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RLX Technology Announces Unaudited Second Quarter 2024 Financial Results

SHENZHEN, China, Aug. 16, 2024 /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, 2024.

Second Quarter 2024 Financial Highlights

  • Net revenues were RMB627.2 million (US$86.3 million) in the second quarter of 2024, compared with RMB378.1 million in the same period of 2023.
  • Gross margin was 25.2% in the second quarter of 2024, compared with 26.1% in the same period of 2023.
  • U.S. GAAP net income was RMB134.9 million (US$18.6 million) in the second quarter of 2024, compared with RMB204.7 million in the same period of 2023.
  • Non-GAAP net income[1] was RMB213.1 million (US$29.3 million) in the second quarter of 2024, compared with RMB86.2 million in the same period of 2023.

"We delivered a strong second quarter performance as revenue continued to increase sequentially, driven by our international business expansion," commented Ms. Ying (Kate) Wang, Co-founder, Chairperson of the Board of Directors, and Chief Executive Officer of RLX Technology. "Our deep exploration of overseas markets and regulations has provided us with valuable insights into the global e-vapor landscape, enabling us to create effective, targeted regional strategies. This year, global regulations are rapidly evolving, with more regulators recognizing e-vapor products as harm-reduction tools for adult smokers. Leveraging our broad expertise in regulatory compliance, we are well-prepared to navigate these changes and ensure a seamless transition for our users and partners. We remain dedicated to product innovation as a key driver of user engagement and market share and are collaborating closely with local partners to introduce compelling offerings. As a trusted e-vapor brand for adult smokers, we will continue to deliver high-quality, compliant products while capitalizing on diverse growth opportunities around the globe."

Mr. Chao Lu, Chief Financial Officer of RLX Technology, added, "In the second quarter, our net revenues reached RMB627.2 million, a 66% year-over-year increase that underscores our ability to capture growth opportunities in international markets. While our gross margin declined slightly due to an unfavorable shift in our revenue mix, disciplined cost management bolstered our non-GAAP operating profit margins. Looking ahead, we are confident of driving continued improvement in both our top and bottom lines, fueled by ongoing revenue growth from international markets and our relentless focus on operational efficiency. As always, our priority is to deliver sustainable and profitable returns to our shareholders."

Second Quarter 2024 Financial Results

Net revenues were RMB627.2 million (US$86.3 million) in the second quarter of 2024, compared with RMB378.1 million in the same period of 2023. The increase was primarily due to our international expansion.

Gross profit was RMB157.9 million (US$21.7 million) in the second quarter of 2024, compared with RMB98.5 million in the same period of 2023.

Gross margin was 25.2% in the second quarter of 2024, compared with 26.1% in the same period of 2023. The decrease was primarily due to an unfavorable change in the revenue mix.

Operating expenses were RMB191.2 million (US$26.3 million) in the second quarter of 2024, compared with RMB47.2 million in the same period of 2023. The increase was primarily due to an increase in share-based compensation expenses, from positive RMB118.5 million in the second quarter of 2023 to RMB78.1 million (US$10.8 million) in the second quarter of 2024. 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 with the fluctuations of the Company's share price.

Selling expenses were RMB62.2 million (US$8.6 million) in the second quarter of 2024, compared with RMB45.2 million in the same period of 2023, primarily due to an increase in share-based compensation expenses.

General and administrative expenses were RMB129.0 million (US$17.8 million) in the second quarter of 2024, compared with positive RMB41.4 million in the same period of 2023, primarily due to an increase in share-based compensation expenses.

Research and development expenses were positive RMB0.04 million (US$0.005 million) in the second quarter of 2024, compared with RMB43.3 million in the same period of 2023, primarily due to a decrease in salaries, welfare benefits and share-based compensation expenses.

Loss from operations was RMB33.3 million (US$4.6 million) in the second quarter of 2024, compared with income from operations of RMB51.4 million in the same period of 2023.

Income tax expense was RMB21.4 million (US$2.9 million) in the second quarter of 2024, compared with RMB51.5 million in the same period of 2023.

U.S. GAAP net income was RMB134.9 million (US$18.6 million) in the second quarter of 2024, compared with RMB204.7 million in the same period of 2023.

Non-GAAP net income was RMB213.1 million (US$29.3 million) in the second quarter of 2024, compared with RMB86.2 million in the same period of 2023.

U.S. GAAP basic and diluted net income per American depositary share ("ADS") were RMB0.108 (US$0.015) and RMB0.103 (US$0.014), respectively, in the second quarter of 2024, compared with U.S. GAAP basic and diluted net income per ADS of RMB0.154 and RMB0.150, respectively, in the same period of 2023.

Non-GAAP basic and diluted net income per ADS[2] were RMB0.171 (US$0.024) and RMB0.164 (US$0.023), respectively, in the second quarter of 2024, compared with non-GAAP basic and diluted net income per ADS of RMB0.064 and RMB0.062, respectively, in the same period of 2023.

Balance Sheet and Cash Flow

As of June 30, 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 RMB14,930.8 million (US$2,054.5 million), compared with RMB14,681.4 million as of March 31, 2024. In the second quarter of 2024, net cash generated from operating activities was RMB196.8 million (US$27.1 million).

