BingEx (FLX) Q2 2026 Earnings Call Transcript

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DATE

Thursday, Aug. 20, 2026 at 8:00 a.m. ET

CALL PARTICIPANTS

• Founder and Chairman of the Board and Chief Executive Officer - Adam Xue
• Co-Founder, Director and Executive President - Hongjian Yu
• Chief Financial Officer - Luke Tang

TAKEAWAYS

• Revenue -- RMB 940.3 million, representing a decrease from RMB 1,024.6 million in the prior-year period due to increased market competition.
• Gross Profit Margin -- 10.2%, reflecting a decline from 12.0% in the second quarter of 2025.
• Net Loss -- RMB 34.0 million, primarily due to a RMB 41.7 million loss from changes in the fair value of long-term investments.
• Non-GAAP Net Income -- RMB 11.4 million, representing a decrease from RMB 45.6 million in the prior-year quarter.
• Order Volume -- 63.1 million fulfilled orders, reflecting 8.9% growth quarter over quarter.
• Average Delivery Time -- 25.3 minutes, an improvement from 25.7 minutes in the first quarter of 2026 as delivery efficiency increased.
• Registered Flash-Riders -- 3.23 million as of June 30, 2026, marking continued expansion of the rider network.
• Service Coverage -- 299 cities, following the continued build-out of the company's logistics network.
• Registered Users -- 124 million, representing an increase of 4 million since the end of the first quarter.
• Enterprise Client Signings -- 53.1% growth quarter over quarter, driven by a dedicated focus on key accounts with complex decision-making cycles.
• Newly Signed Merchants -- 18% growth quarter over quarter, supported by a revised sales team assessment framework.
• Drone Delivery Volume -- 169.3% growth quarter over quarter as the business moved from single-route trials to multi-route operations.
• Low-Altitude Routes -- 22 routes in operation by the end of the second quarter.
• AI Operational Efficiency -- 30% improvement across customer service, marketing, and regional operations through the deployment of systemic AI capabilities.
• Flash Mall Order Volume -- 29.2% growth quarter over quarter.
• Luggage Delivery Volume -- 37.5% growth compared with the first quarter of 2026.
• Food Pickup Volume -- 25% growth compared with the first quarter of 2026.
• Parcel Pickup Volume -- 7.2% growth compared with the first quarter of 2026.
• Assisted Purchasing Volume -- 6.7% growth compared with the first quarter of 2026.
• Huawei HarmonyOS Channel -- 27.6% growth in order volume and 20.9% growth in users quarter over quarter via the HarmonyOS ecosystem.
• Cash and Short-term Investments -- RMB 853.4 million as of June 30, 2026.
• Share Repurchases -- 3.9 million American depositary shares repurchased for approximately $11.8 million as of Aug. 19, 2026.
• Operating Expenses -- RMB 88.3 million, a 14.6% decrease from the prior-year period driven by reduced advertising and staff costs.

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RISKS

• Tang stated, "The decrease [in revenues] was primarily driven by intensifying marketing competition," which impacted the quarterly top line.
• Tang reported that the net loss was "mainly due to RMB 41.7 million of losses from changes in fair value of long-term investments in the second quarter."

SUMMARY

Management of BingEx Limited (NASDAQ:FLX) reported a shift in the on-demand delivery market toward service reliability and experience over price-based competition. The company stated that it is integrating artificial intelligence across customer service, marketing, and regional operations to improve efficiency while expanding its low-altitude logistics through commercial drone routes in Hangzhou. Management also noted the company's participation in a new industry convention focused on self-discipline and rider protections, which they indicated aligns with their long-term focus on service quality. The company continues to return capital to shareholders through an active share repurchase program while navigating a competitive marketing environment and non-cash losses from investment value fluctuations.

