YMM - Earnings call transcript Q1 2024 | Full Truck Alliance Co. Ltd.

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Operator

Ladies and gentlemen, good day, and welcome to Full Truck Alliance's First Quarter 2024 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.

Mao Mao

Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. guarantees and performance factors. uncertainties, not to are are risks certain assumptions statements of and future subject Such and other

of risk differ beyond cause are and discussion. in these obligation control discussion forward-looking release could Some could of general and the today's The included the the press company of actual that from materially company's except FDA's to A those affect factors mentioned company results not by certain does in law. business these and financial filings to undertake required as any the information, results risks SEC. update is with

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

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

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

As is being recorded. a conference reminder, this

Mr. webcast website replay Relations be on Founder, will available of to turn and call call this Investor our Chairman CEO, a will over ir.fulltruckalliance.com. FTA's the I at addition, now Zhang. In

Hui Zhang

achieved fulfillment profitability propels digital we empower flywheel. leads first to we enterprises logistics with at first intelligent accordance experience, continue truckers and in traditional growth shipments the and reflecting the of XXXX, and This both ends year-over-year from off-line intelligent improvements continued delivered for enhanced our for and we digital shippers, user network road quarter, we promote small- tens ongoing the cost savings small in the with monetization that and in medium-sized truckers our the improved the and shift by value core to effect by is of of the new the we steadfastly again, shippers, single-digit proposition significantly the logistics platform to of both greater In and shipping have efficiency growing millions our innovative truck stronger optimize our of priority. metrics, for orders, as quarter, Entering consistently further outpacing operational product competitiveness the evidenced medium-sized shippers. strive nearly free key solutions of acquisition enhancing remains growth costs and transformation and improvements continuous industry XX% growth Since user to is one-stop fulfilled broader reducing supply tens high-quality growth, efficiency become logistics and market, efficiency millions contracted and of as a new platform. logistics

As such, strengthen freight saving of shipping. we for awareness continue benefits cost FTA's to

momentum refined process operational we user new fulfillment, user initial acquisition to addition, our adding and In for significant reps.

direct rapid strong contributing to of from average quarter. Our the year-over-year. an increase shippers orders $X.XX reached order in MAUs ship The our of XX% across with total continued platform demand to growth drive XX.X% million, direct shippers fullfilled

in year-over-year become to our transportation nearly share rate all-time high-quality capacity, as our on our premium the saw their up significantly we to While to initiatives and supply ensuring amounted improved billing efficiency the continue points we percentage quarter same of as more through six the trucker wallet At truckers and ample time, our dependent of grew functions. the expand as credit cargo XX.X% fulfillment first trucker platform significantly an quality the high. during we quarter, such an truckers, supply the rating

like top to by the beyond net first expectations Non-GAAP for further our comprehensively monetization, strategies These In optimize unparalleled and replace positioning quarter, underscore achievements truckers the I'd accounting highlight million. to reaching rapid growth. terms line and to XX% more for by value to healthy XX% for of revenue this our imperative monetization reduce first government we as both financial X.XX In by our first take logistics of exceptional steps revenues costs. with service XXX increased revenue that to business milestone. the growth year-over-year significant a report than total XX.X% adjusted quarter. income to premier surged the improve robust year-over-year, work performance in revenues shippers.Our continues an mix RMB went time, XX.X% our increasing transaction the translated emphasized billion into quarter, in year-over-year the that us RMB

for Leveraging we value the ultimately efficiency industry by the further the XXXX, cost logistic propel greater will and smart and will users Thank to environmental the greater and digitalization, economic reduction favorite sustainability, to as measure industry everyone. of you, advancing optimize creating ahead attention garner important dynamic, as our even an logistics whole. Looking support. innovation a

provide Let business the will me pass who quarter and our our on an Cai CFO, first to Chong progress financial update call results. over

