For more information on the non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and non-GAAP Results" set forth at the end of this press release. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB6.8980 to US$1.00, the exchange rate on March 31, 2026, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred to could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "potential," "continue" and similar statements. Among other things, quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's growth strategies; its future business development, results of operations and financial condition; trends and competition in the global e-vapor market; changes in its revenues and certain cost or expense items; governmental policies, laws and regulations across various jurisdictions relating to the Company's industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is current as of the date of this press release, and the Company does not undertake any obligation to update such information, except as required under applicable law. View original content:https://www.prnewswire.com/news-releases/rlx-technology-announces-unaudited-first-quarter-2026-financial-results-302777365.html

This article first appeared on GuruFocus. Net Revenue: RMB1.59 billion, up 96.2% year-over-year and 38.9% quarter-over-quarter. Gross Margin: 31.8%, up from 28.6% in the same period last year. Non-GAAP Operating Margin: 19.6%, compared to 13.3% in the same period last year. Non-GAAP Income from Operations: RMB310.3 million, a 187.9% increase year-over-year. Non-GAAP Net Income: RMB357.3 million, a 41.4% increase compared to RMB252.7 million last year. Total Financial Assets: RMB14.53 billion (approximately USD2.1 billion) as of March 31, 2026. Accounts and Notes Receivable Turnover Days: 15 days. Inventory Turnover Days: 32 days. Payable Turnover Days: 49 days. Warning! GuruFocus has detected 3 Warning Signs with RLX. Is RLX fairly valued? Test your thesis with our free DCF calculator. Release Date: May 20, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. RLX Technology Inc (NYSE:RLX) achieved strong revenue growth, increasing by 96.2% year-over-year and 38.9% quarter-over-quarter. The company's international business accounted for over 70% of total net revenues, demonstrating strong global expansion. Gross margin expanded to 31.8% in the first quarter, up from 28.6% in the same period last year, due to favorable product mix and supply chain optimization. RLX Technology Inc (NYSE:RLX) has a robust financial position with total financial assets of RMB14.53 billion, providing flexibility for future growth. The company's integrated smart manufacturing facility, Nexus, is fully operational, enhancing operational efficiency and competitive edge. The sequential decrease in total financial assets from RMB15.73 billion to RMB14.53 billion reflects dividend payments, impacting cash reserves. The cancellation of the Chinese export tax rebate may affect production costs, although the long-term impact is expected to be minimal. RLX Technology Inc (NYSE:RLX) faces regulatory uncertainties in the US market, with no current operations there. The company remains cautious in its European M&A strategy due to inherent uncertainties in potential opportunities. The timing is not optimal for large-scale investment in the HMB heated tobacco category, limiting immediate growth opportunities in new product categories. Q: Can management provide an update on the integration of the European invested company and your operations in the UK market? Also, what are the implications of the recent FDA decisions on flavored vapes approval in the US for RLX's global strategy? A: Our integration approach in Europe focuses on strategic alignment rather than operational interference, leveraging local expertise to refine our strategy. We are empowering our European team with resources to scale operations. Regarding the FDA's decisions, we do not currently operate in the US but view the developments as potentially favoring credible industry players. In China, we support regulatory measures for a sustainable industry. Our focus remains on Asia and Europe, where we can drive tangible growth. - Sam Tsang, Head of Capital Markets Q: What are the implications of the UK's smoking ban for people born after 2008 on your business, and how do you view the development of the vape industry in Europe? A: The UK's smoking ban is a significant milestone, positioning e-vapor as the only legal nicotine channel for future generations. This, combined with upcoming regulations, raises entry barriers, allowing compliant leaders like RLX to expand market share in the UK. - Sam Tsang, Head of Capital Markets Q: Can you provide updates on your investment plan in Europe and market strategy for new categories like oral pouch and HMB? A: Our European strategy follows a dual engine approach, focusing on strategic M&A