ATRenew Inc. Reports Unaudited Second Quarter 2022 Financial Results

SHANGHAI,Aug. 24,2022 -- ATRenew Inc. ("ATRenew" or the "Company") (NYSE: RERE),a leading technology-driven pre-owned consumer electronics transactions and services platform in China,today announced its unaudited financial results for the second quarter ended June 30,2022.

Second Quarter 2022 Highlights

Total net revenues grew by 14.9% to RMB2,145.7 million (US$320.3 million) from RMB1,867.7 million in the second quarter of 2021.

Loss from operations was RMB168.2 million (US$25.1 million),compared to RMB507.3 million in the second quarter of 2021. Adjusted loss from operations (non-GAAP)[1]was RMB42.3 million (US$6.3 million) compared to an adjusted loss from operations of RMB51.0 million in the second quarter of 2021.

Total Gross Merchandise Volume ("GMV[2]") increased by 10.3% to RMB8.6 billion from RMB7.8 billion in the second quarter of 2021. GMV for product sales increased by 15.8% to RMB2.2 billion from RMB1.9 billion in the second quarter of 2021. GMV for online marketplaces increased by 8.5% to RMB6.4 billion from RMB5.9 billion in the second quarter of 2021.

Number of consumer products transacted[3] remained flat at 7.8 million compared to the second quarter of 2021.

[1] See "Reconciliations of GAAP and Non-GAAP Results" for more information.

[2] "GMV" represents the total dollar value of goods distributed to merchants and consumers through transactions on the Company's platform in a given period for which payments have been made,prior to returns and cancellations,excluding shipping cost but including sales tax.

[3] "Number of consumer products transacted" represents the number of consumer products distributed to merchants and consumers through transactions on the Company's PJT Marketplace,Paipai Marketplace and other channels the Company operates in a given period,excluding the number of consumer products collected through AHS Recycle; a single consumer product may be counted more than once according to the number of times it is transacted on PJT Marketplace,Paipai Marketplace and other channels the Company operates through the distribution process to end consumer.

Mr. Kerry Xuefeng Chen,the Founder,Chairman,and Chief Executive Officer of ATRenew,commented,"Despite the challenges posed by the COVID-19 resurgence,our quarterly revenue surpassed the guidance we provided,as our team proactively adjusted our operations to adapt to changes. Although our business is facing short-term headwinds from the pandemic,we firmly believe that the demand for electronic device recycling,trade-in,and other value-added services will grow concurrently with the long-term development of the circular economy in China. Going forward,we will continue to focus on executing our city-level integration strategy while constantly increasing the penetration of our recycling offerings. At the same time,we will maintain our investment in automation to improve cost efficiency. Furthermore,we will increase strategic investment in category expansion and corresponding capabilities while continuing to provide consumers with more diverse and convenient recycling services."

Mr. Rex Chen,the Chief Financial Officer of ATRenew,added,"The pandemic has disrupted domestic consumption and adversely impacted our self-operated store business as well as marketplace transactions. Facing such challenges,we responded nimbly by adjusting our operating strategy and implementing cost control measures. As a result,our losses narrowed compared with the same period of last year. Since June,when cities including Shanghai and Beijing resumed normal production and daily life,our self-operated recycling and trade-in businesses went on a visible path to recovery. In addition,as of June 30,2022,we have sufficient cash reserves to support our business in the face of a dynamic operating environment. Looking ahead,we plan to tap into new categories and further generate synergies from our city-level integration strategy. We look forward to expanding our market share and delivering long-term value to shareholders and society."

