111, Inc. Sponsored ADR Class A (YI.US) releases third quarter financial report for 2025: Achieved Non-GAAP operating profit for three consecutive quarters, and achieved positive operating cash flow for the quarter.

On December 17th, Yi.US officially released its performance report for the third quarter of 2025. Amidst a complex and changing macroeconomic environment, the company demonstrated strong operational resilience, achieving Non-GAAP operational profitability for a third consecutive quarter and positive operational cash flow, marking a steady progress towards a healthy and sustainable development model. With the upgrade of its strategy from heavy asset to light asset, the company's profit-making ability continues to be consolidated. This quarter, the company achieved a total revenue of 3 billion RMB. Through continuous refined operations and cost control, total operating costs decreased by 13.4% year-on-year, significantly improving operational efficiency. It is worth mentioning that the company has maintained Non-GAAP operational profitability for three consecutive quarters, and achieved Non-GAAP net profit profitability in this quarter. Additionally, the company once again recorded positive operational cash flow in the quarter, confirming the effectiveness of its business model and the ongoing optimization of its financial structure. During the reporting period, the company actively promoted strategic structural optimization measures by officially upgrading its three self-operated warehouses to a franchise cooperation model and fully integrating them into the company's ecosystem, continuing to provide specialized fulfillment services support for platform customers. This transformation is a key step for the company from its traditional heavy asset operating model to the light asset strategy upgrade. Under the new cooperation model, franchise partners will continue to contribute stable commission income to the company, with their relevant operational costs no longer included in the company's consolidated financial statements, effectively improving the company's overall profitability and fund turnover efficiency. The enhancement of financial stability has laid a solid foundation for the company's continuous investment in the field of technology. This quarter, 111, Inc. Sponsored ADR Class A's investment in artificial intelligence and digital innovation has significantly advanced, systematically driving the intelligent transformation of the entire business chain. The application of AI technology in key scenarios has made substantial breakthroughs: in the after-sales process, the AI image recognition-based waybill verification system has improved recognition accuracy to 98%-99%, reducing manual costs and errors while greatly improving user experience and processing efficiency; at the merchant service end, the independently developed SaaS intelligent data analysis tool "Hu Jing AI" has empowered thousands of partners, allowing them to visually analyze sales, inventory, and other data through natural language interaction, enabling more agile business decisions; in addition, by strengthening AI coding capabilities, the company's intelligent coding system has stabilized the drug coding rate at a high level of 98%, providing a reliable data foundation for the efficient and precise operation of the entire business system. The leap in operational efficiency brought about by AI, combined with the strong intelligent supply chain network built by the company in the long term, has created a solid competitive barrier for 111, Inc. Sponsored ADR Class A. The upgrade of the intelligent supply chain network has been widely recognized for its leading position in the region. The company's nationwide coverage of intelligent supply chain infrastructure continued to be upgraded in this quarter, providing specialized fulfillment services for platform customers through self-operated, franchise, and other models. With 18 digital waybill centers deployed nationwide, 111, Inc. Sponsored ADR Class A has achieved efficient network reach to over 890 counties and cities nationwide within 24 hours. Its self-built "Kunpeng" logistics system ensures the controllable, reliable, and efficient flow of pharmaceutical distribution throughout the entire chain through digital trunk coordination and a wide range of landing distribution networks. The outstanding operational strength has won dual recognition from the industry and the market. Recently, the company's core operations Hub Group, Inc. Class A received authoritative recognition successively: Guangdong Yihao Pharmaceutical Industry has been included in both the "Guangdong Province Top 100 Private Enterprises" and the "Guangdong Province Top 50 Private Service Industry Enterprises" for two consecutive years; Chongqing Yihao Pharmaceutical has been named the "Top 100 Service Industry Enterprises in Chongqing" for three consecutive years; Hubei Yihao Pharmaceutical has been named the "Top 100 Private Service Industry Enterprises in Hubei" for the second consecutive year and has been listed in the "Top 100 Private Enterprises in Wuhan" for three consecutive years. These honors not only demonstrate the company's leading position in various regional markets but also reflect the widespread recognition of its business model and operational capabilities. Dr. Yu Gang, Co-founder and Executive Chairman of 111, Inc. Sponsored ADR Class A, commented: "The performance of the third quarter shows that our strategic execution is firm and effective. Despite external challenges, we have continuously achieved Non-GAAP operational profitability and maintained a healthy cash flow, thanks to our continuous efforts to build a more efficient and lightweight business model. Looking ahead, artificial intelligence has become our core strategic DRIVE. We will accelerate the comprehensive intelligent transformation, committed to continuously improving customer experience and operational efficiency through technological innovation, creating solid and long-term value for all stakeholders."