Full Truck Alliance (YMM) 22 May 232023 Q1 Earnings call transcript

Ladies and gentlemen, good day and welcome to Full Truck Alliance's First Quarter 2023 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mao Mao, Head of Investor Relations. Please go ahead.

Thank you, operator. as discussion performance, forward-looking qualify which Safe from today’s the relating for that U.S. Harbor future the company’s are liability, note will statements contain to the Please by established intended to Private Securities Reform Litigation Act.

performance statements to are and factors. certain Such assumptions subject uncertainties, and of and not guarantees other are future risks

today’s actual differ materially from of are the beyond to Some and company’s control mentioned results in press these risks and release discussion. could cause those

affect SEC. of FTA’s included any discussion A does forward-looking the as by this results of that could information, not update and risk is required business general law. in the factors financial company The undertake filings certain to except with obligation the company

for only. During comparison today’s management financial purposes also call, will discuss certain measures, non-GAAP

of a today. For non-GAAP earnings non-GAAP GAAP to see and results, earlier release issued financial of measures, financial reconciliation please the a definition

Mr. Zhang, session. Management Mr. Joining Chairman the and us management remarks, Q&A prepared conclude senior today call and are Cai, FTA’s and on will call with Founder, our begin from with Simon a our Hui the CEO, will CFO.

As a conference reminder, being recorded. this is

ir.fulltruckalliance.com. addition, In replay call at this be on webcast FTA’s website relations of available investor will a

Chairman, I sir. call to will and go over now Please CEO, our turn Zhang. Founder, Mr. the ahead,

joining [Foreign quarter for Hello conference Language] everyone. our Thank us first call. on today you of XXXX earnings

of pandemic activity kick-off XXXX, Festival to in economic the Spring January. strong boosted growth sizable as particular, subsided. In We in quarter are we another the to pleased China’s rebound experienced following deliver pick-up by a

businesses rapid and further the model, in of monetization truckers way and the our goals. paving shippers business The achievement long-term sustainable the for unique improved across illustrating efficiency and among our strategic our expansion our user our appeal growth of business accelerated while first quarter, activity

our at look detailed a quarter first Now, Language] performance. [Foreign

and from direct the X.XX MAU high orders peak user million fulfilled jumped by up XX.X% reached average and million, year-over-year, the shipper daily number with during to an high-quality and fulfilled orders shippers. The increasing XX.X and quarter. XX.X% contribution numbers Our historic active respectively, of an

Beyond that, our again once beat the and line line top both market first in expectations quarter. bottom

revenues XXX.X% income year-over-year RMBXXX.X the grew to measures, billion, million RMBX.X net by first surged our non-GAAP by net total adjusted year-over-year quarter. Our in to and XX.X% under

[Foreign during interests of Language] and rights Given company’s users’ to develop made to always our priorities, and the user one significant that we strengthen the mechanism quarter. are user our further experience systems improve rating hierarchical top efforts

create boost continue we our matching efficiency implementation to and for Going user quality truckers simultaneously stickiness. strategies, while order the forward, more of believe operational we accelerate our revenue will will which enhancing

[Foreign and products the user long-term freight bolster to allocation, growth activity and for in the greater our of Language] and at services of process, capacity stable management, volume. the reinforce, active acquisition plan more consistently on our company of user advance the platform, stickiness and year, both users shippers, and Looking positioning the strategies, the for implement we enrich scale direct of rest to and the our users advantages, competitiveness of same freight the prioritizing operational and scale are value rate its refining and its in time, healthy freight matching, goal terms core our expansion for and building creating platform. At platform’s a ecosystem harnessing we freight with our

XXXX, XXXX, XX, our continue buybacks. sluggish share in repurchase in Even through provide Pursuant March program. as and from [Foreign the aggregate share environment, for development May shareholders are about of approximately market. we the will to repurchase strategy, open Language] had current approximately optimistic market we repurchased vision share million US$XX.X the ADS company’s capital update our million announced to reward our Next, I’d program like on in million to X.X an US$XXX long-term and