Second Quarter 2022 Financial Results

REVENUETotal net revenues increased by 14.9% to RMB2,867.7 million in the same period of 2021.Net product revenues increased by 15.6% to RMB1,854.1 million (US$276.8 million) from RMB1,603.4 million in the same period of 2021. The increase was primarily attributable to an increase in the sourcing volume and the corresponding sales of pre-owned consumer electronics through Paipai Marketplace and the Company's overseas channels.Net service revenues increased by 10.3% to RMB291.6 million (US$43.5 million) from RMB264.3 million in the same period of 2021. The increase was primarily due to the increases in transaction volume and monetization capability of PJT Marketplace.OPERATING COSTS AND EXPENSESOperating costs and expenses decreased by 2.2% to RMB2,327.4 million (US$347.5 million) from RMB2,379.4 million in the same period of 2021.Merchandise costs increased by 18.5% to RMB1,653.8 million (US$246.9 million) from RMB1,395.4 million in the same period of 2021. The increase was primarily due to the growth in product sales.Fulfillment expenses decreased by 0.1% to RMB275.2 million (US$41.1 million) from RMB275.5 million in the same period of 2021. The decrease was primarily due to the decrease of share-based compensation expenses as the Company recognized more expenses with IPO condition in the same period of last year which was offset by the increases in operation center related expenses and personnel cost which were in line with the Company's business growth.Selling and marketing expenses decreased by 7.2% to RMB293.4 million (US$43.8 million) from RMB316.3 million in the same period of 2021. The decrease was primarily due to (i) a decrease in sales promotion and coupon expenses as a cost control measure during the resurgence of the COVID-19 variants; and (ii) the decrease of share-based compensation expenses as the Company recognized more expenses with IPO condition in the same period of last year.General and administrative expenses decreased by 85.4% to RMB45.2 million (US$6.8 million) from RMB310.3 million in the same period of 2021. The decrease was primarily due to the decrease of share-based compensation expenses as the Company recognized more expenses resulting from share-based awards granted with an IPO condition in the second quarter of 2021.Technology and content expenses decreased by 27.1% to RMB59.7 million (US$8.9 million) from RMB81.9 million in the same period of 2021. The decrease was primarily due to the decrease in the recognition of share-based compensation expenses resulting from options granted to employees with an IPO condition compared to the second quarter of 2021.LOSS FROM OPERATIONSLoss from operations decreased by 66.8% to RMB168.2 million (US$25.1 million) from RMB507.3 million in the same period of 2021. Adjusted loss from operations (non-GAAP),excluding amortization of intangible assets and deferred cost resulting from assets and business acquisitions and recognition of share-based compensation expenses resulting from options and restricted stock units granted to employees,decreased by 17.1% to RMB42.3 million (US$6.3 million) from RMB51.0 million in the same period of 2021.NET LOSSNet loss was RMB125.3 million (US$18.7 million),compared to RMB505.7 million in the same period of 2021. Adjusted net loss (non-GAAP)[1] was RMB13.2 million (US$2.0 million),compared to RMB59.7 million in the same period of 2021.BASIC AND DILUTED NET LOSS PER ORDINARY SHAREBasic and diluted net loss per ordinary share were RMB0.78 (US$0.12),compared to RMB13.47 in the same period of 2021.Adjusted basic and diluted net loss per ordinary share (non-GAAP)[1] were RMB0.08 (US$0.01),compared to RMB1.59 in the same period of 2021.CASH AND CASH EQUIVALENTS,RESTRICTED CASH,SHORT-TERM INVESTMENTS AND FUNDS RECEIVABLE FROM THIRD PARTY PAYMENT SERVICE PROVIDERSCash and cash equivalents,restricted cash,short-term investments and funds receivable from third party payment service providers increased to RMB2,594.1 million (US$387.3 million) as of June 30,from RMB2,421.9 million as of December 31,2021.Business OutlookFor the third quarter of 2022,the Company currently expects its total revenues to be between RMB2,500.0 million and RMB2,550.0 million. This forecast only reflects the Company's current and preliminary views on the market and operational conditions,which are subject to change.Environment,Social,and GovernanceOn June 9,ATRenew published its second annual environmental,social,and governance ("ESG") report (the "Report") incorporating the Task Force on Climate-related Financial Disclosures recommendations,a framework set by the G20's Financial Stability Board,for the first time. In the Report,the Company explores the climate-change-related opportunities and challenges it faces in its operation and reuse of pre-owned electronic devices through the perspectives of governance,strategy,risk management,and metrics and targets.In order to help quantify its commitment to ESG,the Company has leveraged the Circular Footprint Formula for the first time to disclose its contribution of 464,000 metric tons of green-house gas emission reductions through reusing pre-owned mobile phones in 2021.Recent DevelopmentOn December 28,2021,ATRenew announced a share repurchase program,effective immediately,to repurchase up to US$100 million of its shares over a twelve-month period. During the second quarter 2022,the Company repurchased 2,881,811 American depositary shares ("ADSs") in the open market at an average price of US$3.14 per ADS,with a total cash consideration of US$9.0 million. As at the end of the second quarter 2022,the Company repurchased a total of 7,635,651 ADSs for approximately US$31.5 million under its share repurchase program.Conference Call InformationThe Company's management will hold a conference call on Wednesday,August 24,at 08:00 A.M. Eastern Time (or 08:00 P.M. Beijing Time on Wednesday,2022) to discuss the financial results. Listeners may access the call by dialing the following numbers:International:

