ZKH Group Limited (NYSE:ZKH) shares soared 21.34% in pre-market trading on Friday after the company reported a major improvement in its second-quarter performance, including its first-ever operating profit.
Adjusted earnings reached $0.04 per ADS, reversing a loss of $0.23 per ADS in the corresponding period last year. Revenue climbed to $360.2 million from $302.1 million in the second quarter of 2025, representing year-on-year growth of 12.8%. Revenue also increased 12.8% when measured in RMB.
ZKH swings from net loss to profit
The company recorded a GAAP net profit of RMB26.7 million for the quarter, marking a substantial turnaround from the RMB53.5 million net loss reported a year earlier.
“The second quarter marked an important milestone in our earnings trajectory, as we achieved operating profitability for the first time,” said Jerry Qian Wang, Chief Financial Officer. “This achievement was underpinned by our continued scale expansion and stronger operating leverage.”
Operating profit reached RMB4.0 million, compared with an operating loss of RMB72.0 million in the second quarter of 2025.
On a non-GAAP basis, adjusted net profit improved to RMB38.5 million, reversing an adjusted net loss of RMB36.5 million in the prior-year period.
Gross merchandise value climbs nearly 19%
Growth across ZKH’s customer base helped support the improvement in profitability.
Gross merchandise value increased 18.9% year on year to RMB2.88 billion, reflecting deeper penetration across both small and medium-sized enterprise customers and major corporate accounts.
GMV generated from SME customers climbed approximately 30% from a year earlier, while industry key accounts and central state-owned enterprises continued to produce double-digit growth.
The stronger volumes demonstrate continued expansion across ZKH’s customer segments and helped generate greater operating leverage as the business scaled.
Gross margin improves as operating expenses decline
Gross profit increased 20.3% year on year to RMB429.6 million, outpacing revenue growth.
Gross margin consequently expanded to 17.6% from 16.5% in the second quarter of 2025, providing another important contribution to the company’s move into profitability.
ZKH also maintained tighter control over costs. Operating expenses declined 0.8% year on year to RMB425.6 million and represented 17.4% of net revenue, compared with 19.8% a year earlier.
The combination of double-digit revenue and GMV growth, higher gross margins and lower operating expenses enabled ZKH to achieve operating profitability for the first time, prompting the sharp positive reaction in its shares ahead of Friday’s opening bell.