Q3 2025 BingEx Ltd Earnings Call

Speaker #1: Please go ahead.

Speaker #2: Thank you, Operator. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today.

Speaker #2: After events or results could differ materially from those mentioned in today's news release and in this discussion, due to a number of risks and uncertainties, including those mentioned in our most recent findings with the SEC.

Speaker #2: The non-GAAP financial measures we provide are for comparison purposes only. The definitions of these measures and the reconciliation table are available in the news release we issued earlier today.

Speaker #2: As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the BingEx company's IR website at ir.isenson.com.

Speaker #2: Furthermore, throughout the call, we will consistently use the company's brand name, FlashEx, to refer to its publicly listed entity, BingEx Limited. Joining us today from FlashEx Senior Management are Mr. Adam Xue, Founder and Chairman of the Board, and Chief Executive Officer, Mr. Hong Jianyu, Co-Founder, Director, and Executive President.

Speaker #2: And Mr. Luke Tang, Chief Financial Officer, I will now turn the call over to Mr.

Speaker #2: Adam Xue. Thank you,

Speaker #3: Helen: Hello, everyone, and welcome to FlashEx's third-quarter 2025 earnings call. Amid ongoing external challenges in the third quarter, FlashEx continued to enhance our unique on-demand dedicated courier model to strengthen our core competitiveness.

Speaker #3: To elevate service quality and user experience, we expanded service categories and scenarios, deepened user insights, broadened service touchpoints, tested new technologies, and improved our dispatch algorithms.

Speaker #3: Meanwhile, we are steadily improving user engagement by focusing on high-value, time-sensitive sectors and leveraging refined operations to reinforce our brand reputation and boost user recognition.

Speaker #3: We also broadened our reach among both merchant and individual customers, building a strong foundation for long-term sustainable growth. For the third quarter of 2025, FlashEx recorded total revenue of ¥1 billion, with a gross margin of 11%.

Speaker #3: Adjusted net profit reached ¥62.6 million, representing a 9% increase year over year. As of the end of the quarter, cash positions stood at ¥877.9 million, reflecting a healthy financial position.

Speaker #3: Let's move on to our operational initiatives for merchants and individual users. In the third quarter, we adopted a more refined tiered management approach for merchant customers.

Speaker #3: Optimizing response mechanisms and benefits within our existing service framework. For high-frequency merchant customers, we introduced a dedicated VIP support team offering direct one-on-one assistance to improve feedback efficiency and order fulfillment.

Speaker #3: We also launched a membership program that grants qualified merchants key benefits, such as priority dispatching, peak hour surcharge waivers, ensuring stable fulfillment rates, and service quality even during holidays or peak demand periods.

Speaker #3: These core merchant customers generally have more major operations, higher order frequency, and steady demand. With longer customer lifecycles and stronger brand synergies, they provide FlashEx with stable, predictable revenue, building a resilient income model.

Speaker #3: Through long-term collaboration, we continue to focus on highly time- and experience-sensitive categories such as FlashFlowers and Cakes, expanding our merchant partnerships from simple delivery to collaborative operations.

Speaker #3: Building on previous initiatives like packaging design upgrades and delivery route optimization, we established specialized teams to conduct customized fulfillment training. Each month, we cover holidays, trends, consumer preferences, and more.

Speaker #3: This program ensures that our riders are well-trained in processing handling procedures for dedicated flowers and cakes, turning last-mile delivery into a seamless extension of a merchant's brand experience.

Speaker #3: At the same time, we expanded our in-store service pilot program in key cities. Under this program, dedicated on-site representatives work directly with merchant customers to allocate delivery resources in real time based on peak hours and special events.

Speaker #3: Improving delivery efficiency and fulfillment rates. For example, at a cake shop in Chongqing, FlashEx order volume grew fourfold from the previous quarter after the in-store model was introduced in July.

Speaker #3: This success also encouraged nearby merchants to join the platform, unlocking additional order potential. By combining category expertise with in-store support, we help merchants enhance customer satisfaction while reinforcing FlashEx's unique advantages in premium delivery categories.