1-412-317-6061United States Toll Free:

1-888-317-6003Mainland China Toll Free:

4001-206115Hong Kong Toll Free:

800-963976Access Code:

7639205The replay will be accessible through August 31,by dialing the following numbers:International:

1-412-317-0088United States Toll Free:

1-877-344-7529Access Code:

6668246A live and archived webcast of the conference call will also be available at the Company's investor relations website at ir.atrenew.com.About ATRenew Inc.Headquartered in Shanghai,ATRenew Inc. operates a leading technology-driven pre-owned consumer electronics transactions and services platform in China under the brand ATRenew. Since its inception in 2011,ATRenew has been on a mission to give a second life to all idle goods,addressing the environmental impact of pre-owned consumer electronics by facilitating recycling and trade-in services,and distributing the devices to prolong their lifecycle. ATRenew's open platform integrates C2B,B2B,and B2C capabilities to empower its online and offline services. Through its end-to-end coverage of the entire value chain and its proprietary inspection,grading,and pricing technologies,ATRenew sets the standard for China's pre-owned consumer electronics industry.Exchange Rate InformationThis announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted,all translations from RMB to U.S. dollars are made at a rate of RMB6.6981 to US$1.00,the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30,2022.Use of Non-GAAP Financial MeasuresThe Company also uses certain non-GAAP financial measures in evaluating its business. For example,the Company uses adjusted loss from operations,adjusted net loss and adjusted net loss per ordinary share as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation,or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. Adjusted loss from operations is loss from operations excluding the impact of share-based compensation expenses and amortization of intangible assets and deferred cost resulting from assets and business acquisitions. Adjusted net loss is net loss excluding the impact of share-based compensation expenses,amortization of intangible assets and deferred cost resulting from assets and business acquisitions,fair value change in warrant liabilities and tax effects of amortization of intangible assets and deferred cost resulting from assets and business acquisitions. Adjusted net loss per ordinary share is adjusted net loss attributable to ordinary shareholders divided by weighted average number of shares used in calculating net loss per ordinary share.The Company presents non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. The Company believes that adjusted loss from operations and adjusted net loss help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that are included in loss from operations and net loss. The Company also believes that the use of non-GAAP financial measures facilitates investors' assessment of the Company's operating performance. The Company believes that adjusted loss from operations and adjusted net loss provide useful information about the Company's operating results,enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision making.The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP financial measures is that they do not reflect all items of income and expense that affect the Company's operations. Share-based compensation expenses,fair value change in warrant liabilities and tax effects of amortization of intangible assets and deferred cost resulting from assets and business acquisitions have been and may continue to be incurred in the Company's business and is not reflected in the presentation of non-GAAP financial measures. Further,the non-GAAP measures may differ from the non-GAAP measures used by other companies,including peer companies,potentially limiting the comparability of their financial results to the Company's. In light of the foregoing limitations,the non-GAAP financial measures for the period should not be considered in isolation from or as an alternative to loss from operations,net loss,and net loss attributable to ordinary shareholders per share,or other financial measures prepared in accordance with U.S. GAAP.The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures,which should be considered when evaluating the Company's performance. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures,please see the section of the accompanying tables titled,"Reconciliations of GAAP and Non-GAAP Results."Safe Harbor StatementThis press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things,quotations in this announcement,contain forward-looking statements. ATRenew may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"),in its annual report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Statements that are not historical facts,including statements about ATRenew's beliefs,plans and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following: ATRenew's strategies; ATRenew's future business development,financial condition and results of operations; ATRenew's ability to maintain its relationship with major strategic investors; its ability to provide facilitate pre-owned consumer electronics transactions and provide relevant services; its ability to maintain and enhance the recognition and reputation of its brand; general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ATRenew's filings with the SEC. All information provided in this press release is as of the date of this press release,and ATRenew does not undertake any obligation to update any forward-looking statement,except as required under applicable law.Investor Relations ContactIn China:

