TLDR
- RLX posted Q1 2025 net revenue of RMB808 million, up 47% year over year
- Gross profit margin rose to 28.6% due to improved product mix and cost controls
- Non-GAAP operating profit reached RMB106 million, sixth straight profitable quarter
- Cash position improved to RMB16.2 billion, with strong operating cash inflow
- Global regulatory pressures remain a concern for e-vapor industry players like RLX
RLX Technology Inc. (NYSE: RLX) closed at $1.99 on May 16, up 2.05%, following strong first-quarter results for 2025.
The company reported a 47% year-over-year increase in net revenue to RMB808 million, reflecting improving demand despite ongoing regulatory changes in the e-vapor industry.
Gross profit margin expanded by 2.7 percentage points to 28.6%, compared to the same quarter last year. This was largely driven by an optimized revenue mix and cost-efficiency efforts. Operating cash inflow rose significantly to RMB207 million, up from just RMB4 million in the year-ago quarter.
Sustained Profitability and Strong Balance Sheet
RLX reported a non-GAAP operating profit of RMB106 million for the quarter. This marks the sixth consecutive quarter of positive operating profit, highlighting consistent operational improvement. Operating profit margin improved by 9 percentage points year over year.
RLX Technology $RLX Earnings Report
1⃣ Revenue: $111.4M ✅ vs. est. $106M
2⃣ EPS: $0.02 ✅ vs. est. $0.02RLX Technology reports strong Q1 2025 growth with a 46.5% revenue increase and positive outlook despite ongoing regulatory challenges. The company remains confident in its… pic.twitter.com/C3yrwHVHaE
— CatCapital (@CatCapital_Ltd) May 16, 2025
The company’s total financial assets stood at RMB16.2 billion as of March 31, 2025, up from RMB15.9 billion at the end of 2024. RLX also maintained healthy inventory turnover at 25 days and receivable turnover at 13 days, while payables averaged 81 days. These metrics indicate strong working capital management and liquidity.
Challenges from Regulatory Landscape
Despite the strong quarter, RLX continues to face major hurdles. The global e-vapor industry is being reshaped by tighter regulations, including bans on disposable products in countries such as the UK and New Zealand. These changes are expected to dampen overall industry revenue growth in 2025.
RLX also noted that the rising popularity of big puff e-vapor products is affecting pricing, lowering average revenue per unit. Although e-liquid consumption is increasing, the shift to these cheaper products has limited topline growth across the sector.
In Mainland China, the presence of illegal e-vapor products remains a barrier. Despite better enforcement, these unregulated alternatives continue to dominate, stifling potential market share gains for compliant firms like RLX.
Outlook and Strategy
RLX is positioning itself to navigate these challenges through strong internal product development and a responsive supply chain. The company’s cash-rich balance sheet and consistent profitability provide a solid foundation for future growth, even as the industry adapts to regulatory shifts.
Investors will be watching for RLX’s next earnings report, expected between August 14–18, 2025, to assess how the company maintains momentum amid evolving industry pressures.
