RLX Technology Inc. reported third‑quarter 2025 results that surpassed consensus estimates, with revenue reaching RMB1.129 billion—an increase of 49.3% year‑over‑year—while international operations accounted for 71.6% of total sales. The company’s gross profit rose to RMB352.6 million, lifting the gross margin to 31.2% from 27.2% in the same period last year, a gain driven by a higher mix of high‑margin international sales and disciplined cost control.
Revenue beat the consensus estimate of $140.5 million (≈RMB1.02 billion) by roughly $18.1 million, reflecting robust demand in the company’s modern‑oral product line in the UK and continued expansion in Asia‑Pacific and European markets. The 49.3% YoY growth is largely attributable to a 71.6% share of revenue coming from overseas, where pricing power and a favorable geographic mix offset domestic headwinds such as enhanced customs enforcement in Mainland China.
Gross‑margin expansion to 31.2% from 27.2% was achieved through a shift toward higher‑margin product categories and improved operational leverage. The company’s disciplined cost management—particularly in shipping and salaries—helped maintain profitability even as operating expenses climbed to RMB259.3 million, a rise that was partially offset by a reduction in share‑based compensation.
Operating income more than doubled to RMB187.8 million, and net income (GAAP) reached RMB206.8 million, while non‑GAAP net income climbed to RMB295.4 million. The company’s basic and diluted earnings per ADS were RMB0.236 and RMB0.221, respectively, translating to a non‑GAAP EPS of $0.1901—an absolute beat of $0.1601 and a 533% exceedance of the consensus $0.03 estimate. The earnings beat was driven by the margin expansion, a favorable mix of international sales, and effective cost containment.
Cash and cash equivalents stood at RMB15.351 billion as of September 30, 2025, providing a strong liquidity buffer. RLX declared a cash dividend of US$0.10 per ordinary share, payable in early February 2026, and continues an ongoing share‑repurchase program authorized up to US$500 million. Cumulative shareholder returns—including dividends and share buybacks—total approximately US$171 million, underscoring the company’s commitment to value creation while maintaining a robust balance sheet.
CEO Kate Wang highlighted the company’s “strong performance across the board” amid “persistent macro and regulatory challenges,” noting a measured recovery in Mainland China due to enhanced customs enforcement and the successful rollout of the modern‑oral product line in the UK. CFO Chao Lu emphasized that the balance sheet remains robust, enabling consistent capital returns, and cited disciplined cost management as a key factor in the earnings beat.
Investors responded positively to the results, citing the company’s strong revenue growth, margin expansion, and disciplined capital allocation as evidence of a resilient business model and a clear path to continued profitability.
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