Speaker #3: This approach continues to strengthen recognition of our brand-differentiating model and boost user loyalty. While deepening collaboration with high-frequency merchant customers, we also continue to expand our channels for acquiring new merchant leads.

Speaker #3: First, our business development team actively engages with commercial districts and local communities to reach potential new customers. Meanwhile, we encourage and incentivize our Flash riders to identify new stores during their daily deliveries.

Speaker #3: Compared with traditional shop-by-shop prospecting, rider-generated leads are less costly and better aligned with real business scenarios. This approach not only improves the efficiency of new merchant acquisition, but also creates a virtuous cycle that enhances our reach among small and medium-sized businesses.

Speaker #3: For individual users, we remain focused on instant lifecycle assistance positioning in the third quarter, actively expanding service scenarios to grow our user base. Since the second quarter, we have steadily introduced a range of new services for individual users in the FlashEx App, including shopping assistance, parcel pickup, meal pickup, gift delivery, and luggage delivery.

Speaker #3: Daily delivery volume across these five lifecycle scenarios continues to grow in the third quarter, up by 15% from the previous quarter. We also explored new and emerging needs; for example, with rising demand in the electric vehicle sector, we piloted an on-site battery charging support service that allows Flash riders to handle the manual process for car owners, saving them valuable time.

Speaker #3: Our offerings are designed to meet users' everyday needs, transforming FlashEx from a delivery brand into an essential part of their daily life. To further enhance individual user engagement and experience, we added new community sections to the FlashEx App.

Speaker #3: Encouraging users to share their experiences, usage scenarios, and personal needs. These interactions help us gain deeper user insights and continuously improve our services. Meanwhile, they also naturally boost brand awareness, allowing us to more effectively promote new service features.

Speaker #3: As we continue to deepen our engagement with merchant customers and individual users, during the quarter, we also focused our business development efforts on enterprise clients.

Speaker #3: Our high-value user group actively pursued off-charge and partnership opportunities. Enterprise clients offer important benefits. They typically have long lifecycles and high retention rates, and require ongoing steady services.

Speaker #3: Their long-term value helps drive our steady and stable business growth. Based on these traits, we have created focused strategies for enterprise clients, targeting mutual growth through deepened collaboration.

Speaker #3: By tapping into enterprise clients' private traffic potential and helping them improve service quality, we expanded FlashEx's user base, reached more industries, and penetrated new service scenarios.

Speaker #3: This approach not only drives business volume growth but also increases brand awareness, strengthening FlashEx's market recognition and reputation. As we grew our business base and our user base, we prioritized improving technology and operational efficiency. In the third quarter, we teamed up with the Yuyang District Government in Hangzhou and other partners to implement a city-wide low-altitude logistics delivery solution.

Speaker #3: Which has now reached the commercial testing stage. With more than 11 years of experience, a nationwide network across 298 cities, and over 100 million users, FlashEx provides precise order forecasting, set recommendations for drone takeoff and landing, route planning, and smart dispatch support, positioning us as an early leader in urban drone delivery systems.

Speaker #3: As a key element of new productive forces, low-altitude logistics not only fits well with FlashEx's on-demand dedicated query model, but also offers better solutions for long-distance, time-critical, and personalized orders.

Speaker #3: By combining drones with riders, we can better support deliveries in specific scenarios, such as heavy traffic, helping to alleviate service gaps, and improving delivery quality and user experience.

Speaker #3: FlashEx has always viewed our riders as our key strengths. In the third quarter, we continue to enhance our incentive programs, create development opportunities for riders, and offer educational support to families of eligible riders.

Speaker #3: This initiative boosts riders' sense of belonging, as well as their career motivation, highlighting FlashEx's strong commitment to social responsibility. As we enter the fourth quarter of 2025, FlashEx will remain focused on steady growth in our core business, refining operations business-wide to drive comprehensive platform growth.

