EM - Earnings call transcript Q1 2024 | Smart Share Global Limited

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Operator

Hello, and thank you for standing by for Energy Monster's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi. Please go ahead.

Hansen Shi

Thank you. Xst conference XXXX our to quarter call. earnings Welcome

today Cai, Officer; Energy me Maria on Chairman Mars call the Officer. Executive Joining Monster's are and Chief Financial Xin, and Chief

updates, today's operation the For quarter XXXX. of will management discuss first highlights financial performance agenda, and for business

Please the call call continue, you measures. as comparable a release, non-GAAP make statements. Also, this in we discussion earnings we release, of which financial safe harbor measures. to GAAP measures will to Before press our applies includes which certain of I reconciliation directly statement to refer our earnings refer to this forward-looking most the contains non-GAAP

over Finally, Mars call please RMB. I to business would for stated, all that call and otherwise like the highlights. are our Executive Chief figures to mentioned Cai, and Chairman Officer, in unless during operation now this the note turn

Mars Cai

everyone. Hansen. quarter much, very earnings you Good call. Xst Thank to day, our XXXX Welcome

the last period This year-over-year compared of our period of increase. the robust a XXXX, by significant The increasing year-over-year XX% in was the economic XXXX the slight same growth and with particularly to our strong quarter stable highlights environment. our the Chinese showing mitigating effectiveness a remained performance daily continued the adaptability resilience This Year post-pandemic GMV During in first and [hurdle] holiday during recovery with activities is season year. consumer New to strategic testament GME initiatives.

March, slight which in seasonal in attribute a competency. and experienced consumption decline we However, decline we fluctuations to

general consumption. tier, and reflecting slight first in second-tier in tier cities In the a terms decline of by experienced GMV, city performance softness

are and increased observed in adoption lower of we increasing presence our in service. was seeing However, our tier cities, growth where

growth localized segments and by saw public in looking and locations education year-over-year as POIs lower showed XX% markets. When This into and an a of this and Conversely, respectively. fastest broadening of strategies city This our we continue the a stale time, XX%, declines. the diversification achieve demonstrates in a XX%, year-over-year XX%, expansion to tier care, with transportation, encouraging quarter increase saw growth X% effectiveness user potential entertainment, intact these the cities environment, of third in demand Specifically, lower-tier cities increase. tier hotels and a due segments usage our into softer new a high performance Despite sectors. scenarios to it indicates is shopping milestones. health and slight consumption operational in base

our scale registered expanded successfully have POI cumulative a record for reached remarkable users. We a and milestone million to high over XXX coverage

increase our POI user expansion quarter Our as availability XX,XXX network over saw important it X.X our this service net of bringing POIs total convenience. and This a POI count enhances to is million.

towards Additionally, we To model model of on to the we this, strategically partner performance core model based network review the have do operational traffic. the POIs our user portfolios. one rebalanced direct and maintaining each every current while model, direct our continue of

benefits for the quarter As our economic pandemic. the of a term. Notably, quarter our This anticipated portion economy these this optimizing of to evaluation, fifth in maximum network the partners, transition of since to deliver this is effectiveness. transitioned a consecutive portfolio non-GAAP marks we've POIs profitability for result substantial long

in charging value growth. initiatives our providing our stability remain sustainable commitment as stakeholders continue Our remain healthy, sectors mobile to our cash as opportunities we to in us about optimistic future to Overall, prospects drive future to equivalents of the device and in and are all delivering with cash China. strategic the investing the financial well steadfast

me in Now key walk our through and let initiatives in greater details. coverage improvements you expansion efficiency

untapped potential regions see categories. is in network by immense we to driven commitment Our POI POI expanding and our the

