Q2 FY2026
Filed Aug 14, 2026RLX Technology reported second-quarter net revenues of RMB1,010.5 million, up 14.8% year over year, while gross margin expanded to 35.4% from 27.5%.
Revenue growth, a 47.8% increase in gross profit, and substantial gross-margin expansion supported solid operating results. Non-GAAP net income declined from the prior year, operating cash flow was negative, and management said revenue and gross profit moderated from the first quarter because Q1 included a one-time export-regulation benefit.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net revenuesGAAP | RMB1,010.5 million (US$148.9 million) | – | 14.8% |
| International business revenue mixother | 68.5% of net revenues | – | – |
| Cost of revenuesGAAP | RMB559,057 thousand (US$82,395 thousand) | – | – |
| Excise tax on productsGAAP | RMB93,563 thousand (US$13,790 thousand) | – | – |
| Gross profitGAAP | RMB357.8 million (US$52.7 million) | – | 47.8% |
| Gross marginGAAP | 35.4% | – | – |
| Selling expensesGAAP | RMB123.7 million (US$18.2 million) | – | – |
| General and administrative expensesGAAP | RMB74.4 million (US$11.0 million) | – | – |
| Research and development expensesGAAP | RMB29.4 million (US$4.3 million) | – | – |
| Total operating expensesGAAP | RMB227.5 million (US$33.5 million) | – | – |
| Income from operationsGAAP | RMB130.4 million (US$19.2 million) | – | 234.7% |
| Income from operationsnon-GAAP | RMB149.6 million (US$22.0 million) | – | 28.8% |
| Interest income, netGAAP | RMB109,116 thousand (US$16,082 thousand) | – | – |
| Investment incomeGAAP | RMB7,117 thousand (US$1,049 thousand) | – | – |
| Others, netGAAP | RMB235 thousand (US$35 thousand) | – | – |
| Income before income taxGAAP | RMB246,849 thousand (US$36,381 thousand) | – | – |
| Income tax expenseGAAP | RMB24.8 million (US$3.7 million) | – | – |
| Net incomeGAAP | RMB222.0 million (US$32.7 million) | – | 1.6% |
| Net incomenon-GAAP | RMB238.8 million (US$35.2 million) | – | – |
| Net income attributable to RLX Technology Inc.GAAP | RMB217,746 thousand (US$32,092 thousand) | – | – |
| Basic net income per ADSGAAP | RMB0.178 (US$0.026) | – | – |
| Diluted net income per ADSGAAP | RMB0.167 (US$0.025) | – | – |
| Basic net income per ADSnon-GAAP | RMB0.190 (US$0.028) | – | – |
| Diluted net income per ADSnon-GAAP | RMB0.178 (US$0.026) | – | – |
| Total comprehensive incomeGAAP | RMB43,713 thousand (US$6,443 thousand) | – | – |
| Net cash used in operating activitiesGAAP | RMB63.2 million (US$9.3 million) | – | – |
| Net cash generated from investing activitiesGAAP | RMB983,338 thousand (US$144,926 thousand) | – | – |
| Net cash used in financing activitiesGAAP | RMB403,599 thousand (US$59,483 thousand) | – | – |
What drove it
- Net-revenue growth was primarily due to international expansion and contributions from the Company’s May 2025 acquisition.
- Gross-margin expansion was primarily due to a favorable change in revenue mix and further supply chain optimization.
- Selling expenses increased primarily due to salary and welfare expenses, branding expenses, and depreciation and amortization expenses related to the May 2025 acquisition.
- General and administrative and research and development expenses benefited from lower share-based compensation expenses.
- In July 2026, RLX acquired a 51% equity interest and board control in a Western European distributor of next-generation smoke-free and FMCG products. The entity’s results will be consolidated beginning in the third quarter of 2026.
Concerns
- Management said second-quarter revenues and gross profit moderated from the first quarter, which included a disclosed one-time benefit due to a change of export related regulation.
- Non-GAAP net income was RMB238.8 million, compared with RMB291.2 million in the same period of 2025.
- Net cash used in operating activities was RMB63.2 million (US$9.3 million).
- Foreign currency translation adjustments were RMB(181,016) thousand (US$26,678 thousand), contributing to total comprehensive income of RMB43,713 thousand (US$6,443 thousand).