Conference Call

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 16, 2024 (8:00 PM Beijing/Hong Kong Time on August 16, 2024).

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:

3613850

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 August 23, 2024, by dialing the following telephone numbers:

United States:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:

9416265

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 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 RMB 7.2672 to US$1.00, the exchange rate on June 28, 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 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 Markets
Sam Tsang
Email: ir@relxtech.com

Piacente Financial Communications
Jenny Cai
Tel: +86-10-6508-0677
Email: RLX@tpg-ir.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
Email: RLX@tpg-ir.com

[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.

 

 

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands)






As of


December 31,

June 30,

June 30,


2023

2024

2024


RMB

RMB

US$

ASSETS




Current assets:




Cash and cash equivalents

2,390,298

3,076,781

423,379

Restricted cash

29,760

61,908

8,519

Short-term bank deposits, net

2,631,256

2,615,677

359,929

Receivables from online payment platforms

6,893

5,619

773

Short-term investments, net

3,093,133

2,604,414

358,379

Accounts and notes receivable, net

60,482

114,428

15,746

Inventories

144,850

84,306

11,601

Amounts due from related parties

118,736

196,791

27,079

Prepayments and other current assets, net

508,435

709,991

97,698

Total current assets

8,983,843

9,469,915

1,303,103

Non-current assets:




Property, equipment and leasehold improvement, net

77,358

63,192

8,696

Intangible assets, net

69,778

60,215

8,286

Long-term investments, net

8,000

8,000

1,101

Deferred tax assets, net

58,263

58,264

8,017

Right-of-use assets, net

52,562

39,604

5,450

Long-term bank deposits, net

1,757,804

876,340

120,588

Long-term investment securities, net

5,236,109

5,695,667

783,750

Goodwill

66,506

62,606

8,615

Other non-current assets, net

4,874

6,499

894

Total non-current assets

7,331,254

6,870,387

945,397

Total assets

16,315,097

16,340,302

2,248,500





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts and notes payable

266,426

323,811

44,558

Contract liabilities

49,586

56,908

7,831

Salary and welfare benefits payable

39,256

60,048

8,263

Taxes payable

77,164

79,197

10,898

Accrued expenses and other current liabilities

103,996

99,440

13,683

Amounts due to related parties

101,927

10,984

1,511

Dividend payable

881

-

-

Lease liabilities - current portion

29,435

28,202

3,881

Total current liabilities

668,671

658,590

90,625





Non-current liabilities:




Deferred tax liabilities

23,591

21,790

2,998

Lease liabilities - non-current portion

24,419

13,124

1,808

Total non-current liabilities

48,010

34,914

4,806

Total liabilities

716,681

693,504

95,431









Shareholders' Equity:




Total RLX Technology Inc. shareholders' equity

15,609,393

15,654,233

2,154,092

Noncontrolling interests

(10,977)

(7,435)

(1,023)

Total shareholders' equity

15,598,416

15,646,798

2,153,069





Total liabilities and shareholders' equity

16,315,097

16,340,302

2,248,500

 

 

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(All amounts in thousands, except for share and per share data)











For the three months ended


For the six months ended


June 30,

March 31,

June 30,

June 30,


June 30,

June 30,

June 30,


2023

(As adjusted) (a)

2024

2024

2024


2023

(As adjusted) (a)

2024

2024


RMB

RMB

RMB

US$


RMB

RMB

US$










Net revenues

378,123

551,623

627,176

86,302


567,000

1,178,799

162,208

Cost of revenues

(171,733)

(327,610)

(400,712)

(55,140)


(250,426)

(728,322)

(100,220)

Excise tax on products

(107,853)

(81,240)

(68,602)

(9,440)


(172,311)

(149,842)

(20,619)

Gross profit

98,537

142,773

157,862

21,722


144,263

300,635

41,369










Operating expenses:









Selling expenses

(45,226)

(52,887)

(62,235)

(8,564)


(130,987)

(115,122)

(15,841)

General and administrative expenses

41,368

(109,954)

(128,997)

(17,751)


(215,136)

(238,951)

(32,881)

Research and development expenses

(43,317)

(31,540)

40

5


(119,999)

(31,500)

(4,335)

Total operating expenses

(47,175)

(194,381)

(191,192)

(26,310)


(466,122)

(385,573)

(53,057)










Income/(loss) from operations

51,362

(51,608)

(33,330)

(4,588)


(321,859)

(84,938)

(11,688)










Other income









Interest income, net

162,888

158,858

154,207

21,220


311,691

313,065

43,079

Investment income  

20,588

12,776

12,718

1,750


41,973

25,494

3,508

Others, net

21,380

28,943

22,739

3,129


150,537

51,682

7,112

Income before income tax

256,218

148,969

156,334

21,511


182,342

305,303

42,011

Income tax expense  

(51,502)

(16,344)

(21,389)

(2,943)


(33,931)

(37,733)

(5,192)

Net income

204,716

132,625

134,945

18,568


148,411

267,570

36,819

Less: net income attributable to noncontrolling interests

1,929

717

2,631

362


2,590

3,348

461

Net income attributable to RLX Technology Inc.

