BingEx Limited ($FLX)

Good day, and welcome to BingEx 2026 First Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Helen Wu from Placenta Financial Communications. Please go ahead.

Thank you, operator. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties including those mentioned in our most recent filings with the SEC. The non-GAAP financial measures we provided for comparison purpose only. The definition of those measures and the reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the BingEx company's IR website at ir.chanzong.com. Furthermore, throughout the call, we are consistently using the company's brand name FlashEx to refer to its publicly listed city, BingEx Limited. Joining us today from FlashEx senior management are Mr. Adam Xue, Founder, Chairman of the Board and Chief Executive Officer; Mr. Hongjian Yu, Co-Founder, Director and Executive President; and Mr. Luke Tang, Chief Financial Officer. I will now turn the call over to Mr. Adam Xue.

Thank you, Helen. Hello, everyone, and welcome to FlashEx's Fourth Quarter 2026 Earnings Call. In the first quarter of 2026, the on-demand delivery industry continued to grow steadily driven by rising user demand for high-quality time-sensitive delivery services. At the same time, the competitive landscape continues to evolve. Against this backdrop, we made meaningful progress in both operational efficiency and business innovation. Most notably, we made new breakthroughs this quarter in opening up our technology ecosystem and real-world deployment of low audio logistics, creating new avenues for the platform's medium- and long-term growth. In the first quarter, FlashEx fulfilled 57.9 million orders, delivering a stable performance made a dynamic market environment that demonstrated the resilience of our business model. Today, the platform has 3.1 million registered flash writers. Our average delivery time further improved to 25.7 minutes, reflecting our continued efforts to in-house user experience and service efficiency. Turning to our financial performance. Total revenues for the first quarter reached RMB 935.3 million with a gross margin of 11.3%. Non-GAAP income from operations was RMB 21.6 million. As of the end of the first quarter, we held cash and cash equivalents, restricted cash and short-term investments totaling RMB 859.1 million, maintaining a healthy financial vision. On the merchant side, we continued to execute our tiered merchant management strategy in the first quarter, further improving service response, efficiency and results allocation. Among our core high-frequency categories, cake and flower merchants typically have stable recurring business needs and lasting business relationships, making them the most predictable component of our revenue mix. In the first quarter, order volume from the cake category exceeded RMB 15.4 million, achieving year-over-year growth despite a high comparison base. To support this category, we continue to improve our fulfillment capabilities, including upgrading delivery box design, improving shock-resistant standards and strengthening rather handling protocols. All these efforts contributed to higher fulfillment quality and merchant satisfaction. Electronics delivery in the first quarter posted robust growth as well. With order volume up 15.9% year-over-year, maintaining strong momentum and becoming an important driver of order mix improvement. We continued to refine our service response standards from merchants in this key vertical during the quarter. deploying delivery resources ahead of key period to ensure stable order fulfillment rates and delivery quality during peak season, a growing number of well-known companies automotive services, premium retail and consumer electronics have incorporated with FlashEx into their standard fulfillment channels further strengthening our reputation as a trusted provider in premium on-demand dedicated growth segment. In terms of new scenario expansion, we continue to explore new service opportunities in the first quarter. Campus delivery is one example. Most campus services, delivery services currently stop at the campus entrants falling short of users last mail on-demand delivery needs. At the same time, there are large numbers of students on campus who are looking for flexible part-time income. Building on this, FlashEx is exploring a model that combines our user network with on-campus students resources to complete the food delivery chain from campus entrants to dometries. On the individual user side, we continue to reinforce our positioning as an instant lifestyle assistant. In the first quarter, daily order volume remained steady across life style services such as assisted purchasing, parcel pickup, food pickup and give the delivery and luggage delivery, as of this service categories continue to gain traction, FlashEx's connection with users' daily lives has deepened gradually transforming the platform from a single-purpose delivery tool into an on-demand service entry point, covering a broader range of everyday needs. This helps strengthen user engagement and support improvements in overall platform activity and user retention. On the technology and ecosystem front, in April, we officially open sourced our core command line interface tool becoming the first company in the intercity on-demand delivery industry to do so. Through this tool, FlashEx has further standardized and API-enabled its delivery capabilities Merchants can integrate our system with their own point-of-sale or order management system to automatically trigger delivery requests upon customer payment. Developers and enterprise clients can connect directly with FlashEx back end, while come online to place orders, request pricing and track shipments leading AI agents, including cloud code, codex and [indiscernible] can also involve FlashEx's services directly through this interface. This marks the first time that on-demand delivery capability has formally entered the AI workflow ecosystem at a standardized compostable and API accessible model. In this advancement manifests what we have always envisioned, enabling ecosystem partners to excise FlashEx service at lower cost while empowering our flash writers to evolve beyond the traditional core role to become a bridge between AI systems and physical reality. The initial