Speaker #3: We will deepen our efforts across key service areas, boosting our service capabilities and targeting the right user segments to grow our user base. We will also explore new service opportunities, strengthen partnerships, and enhance the user experience, reinforcing FlashEx's unique position as a leading on-demand dedicated query service provider and building a strong comprehensive edge.

Speaker #3: Competitive edge. Meanwhile, we will actively align with national policies and current trends, offering users a more diverse range of services to boost satisfaction. Through these efforts, we aim to achieve both commercial success and social impact, making positive contributions to society as a whole.

Speaker #3: This concludes my remarks. Now I will turn the call over to our CFO, Luc Tang. Thank you.

Speaker #3: This concludes my remarks. Now I will turn the call over to our CFO, Luc Tang. Thank you. Thank you, Adam.

Speaker #2: Hello, everyone. This is Luc. Let me walk you through our third-quarter financial results. Before I begin, please note that all numbers are in renminbi, and all percentage changes are on a year-over-year basis.

Speaker #2: Unless none of us noted, in the third quarter of 2025, we delivered a solid financial performance driven by disciplined, refined operations and the strengthening of our differentiated business positioning.

Speaker #2: Our on-demand dedicated query model continued to demonstrate strong resilience. In the third quarter, gross margin held steady at 11%, while non-GAAP net margin expanded to 6.2% from 5% in the same period of last year.

Speaker #2: Our shareholders' equity grew to $839.3 million as of the third quarter end 2025, up from $747.1 million at the end of 2024. Additionally, we have demonstrated our commitment to enhancing shareholder value by repurchasing approximately 1.6 million ADS as of November 18, 2025.

Speaker #2: Our revenues for the third quarter reached $1,005.4 million compared to $1,154.8 million in the same period of 2024. The year-over-year decline primarily reflects lower order volumes amid ongoing competitive pressures in the market throughout the quarter.

Speaker #2: Our cost of revenues for the quarter was $893.6 million, representing a decrease of 12.8% compared to the same period in 2024. This was primarily in line with the decline in revenues and also reflects our continued efforts to enhance operational efficiency.

Speaker #2: Our gross profit was $111.8 million for the third quarter, compared with $130.3 million in the same period of 2024. Gross profit margin for the third quarter was 11.1%.

Speaker #2: Turning to operating expenses, our total operating expenses for the third quarter were $97.7 million, comprised of $42.9 million in selling and marketing expenses, $37 million in general and administrative expenses, and $17.7 million in research and development expenses.

Speaker #2: Excluding share-based compensation expenses, our non-GAAP income from operations was $23.7 million for the third quarter, compared with $46.2 million in the same period of 2024.

Speaker #2: Other income was $2.5 million for the third quarter, compared with $5.8 million in the same period of 2024. The year-over-year decrease was primarily due to a lower amount of government grants.

Speaker #2: Our non-GAAP net income for the third quarter reached $62.6 million, representing an 8.6% increase compared with $57.6 million in the same period of 2024.

Speaker #2: Our cash position remained healthy, with cash and cash equivalents, restricted cash, and short-term investments totaling $877.9 million as of the third quarter's end. In summary, our third quarter results highlight the resilience of our business in a dynamic and competitive market.

Speaker #2: By leveraging our refined and differentiated operational strategy, loyal core merchant base, and continued expansion of our user scenarios, we are strategically positioned to capture emerging opportunities and drive sustainable long-term growth.

Speaker #2: That concludes our prepared remarks. We would now like to open the floor to your questions. Operator, please go ahead.

Speaker #3: Thank you. If you wish to ask a question, please press *11 on your telephone and wait for your name to be announced. To withdraw your question, please press *11 again.

Speaker #3: For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

Speaker #3: Please stand by while we compile the Q&A roster. We will take our first question, and the question comes from the line of Saifan Jiang from CICC.

Speaker #3: Please go ahead, your line is open.