ATRenew Inc.

Investor Relations

Email: ir@atrenew.comIn the United States:

ICR LLC.

Email: atrenew@icrinc.com

Tel: +1-212-537-0461ATRENEWINC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands,except share and per share and otherwise noted)

As of December 31,

As of June 30,

2021

2022

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

1,356,342

1,215,953

181,537

Restricted cash

150,000

—

—

Short-term investments

510,467

1,030,682

153,877

Amount due from related parties,net

410,088

139,043

20,759

Inventories

478,751

673,444

100,543

Funds receivable from third party payment service providers

405,095

347,468

51,876

Prepayments and other receivables,net

840,102

697,237

104,095

Total current assets

4,150,845

4,103,827

612,687

Non-current assets:

Long-term investments

241,527

234,457

35,004

Property and equipment,net

103,843

115,467

17,239

Intangible assets,net

1,075,811

913,693

136,411

Goodwill

1,803,415

1,819,926

271,708

Other non-current assets

127,321

91,234

13,619

Total non-current assets

3,351,917

3,174,777

473,981

TOTAL ASSETS

7,502,762

7,278,604

1,086,668

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term borrowings

94,999

146,370

21,852

Accounts payable

41,311

66,894

9,987

Contract liabilities

211,964

304,867

45,516

Accrued expenses and other current liabilities

296,627

387,508

57,853

Accrued payroll and welfare

105,787

79,654

11,892

Amount due to related parties

73,976

53,440

7,978

Total current liabilities

824,664

1,038,733

155,078

Non-current liabilities:

Operating lease liabilities,non-current

34,501

37,109

5,540

Deferred tax liabilities

223,138

196,106

29,278

Total non-current liabilities

257,639

233,215

34,818

TOTAL LIABILITIES

1,082,303

1,271,948

189,896

TOTAL SHAREHOLDERS' EQUITY

6,420,459

6,006,656

896,772

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

7,668

ATRENEWINC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Amounts in thousands,except share and per shareand otherwise noted)

Three months ended June 30,

Six months ended June 30,

2021

2022

2021

2022

RMB

RMB

US$

RMB

RMB

US$

Net revenues

Net product revenues

1,603,419

1,854,133

276,815

2,913,966

3,763,065

561,811

Net service revenues

264,297

291,586

43,533

468,181

589,158

87,959

Operating expenses (1)(2)

Merchandise costs

(1,395,358)

(1,653,834)

(246,911)

(2,491,054)

(3,293,856)

(491,760)

Fulfillment expenses

(275,525)

(275,201)

(41,086)

(498,544)

(571,421)

(85,311)

Selling and marketing expenses

(316,295)

(293,405)

(43,804)

(538,875)

(601,199)

(89,757)

General and administrative expenses

(310,280)

(45,227)

(6,752)

(339,688)

(90,185)

(13,464)

Technology and content expenses

(81,903)

(59,726)

(8,917)

(137,402)

(123,265)

(18,403)

Total operating expenses

(2,379,361)

(2,327,393)

(347,470)

(4,005,563)

(4,679,926)

(698,695)

Other operating income,net

4,369

13,447

2,008

4,730

24,688

3,686

Loss from operations

(507,276)

(168,227)

(25,114)

(618,686)

(303,015)

(45,239)

Interest expense

(5,513)

(2,516)

(376)

(12,065)

(3,519)

(525)

