ZKH Swings to Profit, Touting AI and Global Push in Strong Q4 Finish

SHANGHAI – March 19, 2026 – ZKH Group Limited (NYSE: ZKH), a major player in China's industrial supply sector, announced a significant financial turnaround, posting a net profit in the fourth quarter of 2025 and signaling that its strategic pivot towards efficiency and technology is paying off. The results, which capped a year of narrowing losses, were driven by accelerated sales, an enormous expansion of its customer base, and the deep integration of artificial intelligence across its operations.

The Shanghai-based Maintenance, Repair, and Operations (MRO) procurement platform reported a net profit of RMB4.8 million (US$0.7 million) for the quarter ending December 31, 2025. This marks a sharp reversal from the RMB29.1 million net loss recorded in the same period of 2024. On a non-GAAP adjusted basis, the company posted a profit of RMB14.9 million, further underscoring the improved earnings profile.

"In the fourth quarter, we achieved accelerated year-over-year GMV and revenue growth and returned to profitability, closing the year on a strong note," said Eric Long Chen, Chairman and CEO of ZKH. "This performance marks the start of a fundamentally healthier, more resilient growth phase for the Company."

The Path to Profitability

The fourth-quarter profit appears to be the culmination of a year-long strategic effort rather than a one-time event. For the full fiscal year 2025, ZKH significantly reduced its net loss by 47.9% to RMB139.7 million from RMB268.0 million in 2024. This progress was built on a foundation of steady growth and disciplined cost management.

Fourth-quarter net revenues rose 7.9% year-over-year to RMB2.56 billion, while Gross Merchandise Value (GMV), the total value of transactions on its platforms, grew 8.5% to RMB2.92 billion. This top-line growth was achieved alongside enhanced operational efficiency. For the full year, operating expenses fell by 8.7%, with fulfillment expenses alone decreasing by 7.5%, which the company attributed to lower warehouse rental costs and optimized staffing.

However, the path forward requires navigating some complexities. The company's gross margin in the fourth quarter declined to 15.5% from 17.1% a year earlier. ZKH attributed this primarily to changes in product mix and a lower revenue contribution from its marketplace model, which has a higher margin profile. This was partially offset by a growing share of sales from its higher-margin private-label products, a segment the company is actively cultivating.

The AI Engine Driving Efficiency

Central to ZKH's strategy is its aggressive adoption of artificial intelligence, which is being deployed to automate processes, drive sales, and enhance productivity. The company is positioning itself as a technology leader in the traditionally low-tech MRO industry.

In 2025, ZKH launched "H-Nimble (行家玲珑)," which it describes as the industry's first vertical large language model for MRO, designed to provide expert-level assistance. The company also revealed it has deployed more than 5,000 robotic process automation (RPA) "digital employees," a force that now exceeds its human workforce. These bots are handling a substantial volume of routine tasks, freeing up human staff for more complex work.

The commercial impact of this AI investment is already becoming clear. An application named the ProductRecom Agent, which uses AI to recommend products to customers, generated over RMB200 million in cumulative sales during 2025. Furthermore, the company reported that its AI Smart Workbench improved productivity for customer service and procurement roles by approximately 45% and 50%, respectively.

"Our ongoing investments in AI are already delivering measurable commercial impact and meaningful productivity gains across our operations," Chen stated in the announcement.

A Surge in New Customers

A massive influx of new customers, particularly from the small and medium-sized enterprise (SME) segment, was a key driver of ZKH's performance. The company's total customer count for the year skyrocketed by 85.6% to 155,829. In the fourth quarter alone, the number of transacting customers grew by nearly 60% year-over-year to 73,803.

This focus on SMEs appears to be a strategic move to capture a large and often underserved market. These smaller businesses typically lack sophisticated procurement departments and benefit from ZKH's digital, one-stop-shop platform, which simplifies the complex process of sourcing industrial parts and supplies.

To serve this expanding base, ZKH has dramatically broadened its product catalog. The company added more than 5.7 million new sellable SKUs during the year, bringing its total to approximately 23 million items. At the same time, its private-label products, which offer higher margins, grew to represent 8.3% of total GMV in 2025, up from 6.7% in the prior year. CFO Max Chun Chiu Lai highlighted that this, along with the expanding SME base, is "strengthening our margin foundation."

Charting a Global Course

While solidifying its position in China, ZKH is also accelerating its international expansion. The company is capitalizing on the trend of Chinese manufacturers setting up operations abroad, following its key clients into new territories.

This global push showed significant momentum in the fourth quarter, with the international business delivering approximately 50% sequential GMV growth and a 20% increase in its customer count. The company's global fulfillment network now extends to 17 countries, with management previously noting strong growth in the U.S. market and plans for a European entry.

This expansion is not without challenges, including navigating complex international logistics, geopolitical uncertainties, and adapting to local market demands. However, ZKH's early success suggests its model of providing a tech-enabled, cost-efficient procurement solution has a strong appeal beyond its home market. The company's ability to leverage its proven platform and AI capabilities will be critical as it seeks to build a resilient and sustainable foundation for future global growth.