and organic growth. We are cautious in valuations and will update on materialized projects. For new categories, we are scaling up production for oral products and identifying distribution channels. We have no immediate plans for large-scale investment in HMB heated tobacco, focusing instead on e-vapor market share. - Sam Tsang, Head of Capital Markets Q: Will the cancellation of the Chinese export tax rebate affect the company's production cost? A: The policy shift contributed to revenue increase in Q1 due to strategic inventory positioning by partners. The impact on retail prices is expected to be manageable, with minimal long-term effects on cost structure and margins. - Sam Tsang, Head of Capital Markets Q: Can you provide more details on your overseas expansion and any new markets entered in the first quarter? A: In Q1, we entered two new markets in Southeast Asia and Europe. Our strategy involves leveraging brand equity in Asia and exploring strategic opportunities in Europe, focusing on tailored products and partnerships for long-term growth. - Sam Tsang, Head of Capital Markets For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in RLX Technology Inc. Sponsored ADR? Here are five stocks we like better. RLX reported a strong Q1 2026 with revenue up 96.2% year over year to RMB 1.59 billion, driven mainly by international growth, the European investment, and stable performance in mainland China. Profitability improved meaningfully, with gross margin rising to 31.8% and non-GAAP operating margin expanding to 19.6%; non-GAAP income from operations jumped 187.9% from a year earlier. Management highlighted Europe and regulatory changes as key opportunities, citing the now fully operational Nexus manufacturing hub, expansion into new markets, and U.K. tobacco/vape rules that could favor compliant e-vapor players. RLX Technology (NYSE:RLX) reported a sharp increase in first-quarter 2026 revenue, driven by international expansion, contributions from a European investment and continued stability in mainland China, executives said on the company’s earnings call. Chief Executive Officer Kate Wang said the company was “off to a robust start in 2026,” citing a 96.2% year-over-year increase in revenue and a 38.9% sequential increase. Wang attributed the performance to RLX’s global expansion strategy, localized market efforts and the buildout of its integrated operating hub, Nexus. → Vertical Aerospace: Pre-Flight Checks Point to a Breakout “Our international business sustains its rapid organic growth, while our mainland China business demonstrated resilience and stability,” Wang said. Chief Financial Officer Chao Lu said net revenues for the first quarter reached RMB 1.59 billion, up 96.2% from the prior-year period and 38.9% from the previous quarter. He said the increase was primarily driven by momentum in international operations, accretion from the company’s acquired European entity, steady progress in mainland China and a one-time impact from changes in China’s export policy. → The Pentagon's AI Pivot Supercharges Defense Stocks Lu said RLX’s international business has accounted for more than 70% of total net revenues for several consecutive quarters, making it the company’s key growth driver. Profitability also improved during the quarter. Gross margin expanded to 31.8%, compared with 28.6% in the same period last year, which Lu said reflected a more favorable product mix and supply chain optimization. Non-GAAP operating margin rose to 19.6% from 13.3% a year earlier. → Ackman and Berkshire Are Betting Against Each Other on AI Non-GAAP income from operations increased 187.9% year over year to RMB 310.3 million, while non-GAAP net income rose 41.4% to RMB 357.3 million, compared with RMB 252.7 million in the first quarter of 2025. Wang said Europe remains a “cornerstone” of RLX’s global strategy, supported by what she described as a more mature regulatory environment and demand for higher-quality alternatives to combustible tobacco products. The company’s May 2025 strategic investment in a European company has helped RLX navigate local market dynamics, Wang said. During the question-and-answer portion of the call, she said the integration is focused on strategic alignment rather than day-to-day operational control. “It is a synergetic relationship,” Wang said, adding that RLX is providing capital resources and global platform support while relying on the local team’s market expertise. Wang said RLX recently invested in a new local warehouse facility to address prior capital constraints and improve distribution efficiency. She said the company intends to use its cash position to help the European business secure more downstream resources. RLX is pursuing what Wang called a “dual-engine strategy” in Europe, combining strategic mergers and acquisitions with organic growth. She said the company remains selective on investments