YJ · Yunji Inc.

Yunji Inc. reported continued revenue contraction in FY2025, with total revenue of $317.0 million, down 24.1% from $417.7 million in FY2024. This decline reflects softening customer demand, which directly influences the volume of products stored in warehouses and overall sales activity. The company's curation-focused model and reliance on member engagement faced headwinds, leading to lower sales volumes despite efforts to negotiate discounted prices with suppliers based on historical large sales propositions.

Gross profit decreased more sharply at 31.8% to $140.8 million from $206.3 million, yet gross margin remained resilient at 44.4%. This stability stems from the company's ability to secure favorable supplier terms and manage product costs effectively, even as revenue fell. The warehouse management system, designed for frequent curated sales events and high inventory turnover, continues to support fulfillment efficiency, enabling quick and accurate order delivery to maintain customer experience.

Operating income deteriorated to a loss of -$143.4 million, 5.2% worse than the prior year's -$136.3 million, with operating margin at -45.2%. The widening gap highlights how fixed overhead and operational costs persisted amid revenue declines, underscoring the need for scalable expense alignment with demand fluctuations. Net income followed suit, posting a -$133.3 million loss, up 8.3% from -$123.1 million, with diluted EPS at -$0.07 compared to -$0.06.

A notable positive was the improvement in cash flows from operating activities, using only -$57.8 million versus -$126.1 million last year. This enhancement arises from better working capital management, including strategic inventory increases to support anticipated order demand and handle temporarily unaccepted deliveries from customers. These moves position the balance sheet to capitalize on potential demand recovery while fulfilling orders efficiently.

Looking forward, Yunji is applying AI solutions to boost operational efficiency, with plans to expand into areas like intelligent customer services and big data applications for enhanced user experience. The company anticipates adjusting fulfillment infrastructure to improve logistics and support business expansion. Management notes potential future capital raises to bolster liquidity for investments, aligning with disciplined cash preservation amid current losses. This strategic pivot emphasizes long-term efficiency gains and demand responsiveness over short-term volume recovery.