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Investing.com - ZKH Group Limited (NYSE:ZKH) reported second quarter revenue on Friday that fell short of analyst expectations, while showing some improvement in operational metrics.
The company reported revenue of $302.5 million for the second quarter ended June 30, 2025, missing the analyst consensus estimate of $336.15 million.
Revenue decreased 3.7% compared to the same period last year, primarily due to a strategic shift away from low-margin businesses with extended customer credit terms. The company’s GMV (gross merchandise value) declined 12.1% YoY to RMB2.42 billion.
Despite the revenue decline, ZKH Group expanded its customer base by 53.5% YoY to 74,854 customers. The company also improved its net loss margin to negative 2.5%, compared with negative 2.9% in the same period last year.
Non-GAAP EBITDA loss narrowed to RMB38.7 million from RMB47.1 million a year ago.
"Despite ongoing macro headwinds and subdued market sentiment, we continued to grow our customer base and achieved consistent improvements in business quality during the second quarter," said Eric Long Chen, Chairman and CEO of ZKH.
"This reflects our resilience and commitment to operational excellence and disciplined execution, which are fundamental to our sustainable growth."
The company highlighted progress in enhancing its private-label offerings, with the operational launch of its Taicang facility in China. This strategic hub will enhance ZKH’s capabilities in research and development, testing, and production of industrial products.
"Our higher-margin private-label products continued to grow, with GMV outpacing overall business growth, highlighting a successful shift toward a more profitable and sustainable revenue mix," noted Max Chun Chiu Lai, CFO of ZKH Group.
As of June 30, 2025, the company had cash, restricted cash and short-term investments of $258.4 million, compared with RMB2.06 billion as of December 31, 2024. The company also announced a new share repurchase program of up to $50 million through June 2026.
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