and is prioritizing long-term synergy over immediate scale. Management discussed regulatory changes in the United Kingdom, including the Tobacco and Vapes Act, which Wang said became law in April 2026. She said the law prevents anyone born after 2009 from legally purchasing combustible cigarettes, while exempting regulated harm-reduction alternatives such as vapes. Wang said the law reflects a broader global trend of restricting combustible tobacco while preserving regulated pathways for alternatives. She characterized this as a potential structural tailwind for companies with compliance capabilities, product quality controls and proactive regulatory engagement. In response to a question from Citi analyst Lydia Ling, Wang said the U.K.’s generational smoking ban reinforces the role of e-vapor products as a harm-reduction tool, while other upcoming rules, including the Vaping Products Duty in October 2026 and an HMRC licensing scheme, are expected to raise barriers to entry. Wang said RLX believes such measures could reduce the presence of non-compliant and black-market brands, allowing compliant companies to expand market share in the U.K. Wang said RLX’s integrated smart manufacturing facility, Nexus, is now fully operational. She described the facility as more than a manufacturing upgrade, saying it brings research and development, manufacturing and commercial operations under one roof. According to Wang, Nexus expands the company’s self-manufacturing capacity and supports higher precision quality standards. She also said the facility strengthens RLX’s control over proprietary technologies and improves operational efficiency by enabling faster decision-making and more agile responses to global market shifts. “This integrated hub has materially improved our operational efficiency,” Wang said. Lu said RLX ended the quarter with total financial assets, including cash equivalents, deposits and investments, of RMB 14.53 billion, or approximately $2.11 billion, as of March 31, 2026. That was down from RMB 15.73 billion at the end of 2025, a change he said primarily reflected dividend payments made during the first quarter. The company also reported accounts and notes receivable turnover days of 15 days, inventory turnover days of 32 days and payable turnover days of 49 days. During the Q&A session, Wang said RLX entered two new markets in the first quarter, located in Southeast Asia and Europe. She said the company is using its brand strength in Asia to expand into neighboring markets, while taking a more localized approach in Europe due to differences in consumer preferences and regulation. Asked about the recent cancellation of China’s export tax rebate, Wang said anticipated policy changes contributed in part to the company’s first-quarter revenue increase, as downstream partners positioned inventory before the cancellation took effect in April 2026. She said the front-loading effect was “largely behind us” and described the volume shift as moderate. Wang said the policy change has little impact on organic end-user demand and is expected to have a manageable impact on final retail prices. She said RLX will use cost pass-through mechanisms when necessary and expects the long-term impact on overall costs and margins to be minimal. Management also addressed potential expansion into new product categories. Wang said RLX is scaling production capacity for modern oral products and identifying new distribution channels, while the company does not currently plan a large-scale launch in heated tobacco products, despite having technical reserves in the category. “Our primary focus remains on capturing more market share within the e-vapor sector,” Wang said. RLX Technology Inc (NYSE:RLX) is a China-based company specializing in electronic nicotine delivery systems. The company develops, manufactures and markets closed-pod vaping devices and prefilled cartridges, positioning its products as an alternative to traditional combustible tobacco. RLX emphasizes consistent nicotine delivery, flavor variety and convenience through its proprietary e-liquid formulations and device design. RLX operates a vertically integrated business model that encompasses research and development, production, quality control and sales. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "RLX Technology Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

