111 Inc. reported revenue of 3.5 billion yuan in the first quarter, increasing investment in AI innovation and digital applications

According to Zhitong Finance APP, on June 19, 111 Inc. (YI.US) released its performance report for the first quarter of 2025. The report shows that 111 Inc. achieved revenue of 3.5 billion yuan in this quarter, flat compared to the same period last year; it continued to maintain operational profitability at both Non-GAAP and GAAP levels, with adjusted operating profit of 4.3 million yuan, achieving positive operating cash flow of 110 million yuan. In addition, the percentage of Non-GAAP total operating expenses to net income decreased from 5.7% in the same period last year to 5.4%, a decline of 30 basis points, indicating that the company's operational efficiency continues to improve. Increased Investment in AI Innovation and Digital Applications Significant Improvement in Operational Efficiency 111 Inc. is committed to reshaping the value chain of the pharmaceutical and health industry with digital technology. During the reporting period, it continued to increase investment in AI innovation and digitalization, utilizing its comprehensive internal digital operation system to continuously improve operational efficiency. In the first quarter, 111 Inc. achieved innovative applications of AI in the pharmaceutical qualification review scenario. Through OCR, knowledge graphs, and upgrades to large model technology architecture, it restructured traditional review processes, making AI applications a "super assistant" for pharmaceutical qualification reviews, providing dual guarantees for the safety and efficiency of drug circulation, and improving qualification review efficiency by over 100%. The company also leveraged AI algorithms to promote shared inventory upgrades. Based on AI algorithm optimization for B-end and C-end sales forecasts, combined with process restructuring and ecological collaboration breakthroughs, it promoted the supply upgrade from "one-way channels" to "two-way resource integration," resulting in significant improvements in order fulfillment rates, purchasing breadth, and repurchase rates, with some indicators exceeding 50%. Furthermore, by integrating business processes and financial management, the company provided full-link digital support for franchise warehouse management in the order fulfillment center, achieving a transformation from "human management" to "data management," significantly enhancing operational efficiency, financial transparency, and market response speed, and multiplying the fulfillment capabilities of franchise warehouses. Benefiting from the company's continuously enhanced technology and excellent operational capabilities, 111 Inc.'s operational efficiency has significantly improved, and operational costs have continued to decline. During the reporting period, the percentage of Non-GAAP overall operating expenses to net income decreased from 5.7% in the same period last year to 5.4% in this quarter. Supply Chain Network Optimization and Upgrade Deepening Upstream and Downstream Industry Cooperation By firmly advancing its industrial internet strategy, 111 Inc. has created a nationwide virtual pharmacy network, serving approximately 580,000 pharmacies across the country, and has established strategic direct procurement partnerships with over 500 globally renowned domestic and foreign pharmaceutical companies. In the first quarter, the supply chain network infrastructure covering the entire country continued to upgrade, and as of now, 18 order fulfillment centers have been established. The newly added order fulfillment center located in Nanjing, Jiangsu Province, began operations in the first quarter. In 2025, the company plans to add at least 14 more order fulfillment centers to expand the coverage of order fulfillment centers. In addition, through the national logistics network "Kunpeng" built by 111 Inc., the company continues to provide professional and efficient pharmaceutical logistics distribution services to upstream and downstream partners in the pharmaceutical supply chain. During the reporting period, 111 Inc. insisted on using digital technology to empower upstream and downstream partners in the pharmaceutical industry chain. Currently, 111 Inc. has empowered hundreds of well-known pharmaceutical companies and thousands of distributors in areas such as multi-channel drug commercialization, digital marketing, and market insights In order to continuously deepen upstream and downstream industrial cooperation, 111 Inc. successfully held the "No. 1 Summit and Pharmaceutical Retail Industry Innovation and Development Conference." The summit attracted over 500 industry leaders and experts from the national pharmaceutical industry, retail enterprises, policy research, and cross-border fields to gather and discuss the path to breaking through and coexisting in areas such as policy trends, differentiated product selection upgrades, professional services, and marketing innovation. Dr. Yu Gang, co-founder and executive chairman of 111 Inc., stated: "In the first quarter, facing challenges from the macroeconomic environment, we fully leveraged our digital technology innovation capabilities and the advantages of our intelligent supply chain, persistently improving operational efficiency, achieving another quarter of operational profitability and positive operating cash flow, and maintaining steady growth in operating performance. This year, we have prioritized the application of artificial intelligence, especially the establishment of various cost-reduction and efficiency-enhancing intelligent systems, in our company strategy and have achieved significant results. We will continue to increase our investment in artificial intelligence and digital solutions, utilizing our core digital technology capabilities to empower upstream and downstream partners in the industry and contribute to the digital transformation and upgrading of the pharmaceutical and health industry."