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Yunji Inc. reported a significant drop in revenue for the second quarter of 2025, with total revenue declining by 32% year-over-year to $158.3 million. The company also recorded a substantial net loss of $100.7 million, a sharp increase from the $8 million loss in the same period last year. According to InvestingPro data, the company’s shares are currently trading below their Fair Value, with a notably low Price/Book ratio of 0.06. Despite these challenges, Yunji is focusing on optimizing its cost structure and improving its gross margin as part of its strategic initiatives to achieve breakeven.
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Key Takeaways
- Total revenue declined by 32% to $158.3 million.
- Net loss increased to $100.7 million from $8 million year-over-year.
- Yunji launched new product lines, including Yujiang Organic.
- The company is focusing on cost optimization and improving gross margins.
- Yunji aims to strengthen its financial position amid challenging market conditions.
Company Performance
Yunji’s performance in Q2 2025 reflects a challenging market environment, characterized by weakened consumer confidence. The company’s revenue fell to $158.3 million, down from $233.8 million in the same quarter last year, continuing a trend that has seen revenue decline by 34.76% over the last twelve months. Merchandise sales contributed $131.7 million to the total revenue, while the marketplace business added $24.5 million. The company maintains a strong liquidity position with a current ratio of 1.97, though InvestingPro analysis indicates the company is quickly burning through its cash reserves. Despite these figures, the company remains committed to its organic health strategy and is actively expanding its product portfolio.
Financial Highlights
- Total Revenue: $158.3 million, down 32% year-over-year.
- Merchandise Sales: $131.7 million.
- Marketplace Business Revenue: $24.5 million.
- Gross Margin: 47.3%.
- Net Loss: $100.7 million, compared to an $8 million loss in the previous year.
- Cash and Equivalents: $217.1 million as of January 30, 2025.
Outlook & Guidance
Yunji is focusing on optimizing its cost structure and improving its gross margin, which stands at 49.4%, as part of its strategic plan to achieve breakeven. The company aims to strengthen its financial position and prepare for market evolution and capital growth opportunities. InvestingPro’s Financial Health Score indicates a WEAK overall rating of 1.35 out of 5, suggesting significant room for improvement. Despite the current challenges, Yunji is committed to its organic health strategy and is aligning its efforts with the "Healthy China 2030" government initiative.
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Executive Commentary
"We have remained firmly anchored to our organic health strategy," said Sheng Wu Zhao, CEO of Yunji. Nan Song, the Financial Director, added, "We continue to optimize our cost structure while ensuring efficient capital allocation." These statements underscore the company’s focus on improving operational efficiency and capital utilization amid market challenges.
Risks and Challenges
- Market Conditions: Weakened consumer confidence continues to pose a challenge.
- Competitive Pressure: The rise of instant retail is challenging community retail group leaders.
- Financial Losses: The increased net loss highlights the need for improved cost management.
- Strategic Execution: Successful implementation of cost optimization and margin improvement strategies is crucial.
- Regulatory Environment: Aligning with government initiatives requires careful navigation.
Yunji’s Q2 2025 earnings call highlights both the challenges the company faces and its strategic initiatives to navigate these hurdles. The focus on organic health products and cost optimization reflects the company’s efforts to position itself for future growth despite current market difficulties.
Full transcript - Yunji Inc (YJ) Q2 2025:
Conference Operator: Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to the Yunji’s First Half twenty twenty five Earnings Conference Call. With us today are Mr. Sheng Wu Zhao, Chairman and Chief Executive Officer and Mr. Nan Song, Senior Financial Director.
As a reminder, this conference call is being recorded. Before we start, please note that this call will contain forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on the company’s current expectations and current marketing operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors of UMG and its industry. These forward looking statements can be identified by terminologies such as will, expect, anticipate, continue or other similar expressions. For a detailed discussion of these risks and uncertainties, please refer to the company’s related documents filed with the U. S.
SEC. Any forward looking statements that the company makes on this call are based on assumptions as of today and are expressly qualified in the entirety by cautionary statements, risk factors and other details of its filings with the SEC. The company does not undertake any obligation to update these statements except as required under applicable law. With that, I will now turn it over to Mr. Sheng Luo, Chairman and CEO of Yunji.
Please go ahead, sir. Apologies, ladies and gentlemen, we seem to have disconnected with our speakers. Please hold while we reconnect. Ladies and gentlemen, we’ve reconnected with our speaker line. Please proceed with the presentation.
Sheng Wu Zhao, Chairman and Chief Executive Officer, Yunji: Hello, everyone, and welcome to LingQi’s First Half twenty twenty five Earnings Call. Thank you for your continued interest and support. Already past six months, we have remained firmly anchored to our organic health strategy, While overall market conditions and a weakened consumer confidence have led to a slight decline in our total revenue, we believe that staying committed to organic health is the right strategy and represents an important opportunity for BingQi’s future And we have a center on our strategy on organic health positioning Youjiang Organic and Newcast, our flagship product to shape our brand image in this space. The product achieved an RMB5 million in sales at launch, helping establish Yunji’s health focused brand awareness among consumers. Building on this success, we will gradually expand the concept from these foundation.
Additionally, Yunjiangmyeok will serve as an important tool for Bingji’s expansion, helping us better penetrate the retail market developed through community leaders. Over the past six months, our other major products have also performed exceptionally well. Blinds Lemon Coffee achieved sales of over RMB10 million, Probind Audis bolus reached nearly RMB7 million, while freeze dried Seabulk Thorn Powder and Herbal Sansea Paste, each generated more than million in sales. This is a sense comes from our organic health strategy and our scientific weight management product selection, both aligned closely with the national health agenda, outlined in healthy China 02/1930, a government initiative that sets long term goals to improve public health and healthcare by 02/1930. This marks our approach sustainable in the long term and holds a tremendous development potential.