open source really supports 4 core functions price inquiry, order placement, order checking and order cancellation. We will continue to iterate and expand their capabilities, deepening the integration between on-demand delivery and the broader AI ecosystem. We have also completed our quick cap integration with the Huawei Harmony OS ecosystem, allowing users to initial delivery requests directly through conversational interactions on the devices without opening the FlashEx app. Additionally, we have fully opened our API interface to support major AI platforms in evoking FlashEx's order placement capabilities through standardized integrations, further broadening excise to our services. In terms of internal operational efficiency, AI tools are involving from isolated productivity tools into systematic efficiency drivers at the organizational level. In customer service, AI can now independently handle the majority of the routine complaint types significantly reducing the high count required. The time needed to test and launch new service scenarios has been shortened from approximately 2 months to 1 to 2 weeks. The onboarding process for new partners has also been fully automated through AI agents, bringing integration time lines down from over a week to under day in R&D, I acted coating tools have improved overall development efficiency compared to last year. Taken together, these efficiency gains are delivering ongoing value across multiple operational functions, lowering the marginal cost of business expansion while ensuring service quality. In low auditor logistics, we made significant progress this quarter. As many of you may have noticed earlier this week, we announced an important development FlashEx's wholly owned subsidiaries have entered into strategic investment partnership with Hangzhou audited industry development, making FlashEx one of the first on-demand courier service providers in Hangzhou's low altitude economy sector to receive strategic institutional backing. This partnership represents not only strong recognition from the capital markets, but also a meaningful endorsement of our real-time fulfillment capabilities and technological innovation. More importantly, it marks a major milestone in FlashEx's expansion into autonomous delivery and low auditor logistics as we accelerate the traffic transition from the technology exploration to real-world deployment and skilled operation. After more than a decade of operating in China's on-demand delivery market, Flex has built a nationwide fulfillment network spanning nearly 300 cities and is devised a highly major real-time delivery infrastructure. Looking ahead, low audited logistics rapid a key strategic priority for both our technological advancement and long-term business expansion. Leveraging our industry-leading real-time fulfillment capabilities, our core operational strengths that continue to set us apart. We are well positioned to meet the standardized and high efficiency operational requirements of drone delivery services. At the same time, by integrating Hangzhou's local industry ecosystem as strategic resources, we are building a next-generation on-demand logistics model that combines rapid aerial transportation plus ground-based last mile fulfillment enabling seamless coordination between low altitude and ground delivery network. At present, our drone delivery initiative has moved into substantive commercial operations in partnership with Hangzhou Low audited industry ecosystem, we have established 5 top and lending sites and launched 14 delivery routine covering key districts, including Yuhang, Shenzhen and Guangzhou. In the first quarter, drone delivery order volume grew 157% quarter-over-quarter. To date, the project has completed approximately 3,500 paid orders and nearly 2,900 drone flights while maintaining 100% safety record. Through real-world operations, the commercial viability of the business model has now been validated. Under normal operating conditions, our air FlashEx service has achieved delivery time approximately 20% to 30% faster than traditional ground-based delivery services. Looking ahead, we will continue to drive innovation through technology and further invest in frontier areas such as intelligent dispatching, route automization and autonomous delivery are deeply integrating our major ground fulfillment infrastructure with next-generation low auditor logistics technology. The aim to further enhance delivery efficiency, broaden service capabilities and expand the boundaries of our fulfillment network. On the radar side, we continue to refine our training programs and service standards to ensure that every delivery brings users a high-quality experience. In the first quarter, we continued our good Flash rider recognition program, selecting outstanding riders from the platform who proactively demonstrated social responsibility during the deliveries. These riders received both material rewards and public recognition reinforcing their signs of professional pride and belonging. We firmly believe that the sustainability and the professionalism of our rider team is a cornerstone of our service quality. Looking ahead to the coming quarters, we will remain focused on 3 strategic priorities. First, continue to depend the application of AI across Flagship's internal operations to further improve organizational efficiency; second, accelerating the expansion and commercialization of low audited logistics by exploring more order types and scenarios suited to air ground coordination; and third, continuing to strengthen high-value merchant services and user scenario coverage to drive further improvements in our order mix. As industry competition continue to intensify, the combination of operational efficiency and service quality remains the foundation of FlashEx's long-term competitive advantage. We have always believed that a platform with our new value serves multiple stakeholders, creating real convenience for users, providing Flash riders with stable and rewarding clear opportunities and contributing positively to the healthy development of the industry. This is how we define long-term value, and it remains a driving force behind FlashEx's continued progress. That concludes my remarks. Now I will turn the call over to our CFO, Luke Tang. Thank you.