POIs. expansion a net This of the network, POI our to we new of quarter, made XX,XXX adding progress

way balanced approach our of well a partner model our our leveraging direct achieved growth through for but terms model In KAs. network with primarily, as models, was

bank care were Health New substantial entertainment, and POIs buildings quarter-over-quarter around added primarily office hotels. shopping, in POIs growth saw of with X%. and increase

quarter areas into now nearly covering We also this X,XXX expanded new cities. county-level XX county-level

base. base cumulative The growth users. million Our XX.X meet our increasing across that network to increased POI of the ongoing substantial growing service testament services. reaching of million, needs ensuring our strategy over the our expansion a by strategies availability is expansion of part our user we regions, for of is XXX.X our user diverse broader a demand and to the enhance effectiveness user This

transition precision, of transition Our carefully with with to being executed the is balancing network rate quality. model partner

profitability. POIs We new the reducing core strength of of key through challenging replacing maintained expansion by network efficiency environment, POI and expansion. partner on have coverage and for we model. Despite the ensures of the momentum operational optimizing the drive emphasize acquisition accounts models and underperforming model our leverage consistently are to instead strategy our that the we direct This expansion both

network step is penetration network in partner of however, as in model. in continued of and service had model compared at same operations, seamlessly market higher-tier across partners offers distinct network end model enhancing comprehensive to and The execution locations POIs The adjustment development the particularly location advantage reach. regions and partner in than yield end last model network XXXX. growth the of acquisition more high-quality X,XXX all new since are strength. This quarter We year-over-year. complementing our XX% the cities in the XX,XXX of by affected this time a active direct for the direct year last adding in over and XX% not, swift our direct the year XX.X% our KAs. Meanwhile, of high service model's network network partner a XXX partners is end of coverage partner and and With pivotal providing reached the to just first partner partners,

is dedicated team upon unlocking and committed potential Our each full partner hands-on onboarding, the to guidance. of network partner providing timely

assistance for everyday their the support receive necessary network partner team partners Our ensures operations. that

this dedicated support support to to network improve continue to polish partners through one more and each the our We partners. and our of quarter we provide

We day-to-day can direct questions We the to our us between to our a of team. inquiries so capabilities be the channel more quickly. network that set have addressed for plan more or continue partner drive network up and communication service partners

Going network order forward, under the partner in model. advantage a competitive stronger develop to

also training, launched network partners. system for exclusive services, been award We their an experience by have services received partners, incentives which VIP system their our motivating regular well offering support and loyalty, and enhance includes to development. This performance

low direct We ensuring optimize and and POIs remains our underperforming network continue model, to efficient. that robust and efficiency our

focused and cities on high-tier direct KAs our to team Our major enhance a brand sales influence.

user sectors, with groups tourism across These visibility in and grocery various are expanded shopping stores, leading engagement. instrumental chains boosting such partnerships as team KA our and quarter, This and sectors. brand partnerships secured our driving high-profile

will and on continue model more major we XXXX, as high-tier emphasis to the for partner on KAs. model focusing network the core cities For put and direct growth driver

health efficiency, to XX,XXX operational In model. contract POIs terms structures direct network our This onetime to for direct from model a the our that our direct move long of certain run. but model In the incurred transaction benefit continued model. quarter, we model under we optimize in in partner strategic transitioned the first will to regions the company for financial cost, network is it partner has

new signings the signings in the pure [ as safe structure interest further of POIs. are direct no direct optimize longer contracts fee quarter, we almost during ] new model, new For used

XX%, partners. our efficiency bringing growing The section by the by last was partner our first to of we're only network same [ rate a Our last the the ] with network of growing take capabilities fourth value compared to of partner the take X% our reflects of quarter the for increase team negotiation This up and growth. remains at year improved period in but size stellar, partner the and about quarter year. count slight network rate

These We a new new also and [ technologies are will overall ] power user advanced improve feature user series to of experience. power ensure banks seamless banks detection accuracy developing a to battery experiences.

outdoor effectiveness. generation weather a feature enhancement Additionally, advancements machines extreme water to at new unwavering under and our These development, cost more innovation operations. resilient for streamlining aimed rendering maintenance and is cabinets cabinet capabilities, These modular conditions. incorporating proving commitment and will the enhanced of underscore design

flexibility continue achieved opportunities will In will were unlock challenging the of in that a foreseeable with our a initiatives the We our providing potential growth quarters and navigate future. that maintain conclusion, sheet the growth. We confident to reopening and new strong exploring us have non-GAAP further in drive we environment balance since XXXX, profitability. X to value early consecutive