Wenjian new Dai for his Strategy personal Guo, Mr. today, we former earlier of position company’s Lastly, of a member as Language] Langbo [Foreign resigned a our Mr. the Directors our from Board. reasons. announced Chief to was and in Board change company. of Officer, business assume to the Guo a back-office simultaneously greater promoted as President Mr. middle to certain appointed fill will functions our was director responsibilities vacancy, and operations. of the and

years Mr. Ms. our to sincere value would in Ma, Board, Mr. compensation will take his forward current Guo to invaluable for of the gratitude adding Guizhen and director contribution our a his our committee. Dai previous to We over most Mr. member responsibilities as FTA to over like Dai’s of new great the look express position.

to progress ahead. Thank call our Simon results over our the you, and Simon, more elaborate I operational and to CFO, With quarter go detail. on financial over in turn for the everyone. please further more will that, go

Zhang, Mr. you, I thank I first of then operational key would everyone quarter on us to call. our financials. all highlights and joining for like brief overview you. earnings hello will of a with and Thank today our to start provide XXXX

monthly the the a down if exclude first Year our low outpacing New in platform’s showed our during year-over-year Chinese XX.X% volume expectations. by order upward trend grew month-over-month. the orders quarter, fulfilled data, the demand period, steady we Our Breaking

volume rebound in which It more performance activity. worth exceeded In March, engagement, mainly ongoing to in This the increased a scale levels. of high. is even truckers’ attributable we a marking mentioning XX% user was for month significant better-than-expected particular, pre-pandemic improvements noted that by than record our order and

we transportation Transportation of costs pandemic’s into On top the the year. details. dig that, past of eased over resumption user to observed for new impediments of impact me truckers Let the largely last the the has decreased were during as six months eliminated. registration shortage and the truckers quarter alleviated

Thanks enhance improve. new rate optimizations level engagement acquisitions, our as initiatives and user designed user product continued to user well new to to as retention and experience, our effective

due also We past some the the undergone have has landscape noticed industry’s two that over pandemic years. the competitive major to changes

looked inaccessible models offline during truckers have for to and and a pandemic, number back. of turned As and the users transactions growing inefficient became shippers online not

of position have the market transportation pronounced. significantly, the more in share our our result, network increased market spot has market a leading FTL become As effects and

fulfillment improving hugely to matching our has The easier recovery [ph] in to [carrier much for Turning find robust efficiency. it truckers, supply] rate. made shippers

for rate average record Our quarter-over-quarter In us. historical XX%, points. points percentage reached and of increase a year-over-year March, X reached X percentage fulfillment the increase XX%, the quarter another of a for fulfillment rate first

from The Furthermore, others minutes. to reduction our quarter, also surged matching the our first overall order to matching as X based the in time median reflects first highs, of improvement. digits efficiency models record about entrusted non-negotiation efficiency. year matching our matching and the returned shipment improving contribution tap-and-go, such levels, transactions, in quarter, during to falling elevated a time After freight single

record-breaking China’s very achieved macroeconomic uncertainty prospects We and confidence to performance further amid long-term resilience have of our recovery, our high low a and macroenvironment. growth pleased in sustainable economic are strengthening

the on year-over-year. our the first moving We during strong [ph], user our strategically base further to scale Now, the quarter quarter, shipper fourth on million] to driving capitalized momentum to the year our of growth up average quarter approximately broaden users. XX% first from last [X.XX MAUs

non-paying MAUs the last year-over-year, user further number bases average of Expansion composition. by both high. member shipper In first reaching XX%. reached acquisition quarter, since contribution and resulted optimization by non-member all-time has of also percentage X an user and points in increased of members user resumption fulfilled million, year our March XXX of the members the orders from XXX our X

the XX%. average quarter Notably, first was close members’ fulfillment in to our rate XXX

platform’s in rate shippers expect continued from Going improvement forward, as we to low fulfillment our increases. medium contribution overall order frequency