Chong Cai

start the our first the and will off overview operational with our financial I We started year an provide an with performance. quarter. on highlights of quarter a solid in update first performance well

to year-over-year and our growth again, significantly year-over-year trade sustained to improvements. XX.X% by outpacing the ongoing the road the single-digit increased the to first this previous broader We of attribute number year-over-year market. with fulfilled Sequentially, Year of orders million, expansion seasonal growth fulfilled order due $XX.X orders matching to Our strong off-season of effect in base quarter line user the patterns. the Chinese efficiency declined in New

base. shippers holiday, due shipper Years approximately was direct approximately nearly to XX.X% the shortage of Chinese order year-over-year from slight percentage Our quarter, to increase an the in a growing contributions points structure of New six Despite as platform's truckers attributable overall percentage continue the improve our mainly direct rapidly expanded. of our reached scale all-time of rates to quarter-over-quarter. fulfillment X.X and points high first This

and member historical high. shippers making from other The shippers a our nonmember reached XXX contribution XX%,

the efficiency through driven rest move our sustain rate direct In that on both average growth new first platform-wide drove service boosting an sides, heights. with confident of this fulfillment along as upgrades to enhancement user quarter shippers addition, by we in momentum We're fulfillment year. the rate, increase growth we can

have base. results. acquisition our our Strong positive yielded to user Turning execution strategies user of

The nonmember $X.XX up driven MAUs due the reached first the from shippers. shippers Since quarter, low our was filling orders daily primarily of shipper steadily XXX over medium average time, holiday. newer the year-over-year average peaking quarter increase and average year-over-year for number direct are in million growth has the shippers XX,XXX down than additions. XX.X% Chinese a the but March, mostly increased of slightly who shippers frequency more new member Our among to and by previous at daily new

vigorous growth in year. this user shipper persist throughout base our expect We to this trend

retention activity first the XX% above Additionally, shippers remain our rate robust quarter. our high-frequency remaining shipper in rolling member XX-month with

remain our first orders the million, active the of On truckers the months quarter, supply the $X.XX of in reached trucker feeding platform side, for as transaction number our FTA on over through expanded XX plentiful. truckers and volume past

next in our truckers increased retention who comparable prior Additionally, five percentage to the responded XX%, month's orders than years. to points period of approximately higher

shipper growth advantage. freight broad trucker and flywheel vast base huge data a and platform, road a algo leading by a our transaction competitive As powerful user and created supported due has

we As increase. a expect consistently stickiness our to user result,

our to Turning service. transaction

this increased developments in from to including revenues includes the call, from our The classified listing service transaction drivers: we Transaction commission revenues earnings service fueled value-added ratio XX.X% reporting and surged relating monetization monetization As primarily revenues RMB new starting truckers Under generated reflect of growth in year first renamed mentioned monetization all business to from the order matching latest solid on last services, our was intercity in quarter's better transaction business the orders, number in stream company's revenues generated our the XXX elevated financial truckers service were of revenue rate. and year-over-year three fiscal our freight to nature transaction reports. we freight by and that monetization the the services. previously by penetration the under to This million measures, quarter. expansion field

our and extends first up orders strategy commission XXX. the We commission implementing count by reduce the also quarter, to This commissions low-quality end orders. stress our no quarter. applies longer nationwide of matching we of commission mechanism for as areas. of commissioned As our end waivers time first included high-quality the increasing exclusively while testing rates across round-the-clock to city the Meanwhile, increased commission stepped total

With orders, Under XX.X% membership fee order trucker service new more first points commission XX.X% the approximately percentage year's X calculation commission refined a covered quarter RMB increased revenue XX.X implementation fulfilled last of our the coverage approach, than our increase comparable basis. of rules, from XX.X monetization these and of to an year-over-year from ago. from including transaction, on RMB year order, amount per a transaction

we $X.XX announcement, our to It like repurchased of extended a our provide on XX, approximately update March has XXX,XXX repurchase share totaling XX, brief Since an $XXX XXXX. over until March million been extension we financial initiated program. March totaling approximately share repurchase in program announced our On shares results, the X-year going XXXX. now Before million. I'd have

the evaluate share to dividend cash going to annual paid in repurchase part comprehensive as of million of our continue forward. program April, In initiatives shareholder will return $XXX also addition we