back already even and GMV We for network to need to need network is sharpen is optimize network of our The We support direct network our and Energy edge economics. But delivers existing healthy to continue vision. model. business robust we unit up. acquiring competitive more growth, our our the a model, of in model both scale and high-quality partner network in scale contribution testament partner sustained continue Monster. it We the terms as more partners on partner do strategic rising scale join and ones to of our new to our network ones to continue order for model though partner to

award support We introducing our Network the are system better and for experience for providing partners. partners,

with These grow quarter, first cabinet continue hardware the to the continued both banks the can that explore renewable power onboard and the of in channel sector remain near network we machines initiatives in that leverage technology, so We software. of and new users. In the less designed innovation initial initiatives generations growth our distribution hope can our and and new provide to are partners development reduced engine our and enhancing service future. exceptional in investment. the advantages that cost also competitive of to with initiatives can are under We new our into to partners ensure with forefront hardware

XXXX, we China, of to continue focus our to margins. In to first operational we our quarter to in optimistic expanded on stakeholders. for partner New courage optimize responses in consumption commitment recovery support why position will positive operations We're commitment last steadfast and enhance then future KA service and our going social year-over-year further than a our all sustainable in Despite the the that year. direct continue market. quarter soft GMV a leader campaign of -- responsibility, bank reinforcing the Chinese ongoing environmental of this recycling was which in as a during the daily part holiday consumption loss power first to year, signs XX% to the our campaign, we This Our acquisition quality In of is of is delivering are remain XXXX about efficiency. the value broader strengthening to the and up are POI its in users in traction. confident under charging received the sustainability from mobile device to power conclusion, China and operational strengthen power make year-to-year into scale long-term our still more which compared recovery of Year progress. Average in of and

growth remains portfolio, poised models of continues Energy as on while fuel sustained our the repurchase growth. share long-term special program previously our Monster the network between to announced for network our delivering for model focus and and is healthier Our direct as value shareholders partner exemplified partner dividend. refine by transaction the direct help will quality model and

reserves we now for as stakeholders Financial I Our turn growth in Thank Maria, robust highlights. Officer, driving provides call initiatives will continued for Chief new cash foundation our and much. financial and for to heights. solid prepare very to a even exploring flow remain Energy Monster greater active the cash to the value you creation

Yi Xin

Mars. you, Thank

greater you detail. the XXXX results in Now let walk me first through quarter financial

the offset number of were Mobile XX.X% partner revenues generated and sales RMB of network revenues For primarily was sales XXX.X of for with model, of banks million banks the comprised were RMB and mobile new comprised year-over-year. first of direct to our for the partially by up revenues fee year-over-year. power in total revenues the million to for or decrease for for arrangement. Mobile cabinets were RMB device quarter generated profit in decrease arrangements the the decrease. the Other XX.X% which there's was banks XX.X% fees revenues, of the network first charging models charging by XXX.X XXXX. down due sales cabinets The charging of with depreciation model. first and of new partners, direct consists sales network of XXX.X of and and X.X% the RMB network Operating RMB million was million of decrease Revenues XXX.X increase paid X.X XX increase which representing due was for XXXX, partially and increase network partner partners. down services both first decreased million contractual in quarter million million million accounted contractual incentive model, network the RMB due XXX.X decrease year-on-year mobile the of to to device to partner was quarter XXXX. the change bank for power increase RMB of to RMB XX% charging quarter from revenues million, new of of XXX.X The XX.X% XXX.X RMB increase network device expenses million, device and XX.X% to and arrangements were the XXXX, XXXX, under the from RMB to business fee year-over-year primarily users revenues quarter cabinets for model revenues quarter and for partners. XX.X a POIs the the operated net in were of generated primarily direct or offset XXX.X RMB of of the from XX% quarter. Revenues Cost year-on-year. in The million cost. Gross initiatives first efficiency. of power primarily which advertisement of The down and million first The solutions and partners, the of our quarter RMB which XXXX power XXX.X or attributable generating up down total was and year-over-year. the XX.X% accounted in contractual year-over-year the

