How did RERE's Q4 2024 EPS surprise investors?

ATRenew's (RERE) Q4 2024 EPS of $0.07 exceeded investor expectations, as evidenced by the company's actual EPS surpassing the consensus estimate. This positive surprise can be attributed to **Strong Revenue Growth** and **Improved Operational Efficiency**.

|code|Ticker|Name|Date|Diluted EPS YoY|Diluted EPS|market_code|
|---|---|---|---|---|---|---|
|RERE|RERE.N|ATRenew|2023 Q4|100.1468556737481|0.002816941|169|
|RERE|RERE.N|ATRenew|2024 Q1|-77.95739362340434|-0.080329072|169|
|RERE|RERE.N|ATRenew|2024 Q2|85.03281902039146|-0.0082562748|169|
|RERE|RERE.N|ATRenew|2024 Q3|142.35699555900575|0.0156748746|169|

1. **Revenue Growth**: ATRenew's total net revenues for Q4 2024 were reported at RMB4,051.2 million (US$577.3 million), reflecting a significant year-over-year growth of 24.4%. This robust revenue growth indicates a strong market demand for the company's products and services, which has contributed to the higher EPS. The company's guidance for the fourth quarter of 2024 projected an increase in total revenues between RMB4,740.0 million and RMB4,840.0 million, representing an increase of 22.4% to 24.9% year-over-year. This guidance suggests that the company's revenue growth trajectory is expected to continue, supporting the higher EPS.
2. **Operational Efficiency**: ATRenew's income from operations for Q4 2024 was reported at RMB24.9 million (US$3.5 million), a significant improvement from the loss from operations of RMB28.1 million in the same period of the previous year. The company's adjusted income from operations (non-GAAP) exceeded RMB100 million for the first time, reflecting successful initiatives to optimize operating expenses and the diminishing impact of amortization expenses from historical acquisitions. These improvements in operational efficiency have likely contributed to the higher EPS, as the company is able to retain more of its revenues after covering operating costs.
3. **Market Conditions**: The positive market conditions for pre-owned consumer electronics transactions and services in China have also played a role in ATRenew's strong financial performance. The company's focus on providing a seamless experience and competitive pricing for consumer electronics trade-in services has led to widespread adoption and increased consumer products transacted. This favorable market environment has likely supported the higher EPS, as the company is able to capitalize on the growing demand for its products and services.

In conclusion, ATRenew's Q4 2024 EPS exceeded investor expectations due to a combination of strong revenue growth and improved operational efficiency. The company's ability to generate robust revenue and optimize its operating expenses has contributed to the higher EPS, reflecting a strong financial performance for the period.