What to watch
- Consolidation of the July 2026 Western European distributor acquisition beginning in the third quarter of 2026.
- Execution of the European dual-engine approach, including strategic investment in top-tier local partners and organic growth.
- Store-level execution in Asia and expansion of modern oral nicotine pouches and other smokeless categories.
- Whether gross-margin benefits from revenue mix and supply-chain optimization continue after the first-quarter export-regulation benefit.
Balance sheet and cash flow
- Cash and cash equivalents, restricted cash, short-term bank deposits, net, short-term investments, long-term bank deposits, net, and long-term investment securities, net were RMB13,883.4 million (US$2,046.2 million) as of June 30, 2026, compared with RMB14,529.7 million as of March 31, 2026.
- Cash and cash equivalents were RMB4,629,116 thousand (US$682,247 thousand) as of June 30, 2026, compared with RMB5,367,139 thousand as of December 31, 2025.
- Short-term investments were RMB2,019,812 thousand (US$297,683 thousand) as of June 30, 2026, compared with RMB2,326,610 thousand as of December 31, 2025.
- Long-term bank deposits, net were RMB526,412 thousand (US$77,584 thousand) as of June 30, 2026, compared with RMB433,618 thousand as of December 31, 2025.
- Long-term investment securities, net were RMB4,387,136 thousand (US$646,584 thousand) as of June 30, 2026, compared with RMB5,116,336 thousand as of December 31, 2025.
- Short-term loan was RMB165,168 thousand (US$24,343 thousand) as of June 30, 2026, compared with RMB92,100 thousand as of December 31, 2025.
- Cash, cash equivalents and restricted cash at the end of the period were RMB4,839,991 thousand (US$713,326 thousand).
Analysis
RLX reported RMB1,010.5 million of second-quarter net revenues, up 14.8% from RMB880.0 million in the same period of 2025. The company attributed growth to international expansion and contributions from its May 2025 acquisition, while international business accounted for 68.5% of revenue. Management stated that revenue moderated from the first quarter, which included a disclosed one-time benefit from a change of export related regulation.
Gross profit rose 47.8% to RMB357.8 million and gross margin expanded to 35.4% from 27.5%. RLX attributed the margin improvement to a favorable change in revenue mix and further supply chain optimization. This gross-profit growth exceeded revenue growth and supported U.S. GAAP income from operations of RMB130.4 million, up 234.7% year over year, and non-GAAP income from operations of RMB149.6 million, up 28.8%.
Operating expenses were RMB227.5 million compared with RMB203.1 million in the prior-year period. Selling expenses increased to RMB123.7 million from RMB84.6 million, reflecting salary and welfare, branding, and acquisition-related depreciation and amortization expenses. General and administrative expenses declined to RMB74.4 million from RMB88.4 million and research and development expenses declined to RMB29.4 million from RMB30.1 million, each primarily reflecting lower share-based compensation expenses. U.S. GAAP net income increased 1.6% to RMB222.0 million, while non-GAAP net income declined to RMB238.8 million from RMB291.2 million.
Liquidity remained substantial, with the stated aggregate of cash, restricted cash, bank deposits, and investments at RMB13,883.4 million as of June 30, 2026, versus RMB14,529.7 million as of March 31, 2026. Second-quarter operating cash flow was negative RMB63.2 million and financing cash outflow was RMB403.6 million. In July 2026, RLX acquired a 51% equity interest and board control in a Western European distributor; its financial results will be consolidated beginning in the third quarter. The release provided no quantitative financial outlook.
Management, verbatim
We delivered solid second quarter results as we continued to strengthen our global business with a focus on quality, stability, and long-term resilience.
Ying (Kate) Wang, Co-founder, Chairperson, and Chief Executive Officer of RLX Technology
As expected, revenues and gross profit moderated from the first quarter, which included a disclosed one-time benefit due to the change of export related regulation.
Chao Lu, Chief Financial Officer of RLX Technology
Not in the filing
stated, not guessed- Forward revenue, gross-margin, operating-expense, tax-rate, earnings, or cash-flow guidance
- Prior outlook for comparison
- Segment revenue and segment profitability disclosures
- Free cash flow
- Share repurchases
- Dividend declaration or payment details for the reported quarter
- Total debt
- Tax rate
- Purchase consideration for the July 2026 acquisition
- Quantified financial contribution expected from the July 2026 acquisition
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.