• Management noted that the Hangzhou industry convention aims to shift competition from price to service quality and fulfillment certainty.
• The company established an organizational innovation committee to oversee the implementation of AI projects across separate business units.
• AI systems now independently handle 85% of inquiries and complaints within the customer service department by addressing routine inquiries automatically.
• A new round trip order service was launched to facilitate tasks requiring a return journey, such as document and contract signing.
• The low-altitude logistics segment transitioned to commercial operation with a cross-river route in Hangzhou that reduced delivery time from over 40 minutes to 13 minutes.
• CFO Tang indicated that the company had repurchased 3.9 million American depositary shares as part of a $30 million buyback authorization through April 2027.
• CEO Xue stated, "Users today expect more than speed alone, placing growing weight on the entire service experience from the moment they place an order to the moment it arrives."

INDUSTRY GLOSSARY

• FlashEx: The consumer-facing brand name for the on-demand dedicated courier services provided by BingEx Limited.
• Flash-Riders: The network of independent service providers who execute on-demand delivery tasks for the FlashEx platform.
• Low-altitude logistics: A delivery model utilizing drones in low-altitude airspace to fulfill orders and bypass ground-level obstacles.
• ADS: American Depositary Shares, which are equity shares of a non-U.S. company that are held by a U.S. depositary bank and available for purchase by U.S. investors.
• HarmonyOS: An operating system developed by Huawei that hosts the FlashEx quick app entry point for users.
• CLI: Command Line Interface, a text-based tool that allows developers to access FlashEx AI-powered services directly through typed commands.

Full Conference Call Transcript

Operator: Good day, and welcome to BingEx 2026 Second Quarter Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Helen Wu from Piacente Financial Communications. Please go ahead.

Helen Wu: Thank you, operator. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC. The non-GAAP financial measures we provide are for comparison purpose only. The definition of these measures and a reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded.

In addition, a webcast replay of this conference call will be available on the BingEx Company's IR website at ir.ishansong.com. Furthermore, throughout the call, we will constantly use the company brand name FlashEx to refer to its publicly listed entity, BingEx Limited. Joining us today from FlashEx senior management are Mr. Adam Xue, Founder and Chairman of the Board and Chief Executive Officer; Mr. Hongjian Yu, Co-Founder, Director and Executive President; and Mr. Luke Tang, Chief Financial Officer. I will now turn the call over to Mr. Adam Xue.

Peng Xue: Thank you, Helen. Hello, everyone, and welcome to FlashEx Second Quarter 2026 Earnings Call. The on-demand delivery industry continued to evolve in the second quarter. Users today expect more than speed alone, placing growing weight on the [ entire service ] experience from the moment they place an order to the moment it arrives, at the same time, AI is advancing quickly, and low audited airspace is opening up, creating new ways to fulfill orders in our industry. This plays to the on-demand dedicated courier model. FlashEx has been building all along as well as the technology work we have been advancing over the past several quarters.

The operating approach we have followed over the past several quarters translated into real results in the second quarter with scale and delivery efficiency improving together. Total order volume grew 8.9% quarter-over-quarter and average delivery time shortened from 25.7 minutes in the first quarter to 25.3 minutes in the second quarter even as volume rose, behind this is the rider base and service network that keep expanding as of the end of the second quarter, registered Flash-Riders reached 3.23 million and our service coverage expanded to 299 cities. Our user base also grew steadily with registered users up to up 4 million from the end of the first quarter to 124 million.

Turning to our financial performance, total revenue from the second quarter RMB 940.3 million with a gross margin of 10.2%. Non-GAAP income from operations was RMB 10.8 million and non-GAAP net income was RMB 11.4 million. Our cash position stood at RMB 853.4 million as of the end of the second quarter, reflecting a healthy overall financial position. Looking at the order mix by category, volume recovery in the second quarter came from across board. [ Flash Mall ] a core category, we have cultivated for years grew 29.2% quarter-over-quarter in order volume. Food, cakes and electronics all posted order volume growth both year-over-year and quarter-over-quarter, leaving our overall order mix more balanced.

Several major categories moving up [ trends tell ] us how well our on-demand dedicated courier model with high-value scenarios, and it also [indiscernible] our order composition more widely, reducing our reliance on any one category. On the merchant side, we set out to simultaneously grow our merchant base and improve its quality in the second quarter. Newly signed merchants grew 18% quarter-over-quarter and the share of high value, high stickiness merchants rose meaningfully as our merchant base expanded. Enterprise clients stood out in particular, with new signing up 53.1% quarter-over-quarter, moving our merchant structure in a healthy direction.