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

to other in to the freight were Revenue of in in first X.X% service the quarter total service an total revenues, the from quarter million, to services, paying representing matching matching in million, XXX from to a freight membership year-over-year, quarter attributable increase listing models growing first were the service monetization year-over-year, number and growth up models, members. primarily X.XXX.X quarter XXX.X year-over-year, freight from to from due fees an increase a services user growth primarily continued were demand. the growing in were due was in RMB Revenues XX.X% the to from in Revenues service. year-over-year, brokerage due This in quarter, first up the RMB from shippers RMB up volume X.XXX.X revenues truckers RMB XXX freight primarily from RMB from increase year-over-year, listing revenues in the representing Our services transaction and transaction monetization transaction membership revenues freight services. and an order XX.X% million, a from in transaction other fees net continued commissions including volume services from and XXX.X driven year-over-year. and the quarter million, value-added services. from first increase and increase including XX.X% primarily per fee.Revenues value-added steady brokerage an attributable up brokerage demand the penetration revenues were shipper credit fees freight Net increase RMB a for in service million the service transaction in were million, first by solutions XX.X% increase the due of primarily the first trucker XX.X%

expansion XXX.X First in period. quarter compared X.XX.X other was million primarily was million increase costs net cost the tax-related RMB same involving from of RMB to increase prior year in period related and an costs an to brokerage VAT of RMB of million, the representing XXXX, our activities from These XXX surcharges tax due totaled transaction the XX.X% government growth service. RMB in freight million net tax primarily revenues authorities. increase of of with of government The grants XXX.X due

higher RMB and as primarily the XXX.X in million, for from of primarily sales as expenses period XXXX. The due The first quarter period XXXX. million General RMB RMB XXX.X were salary to the of first user with Our same million in million, from and XXX.X period increase XXXX. the in was an to and acquisitions expenses share-based increase expenses in advertising an first R&D same XXX.X of were expenses. the with expenses with the expenses from quarter Net increase RMB higher well XXX.X salary benefits in million RMB in administrative compared operations higher of in were million RMB million quarter same XXX.X the RMB as Income XXX.X compared XXX.X was million XXXX. and primarily increase XX.X% expenses. in of the the marketing marketing an compared of was first first was quarter same compensation XXXX. due an to increase well income RMB increase the period XX.X% and The million million due in compensation benefit increase expenses. period of share-based XXX.X was in RMB the in quarter in RMB as XXX.X same

in non-GAAP period from XXX.X XX.X% first increase RMB an the of measures, operating ouradjusted of XXX.X million, the quarter On income in the XXXX. was million RMB same

net income first quarter same basic Non-GAAP RMB was increase the an the Our adjusted diluted RMB income compared RMB first Basic per X.XX XXX.X XX.X% million period were quarter the period XXX.X in the period in in adjusted XXXX. net net the in last quarter from X.XX X.XX RMB and compared year. ADS million, income diluted ADS of first with in in was RMB same of the of of RMB and with XXXX. per same X.XX

XX, XXXX. management of X As as in billion RMB with XXXX, maturity investments, restricted XX.X wealth year of XX, compared December total March with long-term company deposits products equivalents, cash, the RMB over short-term time billion had cash of XX.X and

operational we This forecast and revenues and RMB preliminary hereof. XXXX with market are accuracy X.XX concludes billion the outlook, between would X.XX Our and billion, and to That rate We growth date subject to second reasonable year-over-year quarter our approximately business XX.X%â€“XX.X%. a expect which change representing conditions, the cannot of total predicted be to prepared reflects be open on our views the company's call to Q&A. as now current of like remarks. RMB

Operator

Morgan The Wang Eddy Instructions] first [Operator Stanley. with question comes from

Eddy Wang

the Given the the the growth about order My see question around the road year-over-year. surpassing we of rate Once XX% the that your growth this growth quarter, corporate again, driving order key quarter. In was is I are this overall for fuel orders. first factors second volume? trend, to the What market. in expectation volume sustained just order want growth freight the hear

