ZKH Group Limited Announces Fourth Quarter and Fiscal Year 2024 Unaudited Financial Results
SHANGHAI, March 18, 2025 /PRNewswire/ -- ZKH Group Limited ("ZKH" or the "Company") (NYSE:ZKH), a leading maintenance, repair and operations ("MRO") procurement service platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024.
Fourth Quarter and Fiscal Year 2024 Operational and Financial Highlights
in thousand RMB, except for number of customers,percentage and basis points ("bps")
Fourth Quarter
Fiscal Year
2023
2024
Change
2023
2024
Change
GMV[1]
3,207,139
2,690,311
-16.1 %
11,083,035
10,479,461
-5.4 %
GMV by Platform
ZKH Platform
2,907,077
2,435,037
-16.2 %
10,112,872
9,475,550
-6.3 %
GBB Platform
300,062
255,274
-14.9 %
970,163
1,003,911
3.5 %
GMV by Business Model
Product Sales (1P)
2,321,861
2,324,005
0.1 %
8,336,846
8,530,328
2.3 %
Marketplace (3P)[2]
885,279
366,306
-58.6 %
2,746,189
1,949,133
-29.0 %
Number of Customers[3]
42,220
46,192
9.4 %
66,562
83,958
26.1 %
ZKH Platform
31,174
36,116
15.9 %
48,211
57,679
19.6 %
GBB Platform
11,046
10,076
-8.8 %
18,351
26,279
43.2 %
Net Revenues
2,443,961
2,370,223
-3.0 %
8,721,175
8,761,318
0.5 %
Gross Profit
417,151
404,998
-2.9 %
1,452,434
1,510,471
4.0 %
% of Net Revenues
17.1 %
17.1 %
1.8bps
16.7 %
17.2 %
58.6bps
Operating Loss
(6,779)
(32,589)
380.7 %
(398,724)
(338,770)
-15.0 %
% of Net Revenues
-0.3 %
-1.4 %
-109.8bps
-4.6 %
-3.9 %
70.5bps
Non-GAAP EBITDA[4]
43,272
(13,330)
-130.8 %
(211,896)
(193,258)
-8.8 %
% of Net Revenues
1.8 %
-0.6 %
-233.3bps
-2.4 %
-2.2 %
22.4bps
Net Profit/(Loss)
20,229
(29,102)
-243.9 %
(304,900)
(268,043)
-12.1 %
% of Net Revenues
0.8 %
-1.2 %
-205.6bps
-3.5 %
-3.1 %
43.7bps
Non-GAAP Adjusted Net Profit/(Loss)[5]
27,538
(15,033)
-154.6 %
(287,507)
(159,527)
-44.5 %
% of Net Revenues
1.1 %
-0.6 %
-176.1bps
-3.3 %
-1.8 %
147.6bps
"2024 presented a dynamic demand landscape, yet we delivered robust performance, further solidifying our leadership in China's MRO industry and expanding our global footprint." stated Mr. Eric Long Chen, Chairman and Chief Executive Officer of ZKH. "During the past year, we continued to enhance our profitability, bolstered by a growing customer base, increased customer loyalty, and advancements in digitalization and artificial intelligence. Notably, in 2024, we reached a significant milestone by broadening our international presence, particularly as our U.S. operations gained momentum. Looking ahead, we remain steadfast in our commitment to enhancing our products and supply chain capabilities and advancing our digitalization and artificial intelligence initiatives. While our strategic business optimization initiatives temporarily affected overall GMV growth, we believe the impact of these adjustments has gradually faded, placing us on a stronger path toward solid and sustainable growth, and we are confident that we will achieve full-year profitability for our domestic operations in 2025."
Mr. Max Chun Chiu Lai, Chief Financial Officer of ZKH, added, "Despite challenges in the demand environment and the impacts of business optimization, we concluded the year with resilient results, alongside overall enhancements in profitability. This is reflected in the improvement in both gross margin and net margin in 2024, driven by our expanded business scale and continued efforts to optimize our supply chain, sales force, and organizational structure. Our cash position has also strengthened, as we generated net cash of RMB170.7 million from operating activities in the fourth quarter and RMB229.1 million in 2024, marking our third consecutive quarter and our first full year of positive net cash inflow from operating activities. With this solid foundation, we are poised to leverage future growth opportunities and enhance shareholder returns."
