AT Renew (RERE) Q4 2025: 88% 1P2C Retail Surge Reshapes Margin and Channel Mix
AT Renew’s fourth quarter delivered record growth in both revenue and operating profit, with a decisive strategic pivot toward higher-margin 1P2C retail and multi-category recycling. The company’s platform and export businesses gained operational leverage, while cost discipline and automation initiatives began to reshape expense ratios. Management’s outlook for 2026 signals continued double-digit expansion, underpinned by policy tailwinds and a maturing omnichannel model.
Summary
- Retail Channel Transformation: 1P2C retail mix hit a record, driving margin expansion and channel leverage.
- Platform and Export Maturation: Marketplace and overseas business delivered stable growth and operational efficiency gains.
- 2026 Growth Visibility: Policy support, automation, and expanded store footprint position AT Renew for sustained outperformance.
Performance Analysis
AT Renew’s Q4 2025 results reveal a business scaling rapidly across both top and bottom lines, as net revenue grew strongly on the back of surging product sales and a robust service platform. The company’s 1P2C retail, direct-to-consumer refurbished sales, business posted an 88% year-over-year increase, now accounting for 41.7% of product revenue—a structural shift from 29% a year ago. This channel mix shift underpinned a notable improvement in 1P gross margin, up to 13.7% from 12.5% in Q4 2024, as higher-margin retail sales expanded within the overall product mix.
Service revenue, anchored by PJT Marketplace, B2B trading platform, and multi-category recycling, rose 8.8% year-over-year, with take rates holding steady at 4.79%. The multi-category recycling business—covering gold, luxury, and other categories—drove 18.8% of service revenue in Q4, up from 8.6% in the prior year, and contributed to a 93.4% annual increase. While fulfillment and marketing costs rose to support network expansion and channel incentives, expense ratios improved or remained stable due to scale and automation. Non-GAAP operating profit margin ticked up to 2.9% for the quarter, reflecting underlying leverage as the business model matures.
- Retail Mix Shift: 1P2C retail’s share of product revenue rose 12.7 points year-over-year, supporting margin expansion.
- Multi-Category Acceleration: Recycling GMV for gold and luxury surged, with gold up 136.3% and luxury take rate rising 1.2 points sequentially.
- Expense Ratio Discipline: Fulfillment and G&A expense ratios declined, offsetting higher channel commission and marketing costs.
The company’s record results outpaced internal targets, reflecting not just end-market demand but also improved operational execution and channel leverage.
Executive Commentary
"In the fourth quarter, we once again achieved strong growth in both revenue and profit. Total net revenues reached 6.25 billion RMB, representing a 29% year-over-year growth. Non-GAAP operating profits reached 180 million RMB, up 38.1% year-over-year. Both revenue and profit exceeded the expectations we set internally at the beginning of the year."
Kerry Chen, Founder, Chairman, and CEO
"The growth margin improvement in our 1P business was primarily driven by high-efficiency C2B recycling scenarios, compliant refurbishment capabilities incorporated in our supply chains, and then increasingly diversified retail channel mix. This allowed us to increase the proportion of higher margin retail sales with 1P2C revenue accounting for 41.7% of product revenue in the fourth quarter of 2025, up from 29% in the same period of last year."
Rex Chen, Chief Financial Officer
Strategic Positioning
1. Retail-First Channel Evolution
AT Renew’s pivot to a retail-first strategy, emphasizing 1P2C (first-party to consumer) sales, is now the company’s primary growth and margin engine. By leveraging curated retail pricing as a benchmark for trade-in offers, management is driving higher trade-in volumes and capturing more value per device, reinforcing a positive flywheel across sourcing and sales channels.
2. Marketplace and Multi-Category Expansion
The PJT Marketplace, B2B platform, continued to scale with stable take rates and growing penetration among merchants and individual users, particularly in lower-tier markets and among college students. Multi-category recycling, including gold and luxury, is now a material revenue contributor, benefiting from transparent pricing and operational innovation.
3. Overseas Business Platformization
Export and overseas operations, run primarily on a 1P model, delivered sequential growth for four straight quarters. The company’s integrated inventory and compliance-driven approach has reduced friction and improved capital efficiency, laying the groundwork for future platformization and international expansion.