This came partly from optimizing our sales team assessment framework and partly from a dedicated effort to develop key accounts pursuing enterprise clients through a separate track given their longer sales cycles and more complex decision-making. What we have observed is that delivery demand from these clients comes out of the day-to-day business processes such as transferring inventory between stores, sending client documents back and forth or dispatching after-sale parts urgently. This demand ran more continuously and the relationships last longer making our revenue more stable. On the individual user side, the role FlashEx plays for our users continues to extend from delivering an item to completing a task.

Compared with the first quarter, luggage delivery order volume grew 37.5%, food pickup grew 25% and parcel pickup grew 7.2% and assisted purchasing grew 6.7%. Growth across these scenarios came from delivery developing new service formats around what users actually need and from reaching out to them at the specific moment when those needs arrive. Round trip orders, which we launched recently, as one example, they combine delivery, waiting and the return trip to a single order handled by the same Flash-Riders, designed for tasks that require a round trip such as document and contract signing. These are exactly the tasks a dedicated courier model handles well, and they bring FlashEx further into our users' everyday routine.

Our AI work in the second quarter centered on 2 priorities: making our services easier for user to reach and putting AI to work across the company's daily operations. Starting with users, we saw notably more users placing orders through our quick app entry point in Huawei HarmonyOS ecosystem during the second quarter. Order volumes through this entry grew 27.6% quarter-over-quarter and the number of users ordering through it grew [ 20.9% ]. This lightweight entry point make our services easier to access, driving both new user acquisition and high order frequency. In June, we launched AI-powered ordering in FlashEx apps.

Users simply describe what they need by voice and the system identifies and matches the pickup and drop-off addresses and other order details completing the order in a single exchange. More recently...

Operator: Ladies and gentlemen, please stand by, your conference will resume momentarily. [Technical Difficulty]

Peng Xue: Had to finish without switching to another interface, whether the order -- whether the order is an urgent document, flowers or medicine, AI can quickly match the right delivery option. Along with the CLI tool, we open source in the second quarter, developers and individual users can now reach FlashEx AI-powered service directly. Across all of our AI work, we keep coming back to one question. What does the user actually end up with? Whether an order is placed through our APP or a voice assistant or an AI agent is fundamentally irrelevant to the user.

What shifts experience is whether FlashEx arrived on time and complete the job to a high standard and whether we can respond to the user concern properly. That stays at the core of how we develop and deploy AI. Now to our internal operations, we established an organizational innovation committee in the second quarter, letting each business unit propose and implement its own AI projects. In customer service, our AI system now independently handles 85% of the scenarios it covers addressing routine inquiries and complaints the moment they are submitted. In marketing, compliance review of [ ICN ] content.

Previously conducted manually now goes to a first pass by self-developed AI reviewing system in regional operations, the time required to model capacity applies for new city launches and holiday peak has come down from several days to a few hours. Across these areas, operating efficiency improved by roughly 30%. We see AI as a compounding effort rather than a single link. It builds gradually with the green adding up over quarters as AI becomes more routine part of how organization works, but believe that our operating expense ratio can improve further over the medium to long term. creating room for better profit margins ahead. Next, let's take a look at low-altitude logistics.

The business moved from single route trails to multi-route operations during the second quarter. Drone delivery order volume grew 169.3% quarter-over-quarter. And we now have 22 routes in operation. In July, Hangzhou's first cross river route for low-altitude on-demand delivery entered commercial operation taking only 13 minutes to cross the river with Flash-Riders handing off at each end and the drone crossing in between, orders can -- orders that once took more than 40 minutes now arrived in a little over 20 minutes. Since the route became operating deliveries have mainly been medicine, urgent business documents, fresh food and digital accessories, all categories while timing matters.

With use continuing to increase and the delivery model proving all across different scenarios, low-altitude logistics has moved past. The trail stage and into a broader expansion. On the rider side, we registered Flash-Riders base continued to expand in the second quarter. We also further strengthened our training program and create protection through dedicated training around safety standards handle procedure for high-value items and new services such as round trip orders, the stability and professionalism of rider team remain the foundation of our high-quality service. Looking to the second half of the year, our focus stays on the service itself, AI and low-altitude logistics are 2 new paths to making the service better.