[1] GMV is the total transaction value of orders placed on the Company's platform and shipped to customers, excluding taxes, net of the returned amount.
[2] The proportion of GMV generated by the marketplace model was 27.6% and 24.8% for the fourth quarter of 2023 and for the fiscal year of 2023, and 13.6% for the fourth quarter of 2024 and 18.6% for the fiscal year of 2024, respectively.
[3] Customers are customers that transacted with the Company during the reporting period, mainly comprised of enterprise customers in various industries.
[4] Non-GAAP EBITDA is defined as net profit/(loss) before interest expenses, income tax expenses/(benefits) and depreciation and amortization expenses.
[5] Non-GAAP adjusted net profit/(loss) is defined as net profit/(loss) excluding share-based compensation expenses.
Fourth Quarter 2024 Financial Results
Net Revenues. Net revenues were RMB2,370.2 million (US$324.7 million), representing a decrease of 3.0% from RMB2,444.0 million in the same period of 2023, mainly due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model.
in thousand RMB, except for percentage
Fourth Quarter
2023
2024
Change
Net Revenues
2,443,961
2,370,223
-3.0 %
Net Product Revenues
2,324,986
2,303,451
-0.9 %
From ZKH Platform
2,028,986
2,049,520
1.0 %
From GBB Platform
296,000
253,931
-14.2 %
Net Service Revenues
98,592
51,226
-48.0 %
Other Revenues
20,383
15,546
-23.7 %
Net Product Revenues. Net product revenues were RMB2,303.5 million (US$315.6 million), representing a decrease of 0.9% from RMB2,325.0 million in the same period of 2023, primarily due to lower revenues generated on the GBB platform.
Net Service Revenues. Net service revenues were RMB51.2 million (US$7.0 million), a decrease of 48.0% from RMB98.6 million in the same period of 2023, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model.
Other Revenues. Other revenues were RMB15.5 million (US$2.1 million), a decrease of 23.7% from RMB20.4 million in the same period of 2023, mainly due to lower revenues from warehousing and logistic services and operating lease services for certain types of machinery and equipment.
Cost of Revenues. Cost of revenues was RMB1,965.2 million (US$269.2 million), representing a decrease of 3.0% from RMB2,026.8 million in the same period of 2023, mainly due to the effectiveness of the Company's measures to reduce overall product procurement costs.
Gross Profit and Gross Margin. Gross profit was RMB405.0 million (US$55.5 million), representing a decrease of 2.9% from RMB417.2 million in the same period of 2023. Gross margin was 17.1%, remaining flat compared with the same period of 2023, mainly due to lower revenue contribution from the marketplace model, while both the gross margin of the product sales model and the take rate of the marketplace model from the ZKH Platform increased, driven by business optimization, reduced procurement costs, and higher proportion of GMV from higher-margin private label products.
in thousand RMB, except for percentage and basis points ("bps")
Fourth Quarter
2023
2024
Change
Gross Profit
417,151
404,998
-2.9 %
% of Net Revenues
17.1 %
17.1 %
1.8bps
Under Product Sales (1P)
ZKH Platform
291,915
335,894
15.1 %
% of Net Product Revenues from ZKH Platform
14.4 %
16.4 %
200.2bps
GBB Platform
18,688
13,958
-25.3 %
% of Net Product Revenues from GBB Platform
6.3 %
5.5 %
-81.7bps
Under Marketplace (3P)
98,592
51,226
-48.0 %
% of Net Service Revenues
100.0 %
100.0 %
-
% of GMV from the Marketplace Model (Take Rate)
11.1 %
14.0 %
284.8bps
Others
7,956
3,920
-50.7 %
% of Other Revenues
39.0 %
25.2 %
-1,381.7bps
Operating Expenses. Operating expenses were RMB437.6 million (US$59.9 million), an increase of 3.2% from RMB423.9 million in the same period of 2023. Operating expenses as a percentage of net revenues were 18.5%, compared with 17.3% in the same period of 2023. Excluding the share-based compensation expenses, operating expenses as a percentage of net revenues were 17.9%, compared with 17.1% in the same period of 2023.