Thank you, Adam. Hello, everyone. This is Luke. I would like to walk you through our first quarter 2026 financial results. As the industry's competitive landscape continues to evolve, we have leveraged AI to enhance organizational efficiency and made progress in optimizing operational effectiveness. Our broader deployment of AI has contributed to an increase in operating margin in the first quarter. Before I begin, please note that all numbers are in renminbi and all percentage changes are on a year-over-year basis, unless otherwise noted. Our revenues for the first quarter reached RMB 935.3 million compared to RMB 960.8 million in the same period of 2025. The year-over-year decline was primarily driven by intensifying market competition. Our cost of revenues for the first quarter were RMB 829.5 million compared with RMB 834.1 million in the same period of 2025. The decrease was in line with the decline in revenues. Our gross profit was RMB 105.8 million for the fourth quarter compared with RMB 126.7 million in the same period of 2025. Gross profit margin was 11.3% compared with 13.2% in the same period of 2025. Turning to operating expenses. Our total operating expenses for the first quarter were RMB 94.8 million, representing a decrease of 18.7% from RMB 116.67 million in the same period of 2025. They consist of RMB 38.5 million in selling and marketing expenses, RMB 39.9 million in general and administrative expenses and RMB 16.5 million in research and development expenses. Our income from operations was RMB 11 million compared with RMB 10 million in the same period of 2025, lifting our operating margin to 1.2% from 1% year-over-year. Excluding share-based compensation expenses or non-GAAP income from operations was RMB 21.6 million for the first quarter compared with RMB 26.6 million in the same period of 2025. Our non-GAAP net loss was RMB 11.1 million compared with non-GAAP net income of RMB 49.6 million in the same period of 2025. Our cash position remains healthy with cash and cash equivalents, restricted cash and short-term investments totaling RMB 859.1 million as of March 31, 2026. As we move through 2026, we remain committed to disciplined execution and upholding our high-quality service advantages. Building on our achievements in AI deployments, we will further refine cost structures and control expenses to boost margins. By practicing prudent financial [indiscernible] and actively pursuing business innovation, we will capture emerging opportunities and leverage operational efficiency gains to delivery -- to deliver sustainable long-term value for all stakeholders. That concludes our prepared remarks. We would now like to open the floor to your questions. Operator, please go ahead.

[Operator Instructions] We will now proceed to take questions from the line of Susan Zhang of CICC.

My first question is, could you please share our first quarter order volume and ASP trends broken down by 2B and 2C segments. Given this year's declaration in order volume growth with the food delivery sector, coupled with an increase in AOV, how should we interpret the implications of this trend for premium service providers like us. And my second question is, we have recently noted reports that we have received investments from Hangzhou State Honk Capital to expand into the low attitude economy sector. Could you please outline the strategic direction, specific application scenarios and current progress of this initiative.

