BingEx Limited (FLX) Earnings

Management highlights

- Core Business Growth & Network Expansion * Total order volume grew 8.9% quarter-over-quarter, and average delivery time shortened to 25.3 minutes from 25.7 minutes QoQ even as volume increased * As of Q2 end, registered FlashRiders reached 3.23 million, service coverage expanded to 299 cities, and total registered users grew to 124 million * Core category order volume growth QoQ: fresh flowers +29.2%, luggage delivery +37.5%, food pickup +25%, parcel pickup +7.2%, assisted purchasing +6.7% * Newly signed merchants grew 18% QoQ, with new enterprise client sign-ups up 53.1% QoQ, improving the quality and balance of the merchant base - Product and Service Innovation * Launched new roundtrip orders for tasks requiring return delivery (such as contract signing), which leverage the company's dedicated single-order rider model well * Expanded service access via lightweight entry points: order volume through the Huawei Harmony OS quick app entry grew 27.6% QoQ, with user count up 12.9% QoQ * Launched AI-powered voice ordering in the FlashEx app, which automatically extracts order details and matches delivery options, and open-sourced a CLI tool for developers to access FlashEx AI-powered services - AI Deployment for Operational Efficiency * Established a cross-unit organizational innovation committee to support independent AI project development across business units * AI now handles 85% of customer service scenarios automatically, conducts first-pass compliance review of MCN marketing content, and cuts new city/peak capacity modeling time from multiple days to a few hours * Aggregated operational efficiency improvement of roughly 30% across AI-adopted areas - Low-Altitude Drone Logistics * Scaled from single-route trials to multi-route commercial operations, with 22 total routes in operation and Q2 drone delivery order volume up 169.3% QoQ * Launched Hangzhou's first commercial cross-river low-altitude delivery route in July, cutting delivery time from over 40 minutes to ~20 minutes at standard pricing, currently focused on time-sensitive, high-value categories (medicine, urgent documents, fresh food, digital accessories) - Rider Management * Expanded the registered rider base and strengthened training programs for safety, high-value item handling, and new services like roundtrip orders, with rider professionalism and stability cited as the foundation of high-quality service

Guidance

- Management expects that as AI becomes embedded in routine organizational operations, the company's operating expense ratio will structurally improve over the medium and long term, creating room for higher profit margins - For the second half of 2026, the company will maintain its strategic focus on improving core service quality, with AI and low-altitude logistics as key enabling priorities to enhance service delivery - For low-altitude logistics, management will first refine operating standards and a repeatable cost model in Hangzhou before expanding to other markets, with unit economics expected to improve as route density and order volume per route grow

Segment performance

Total company revenue for Q2 2026 was 940.3 million RMB, with a gross margin of 10.2%. Gross profit came in at 95.5 million RMB, down from 122.7 million RMB in Q2 2025, while gross margin fell from 12% year-over-year. Operating income was 7.3 million RMB, down from 19.3 million RMB YoY; non-GAAP operating income was 10.8 million RMB, down from 31.9 million RMB YoY. GAAP net loss was 34 million RMB (compared to a net income of 53.5 million RMB YoY), driven by 41.7 million RMB in losses from fair value changes of long-term investments; non-GAAP net income was 11.4 million RMB, down from 45.6 million RMB YoY. Total operating expenses were 88.3 million RMB, a 14.6% decrease YoY, consisting of 36.6 million RMB in selling and marketing expenses, 37.9 million RMB in general and administrative expenses, and 13.7 million RMB in research and development expenses. As of quarter end, total cash and cash equivalents, restricted cash, and short-term investments stood at 853.4 million RMB, reflecting a healthy liquidity position.

Risks & headwinds

- The company notes that forward-looking statements are based on current expectations, and actual results may differ materially due to a range of unstated risks and uncertainties referenced in prior SEC filings - Intensifying industry marketing competition contributed to a year-over-year decline in Q2 2026 total revenue - Low-altitude logistics expansion is dependent on access to local airspace management approvals, landing site resources, and local supporting industry infrastructure, which may limit the speed of replication to new markets

Analyst Q&A

• Q: What is the implication of the recent industry anti-racing (anti-price-war) self-discipline convention that FlashEX signed, and what impact will this have on order volume and industry pricing? /

  A: The convention signals the industry is maturing, shifting competition from price-driven subsidy wars back to service quality, which aligns with FlashEX's longstanding strategy focused on reliable fulfillment. FlashEX's dedicated single-order model aligns with this new competitive landscape, as it does not pit rider and user interests against each other. The company saw 8.9% QoQ order growth in Q2, and expects rational industry competition to support continued expansion of its service scenarios, with no plans to shift core focus from reliability to short-term pricing moves.

• Q: Can you provide more detail on drone delivery growth, your expansion roadmap outside Hangzhou, and the cost impact of combining drone and AI deployment? /

  A: Q2 drone order volume grew 169.3% QoQ across 22 active routes, with the new cross-river commercial route in Hangzhou cutting delivery time in half at standard pricing for time-sensitive, high-value orders. The company is currently focused on refining operational safety standards and a scalable cost model in Hangzhou first, as expansion depends on local airspace and infrastructure access. Unit economics are expected to improve as route density increases, while AI deployment already lifted operational efficiency by ~30% in Q2 across core functions, with further medium-term operating expense improvements expected as AI adoption scales.