RLX Technology Announces Unaudited Fourth Quarter and Fiscal Year 2024 Financial Results

, /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 fourth quarter and the fiscal year ended December 31, 2024. Fourth Quarter 2024 Financial Highlights Net revenues were RMB813.5 million (US$111.4 million) in the fourth quarter of 2024, compared with RMB520.5 million in the same period of 2023. Gross margin was 27.0% in the fourth quarter of 2024, compared with 23.7% in the same period of 2023. U.S. GAAP net income was RMB127.4 million (US$17.5 million) in the fourth quarter of 2024, compared with RMB216.0 million in the same period of 2023. Non-GAAP net income[1] was RMB251.5 million (US$34.5 million) in the fourth quarter of 2024, compared with RMB432.6 million in the same period of 2023. Fiscal Year 2024 Financial Highlights Net revenues were RMB2,748.6 million (US$376.6 million) in fiscal year 2024, compared with RMB 1,586.4 million in the prior year. Gross margin was 26.4% in fiscal year 2024, compared with 24.4% in the prior year. U.S. GAAP net income was RMB564.3 million (US$77.3 million) in fiscal year 2024, compared with RMB541.0 million in the prior year. Non-GAAP net income was RMB934.0 million (US$128.0 million) in fiscal year 2024, compared with RMB903.9 million in the prior year. "2024 was a remarkable year for RLX, highlighted by tremendous progress in our global operations," commented Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors, and Chief Executive Officer of RLX Technology. "We've holistically upgraded our organizational framework and refined our business models to address international markets' diverse and dynamic needs, driving significant growth and solidifying our market leadership in multiple regions. The innovative open-system and disposable e-vapor products we introduced in 2024 set new trends across the international markets, reaffirming our dedication to advancing harm-reduction solutions. Moving into 2025, we will prioritize innovation, compliance, and diversity in our product portfolio while navigating the industry dynamics to capture new opportunities and drive long-term success." Mr. Chao Lu, Chief Financial Officer of RLX Technology, added, "Our focus on global expansion throughout 2024 fueled an impressive year-over-year increase in full-year revenue to RMB 2.7 billion, up 73.3%. Notably, in the fourth quarter alone, we achieved a non-GAAP operating profit of RMB112.6 million, marking a sequential rise for the fourth consecutive quarter and culminating in a significant return to profitability for the full year 2024. Furthermore, we continued to return value to our shareholders through our share repurchase program and cash dividends. Looking ahead, we will continue to pursue sustainable, profitable growth and enhanced shareholder returns through ongoing innovation and strong strategic execution." Fourth Quarter 2024 Financial Results Net revenues were RMB813.5 million (US$111.4 million) in the fourth quarter of 2024, compared with RMB520.5 million in the same period of 2023. The increase was primarily due to our international expansion. Gross profit was RMB219.9 million (US$30.1 million) in the fourth quarter of 2024, compared with RMB123.4 million in the same period of 2023. Gross margin was 27.0% in the fourth quarter of 2024, compared with 23.7% in the same period of 2023. The increase was primarily due to a favorable change in the revenue mix and cost optimization initiatives. Operating expenses were RMB231.5 million (US$31.7 million) in the fourth quarter of 2024, compared with RMB263.9 million in the same period of 2023. The decrease was primarily due to the fluctuation of share-based compensation expenses, offset by the increase in salaries and welfare expenses. The changes in share-based compensation expenses were primarily due to the changes in the fair value of the share incentive awards that the Company granted to its employees in line with the fluctuations in the Company's share price. Selling expenses were RMB45.4 million (US$6.2 million) in the fourth quarter of 2024, compared with RMB38.0 million in the same period of 2023, primarily due to an increase in salaries, welfare benefits and branding expenses. General and administrative expenses were RMB153.7 million (US$21.1 million) in the fourth quarter of 2024, compared with RMB204.0 million in the same period of 2023, primarily due to a decrease in share-based compensation expenses as well as in legal and other consulting fees, slightly offset by an increase in salaries and welfare expenses. Research and development expenses were RMB32.4 million (US$4.4 million) in the fourth quarter of 2024, compared with RMB21.9 million in the same period of 2023, primarily due to an increase in salaries and welfare expenses, slightly offset by a