active million] trucker trucker first [ph] the MAUs increased quarter, On orders XX our [X.XX the average year-over-year in more with in to past orders by truckers side, responding the than XX% months. fulfilling

we our shipper and attracted our of stores truckers members and also boost exposure of App Additionally, video position, online and various who increased amplifying efforts remained users sales retention around high media and leading a sizable our To XX-month as new further result. at our team, of high-quality next-month our to rate via recognition marketing brand number platforms orders such responded rolling short retention a and while through XX%. our local offline promoted as

existing to huge of platform. with plan direct Accordingly, and to more support China’s greater stickiness composition a users, to members. with ways users, significant our a appeal development, invest more we community particularly SME among to members, our explore believe new direct We offers XXX goal shipper XXX opportunity innovative add user shippers, our our high-quality and of SME the optimizing proportion increase to resources

trucker on After trial system. look just growth months, period the a a covers announced Now, five at all program growth last quarter our we our platform. over of quick trucker now truckers

early rights certain to program, part with truckers information. to qualified of As high-quality access freight introduced we priority this

which recognition gain immediately to truckers. the the continues users Our new of embraced feature, wide

driven with an year-over-year. by million increase from number transaction Last, to commission of This an Revenue growth was sustainable increase robust orders per let’s primarily quarter, our in combined our in online this growth order. turn XX.X% commission fulfilled of representing the model our reached RMBXXX services.

different a transactions through in RMBXX.X. We small of commission cities. of and are us, strategies the testing group XXX model an transaction covers of XX% with The commission now fulfilled nearly cities per average also selected

a financial results. would our quarter provide I to Now, first like of overview brief XXXX

the of revenues attributable increase XX.X% representing year-over-year, an an of total to Our net primarily increase were first revenues from matching in quarter freight in XXXX services. million, RMBXXXX.X

an first in increase including fees in XX.X% listing RMBX,XXX.X services, fees membership growth commissions. continued transaction revenues in from primarily from Revenues from online to and service well an of from freight services, the service models, freight brokerage models, as matching were transaction commissions brokerage from million as due year-over-year, representing increase freight quarter,

in year-over-year, of to to up freight were Revenues increase result the in paying in first the quarter million, million, from first RMBXXX.X service were RMBXXX.X growth total XX.X% year-over-year, user coverage. brokerage due in members. continued primarily primarily XX.X% as up freight Revenues attributable from freight a an volume listing expanded service quarter

transaction revenues increase services million, credit million services. value-added an driven in as the an other in attributable well XX.X% Revenues quarter RMBXXX.X from primarily by transaction of from to to order first order. Revenues volume, in and up quarter, an first from up XX.X% the year-over-year, solutions commission commissions mainly uptick per were in value-added as amounted year-over-year, increase RMBXXX

with in VAT, in increase surcharges year-over-year, RMBXXX.X from refunds representing million to costs, first activities other period Cost of of a million, revenues year. the freight continued refunds RMBXXX.X same increase The to tax-related an brokerage These tax net RMBXXX.X increase was costs the in authorities. quarter net of an government transaction and primarily service. our in last tax XX.X% due was due compared totaled related tax increase involving of primarily million,

due million, marketing the an the in RMBXXX.X primarily and General period last same to million, RMBXXX.X decrease first lower in acquisitions. administrative primarily were compensation with user the and first million in million expenses last compared the was year. and quarter year. RMBXXX expenses increase to in marketing Sales period due quarter RMBXXX.X increase were The expenses. compared advertising for The in expenses share-based with was same

the with R&D salary due RMBXXX.X first benefits compared were the quarter the first was last loss last compared in million year. RMBXXX.X the last same million, expenses from quarter a in quarter to RMBXXX the a same compared was of was year. and in in first expenses. The same higher Overall, million, year. RMBXXX.X income period of with with RMBXXX.X million net primarily increase operations period income the period in million, loss Net the million in RMBXXX.X

year. RMBXXX.X Under quarter was period non-GAAP XXX.X% an our last same from first in in operating increase the million adjusted RMBXXX.X the income measures, of million,

