YI · 111, Inc.

111, Inc.’s Q4 and FY 2025 results reflect a deliberate strategic pivot toward an asset-light, warehouse-partnership business model—executed through divestiture of 100% equity interests in several subsidiaries, which subsequently joined the Company’s ecosystem as exclusive fulfillment partners. This structural optimization drove top-line revenue contraction (Q4’25 revenue down 26.7% YoY), but simultaneously enabled sustained gross margin expansion in the B2B segment (5.6%, +60 bps YoY) and significant cost discipline: total operating expenses fell 21.3% YoY in Q4’25. Critically, the Company achieved non-GAAP operating profitability (RMB0.2 million) and positive operating cash flow (RMB29.9 million) in Q4’25—a clear year-over-year turnaround from a RMB2.3 million non-GAAP operating loss and negative operating cash flow in Q4’24. Management attributes these improvements to recurring commission-based revenue replacing capital-intensive operations, reduced fulfillment and marketing expenses, and tighter control over general and administrative costs. The success of promotional products like 'Cravit'—whose GMV surged 368.2% YoY—highlights the scalability of its digital marketing platform. While FY’25 net revenues declined 12.8% to RMB12.6 billion, non-GAAP operating income remained positive at RMB7.7 million, and cash and cash equivalents rose 17.9% to RMB611.3 million, signaling improved liquidity and financial resilience. The Company explicitly frames this as a foundational step toward sustainable, high-quality growth—notably integrating AI across operations to enhance efficiency and evolve into an intelligent healthcare ecosystem.