decrease in share-based compensation expenses. Loss from operations was RMB11.5 million (US$1.6 million) in the fourth quarter of 2024, compared with loss from operations of RMB140.5 million in the same period of 2023. Income tax expense was RMB26.3 million (US$3.6 million) in the fourth quarter of 2024, compared with RMB15.1 million in the same period of 2023. U.S. GAAP net income was RMB127.4 million (US$17.5 million) in the fourth quarter of 2024, compared with RMB216.0 million in the same period of 2023. Non-GAAP net income was RMB251.5 million (US$34.5 million) in the fourth quarter of 2024, compared with RMB432.6 million in the same period of 2023. U.S. GAAP basic and diluted net income per American depositary share ("ADS") were RMB0.100 (US$0.014) and RMB0.094 (US$0.013), respectively, in the fourth quarter of 2024, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.166 and RMB0.161, respectively, in the same period of 2023. Non-GAAP basic and diluted net income per ADS[2] were RMB0.201 (US$0.028) and RMB0.190 (US$0.026), respectively, in the fourth quarter of 2024, compared with non-GAAP basic and diluted net income per ADS of RMB0.335 and RMB0.325, respectively, in the same period of 2023. Balance Sheet and Cash Flow As of December 31, 2024, the Company had cash and cash equivalents, restricted cash, short-term bank deposits, net, short-term investments, net, long-term bank deposits, net and long-term investment securities, net of RMB15,870.8 million (US$2,174.3 million), compared with RMB15,361.7 million as of September 30, 2024. In the fourth quarter of 2024, net cash generated from operating activities was RMB497.0 million (US$68.1 million). Fiscal Year 2024 Financial Results Net revenues were RMB2,748.6 million (US$376.6 million) in fiscal year 2024, compared with RMB1,586.4 million in the prior year. The increase was primarily due to our international expansion. Gross profit was RMB726.5 million (US$99.5 million) in fiscal year 2024, compared with RMB387.7 million in the prior year. Gross margin increased to 26.4% in fiscal year 2024 from 24.4% in the prior year, primarily due to a favorable change in the revenue mix and cost optimization initiatives. Operating expenses were RMB833.7 million (US$114.2 million) in fiscal year 2024, representing a decrease of 5.7% from RMB884.4 million in the prior year. The decrease in operating expenses was primarily due to the decrease in salaries and welfare benefits. Selling expenses increased by 7.4% to RMB229.5 million (US$31.4 million) in fiscal year 2024 from RMB 213.7 million in the prior year, mainly driven by the increase in branding expenses and share-based compensation expenses, offset by a decrease in salaries and welfare expenses. General and administrative expenses increased by 3.6% to RMB515.9 million (US$70.7 million) in fiscal year 2024 from RMB498.0 million in the prior year, primarily attributable to the increase in share-based compensation expenses and software and technical service expenses, slightly offset by a decrease in legal and consulting expenses as well as in depreciation and amortization expenses. Research and development expenses decreased by 48.9% to RMB88.3 million (US$12.1 million) in fiscal year 2024 from RMB172.7 million in the prior year, mainly driven by the decrease in share-based compensation expenses and salaries and welfare benefits. Loss from operations was RMB107.1 million (US$14.7 million) in fiscal year 2024, compared with RMB 496.7 million in the prior year. Income tax expense was RMB94.5 million (US$12.9 million) in fiscal year 2024, representing an increase of 86.1% from RMB50.8 million in the prior year. U.S. GAAP net income was RMB564.3 million (US$77.3 million) in fiscal year 2024, compared with RMB541.0 million in the prior year. Non-GAAP net income was RMB934.0 million (US$128.0 million) in fiscal year 2024, compared with RMB903.9 million in the prior year. U.S. GAAP basic and diluted net income per ADS were RMB0.448 (US$0.061) and RMB0.428 (US$0.059), respectively, in fiscal year 2024, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.407 and RMB0.399, respectively, in the prior year. Non-GAAP basic and diluted net income per ADS were RMB0.748 (US$0.102) and RMB0.715 (US$0.098), respectively, in fiscal year 2024, compared with non-GAAP basic and diluted net income per ADS of RMB0.684 and RMB0.669, respectively, in the prior year. Share Repurchase Program and Dividend Payment The Company repurchased approximately US$109.2 million of its ordinary shares represented by ADSs during fiscal year 2024. As of December 31, 2024, the Company had cumulatively repurchased US$304.7 million of its ordinary shares represented by ADSs. By repurchasing shares throughout 2024 and declaring cash dividends in November 2024, the Company returned