AI helps users find us at the very moment they need us and low-altitude logistics frees Flash-Riders from obstacles like a river or busy road we have seen this market change many times since we started, and we still believe the hardest thing to replicate here is trust earned through every safe on-time delivery. Behind that trust is our brand, our Flash-Riders team and our technology. This is the foundation of the long-term value we create for our users the riders and our shareholders. That concludes my remarks. Now I will turn the call over to our CFO, Luke Tang. Thank you.

Le Tang: Thank you, Adam. Hello, everyone. This is Luke. I'd like to walk you through our second quarter 2026 financial results. During the second quarter, our unique on-demand dedicated courier model remained resilient as we further refined our operations and the extended use of AI across the organization. We also maintained a healthy cash position and continue to return capital to shareholders through our repurchase program. Before I begin, please note that all numbers are in renminbi and all percentage changes are on a year-over-year basis unless otherwise noted. Our revenues for the second quarter were RMB 940.3 million compared with RMB 1,024.6 million in the same period of 2025. The decrease was primarily driven by intensifying marketing competition.

Our cost of revenues for the second quarter was RMB 844.7 million compared with RMB 901.9 million in the same period of 2025. The decrease was in line with the decline in revenues. Our gross profit was RMB 95.5 million in the second quarter compared with RMB 122.7 million in the same period of 2025, representing a gross profit margin of 10.2% compared with 12% in the prior year quarter. Turning to operating expenses. Our total operating expenses for the second quarter were RMB 88.3 million representing a decrease of 14.6% from RMB 103.4 million in the same period of 2025.

We consisted of RMB 36.6 million in selling and marketing expenses, RMB 37.9 million in general and administrative expenses and RMB 13.7 million in research and development expenses. The decrease in operating expenses was primarily attributable to the reduction in advertising expenses, staff costs and the share-based payment expenses. Our income from operations was RMB 7.3 million compared with RMB 19.3 million in the same period of 2025. Excluding share-based compensation expenses, our non-GAAP income from operations was RMB 10.8 million for the second quarter compared with RMB 31.9 million in the same period of 2025. Our net loss was RMB 34 million compared with net income of RMB 53.5 million in the same period of 2025.

The decrease was mainly due to RMB 41.7 million of losses from changes in fair value of long-term investments in the second quarter. Excluding changes in fair value of long-term investments and share-based compensation expenses, our non-GAAP net income was RMB 11.4 million compared with RMB 45.6 million in the same period of 2025. Our cash position remained healthy with cash and cash equivalents, restricted cash and short-term investments totaling RMB 853.4 million as of the second quarter end. We also carried out share repurchases under the extended buyback program approved in March.

As of August 19, and we had repurchased a total of approximately 3.9 million ADS in the open market for an aggregated consideration of approximately USD 11.8 million. This underscores our confidence in the company's long-term value. As we move through the rest of 2026, we remain committed to disciplined execution and to the high-quality service that differentiates, we are confident that as AI becomes increasingly embedded across our operations. It will support a structural improvement in our operating expenses ratio over the long term, creating room for better profit margins ahead. That concludes our prepared remarks. We would now like to open the floor to your questions. Operator, please go ahead.

Operator: [Operator Instructions] Our first question comes from [ Ghansham Lu ] with CICC.

Unknown Analyst: This is [ Ghansham ] from CICC. I actually have 2 questions I'll ask...

Le Tang: Hello?

Unknown Analyst: Yes? Can you hear me?

Le Tang: Can you repeat your questions?

Unknown Analyst: Okay. Yes. My first question is about the anti-evolution trends about this industry because we know in May, 7 leading instant retailer players, including [indiscernible] signed the Hangzhou anti-evolution, self-discipline commission, right? How do you interpret the broader industry trend from here? And what impact, if any, have you seen on RSP and order volume? Or will you view this as a pricing inflection point for the industry? First question.