Most important, we will continue to expand our brand influence through an integrated organic health concept and continually optimize our product mix. Our beauty brand Suyian offers high value fragrance that align closely with the consumer preferences in today’s market. Its approach of combining major products with high impact promotion has achieved positive market feedback. The SUYEA PRO Xilin Firming Essence Lotion generated over RMB4 million in sales at launch and more than 32 of the buyers being returning dormant users. The entire SUYEA PRO Xilin Firming series including creams, lotion and ancestors generated sales exceeding RMB10 million.
In terms of the channels and brand development, we are actually expanding public domain channels, upgrading our Tmall infrastructure, establishing partnership with influencers for live streaming sales and enhancing WeChat channels content. Currently, our WeChat channels transaction volume runs higher than 92.5% of our peers. As we expand our public domain sales, we will continue monitoring market expenses and constantly improving cost efficiency. Our Jianxin Tea Therapy business is currently in the incubation phase. Thanks to the strong growth potential and customer loyalty of the T therapy program, we successfully reached our goal of building a 100% T therapy setting in the first half of the year with the frequent users maintained a solid 50% participation rate.
More notably, participants in the TSR paper when have gradually expanded from existing members to ASNO high net worth individuals. At present, our internal members in through the program account for nearly 15% of often all participants creating significant opportunities for further business growth. Meanwhile, the T program will help Yingji further establish our organic health image and provide a quality traffic for our organic health products. In the 2025, over 90% of the T therapy users purchased our main products, effectively supporting sales of our other health products. The rapid growth of instant retail is posing new challenges for community retail group leaders.
Underneath the trend, community group leaders are more inclined to increase private domain e commerce and connect with the source suppliers. Therefore, in the future, we will focus on expanding our community group leader channels, placing organic foods in community group leaders stores. These will not only empower community group leaders, but also allow more people to conveniently enjoy our organic products, ultimately achieving mutual benefits and win win results.
Nan Song, Senior Financial Director, Yunji: With that, I will hand over to Ms. Nan Song, our Senior Financial Director, to go through the financial results. Thank you, Sunny. Hello, everyone. Before I go through our financial results, please note that all numbers detailed in the following remarks are in RMB terms and all comparisons and the percentage changes are on a year over year basis unless otherwise noted.
During the 2025, market uncertainties still posted challenges to our operations. Even so, our financial position allowed us to continue advancing our strategic initiatives. We continue to assess the profitability of both new and the innovating business lines and make timely adjustment to adapt to shifting market conditions, ensuring we’re meeting our financial foundation while driving ongoing improvement. Now let’s take a close look at our foundation. Total revenue were $158,300,000 compared to $233,800,000 a year ago.
Revenues from sales of merchandise were $131,700,000 and the revenues from our marketplace business were $24,500,000 The changes were primarily due to softer consumer confidence and our ongoing strategy to refine product selection across all categories under optimization, our supply and merchant basis, which affected sales. Despite this choppiness, our gross margin remained relative solid at 47.3%. This was due to the tender customer loyalty towards our robust levels and our effective productive curation, trade to the data, asset size, high margin, high retention categories within our integrated portfolio. Now let’s take a look at our operating expenses. Fulfillment expenses decreased to $20,600,000 from $42,600,000 a year ago.
This was primarily driven by lower warehousing and the logistics costs from reduced merchandise sales. With long as personal expenses for staffing, structural, and spend. Sales and marketing expenses were 50,100,000.0 compared to $47,500,000 a year ago. This was primarily due to high member management based from growing the membership space and increased personnel cost to support its expansion into market partially offset by lawyer advertising expenses. Technology and content expenses were $300,000 compared to $25,500,000 a year ago.
The decrease was mainly due to a reduction in personnel costs resulting from staffing structure optimization, general and administrative expenses were $93,400,000 compared to $33,500,000 a year ago. The increase was mainly due to a high allowance for credit losses. Currently, by lawyer professional service expenses and their personnel costs, including the one time loss, G and A expenses decreased by 35.6 percent, reflecting the loss of our expenses of amortization effect. Total operating expenses in the 2025 were $179,400,000 compared to $149,100,000 in the same period of 2024. Loss from operation was $100,400,000 compared to loss of operating of $32,400,000 a year ago.
Net loss was $100,700,000 compared with net loss of $8,000,000 a year ago, while adjusted net loss was $100,500,000 compared with adjusted net loss of $6,700,000 a year ago. Basic and diluted net loss per share attributed to ordinary shareholders were both 0.05 compared with basic and diluted net income per share of NIO in the same period of 2024. Turning to recorded as of 01/30/2025, we had a total of $217,100,000 in cash and the cash equivalent, if the adjusted cash and the short term investment on our balance sheet compared to $242,800,000 as of 12/31/2024. Our liquid assets provided adequate coverage for our payable obligation. In addition, we are separated to marking the roster of our working capital and the master managing our assets to best support our operations.
To sum up, during the 2025, we continue to optimize our cost structure while ensuring efficient capital allocation. We remain committed to maintaining financial discipline and driving improved profit activity while supporting long term sustainable growth. Our continued focus on loss integration together with our commitment to efficient asset utilization play a key role in achieving this improvement. Looking ahead, we’ll concentrate on continuously improve our gross margin. Aiming to achieve breakeven and strengthening our overall financial position with strategic focus where we are prepared to manage future handover and the capital growth opportunities in evolving market environment.
This concludes our prepared remarks for today. Thank you.
Conference Operator: That brings us to an end of today’s call. Thank you for attending. You may now disconnect.
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