4. Automation and Operational Efficiency
Investments in automated quality inspection and logistics, particularly at the Dongguan and Changzhou centers, are beginning to yield cost savings—automated inspection now reduces per-order costs by about 30% versus manual methods. This automation roadmap is a key lever for future margin enhancement as volume scales.
5. Brand and Community Penetration
Brand marketing on Douyin and Xiaohongshu, coupled with the expansion of the iFenLay smart recycling machine network, is solidifying AT Renew’s position as the leading national recycling brand. Community-based infrastructure and partnerships with 245 consumer brands are expected to drive further category and geographic penetration.
Key Considerations
The quarter marks a decisive inflection in AT Renew’s channel and operational model, with implications for margin, customer acquisition, and competitive positioning. Investors should weigh the following:
Key Considerations:
- Retail Margin Leverage: Expansion of 1P2C retail mix supports higher gross margin and pricing power, but requires ongoing investment in fulfillment and user experience.
- Marketplace Diversification: Multi-category and B2B platforms increase revenue breadth and reduce reliance on core mobile device trade-ins.
- Automation Payoff: Early automation investments are reducing cost ratios, with further upside as scale and technology adoption increase.
- Policy and Macro Tailwinds: National subsidies and rising new device prices enhance trade-in demand, but also intensify competition and raise the bar for user experience.
- Store Network Expansion: The path to 5,000 stores remains a medium-term goal, with asset-light models in lower-tier cities supporting flexibility and capital efficiency.
Risks
AT Renew faces execution risk as it scales its retail and multi-category businesses, particularly in maintaining high user satisfaction and cost discipline amid rapid network expansion. Competitive intensity is rising, with e-commerce platforms and manufacturers investing in their own trade-in programs. Macroeconomic shifts, regulatory changes, or disruptions in supply chain or logistics could impact growth and profitability. The company’s outlook also depends on continued policy support and consumer adoption of pre-owned electronics.
Forward Outlook
For Q1 2026, AT Renew guided to:
- Total revenue of 5.86 to 5.96 billion RMB, up 25.9% to 28.1% year-over-year
For full-year 2026, management reiterated:
- Confidence in double-digit revenue growth outpacing industry averages
- Continued expansion of retail and platform business mix
Management highlighted several factors that will drive results:
- Policy extensions for trade-in subsidies and inclusion of new device categories (smart glasses, watches)
- Further automation and cost reduction initiatives
- Ongoing investment in store network and brand marketing
Takeaways
AT Renew’s Q4 results confirm a business in transition from pure volume to value capture, with higher-margin retail and multi-category recycling now central to its model. The company’s operational discipline and automation are beginning to yield tangible margin improvement, while platform and export businesses add diversification and resilience.
- Retail and Multi-Category Mix: The strategic channel shift is driving both revenue growth and margin expansion, but will require sustained investment in fulfillment and user experience to maintain momentum.
- Operational Leverage and Automation: Cost ratios are improving, with further upside as automation scales and platform businesses mature.
- Outlook Hinges on Execution: Investors should watch for continued progress on store expansion, automation, and policy-driven demand, as well as management’s ability to balance growth with profitability in a more competitive environment.
Conclusion
AT Renew’s Q4 and full-year 2025 results mark a critical point in its evolution, with a retail-first, omnichannel approach reshaping the company’s margin structure and growth profile. With policy tailwinds and automation gains, AT Renew is positioned for continued outperformance, but execution and competitive intensity will remain key variables in 2026 and beyond.
Industry Read-Through
AT Renew’s results signal a broader maturation in China’s circular economy and pre-owned electronics sector. The shift toward higher-margin, direct-to-consumer retail and multi-category recycling reflects rising consumer acceptance and policy support for trade-ins, which is likely to benefit other players with omnichannel capabilities and strong supply chain integration. The company’s progress in automation and cost discipline also sets a new operational benchmark for the sector. Market participants should expect continued channel convergence and rising competitive stakes as subsidies, price inflation, and consumer expectations drive industry transformation.