ZKH Group Limited Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Gross Merchandise Volume (GMV): Increased by 18.9% year-over-year to RMB 2.9 billion.

Net Revenue: Grew 12.8% year-over-year to RMB 2.4 billion.

Gross Profit: Rose 20.3% year-over-year to RMB 430 million, with a gross margin of 14.9%.

Operating Profit: Achieved for the first time, marking a significant milestone.

Non-GAAP EBITDA: Positive at RMB 42 million, compared to a loss of RMB 39 million in Q2 2025.

Non-GAAP Adjusted Net Profit: Reached RMB 39 million, reversing a loss from the previous year.

Cash Position: As of June 30, 2026, cash and equivalents totaled RMB 1.7 billion.

2Strategic Updates and Business Highlights

Customer Segments: Strong growth from regional SMEs, with GMV up 30% year-over-year, and double-digit growth from central SOEs.

Product Segments: Notable growth in steel and nonferrous metals (GMV doubled), and strong performance in communications, electronics, and pharmaceuticals.

International Expansion: GMV from international markets increased tenfold year-over-year, with a focus on supporting Chinese manufacturers abroad and establishing localized operations.

Private Label Growth: Private label GMV grew over 25%, now accounting for approximately 10% of total GMV.

AI Initiatives: Continued development of AI capabilities, including the launch of the AI Materials Manager, which has served over 8,600 customers.

3Forward Guidance and Outlook

GMV Growth: Expected to accelerate further in Q3 2026, with a full-year growth target of 15% to 20%.

Profitability: Anticipated continued improvement in profitability, with the international business expected to turn profitable in the second half of the year.

Shareholder Returns: Plans to increase the pace of share buybacks and consider dividends as profits scale.

4Bad News, Challenges, or Points of Concern

Market Competition: The company operates in a highly fragmented MRO market, which may pose challenges in maintaining growth and market share.

Operational Risks: As the company expands internationally, it faces risks related to compliance, fulfillment, and market entry strategies.

Dependence on SMEs: While SMEs are growing, their reliance on ZKH's services may be a risk if economic conditions change.

5Notable Q&A Insights

Customer Behavior Changes: There is a shift towards AI-driven procurement, with customers increasingly using natural language to express needs.

International Business: Management emphasized a disciplined approach to international expansion, focusing on efficiency and profitability.

AI Development: The AI Materials Manager is evolving and generating revenue, with plans for further integration with leading technology partners.

Shareholder Returns: The company is committed to increasing buybacks and potentially initiating dividends as profitability improves. Overall, ZKH Group Limited demonstrated strong financial performance in Q2 2026, with significant growth in GMV and profitability, while also advancing its strategic initiatives in AI and international markets. However, challenges related to competition and operational risks remain pertinent as the company scales.