Yes. Thank you, Susan, for your questions. This is Luke. I would like to answer your first question and may hand over your second question to Adam. Now let me first give you an overview of our first quarter performance and then share our perspective with the recent shifts in the food delivery sector, meant for FlashEx. In the first quarter, FlashEx fulfilled 57.9 million orders maintaining solid performance made intensifying industry competition and dynamic market environment, which reflects the resilience of our on-demand dedicated career model. At the same time, our average delivery time further improved to 25.7 minutes and our registered rider base reached 3.5 million, reflecting continued improvement in our fulfillment capabilities and the service experience. On the merchant side, we continue to execute our tiered merchant management strategy in the first quarter with high-quality categories driving continued order mix improvement. A key category order volume exceeded RMB 15.4 million for the quarter. achieving year-over-year growth despite a high comparison base. Electronics order volume grew 15.9% year-over-year, sustaining its strong momentum and serving an important driver of order mix improvements. At the same time, leaving companies in automotive services, premium retail and consumer electronics continue to adopt FlashEx as part of their standard fulfillment channels overall, KA Merchants GMV contribution improved steadily year-over-year in the first quarter and ASP hold at a relatively stable elevated level, further reinforcing our reputation in the premium on-demand delivery segment. On the individual user side, we continue to strengthen our positioning as an instant lifestyle system. In the first quarter, daily order volumes remained steady across lifestyle service categories, including as purchasing parcel pickup -- food pickups, delivery and luggage delivery. As these categories gain tractions, FlashEx's connection with users' daily lives has deepened and the platform is gradually evolving from a single-purpose urgent delivery tool into an on-demand service entry point covering a broader range of areas. Stepping back to the industry level. FlashEx and the food delivery platforms has always deferred meaningfully in terms of user profiles, user cases, delivery efficiency and service experience. In our view, the broader return to the rational competition across the industry is a positive development goes for FlashEx and for the healthy development of the industry as a whole. For FlashEx, specifically, as we deepen our refined operations for merchant clients, expand our channel reach and cover new customer scenarios, the industries and the brands we serve will continue to diversified alongside the steady growth in KA merchant GMV contribution. At the same time, we are proactively positioning ourselves to capture these opportunities through technology. On one hand, by integrating AI capabilities more deeply to make at services more accessible for merchants and users on the other, by developing low altitude logistics to overcome geographic and traffic constraints and continue improving fulfillment efficiency and service experience. Overall, FlashEx will stay true to our value proposition, continuing to focus on high-value merchants high-quality consumer scenarios and emerging areas such as AI and low altitude logistics to reinforce our long-term competitive advantage in the premium on-demand delivery segment. Now we would like to please Adam to answer your second question.

Thank you for your question. For the second question, FlashEx has always placed great importance on emerging technologies and their applications in the industry and our service scenarios. And this strategic investment represents another significant milestone following our deep integration of AI and reflects not only capital market recognition, but also strong endorsement of our on-demand dedicated core model. real-time fulfillment capabilities and technological innovation. Let me walk you through the 3 dimensions you read. Strategic direction, application scenarios and the current progress. Starting with the strategic direction. After more than a decade in intracity on-demand delivery, FlashEx has built a major ground-based fulfillment network spanning nearly 300 cities across China. We see low audited logistics as both a meaningful extension of our existing business and one of our priorities for technological advancement and medium- to long-term growth, doing on years of accumulated fulfillment capability and operational expertise we are well positioned to meet the standardized high-efficiency requirements of drone delivery. At the same time, by working with Hangzhou's local industry partners, we are exploring a new -- next-generation on-demand logistics model that combines rapid aerial transportation with strong based last mail delivery progressively building a deeper coordination between low altitude and ground network. Our application scenarios FlashEx has already built strong fulfillment capabilities in high-value time-sensitive categories such as cakes, fresh flowers, premium retail and consumer electronics. These are precisely the scenarios where faster, more reliable and more secure delivery measures most and where drone delivery can demonstrate the clearest innovation value. In addition, for situation evolving cross-district routes geographic barriers such as rivers or hues or heavy traffic congestion where ground delivery efficiency is limited, drone delivery can meaningful, shortened delivery times and improve fulfillment reliability which aligns well with the needs of our existing premium on-demand delivery clients. On current progress, our drone delivery in true has now entered substantive commercial operations. In partnership with [indiscernible] low altitude industry ecosystem, we have activated 5 pickup and lending sites and launched 14 delivery routes covering key districts including Yuhang, Shenghong and [indiscernible]. In the first quarter, done delivery order volume grew 157% quarter-over-quarter. As of the end of April, the project has completed approximately 3,500 paid orders and nearly 2,900 drone flights, maintaining a 100% safety record. The commercial model has been preliminarily validated and in normal operating conditions, our aerial delivery service achieved delivery times 20% to 30% faster than the traditional ground-based services. Going forward, we will continue to drive innovation through technology, investing in areas such as intelligent dispatching, route optimization and autonomous delivery by deeply integrating our major ground delivery infrastructure with low audit logistic technology, we aim to further improve delivery efficiency and expand the boundaries FlashEx service empty.

I am showing no further questions, and that concludes the question-and-answer session. I will now turn the call over to Helen Wu for closing remarks.

Thank you once again for joining BingEx First Quarter 2026 Financial Results and Business Update Conference Call today. If you have any further questions, please contact the IR team at [indiscernible] for PSP Financial Communications. Thank you, and have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.