Interest income

1,013

2,053

307

4,433

3,777

564

Fair value change in warrant liabilities

(9,242)

—

—

(9,242)

—

—

Other (loss) income,net

(4,862)

32,739

4,888

(3,948)

(5,884)

(878)

Loss before income taxes

(525,880)

(135,951)

(20,295)

(639,508)

(308,641)

(46,078)

Income tax benefits

19,460

13,876

2,072

38,919

26,989

4,029

Share of gain (loss) in equity method investments

735

(3,175)

(474)

123

(4,950)

(739)

Net loss

(505,685)

(125,250)

(18,697)

(600,466)

(286,602)

(42,788)

Accretion of convertible redeemable preferred shares

—

—

—

(508,627)

—

—

Net loss attributable to ordinary

shareholders of the Company

(505,697)

(1,109,093)

(286,788)

Net loss per ordinary share:

Basic

(13.47)

(0.78)

(0.12)

(39.30)

(1.78)

(0.27)

Diluted

(13.47)

(0.78)

(0.12)

(39.30)

(1.78)

(0.27)

Weighted average number of shares

used in calculating net loss per ordinary share

Basic

37,552,443

161,498,812

161,812

28,219,382

161,374,917

161,917

Diluted

37,917

Net loss

(505,788)

Foreign currency translation adjustments

2,427

(10,885)

(1,625)

2,152

(10,386)

(1,551)

Total comprehensive loss

(503,258)

(136,135)

(20,322)

(598,314)

(296,988)

(44,339)

Accretion of convertible redeemable preferred shares

—

—

—

(508,627)

—

—

Total comprehensive loss attributable to

ordinary shareholders

(503,322)

(1,106,941)

(296,339)

ATRENEWINC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED)(Amounts in thousands,

2021

2022

2021

2022

RMB

RMB

US$

RMB

RMB

US$

(1) Includes share-based compensation expenses as follows:

Fulfillment expenses

(42,491)

(7,518)

(1,122)

(42,491)

(22,281)

(3,326)

Selling and marketing expenses

(26,264)

(4,147)

(619)

(26,264)

(19,553)

(2,919)

General and administrative expenses

(282,070)

(16,401)

(2,449)

(282,070)

(32,984)

(4,924)

Technology and content expenses

(27,580)

(5,170)

(772)

(27,580)

(9,729)

(1,453)

(2) Includes amortization of intangible assets and deferred cost resulting

from assets and business acquisitions as follows:

Selling and marketing expenses

(76,258)

(91,126)

(13,605)

(152,517)

(176,881)

(26,407)

Technology and content expenses

(1,580)

(1,580)

(236)

(3,160)

(3,160)

(472)

Reconciliationsof GAAP and Non-GAAP Results(Amounts in thousands,except share and per share and otherwise noted)

Three months ended June 30,

2021

2022

2021

2022

RMB

RMB

US$

RMB

RMB

US$

Loss from operations

(507,239)

Add:

Share-based compensation expenses

378,405

33,236

4,962

378,405

84,547

12,622

Amortization of intangible assets and deferred cost resulting from

assets and business acquisitions

77,838

92,706

13,841

155,677

180,041

26,879

Adjusted loss from operations (non-GAAP)

(51,033)

(42,285)

(6,311)

(84,604)

(38,427)

(5,738)

Net loss

(505,788)

Add:

Share-based compensation expenses

378,879

Fair value change in warrant liabilities

9,242

—

—

9,242

—

—

Less:

Tax effects of amortization of intangible assets and deferred cost

resulting from assets and business acquisitions

(19,460)

(13,876)

(2,072)

(38,919)

(26,989)

(4,029)

Adjusted net loss (non-GAAP)

(59,660)

(13,184)

(1,966)

(96,061)

(49,003)

(7,316)

Adjusted net loss per ordinary share (non-GAAP):

Basic

(1.59)

(0.08)

(0.01)

(3.40)

(0.30)

(0.05)

Diluted

(1.59)

(0.08)

(0.01)

(3.40)

(0.30)

(0.05)

Weighted average number of shares used in calculating net loss per ordinary share

Basic

37,917

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