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111, Inc. Announces Second Quarter 2026 Financial Results

On September 17, 2026, 111, Inc. (NASDAQ: YI), a trailblazer in tech-enabled healthcare platforms, revealed its unaudited financial outcomes for the second quarter ending June 30, 2026. This announcement sheds light on the firm's transition strategy towards a more operationally efficient and asset-light business model.

Key Highlights

• - Net Revenue: The company's net revenue totaled RMB 2.3 billion (approximately USD 339 million), reflecting a 28.3% decrease from RMB 3.2 billion in the same quarter of the previous year. This decline is largely attributed to ongoing strategic changes aimed at optimizing operations and reducing risks by divesting underperforming subsidiaries.
• - Marketplace Service Revenue: Notably, the total service revenue from the marketplace increased by 18.2% year-over-year for the first half of 2026, indicating substantial growth in 111, Inc.'s marketplace service operations and improved revenue quality.
• - Promotional Products Performance: Revenues from promotional products soared by 121% year-over-year, amounting to RMB 60.7 million (USD 8.9 million). Accompanying this growth, gross profit from these products doubled, signaling robust partnerships with pharmaceutical manufacturers for key products.

Strategic Transition Efforts

The leadership at 111, Inc. is keenly focusing on a strategic shift to an asset-light model. CEO Junling Liu noted that this transition is crucial for boosting service-based commission income, while also minimizing operational losses. Alongside cost reduction in fulfillment expenses, the implementation of AI agents has facilitated workforce streamlining and greater operational efficiency.

In an impressive turn, fulfillment expenses decreased by 29.5% year-over-year, falling to RMB 63.6 million (USD 9.4 million). Importantly, fulfillment expenses as a percentage of net revenue improved to 2.76%, showcasing enhanced management of operational costs.

The Growth of Promotional Products

Much of the growth in revenues can be attributed to successful partnerships aimed at expanding the portfolio of promotional products. The company has actively engaged with various pharmaceutical producers, gaining distribution rights for critical products aimed at small and medium-sized pharmacies. A standout in this category is JNOVA Pharmaceutical's Levofloxacin Tablets (Cravit®), which saw sales volume leap from 364,000 boxes to 1,041,000 boxes, with revenue climbing to RMB 28.1 million—a staggering 157% increase. Similarly, other products like Rivaroxaban Tablets (Pusitong®) and Xinkeshu Tablets also performed strongly this quarter.

This trajectory not only reflects the firm’s marketing expertise but also sets a strong momentum for growth among upstream suppliers and downstream pharmacy partners. Liu elaborated on this expansion, stating, “We will continue to integrate AI capabilities across various operational scenarios, from demand forecasting to inventory management, aiming to enhance profitability and deliver lasting stakeholder value.”

Financial Metrics Overview

In terms of operating expenses, the total came in at RMB 155.5 million (USD 22.9 million), marking a 16.1% reduction from RMB 185.3 million year-over-year. Excluding share-based compensation and severance costs, the overall operating expenses represented only a fraction of total Gross Merchandise Value (GMV) this quarter, indicating significant operational efficiency.

The company concluded the quarter with cash and equivalents of RMB 381.1 million (USD 56.2 million). However, the balance has seen a significant decrease from RMB 611.3 million at the end of 2025, necessitating ongoing assessment of liquidity and capital strategies.

Future Outlook

Following these results, 111, Inc. is positioned to further enhance its healthcare platform journey, transcending from merely a pharmaceutical distributor to an intelligent tech-enabled healthcare entity. Renowned for its commitment to leveraging technology across its operations, 111, Inc. anticipates continuous integration of AI-driven solutions in pharmacies and healthcare environments, functioning as a robust resource for customers to optimize their operations.

As the company eyes sustainable margins and profitability growth, it embraces this innovative journey with optimism and strategic intent. By further refining its operation methodologies, 111, Inc. aims to reshape the value chain within China's healthcare industry effectively.

For more detailed insights regarding the financial results and the company’s endeavors, prospective stakeholders and interested parties can visit 111, Inc.'s Investor Relations.