Basic per Our and last the quarter income in RMBXXX.X loss same million, XXX.X% year. adjusted quarter, with first diluted million the net from an the period year. RMBXXX.X income net ADS RMBX.XX of and increase was in first in compared of basic were period same per diluted ADS net for last RMBX.XX the

RMBX.XX with compared Non-GAAP in diluted the adjusted last same first the and ADS period RMBX.XX quarter, net year. were income basic in per

of billion and RMBXX.X the compared XXXX. company RMBXX.X of in and total, December first as As cash RMBXX.X deposits million. restricted March short-term billion XXXX, cash cash, XX, XX, of net had operating equivalents, In long-term the investments in cash provided XXXX, of quarter was with activities

reasonable representing billion, rate we the views second total to of expect outlook year, market RMBX.XX net preliminary company’s year-over-year accuracy and are of and operational as conditions, revenues between Looking and the hereof. forecasts current subject our the to for to with reflect date and which at of quarter XX.X%. this These the predicted a change business billion be cannot approximately on XX.X% growth RMBX.XX be our

would like concludes the to our We now prepared call remarks. Operator, to That Q&A. open

ahead. go please

Keung Thank with first you. go [Operator Today's Ronald Instructions] ahead. from Please comes question Sachs. Goldman

[Foreign the quarter, orders than Language] macroeconomic we fulfilled saw year-on-year, so freight Thank market over first grew you management. recovery. much XX% and In the broader faster

fulfill reasons order you. we behind expect how drivers second are trend to main the Thank the growth that? quarter? the should So, what And in

growth grew think our in address English directly. than increased we're repositioned mainly our platforms, I services. the Thank have very you, from past the quarter. see we rapid matching the We Ronald. I faster as in freight Q&A in the our came market believe broader that in market market FTA orders online consolidated Overall, share pleased market remainder we will the all much trade

online. spot number to strong the the have interviews, online. current impact of in market] condition, market the to perhaps growth offline and due [transportation was was users we refer in quarter of and from observed that that FTL First, in primarily two Throughout migrated in both a learned more eased The user pandemic's other [ph] largely we shippers truckers transact importantly, first the considerable to have volume the And quarter longer restrictive. no have second, factors: truckers travel first

other has freight increased as this leader in to matching, from of market with offline the compared benefit freight we services, the we significantly and In most online the going market forward. share words, expect the matching continue it trend obviously online matching

year, mid-last in efforts continued paid also have since been user Internally, off. acquisition our

fulfilled mostly expect number are from and shippers year who frequency this shippers In the orders. rising. XX% contribute are and quarter, low-to-medium users keep those frequency that orders who shippers roughly XX% small-to-medium the first direct quality a roughly we high to from increased number new came about ago and typically Our of

our In and addition, enhance capabilities we to the continue matching algorithm.

the overall quarter, of infrastructure destination as numbers. take potential origin disputes. our accurate to platform That boost down first the coverage and address address the during and example, orders, broadens street improved and willingness truckers capabilities to as For we well shipment, reduced fulfillment

in to the When number expect number rapid we fulfilled XX% second look maintain of into of the increase and about to orders the growth the second orders and quarter we fulfilled momentum we the quarter, expect year.

management. you Thank

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in increase target quarter-over-quarter, [Foreign rate for Language] quarter marks reasons and increase second first main the the The what's significant and the a fulfillment what rate XX% fulfillment are year-over-year the both behind Thanks. quarter? your

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on impact behalf [ph] in will requires shippers its FDA reign we for cash forward. flow manage growth wait and lastly, rate considering to that freight a And to carefully refund, payments] brokerage to the of going [DAT advance on

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over Thank to you. question-and-answer additional And to that back turn the comments. session. I any for would concludes closing or like the management conference

you us again today. for Thank once joining

any directly to at have feel you Investor us further Relations. or If Truck TPG Full contact questions, Alliance free please

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