This article first appeared on GuruFocus. Fourth Quarter Net Revenues: RMB1.14 billion, up 40.3% year-over-year. Full Year Total Net Revenues: RMB3.96 billion, a growth of 44%. Fourth Quarter Gross Margin: 31.4%, up from 27% a year ago. Full Year Gross Margin: 29.9%. Fourth Quarter Non-GAAP Operating Profit: RMB158 million. Full Year Non-GAAP Operating Income: RMB570 million, doubled from the previous year. Full Year Non-GAAP Net Income: RMB1.16 billion. Operating Cash Flow for Full Year: RMB1.1 billion. Total Financial Assets at Year-End: RMB15.73 billion (approximately USD2.2 billion). Shareholder Returns: Over USD500 million returned, including USD330 million in share repurchases and USD171 million in cash dividends. Warning! GuruFocus has detected 3 Warning Signs with RLX. Is RLX fairly valued? Test your thesis with our free DCF calculator. Release Date: March 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. RLX Technology Inc (NYSE:RLX) achieved a strong fourth quarter with net revenues reaching RMB1.14 billion, marking a 40.3% year-over-year increase. The company experienced significant international expansion, with international sales comprising 76.5% of fourth-quarter revenue. RLX Technology Inc (NYSE:RLX) successfully increased its gross margin to 31.4% in the fourth quarter, up from 27% the previous year. The company maintained a robust balance sheet with USD2.2 billion in cash, providing financial flexibility for strategic growth. RLX Technology Inc (NYSE:RLX) returned over USD500 million to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder returns. The company faces ongoing challenges from illegal products in the Mainland China market, which could impact growth. There is uncertainty in the European market due to regulatory changes, which could affect RLX Technology Inc (NYSE:RLX)'s operations. The macroeconomic and geopolitical landscape presents potential risks to consumer demand across different international markets. The company is navigating a complex regulatory environment in Southeast Asia, which could impact its market strategy. RLX Technology Inc (NYSE:RLX) is still in the early stages of rolling out its nicotine pouch products, which may delay potential revenue growth in this category. Q: What is the growth outlook for RLX Technology's overseas markets in 2026, and are there any new markets being considered for expansion? A: Sam Tsang, Head of Investor Relations, stated that RLX Technology anticipates a stable and predictable environment for its international business in 2026. The company expects volume and revenue growth to align closely, projecting double-digit growth for the broader industry. RLX aims to capture market share and grow faster than the industry average. Geographic expansion remains a core strategy, with a strong pipeline of international markets for 2026, although specific names were not disclosed. Q: Given RLX Technology's strong cash position, are there plans to increase shareholder returns or dividend payouts? A: Sam Tsang explained that RLX Technology's capital allocation strategy focuses on maximizing long-term shareholder value. The company intends to distribute non-GAAP net profit as dividends, subject to board approval. Over USD500 million has been returned to shareholders through dividends and share repurchases. The company will continue to evaluate opportunities to optimize its capital structure and enhance shareholder returns while maintaining a strong cash position for strategic investments. Q: Can you provide an update on the operational performance of the European company RLX invested in, and what is the business outlook for 2026? A: Sam Tsang reported that RLX's European platform successfully navigated UK regulatory changes in 2025 by shifting its portfolio to compliant systems. Despite a contraction in the broader UK market, RLX's business grew by acquiring new customers and expanding shelf space. The company expects the industry to consolidate around established compliance brands, with high taxes pushing out unregulated players, favoring scale compliance operators like RLX. Q: How is RLX Technology responding to regulatory developments in Asia, particularly regarding higher taxes and legalization efforts? A: Sam Tsang noted that in South Korea, recent tax hikes target synthetic nicotine, which does not materially affect RLX's core strength in natural nicotine. In Southeast Asia, the regulatory landscape is shifting towards legalization and new excise taxes. RLX utilizes dynamic pricing to manage cost adjustments, maintaining a significant price advantage over traditional tobacco products. The company welcomes these regulations as they mature the industry and support RLX's leadership position. Q: How does RLX Technology view the sensitivity of consumer demand across different international markets amid macro uncertainty and geopolitical challenges? A: Sam Tsang emphasized that RLX's products are like consumer staples, with demand remaining resilient despite macro and geopolitical headwinds. The structural price advantage of RLX's products protects revenue regardless of the broader economy. The company is insulated from energy and freight volatility, with minimal impact on margins. RLX is developing an AI-empowered ERP system to optimize supply chain operations, ensuring strong margin protection and growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.