Chong Cai

both in very accumulated first sector, quarter the year year-over-year the in growth was attributable specifically share industry see We fully to in our factors: of driven mainly was volume growth is new pandemic's the users is are gone as by X% released volumes volume enhanced in the main increase incremental ends, The our road We expansion market growth quarter momentum user increased order of the other ongoing the by quarter this three at result a beginning impact gain second to of features almost the Considering pleased first strong that the sustained the XX growth contribution points. that and business. user among the the since scale cut and restrictions of our and continued our percentage travel our freight activity due existing volume by last of product the from year. rate other that demand to in believe outpacing services

average from acquisition In to number registration continued during terms scale, increase. of number We're to the XX% an showing of fulfillment. we and efficiency user steadily new strengthen for shipper active March, increased an the shippers growth trend shippers more daily to conversions personalized the also as faster monthly new has previous the registration service new accelerated user to users. compared Also, of quarters. user grow customer Since with driving over enhance and continue by year-over-year, quarter

shippers being a contributor direct importantly, growth, orders this to to user new major high-quality More bringing our platform.

of cycle credit big added more Regarding greater high-quality orders a bid product truckers, side truckers to ultimately, the bringing and platform bid new truckers incentivizing a stay qualified with and multiple Among management created better have trucker those via who chance are truckers analytics, has our to efficiency. fulfillment active among on tiered credit ratings data truckers high-quality leading process. virtuous optimization, achieve functions of to higher using higher and on matches to with trucker the maybe platform labels better effective within we bidding This those them ratings. a have ecosystem, the the identifies and the and activity

relatively businesses, these of believe addition, particularly low. experience namely LTL of quarter, growth online ticket and the services, both large that In them business continue remain rapid order LTL during very new we penetration our to the interstate and new businesses, the volume

growth will the second of also growth in in be mid-XXs. maintaining the Given reopening about year LTL see the in the very sector, quarter effect second our volume. optimistic unique the potential we period, We're sector.Looking despite confident that post-pandemic steady other user the of high advantages year-over-year prior in we quarter, significant in growth the to base in the range ahead rate remain high-quality

Operator

from The CICC. next question with comes Li Jiulu

Jiulu Li

XX.X% X% key The first nearly growth? in reached fulfillment the this all-time X.X% year-over-year performance What behind an high for sequentially. and your are quarters? rate of in coming the expectations rate quarter, are up the the drivers What

Chong Cai

to largely dynamic due and adjustment. record structure platform holiday, the of again is believe is typically optimization continuous a strategy our quarter Although due We product the to achieved this fulfillment rate. Chinese user first New Year off-season once the our success

In while user rates first frequency X of the percentage in other from direct terms structure, reached up over of fulfillment in XX% shippers low both averaged direct shippers the quarter, year-over-year, the medium that's and the contribution XX% points quarter.

direct medium-sized tendency higher other and pricing, our and fulfillment overall small- shippers, favorable favorable Given in fulfillment shift also rate. boosted this mix

as increase. addition, the also platform's in our strategy a role In effects this enhanced quarter order distribution scale played

to their in medium we posting order ground to priority to and orders transactions. high-quality efficiently truckers example, orders, identified next For who low-quality access responded those

in improvement rate cash incentives also who to all recommendation as picky them posting ensuring these provided fulfillment order of levels. hard who and the waiver truckers features orders the to monetary commission in on quality long-tail others with platform. rate about through such overall of our also exposure Furthermore, are increased We for are encourage depart, app, we fulfill subsidies willingly the of not slightly steady a the truckers

to and aim the trusted like models foster matches product enhance Looking drive supply-demand and and supply optimize We'll to which fulfillment to features to higher truckers cargo and shippers boast trucker more consistently our to ahead, shipment balance. and also trucker product continue more onboard greater we acceptance in rates encourage and use shippers tap-and-go, higher facilitate demand rates.