approximately US$122.9 million to its shareholders during fiscal year 2024. Conference Call The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on March 14, 2025 (8:00 PM Beijing/Hong Kong Time on March 14, 2025). Dial-in details for the earnings conference call are as follows: United States (toll-free): +1-888-317-6003 International: +1-412-317-6061 Hong Kong, China (toll-free): +800-963-976 Hong Kong, China: +852-5808-1995 Mainland China: 400-120-6115 Participant Code: 7971219 Participants should dial in 10 minutes before the scheduled start time and ask to be connected to the call for "RLX Technology Inc." with the Participant Code as set forth 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 March 21, 2025, by dialing the following telephone numbers: United States: +1-877-344-7529 International: +1-412-317-0088 Replay Access Code: 5229492 [1] Non-GAAP net income is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section "Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release. [2] Non-GAAP basic and diluted net income per ADS is a non-GAAP financial measure. For more information on the Company's non-GAAP financial measures, please see the section "Non-GAAP Financial Measures" and the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release. 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 operating profit 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. 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 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, enhances the overall understanding of its past performance and future prospects and allows 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 to 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 RMB7.2993 to US$1.00, the exchange rate on December 31, 2024, 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 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] RLX TECHNOLOGY INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands) As of December 31, December 31, December 31, 2023 2024 2024 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 2,390,298 5,593,492 766,305 Restricted cash 29,760 50,867 6,969 Short-term bank deposits, net 2,631,256 2,179,886 298,643 Receivables from online payment platforms 6,893 4,722 647 Short-term investments, net 3,093,133 719,755 98,606 Accounts and notes receivable, net 60,482 78,484 10,752 Inventories 144,850 142,552 19,530 Amounts due from related parties 118,736 346,132 47,420 Prepayments and other current assets, net 508,435 185,091 25,357 Total current assets 8,983,843 9,300,981 1,274,229 Non-current assets: Property, equipment and leasehold improvement, net 77,358 50,787 6,958 Intangible assets, net 69,778 52,796 7,233 Long-term investments, net 8,000 8,000 1,096 Deferred tax assets, net 58,263 38,067 5,215 Right-of-use assets, net 52,562 24,110 3,303 Long-term bank deposits, net 1,757,804 727,448 99,660 Long-term investment securities, net 5,236,109 6,599,365 904,109 Goodwill 66,506 59,581 8,163 Other non-current assets, net 4,874 9,914 1,358 Total non-current assets 7,331,254 7,570,068 1,037,095 Total assets 16,315,097 16,871,049 2,311,324 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts and notes payable 266,426 458,538 62,819 Contract liabilities 49,586 10,610 1,454 Salary and welfare benefits payable 39,256 73,740 10,102 Taxes payable 77,164 126,154 17,283 Short-term loan - 40,000 5,480 Accrued expenses and other current liabilities 103,996 108,816 14,908 Amounts due to related parties 101,927 27,401 3,754 Dividend payable 881 1,144 157 Lease liabilities - current portion 29,435 11,447 1,568 Total current liabilities 668,671 857,850 117,525 Non-current liabilities: Deferred tax liabilities 23,591 16,196 2,219 Lease liabilities - non-current portion 24,419 7,050 966 Total non-current liabilities 48,010 23,246 3,185 Total liabilities 716,681 881,096 120,710 Shareholders' Equity: Total RLX Technology Inc. shareholders' equity 15,609,393 15,988,216 2,190,376 Noncontrolling interests (10,977) 1,737 238 Total shareholders' equity 15,598,416 15,989,953 2,190,614 Total liabilities and shareholders' equity 16,315,097 16,871,049 2,311,324 RLX TECHNOLOGY INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (All amounts in thousands, except for number of shares and per share data, or otherwise noted) For the three months ended For the year ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB US$ RMB RMB US$ Net revenues 520,468 756,288 813,489 111,448 1,586,397 2,748,576 376,553 Cost of revenues (327,325) (473,379) (516,305) (70,733) (856,329) (1,718,006) (235,366) Excise tax on products (69,730) (76,933) (77,278) (10,587) (342,354) (304,053) (41,655) Gross profit 123,413 205,976 219,906 30,128 387,714 726,517 99,532 Operating expenses: Selling expenses (37,985) (68,975) (45,369) (6,216) (213,723) (229,466) (31,437) General and administrative expenses (204,030) (123,226) (153,710) (21,058) (498,015) (515,887) (70,676) Research and development expenses (21,904) (24,435) (32,374) (4,435) (172,686) (88,309) (12,098) Total operating expenses (263,919) (216,636) (231,453) (31,709) (884,424) (833,662) (114,211) Loss from operations (140,506) (10,660) (11,547) (1,581) (496,710) (107,145) (14,679) Other income： Interest income, net 157,928 156,659 146,664 20,093 627,879 616,388 84,445 Investment income 182,699 13,070 11,072 1,517 245,700 49,636 6,800 Others, net 30,925 40,745 7,497 1,027 214,874 99,924 13,690 Income before income tax 231,046 199,814 153,686 21,056 591,743 658,803 90,256 Income tax expense (15,078) (30,423) (26,303) (3,604) (50,755) (94,459) (12,941) Net Income 215,968 169,391 127,383 17,452 540,988 564,344 77,315 Less: net income attributable to noncontrolling interests 2,491 3,737 5,422 743 6,660 12,507 1,713 Net income attributable to RLX Technology Inc. 213,477 165,654 121,961 16,709 534,328 551,837 75,602 Other comprehensive (loss)/income: Foreign currency translation adjustments (132,470) (181,148) 268,079 36,727 198,534 143,811 19,702 Unrealized (loss)/income on long-term investment securities (11,288) 5,292 (8,151) (1,117) 632 (2,167) (297) Total other comprehensive (loss)/income (143,758) (175,856) 259,928 35,610 199,166 141,644 19,405 Total comprehensive income/(loss) 72,210 (6,465) 387,311 53,062 740,154 705,988 96,720 Less: total comprehensive income attributable to noncontrolling interests 2,491 3,730 5,442 745 6,660 12,520 1,713 Total comprehensive income/(loss) attributable to RLX Technology Inc. 69,719 (10,195) 381,869 52,317 733,494 693,468 95,007 Net income per ordinary share/ADS Basic 0.166 0.135 0.100 0.014 0.407 0.448 0.061 Diluted 0.161 0.129 0.094 0.013 0.399 0.428 0.059 Weighted average number of ordinary shares/ADSs Basic 1,285,752,182 1,225,417,517 1,225,140,420 1,225,140,420 1,311,401,901 1,232,148,531 1,232,148,531 Diluted 1,324,466,240 1,287,927,444 1,291,925,422 1,291,925,422 1,340,445,653 1,288,911,783 1,288,911,783 RLX TECHNOLOGY INC. UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, except for number of shares and per share data) For the three months ended For the year ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB US$ RMB RMB US$ Net income 215,968 169,391 127,383 17,452 540,988 564,344 77,315 Add: share-based compensation expenses Selling expenses 12,128 5,768 13,020 1,784 16,700 32,563 4,461 General and administrative expenses 194,153 85,295 103,894 14,233 334,344 348,629 47,762 Research and development expenses 10,335 1,446 7,210 988 11,824 (11,537) (1,581) Non-GAAP net income 432,584 261,900 251,507 34,457 903,856 933,999 127,957 Net income attributable to RLX Technology Inc. 213,477 165,654 121,961 16,709 534,328 551,837 75,602 Add: share-based compensation expenses 216,616 92,509 124,124 17,005 362,868 369,655 50,642 Non-GAAP net income attributable to RLX Technology Inc. 430,093 258,163 246,085 33,714 897,196 921,492 126,244 Non-GAAP net income per ordinary share/ADS - Basic 0.335 0.211 0.201 0.028 0.684 0.748 0.102 - Diluted 0.325 0.200 0.190 0.026 0.669 0.715 0.098 Weighted average number of ordinary shares/ADSs - Basic 1,285,752,182 1,225,417,517 1,225,140,420 1,225,140,420 1,311,401,901 1,232,148,531 1,232,148,531 - Diluted 1,324,466,240 1,287,927,444 1,291,925,422 1,291,925,422 1,340,445,653 1,288,911,783 1,288,911,783 RLX TECHNOLOGY INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (All amounts in thousands) For the three months ended For the year ended December 31, September 30, December 31, December 31, December 31, December 31, December 31, 2023 2024 2024 2024 2023 2024 2024 RMB RMB RMB US$ RMB RMB US$ Net cash generated from operating activities 305,197 156,554 497,011 68,090 198,703 854,349 117,045 Net cash generated from investing activities 310,274 139,120 1,901,084 260,447 2,091,145 3,018,001 413,464 Net cash used in financing activities (791,905) (74,780) (130,366) (17,860) (1,193,216) (678,031) (92,890) Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash (18,544) (45,818) 62,865 8,613 34,340 29,982 4,108 Net (decrease)/increase in cash and cash equivalents and restricted cash (194,978) 175,076 2,330,594 319,290 1,130,972 3,224,301 441,727 Cash, cash equivalents and restricted cash at the beginning of the period 2,615,036 3,138,689 3,313,765 453,984 1,289,086 2,420,058 331,547 Cash, cash equivalents and restricted cash at the end of the period 2,420,058 3,313,765 5,644,359 773,274 2,420,058 5,644,359 773,274 SOURCE RLX Technology Inc. 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RLX Technology Announces Unaudited Fourth Quarter and Fiscal Year 2024 Financial Results

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