Speaker #4: Thank you to the management team for taking my question. I'm Saifan from CICC. I've got two questions here today. My first question is, could you please share our third-quarter order volume and ASP trends broken down by the 2B and 2C segments?

Speaker #4: Given the subsidy rollbacks of food delivery and colder weather in the fourth quarter, have these factors had a measurable impact on order growth? Finally, what is our outlook for order volume trends next year?

Speaker #4: And what are the key drivers? And my third and my second question is, what is the management's outlook on the trend and potential for future reduction in the company's expense ratio?

Speaker #4: Thank you.

Speaker #2: Okay. Thank you for your question. Have you answered our first question? And then my CFO, Luke, will answer the second question. Well, for the first question, we believe that the scaling back of subsidies and the regulatory standardization in the food delivery industry are shifting the competitive focus from lower price to better service.

Speaker #2: Fostering a more stable market environment, this regional environment allows Flashy Eggs to fully leverage its differentiated value proposition of on-demand dedicated courier services. Users are increasingly willing to pay for reliable timeliness, ensuring a sense of trust and security.

Speaker #2: And the perceived quality of service. Accordingly, we remain committed to investing resources in expanding service scenarios and refining the user experience. On one hand, we continue to strengthen our positioning as an instant lifecycle assistant.

Speaker #2: Intensifying the penetration of key everyday scenarios and uncovering users' latent needs. On the other hand, we are enhancing collaboration with our merchant clients, adopting a collaborative management approach to elevate their service quality and customer experience.

Speaker #2: Thereby increasing order frequency. On the operational and delivery side, we continuously optimize operating efficiency while strengthening the training and support team system for our flash riders.

Speaker #2: In the third quarter, the average delivery time was 26 minutes. Improved user experience drives repeat orders, ensuring stable rider income and attracting high-quality delivery resources, creating a positive cycle where better service experiences lead to more frequent orders, which in turn drives higher income for riders.

Speaker #2: In the third quarter, the company's overall order volume demonstrated strong resilience despite external market fluctuations. Additionally, ASP achieved a year-over-year increase. Looking ahead to the fourth quarter and 2026, we will continue to amplify our time efficiency advantage, deepen scenario penetration, expand the overall user base, and increase order frequency from merchants through the collaborative management model, driving long-term and sustainable growth.

Speaker #5: Thank you, Saifan and Adam. This is Luke. I will take your second question. In recent years, the company's overall expense ratio has remained unstable and followed a gradually declining trajectory.

Speaker #5: Primarily driven by our sustained investment in refined operations and the efficiency enhancements. At the same time, we have been expanding the channels of new user acquisition, effectively lowering client acquisition costs.

Speaker #5: On the merchant side, we further diversified our new merchant discovery approach. We encourage riders to identify new stores during their deliveries. Additionally, through deep collaboration with the core merchants, including on-site support and coordination, we have achieved nearby merchants joining the platform, achieving effective synergies in merchant acquisition.

Speaker #5: Furthermore, in this quarter, we focused on unlocking potential among enterprise clients by leveraging their private domain traffic, effectively increasing our brand reach to broader end users.

Speaker #5: From a medium to long-term perspective, we believe there remains room for further optimization of our expense ratio, with continued revenue growth, improved client structure, and ongoing upgrades to operational strategies.

Speaker #5: We expect the expense ratio to trend downward in a healthy and controlled manner. While maintaining strategic investments, we will continue to optimize our cost structure, ensuring that the company can realize stronger operating leverage as market competition stabilizes.

Speaker #5: Overall, with a continuous improvement in operational efficiency and a solid foundation, for the scale, the company's expense ratio retains potential for further reduction in the future.

Speaker #5: Thank you.

Speaker #4: And that concludes the question-and-answer session. I will now hand the call over to Helen Wu for closing.

Speaker #4: remarks. Thank

Speaker #6: Thank you once again for joining the BingEx Q3 2025 financial results and business updates conference call today. If you have any further questions, please contact the IR team at BingEx or PS&T Financial Communications.

Speaker #6: Thank you and have a great day.