202,787

131,908

132,314

18,206


145,821

264,222

36,358

Other comprehensive income:









Foreign currency translation adjustments

563,078

12,706

44,174

6,078


414,982

56,880

7,827

Unrealized income/(loss) on long-term investment

    securities

5,539

(13)

705

97


8,412

692

95

Total other comprehensive income

568,617

12,693

44,879

6,175


423,394

57,572

7,922

Total comprehensive income

773,333

145,318

179,824

24,743


571,805

325,142

44,741

Less: total comprehensive income attributable to

    noncontrolling interests

1,929

730

2,618

360


2,590

3,348

461

Total comprehensive income attributable to RLX

    Technology Inc.

771,404

144,588

177,206

24,383


569,215

321,794

44,280










Net income per ordinary share/ADS 









 Basic

0.154

0.106

0.108

0.015


0.111

0.213

0.029

 Diluted

0.150

0.101

0.103

0.014


0.108

0.205

0.028










Weighted average number of ordinary shares/ADSs









Basic

1,318,628,588

1,249,317,641

1,228,869,526

1,228,869,526


1,317,718,705

1,239,093,583

1,239,093,583

Diluted

1,353,296,802

1,301,431,007

1,284,388,803

1,284,388,803


1,348,021,483

1,290,853,297

1,290,853,297


Note (a): The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted

the above comparative unaudited condensed consolidated statements of comprehensive income in the prior quarter.

 

 

RLX TECHNOLOGY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except for share and per share data)







For the three months ended


For the six months ended


June 30,

March 31,

June 30,

June 30,


June 30,

June 30,

June 30,


2023

(As adjusted) (b)

2024

2024

2024


2023

(As adjusted) (b)

2024

2024


RMB

RMB

RMB

US$


RMB

RMB

US$

Net income

204,716

132,625

134,945

18,568


148,411

267,570

36,819

Add: share-based compensation expenses









       Selling expenses

(15,338)

4,603

9,172

1,262


8,617

13,775

1,895

       General and administrative expenses

(90,923)

66,414

93,026

12,801


110,420

159,440

21,940

       Research and development expenses

(12,229)

3,881

(24,074)

(3,313)


2,425

(20,193)

(2,779)

Non-GAAP net income

86,226

207,523

213,069

29,318


269,873

420,592

57,875










Net income attributable to RLX Technology Inc.

202,787

131,908

132,314

18,206


145,821

264,222

36,358

Add: share-based compensation expenses

(118,490)

74,898

78,124

10,750


121,462

153,022

21,056

Non-GAAP net income attributable to RLX

    Technology Inc.

84,297

206,806

210,438

28,956


267,283

417,244

57,414










Non-GAAP net income per ordinary share/ADS









- Basic

0.064

0.166

0.171

0.024


0.203

0.337

0.046

- Diluted

0.062

0.159

0.164

0.023


0.198

0.323

0.044

Weighted average number of ordinary shares/ADSs









- Basic

1,318,628,588

1,249,317,641

1,228,869,526

1,228,869,526


1,317,718,705

1,239,093,583

1,239,093,583

- Diluted

1,353,296,802

1,301,431,007

1,284,388,803

1,284,388,803


1,348,021,483

1,290,853,297

1,290,853,297


Note (b): The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted

the above unaudited reconciliation of GAAP and Non-GAAP results in the prior quarter.

 

 

RLX TECHNOLOGY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)











For the three months ended


For the six months ended


June 30,

March 31,

June 30,

June 30,


June 30,

June 30,

June 30,


2023

(As adjusted) (c)

2024

2024

2024


2023

(As adjusted) (c)

2024

2024


RMB

RMB

RMB

US$


RMB

RMB

US$

Net cash generated from/(used in) operating

    activities

41,339

4,020

196,764

27,076


(189,347)

200,784

27,629

Net cash generated from investing activities

431,683

420,665

557,132

76,664


813,637

977,797

134,549

Net cash used in financing activities

(199,080)

(472,885)

-

-


(194,734)

(472,885)

(65,071)

Effect of foreign exchange rate changes on cash,

    cash equivalents and restricted cash

48,393

2,903

10,032

1,380


58,802

12,935

1,780

Net increase/(decrease) in cash and cash

    equivalents and restricted cash 

322,335

(45,297)

763,928

105,120


488,358

718,631

98,887

Cash, cash equivalents and restricted cash at

    the beginning of the period

1,455,109

2,420,058

2,374,761

326,778


1,289,086

2,420,058

333,011

Cash, cash equivalents and restricted cash at

    the end of the period

1,777,444

2,374,761

3,138,689

431,898


1,777,444

3,138,689

431,898










Note (c): The Company acquired various companies on December 13, 2023, which was accounted for as an under common control transaction in accordance with ASC 805-50. The Company retrospectively adjusted

the above comparative unaudited condensed consolidated statements of cash flows in the prior quarter.

 

SOURCE RLX Technology Inc.