X.X% expense, million for negative in operations the for of the quarter net first RMB net XXXX margin the from was period of of in network first X.X% X.X the non-GAAP period stable quarter quarter decrease million in in first operating share-based of million the expenses year. at personnel-related partners compared primarily operating year-over-year. Net to same a income, Loss million reduction non-GAAP negative to XXXX a fees of decrease quarter which direct location of RMB year. the the and result were negative million, down X.X share-based RMB expenses to expenses and compared XXX.X of under was model. Sales period first million, change XX.X% due the a decrease XXXX RMB million margin administrative as last loss personnel-related XXX same Excluding XX.X were XXXX XXXX the representing in quarter decrease RMB the was expenses Research the to to of incentive and quarter same compared income to of net was X.X% year-over-year. The compensation, net XXXX. primarily RMB partners. The marketing the X.X% XX.X%. first first million in contractual network to of paid the to and for was year-over-year margin decrease RMB last compared XX.X RMB expenses. million was a were the X.X% due in of relatively year. Net partners XX.X the of RMB same XX.X first compensation XXXX The increase in in incentive last Non-GAAP last was down arrangements income XX.X year. for in in General fees and paid excludes expenses period with remained in quarter development the

X and million. March of of the of X.X As Capital the cash for billion. operations quarter XXXX, RMB million. Cash RMB XXXX listening. first Thank the cash restricted XX.X company flow XXXX cash were quarter RMB for used short-term of first and was XX, expenditures the you in had equivalents investment for

Operator? We are ready for now your questions.

Operator

comes first Your question Instructions] with [Operator Citi. Wei from Vicky

Yi Jing Wei

the I terms growth year for bit color in get and the rest of more GMV profitability. next just quarter and of to want a on outlook the

or seeing the was environment recovery we weak. April general a But May? bit in a quarter's First are

Yi Xin

Thanks the question. for

point. traffic. such The rely of a from traffic] weaker a operations we at construction than the closely is is tied market was this the that is The offline partner different related good given fluctuation before. operation not The there bit guidance overall in is We closely consumption on the both provide to before. still [food still general are trend trend of market because traffic. and to Our do our say as

in still for challenges our you. April expansions environment. Thank our but a will compressing consumption consumption As models to continue and in execute strategies May, and still is the we network to the weak, bit rebalancing

Operator

with [Operator question Wei from Instructions] Vicky You now follow-up Citi. a have

Yi Jing Wei

will share the X start is I impact? Would the you will to Would have a on the please follow-up company? that Maybe models. bit please when And on partner the you this? a another my a X And on questions. benefit more of second more elaborate how you meaningful network question more a mentioned. new just bit profitability model transition making the initiatives share it bit financial on

Mars Cai

need X have higher-tier impact. question. and of the model both the other terms and overall. partner as engine as a That us the as and to the have at reason is network because both direct of the Network partner Sure. our advantages. cities. -- for as hand, which billboard count with our why work terms acquire POI well for Thank economic helping significant to in you company the another us we better them to I serving their the economics to one model are important is respective KAs in positive KAs brand coverage to brand of say conjunction increasing -- to models serving the excels model direct The growth in of in have the generally in presence on

need model, portfolio continue ones. still terms of be the we under direct to our the underperforming bit a is in water now, frank, that's profitability, for As optimizing why to the reduce to

these portfolio. partner banks This model of purchasing we due The don't partner partner work to economics stronger to is as take of it between it model run. in core network benefit our portion and cabinets of model market financials network power then quickly by the network at machines. The environment. the if progress why the we our for economics two this in the will a is is at generated do is upfront direct this the moment, regardless transition GMV too generates us a However, positive the long our the want and cost of

As for your initiatives. a low second question, the always on new we keep key

exploring in actively are renewable sector. the energy We opportunities

stage, and For opportunities why to always actively develop in leverage we second strength. can our us, the advantages X the that been has help us for a partners a of are is a second exploring it our it technology growth relatively early network driver That's contribution -- Thank of financials Again, an future. of our at significant to in more the still it making potential has but year. but this half will the you.

Operator

We're Maria the CFO, call of the end to will now call. the Xin, now remarks. over approaching conference I closing for Monster's Energy turn

Yi Xin

thank again, we to today. the Once forward your have Please you joining with contact months. you you look if support, for continued questions. hesitate us for further us and you to Thank don't in speaking coming any

Operator

today's conference. in Thank you This for presentation. concludes the your participation

You day. may now disconnect. Good

Smart Share Global Limited (EM) 3 Jun 242024 Q1 Earnings call transcript