Le Tang: Yes. Thank you for your questions. This is Luke. I will take your first question. On May [ 28 ], FlashEx joined 6 other leading platforms in Hangzhou in selling and industry self-discipline convention, covering marketing practices, merchant rights, rider protections and governance. What the convention points toward is shifting the center of competition from price back to service itself. And directing more resources into creating incremental demand and improving conditions for merchants and riders. We see this as a healthy signal that the industry is maturing. For FlashEx, this direction aligns closely with how we have operated for 12 years. Each Flash-Riders stays with one order from pickup to hand-off.

Under this model, riders can give every delivery, their full attention. And the rider experience and the user experience have never come at each other's expense. They reinforce one another. The convention moves the industry away from price wars and heavy subsidy-driven traffic refocusing competition on service, quality, efficiency and the experience. For a platform, whose competitiveness, rise service quality and fulfillment certainty, and that is a favorable environment for us. In the second quarter, our total order volume grew 8.9% quarter-over-quarter, supported by better capacity allocation. The continued expansion of our service scenarios and new service formats, we welcome the industry's return to rational competition. and we'll keep investing along these lines on pricing.

Our focus is on the longer-term competitive dynamics rather than short-term movements. We have always believed that the core competitive advantage in on-demand delivery is to low price, but where every order reaches the user reliably and safely, that is where our differentiation lies and where our long-term value comes from. Thank you. Waiting for your second question. Thank you.

Unknown Analyst: Okay. Good to hear that. So my second question is about the low-altitude. Could you give us an update on the growth of drone delivery order volumes, as you mentioned, the total volumes earlier. I just want to see the growth trend here. And also your expansion road map beyond the existing capacity, for example, beyond Hangzhou. Besides combined these drones and AI deployment. Do these efforts translated into visible per cost, the segment level. And what's your path to a scalable or breakeven?

Peng Xue: Thank you for your question. This is Adam speaking. Let me take order volumes and user cases first and then expansion and the economics. In the second quarter, drone delivery order volume grew 169.3% quarter-over-quarter and we now have 22 routes in operation, taking the business from single-site trails into multi-route operations. In July, Hangzhou's first crossover route or low-altitude on-demand delivery entered commercial operation with a [ 13-minute ] flight across the river, with a rider handoff at each end and a drone crossing in between, orders that once took more than 40 minutes now arrived in little over 20 at the same price as a standard FlashEx order.

On user cases, what we carry today is mostly medicine, urgent business documents, fresh food and digital accessories, all time sensitive and relatively high in unit value. Low-altitude shows its value where ground capacity runs into geography or traffic crossing a river, a hill or district line or roads that backs up at peak hours. This happened to be categories where we are already strong, and they sit close to what we already do -- already done. Our priorities at this stage are operationally safety whether routes can be replicated and whether the time advantage of our ground delivery holds up consistently in the scenarios where it matters.

We are confident the unit economics here will keep improving as route density rises as daily order volume for route grows and as we get more out of equipment and ground sites. The 169.3% growth in drone order volume in this quarter also tells us demand is validating well. In terms of the next step on the low-altitude business, our near-term focus is on refining the model in Hangzhou itself. This business draws heavily on local airspace management landing side resources and the supporting industry base. So what we want first is a set of operating standards and the cost model built in Hangzhou that we can carry into other markets.

As our route network will continues to grow denser and operation experience builds, we are confident this model will travel well. On AI, our work in customer service, marketing, and regional operations lifted efficiency in those areas by around 30% in the second quarter, showing up in lower head count requirements and shorter process cycles. The AI is that it accumulates efficiency step-by-step as it becomes a more routine part of how organization works those gains keeping compounding, and we believe there is further room for our operating expense ratio to improve over the medium to long term, creating conditions for better margins ahead. Thank you.

Operator: Thank you. And that concludes the question-and-answer session. I will now turn the call over to Helen Wu for closing remarks.

Helen Wu: Thank you once again for joining BingEx Second Quarter 2026 Financial Results and Business Update Conference Call today. If you have any other further questions, please contact the IR team at BingEx or Piacente Financial Communications. Thank you, and have a great day.

Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.

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