Fulfillment Expenses. Fulfillment expenses were RMB95.1 million (US$13.0 million), a decrease of 11.8% from RMB107.8 million in the same period of 2023. The decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.0%, compared with 4.4% in the same period of 2023.
Sales and Marketing Expenses. Sales and marketing expenses were RMB151.6 million (US$20.8 million), a decrease of 10.9% from RMB170.0 million in the same period of 2023. The decrease was primarily attributable to lower marketing and promotion expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 6.4%, compared with 7.0% in the same period of 2023.
Research and Development Expenses. Research and development expenses were RMB41.4 million (US$5.7 million), an increase of 9.5% from RMB37.8 million in the same period of 2023. The increase was primarily attributable to higher employee benefit costs and expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.7%, compared with 1.5% in the same period of 2023.
General and Administrative Expenses. General and administrative expenses were RMB149.5 million (US$20.5 million), an increase of 38.1% from RMB108.2million in the same period of 2023. The increase was primarily attributable to higher employee benefit costs and share-based compensation expenses. General and administrative expenses as a percentage of net revenues were 6.3%, compared with 4.4% in the same period of 2023.
Loss from Operations. Loss from operations was RMB32.6 million (US$4.5 million), compared with RMB6.8 million in the same period of 2023. Operating loss margin was 1.4%, compared with 0.3% in the same period of 2023.
Non-GAAP EBITDA. Non-GAAP EBITDA was negative RMB13.3 million (US$1.8 million), compared with RMB43.3 million in the same period of 2023. Non-GAAP EBITDA margin was negative 0.6%, compared with 1.8% in the same period of 2023.
Net (Loss)/Profit. Net loss was RMB29.1 million (US4.0 million), compared with net profit of RMB20.2 million in the same period of 2023. Net loss margin was 1.2%, compared with net profit margin of 0.8% in the same period of 2023.
Non-GAAP Adjusted Net (Loss)/Profit. Non-GAAP adjusted net loss was RMB15.0 million (US$2.1 million), compared with non-GAAP adjusted net profit of RMB27.5 million in the same period of 2023. Non-GAAP adjusted net loss margin was 0.6%, compared with non-GAAP adjusted net profit margin of 1.1% in the same period of 2023.
Basic and Diluted Net (Loss)/Profit per ADS[6] and Non-GAAP Adjusted Basic and Diluted Net (Loss)/Profit per ADS[7]. Basic and diluted net loss per ADS were RMB0.18 (US$0.02), compared with basic and diluted net profit per ADS of RMB0.98 in the same period of 2023. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.09(US$0.01), compared with non-GAAP adjusted basic and diluted net profit per ADS of RMB0.45 in the same period of 2023.
[6] ADSs are American depositary shares, each of which represents thirty-five (35) Class A ordinary shares of the Company.
[7] Non-GAAP adjusted basic and diluted net (loss)/profit per ADS is a non-GAAP financial measure, which is calculated by dividing non-GAAP adjusted net (loss)/profit attributable to the Company's ordinary shareholders by the weighted average number of ADSs.
Fiscal Year 2024 Financial Results
Net Revenues. Net revenues were RMB8,761.3 million (US$1,200.3 million), representing an increase of 0.5% from RMB8,721.2 million in 2023, primarily driven by higher revenues from the product sales model, partially offset by a decline in revenues from the marketplace model due to the optimization of certain businesses with low margins and long customer credit terms.
in thousand RMB, except for percentage
Fiscal Year
2023
2024
Change
Net Revenues
8,721,175
8,761,318
0.5 %
Net Product Revenues
8,341,603
8,449,468
1.3 %
From ZKH Platform
7,381,501
7,450,211
0.9 %
From GBB Platform
960,102
999,257
4.1 %
Net Service Revenues
307,412
244,707
-20.4 %
Other Revenues
72,160
67,143
-7.0 %
Net Product Revenues. Net product revenues were RMB8,449.5 million (US$1,157.6 million), representing an increase of 1.3% from RMB8,341.6 million in 2023. The increase was mainly attributable to higher revenues generated from the ZKH platform and the GBB platform, primarily driven by increased customer numbers.