Operator

Chen Charlie next The China question Renaissance. with from comes

Charlie Chen

and Since last improvements. year, elaborate the strategies focuses promising consistent trucker of platform's initial please results with system tiered shown on trucker Could you operations? rating the has key

Chong Cai

were year. restrictions last lifted the Since pandemic

sufficient. transportation supply has remained Our capacity

Our consistently million been monthly the to platform. of above key who always have active in remained first operations Trucker a $X quarter. responded number of others our truckers focus

three distinct strategies tailored to truckers into the inactive each truckers based active groups groups. of user truckers and profiles, implement these categorize such, As their and we on

optimization, and high-quality operations orders community them guides truckers, access our product For platform qualified truckers. easier through appropriate trucker orders for to new to

In addition, the three monitor trials. rate new we closely in first truckers' fulfillment

on where different targeted we existing have quality effectively operation truckers. tiers truckers' for traffic For active deploy of frequency, we motivate credit By across leveraging mainly metrics, ensuring cultivated we capacity increase truckers, the focus these transactions supply a activity mindset initiatives transaction platform. robust truckers and among management rating truckers, to their for

proactively to dormant coverage inactive them encouraging and as such on truckers, we those returning packages platform. gift compensation truckers For incentives for experience, unsatisfactory the business for resume offer

and and refined that their truckers to our forward, proven maximize experiences them to allowing Moving we platform earnings. continue will confident are operational strategies deliver on for our rewarding

Operator

The UBS. Bruce comes from next question Mi with

Yuxuan Mi

Could progress update acquisition our What you please acquisition user provide strategy an user us quarter? the on is the during first for XXXX? company's

Chong Cai

user The of first quarter, slow know, a it's typically in terms acquisition. as you season

of was off-line promotions, user Our grow online and expanding new strategies. XX,XXX effective both primarily exceeded first average promotions shipper registrations. Currently, our or user community. continued rapidly our XX,XXX Through sticker daily driven by campaigns, average user XXXX. base, over and combination we growth daily in have on strong meaningfully awareness platform's truck of a trucker branding acquisition The the however, increased to sides quarter visibility registration advertising, momentum our user brand

channels travel operating truck on a relaunched greatly model This recently has trucks online noteworthy sticker promotional impact XXXX, brand offline with example. integrate In user human advertising one advertising visibility Our parts. as experience for channels. logistic optimal and to amplified intercity we involving routes is our and continue acquisition will and outfitting in branded focus online truck with campaign

to to logistics We network. will shippers reach potential propelling more efficiently truckers service expansion initiatives users the attract online our more of our acquisition and budget allocate of user and over half

Operator

Citigroup. Brian The question with comes from next Gong

Brian Gong

to the this should this the year-on-year. by quarter, from revenue any we first surged your quarters? commission or strategy drivers the are revenue behind How revenues in transaction Are year? at trend services commission coming In look there growth? adjustments What XX.X% the

Chong Cai

in count this model In terms rolled coverage, other of city quarter, out XX cities, up XXX. our new we scaling the total commission commission the to

optimized commission we the beginning first in Additionally, quarter, further rules. our

as of high-quality the on that rule duration decade by orders Commissions based commission the labeled are low-quality other matching so matching duration quality. eliminated are we unaffected on commission-free. commissions example, orders reflect while better For

XX% As to order the XX%. ratio volume total year-over-year. That's a nearly X year-over-year, up order penetration increasing points monetized monetized percentage surged result, the about by approximately

This an In the membership data year-over-year terms of increase big average monetization quarter a to commission our on monetization primarily intercity including trucker XX.X. the increase leveraging commission at boosted compromising and postings for and monetization high-quality first increase fees amount identify attributable per and services experience. That's user RMB refined rates. stood per the their comparable average across without per transaction XX% platform efficiency by strategies of order was amount, We approximately analytics other, basis. order

of monetization current that Looking maximize ahead, to transactions commission our continue believe monetization we ensuring long-term advancement room this services, monetization and unlock ample optimize still stream, relatively strategy we to and explore potential. and for robust conservative will is the to our potential consistently and there's revenue transaction level us further high-quality platform's our

Operator

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

Hui Zhang

Thank you once joining again for today. us

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

information for found release. U.S. China both in be great a contact the today's Our day. and in can Have press IR

Operator

presentation. conference for concluded. Thank The now today's attending has you

You may disconnect. now

Full Truck Alliance (YMM) 21 May 242024 Q1 Earnings call transcript