ZKH Group Ltd. (NYSE: ZKH) has released its financial results for the first quarter of 2026. The MRO procurement service platform reported revenue of 2.114 billion yuan, marking a 9.2% increase compared to the same period last year.
The company's Gross Merchandise Volume (GMV) for Q1 2026 reached 2.45 billion yuan, a 12.9% rise from 2.172 billion yuan a year earlier. Within this total, GMV from the ZKH Platform was 2.184 billion yuan, up 11.1% year-over-year, while GMV from the GBB Platform surged 30.6% to 269 million yuan.
A significant milestone was achieved as ZKH Group recorded an adjusted net profit of 1.69 million yuan for the quarter, marking its first profitable Q1 on an adjusted basis. The MRO industry typically experiences seasonal fluctuations, with the first quarter often being a low point due to the Lunar New Year holiday and winter shutdowns in northern regions. Achieving profitability during this traditionally slow season strengthens the company's path toward full-year profitability. From a financial model perspective, this indicates the company has transitioned from a phase prioritizing scale investment to a cycle balancing both scale and profitability.
**Financial and Operational Highlights**
ZKH Group's Q1 2026 revenue of 2.114 billion yuan (approximately $306 million) represented a 9.2% increase from 1.935 billion yuan in Q1 2025. Revenue breakdown shows the ZKH Platform contributed 1.8 billion yuan, a 7.4% increase, while revenue from the GBB Platform grew 25.8% to 259 million yuan.
The company has set a clear goal for 2026 to "build full-stack AI capabilities for the industrial supplies industry," advancing the systematic application of AI in industrial scenarios to construct a technological moat. At the data infrastructure level, ZKH Group is enhancing its "ZKH Data Dictionary" and industry knowledge graph capabilities to promote the standardization and scenario-based upgrading of MRO data. The company plans to launch an industry knowledge graph covering billions of industrial supplies items in 2026 to facilitate AI understanding and application in complex industrial settings.
In terms of large language models, ZKH Group's self-developed "Xingjia Linglong" vertical MRO model is undergoing continuous iteration, with upgraded multimodal capabilities. The company has launched "Xingjia Huiyan," an intelligent visual search engine for industrial supplies, which uses image recognition technology to quickly identify material types and specifications, combines this with scenario analysis for demand diagnosis and intelligent product selection, thereby improving procurement efficiency in complex industrial environments.
On the tools and application front, ZKH Group is building an AI developer platform for industrial supplies and implementing an "AI Digitalization for All" plan to empower business teams to develop AI tools independently. Over 60 AI agents and RPA robots were launched in Q1, saving over 2,000 man-hours monthly. Concurrently, the IT team's R&D efficiency continues to improve. The company aims to increase the proportion of AI-generated code from the current 30% to 80% in 2026. ZKH Group has now established an integrated AI application system covering core business areas such as products, sales, operations, and customer service, forming a matrix of AI agents including AI inquiry & quotation, AI material management, and AI product recommendation engines.
**Customer and Market Development**
The number of transacting customers in Q1 2026 reached 66,000, an 11% year-over-year increase. GMV from small and medium-sized customers on the ZKH platform grew by over 20%. GMV from central state-owned enterprise clients, which had previously faced pressure, returned to double-digit growth, indicating a clear recovery in procurement demand from large enterprises.
Among key industry clients, the four core sectors of electrical manufacturing, communications & electronics, new energy, and metals & mining all achieved GMV growth exceeding 20%. The company is also expanding into emerging and high-growth industries such as semiconductors, energy storage, optical modules, and robotics, with coverage of leading clients in these fields steadily increasing. This demonstrates a sound strategic balance between deepening relationships with major accounts and securing positions in new growth sectors.
The GBB Platform maintained rapid development, with GMV growing over 30% year-over-year. By serving sub-terminal distributors and micro-enterprises with a standardized, e-commerce model, it complements the main platform, extends service reach, and injects new momentum into group growth.
On the supply side, ZKH Group has built an industry barrier characterized by "one-stop service and high specialization." As of March 31, 2026, the number of platform SKUs increased from 23 million to 27 million, meaning the platform can cover the long-tail procurement needs of the vast majority of industrial enterprises. GMV from own-brand products grew over 20%, with their share rising to approximately 9.7%. Over 400 new products were launched in Q1, covering scenarios like personal protection, tools, cleaning, and office supplies.
Distinguishing itself from general industrial supplies platforms, ZKH Group states it focuses on high-barrier, highly specialized core MRO segments based on years of experience in manufacturing. During the quarter, the company intensified product capability development in ten key product lines, including Factory Automation (FA), electrical automation, pumps/pipes/valves, and cutting tools. The launch of the FA Mall integrates capabilities across the entire chain, including massive component supply, intelligent selection, 3D model downloads, and technical support, directly addressing industry pain points like difficult selection and high entry barriers in traditional FA procurement. Categories like FA and pumps/pipes/valves typically have high knowledge barriers and are difficult to standardize, making them hard for competitors to replicate quickly. Deepening expertise in these "core" areas differentiates ZKH Group from general industrial e-commerce platforms, creating a distinct competitive barrier.
Overseas business emerged as a significant highlight this quarter. Management noted the company is advancing a dual-track strategy: "serving Chinese manufacturing going global" and "developing local business in the United States." For 2026, the overseas business will focus on investment efficiency alongside expansion, with the goal of achieving a full-year break-even.
**Costs, Expenses, and Profitability**
Total costs and expenses for Q1 2026 were 2.136 billion yuan, a 6% increase from 2.017 billion yuan a year ago. Cost of revenue was 1.76 billion yuan (approx. $255 million), up 9.8% year-over-year.
Gross profit was 354 million yuan (approx. $51.3 million), a 6.6% increase from 332 million yuan. The gross margin was 16.7%, compared to 17.2% in the prior-year period.
Total operating expenses were 377 million yuan (approx. $54.6 million), down 8.8% from 413 million yuan. Breakdown of operating expenses: * Fulfillment expenses: 77.6 million yuan, down 16.8%. * Sales and marketing expenses: 138 million yuan (approx. $20 million), up 0.6%. * Research and development expenses: 29.3 million yuan, down 25.9%.
The company reported an operating loss of 22.5 million yuan for Q1 2026, with an operating margin of -1.1%. On a Non-GAAP basis, EBITDA was 4.24 million yuan, a significant improvement from a loss of 52 million yuan in Q1 2025. The Non-GAAP EBITDA margin was 0.2%, compared to -2.7% a year earlier.
Net loss for the quarter was 10.1 million yuan, narrowed substantially from a net loss of 66.7 million yuan in Q1 2025. The net loss margin was 0.5%, improved from 3.4%. As highlighted, adjusted net profit was 1.69 million yuan, turning positive from an adjusted net loss of 50.2 million yuan in the same period last year. The adjusted net profit margin was 0.1%, versus -2.6% a year ago.
As of March 31, 2026, ZKH Group held cash and cash equivalents, restricted cash, and short-term investments totaling 1.84 billion yuan ($266.1 million), compared to 1.92 billion yuan as of December 31, 2025. Net cash used in operating activities for Q1 2026 was 34 million yuan ($4.9 million), compared to net cash used of 97.1 million yuan in Q1 2025.
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