Net Service Revenues. Net service revenues were RMB244.7 million (US$33.5 million), a decrease of 20.4% from RMB307.4 million in 2023, primarily due to the optimization of certain businesses with low margins and long customer credit terms under the marketplace model.
Other Revenues. Other revenues were RMB67.1 million (US$9.2 million), a decrease of 7.0% from RMB72.2 million in 2023, mainly attributable to lower revenues generated from the Company's warehousing and logistic services and operating lease services for certain types of machinery and equipment.
Cost of Revenues. Cost of revenues was RMB7,250.8 million (US$993.4 million), representing a decrease of 0.2% from RMB7,268.7 million in 2023, mainly due to the effectiveness of the Company's measures to reduce overall product procurement costs.
Gross Profit and Gross Margin. Gross profit was RMB1,510.5 million (US$206.9 million), an increase of 4.0% from RMB1,452.4 million in 2023. Gross margin was 17.2%, compared with 16.7% in 2023, primarily due to improved gross margin of the product sales model from the ZKH Platform, resulting from business optimization, reduced procurement costs, and higher proportion of GMV from higher-margin private label products.
in thousand RMB, except for percentage and basis points ("bps")
Fiscal Year
2023
2024
Change
Gross Profit
1,452,434
1,510,471
4.0 %
% of Net Revenues
16.7 %
17.2 %
58.6bps
Under Product Sales (1P)
ZKH Platform
1,046,209
1,192,189
14.0 %
% of Net Product Revenues from ZKH Platform
14.2 %
16.0 %
182.9bps
GBB Platform
61,789
55,243
-10.6 %
% of Net Product Revenues from GBB Platform
6.4 %
5.5 %
-90.7bps
Under Marketplace (3P)
307,412
244,707
-20.4 %
% of Net Service Revenues
100.0 %
100.0 %
-
% of GMV from the Marketplace Model (Take Rate)
11.2 %
12.6 %
136.1bps
Others
37,024
18,332
-50.5 %
% of Other Revenues
51.3 %
27.3 %
-2,400.5bps
Operating Expenses. Total operating expenses were RMB1,849.2 million (US$253.3 million), a decrease of 0.1% from RMB1,851.2 million in 2023. Operating expenses as a percentage of net revenues were 21.1%, compared with 21.2% in 2023. Excluding the share-based compensation expenses, operating expenses as of a percentage of net revenues were 19.9%, compared with 21.0% in 2023.
Fulfillment Expenses. Fulfillment expenses were RMB391.7 million (US$53.7 million), a decrease of 10.8% from RMB439.0 million in 2023. The decrease was primarily attributable to lower employee benefit costs, warehouse rental costs, and distribution expenses. Fulfillment expenses as a percentage of net revenues were 4.5%, compared with 5.0% in 2023.
Sales and Marketing Expenses. Sales and marketing expenses were RMB641.5 million (US$87.9 million), a decrease of 8.5% from RMB700.8 million in 2023. The decrease was primarily attributable to lower employee benefit costs, marketing and promotion expenses and travel expenses. Sales and marketing expenses as a percentage of net revenues were 7.3%, compared with 8.0% in 2023.
Research and Development Expenses. Research and development expenses were RMB169.5 million (US$23.2 million), a decrease of 3.6% from RMB175.9 million in 2023. The decrease was primarily attributable to lower employee benefit costs and traveling expenses, partially offset by higher expenses related to technology and information services, such as cloud services. Research and development expenses as a percentage of net revenues were 1.9%, compared with 2.0% in 2023.
General and Administrative Expenses. General and administrative expenses were RMB646.5 million (US$88.6 million), an increase of 20.7% from RMB535.5 million in 2023. The increase was primarily attributable to higher share-based compensation expenses and allowance for credit losses, partially offset by lower employee benefit costs and travel expenses. General and administrative expenses as a ...
