Full Truck Alliance Co. Ltd. Announces Third Quarter 2023 Unaudited Financial Results

GUIYANG, China, Nov. 20, 2023 /PRNewswire/ -- Full Truck Alliance Co. Ltd. ("FTA" or the "Company") (NYSE: YMM), a leading digital freight platform, today announced its unaudited financial results for the third quarter ended September 30, 2023.

Third Quarter 2023 Financial and Operational Highlights

• Total net revenues in the third quarter of 2023 were RMB2,263.9 million (US$310.3 million), an increase of 25.2% from RMB1,808.6 million in the same period of 2022.
  
  
• Net income in the third quarter of 2023 was RMB618.4 million (US$84.8 million), an increase of 56.4% from RMB395.5 million in the same period of 2022.
  
  
• Non-GAAP adjusted net income[1] in the third quarter of 2023 was RMB826.6 million (US$113.3 million), an increase of 67.6% from RMB493.0 million in the same period of 2022.
  
  
• Fulfilled orders[2]in the third quarter of 2023 reached 42.5 million, an increase of 27.0% from 33.5 million in the same period of 2022.
  
  
• Average shipper MAUs[3]in the third quarter of 2023 reached 2.13 million, an increase of 15.0% from 1.85 million in the same period of 2022.

Mr. Peter Hui Zhang, Founder, Chairman and Chief Executive Officer of FTA, commented, "Amid the evolving market demand in the logistics industry in the third quarter, we delivered another record-setting quarter with many operational and financial improvements, propelled by further improvements in our product functions and services. Both user scale and number of fulfilled orders achieved significant growth year over year, reflecting the resiliency of domestic economy, the strong network effect of FTA's nationwide road logistics network and the unparalleled competitive moat created by our unique business model. In addition, our average shipper MAUs reached a new record of 2.13 million during the quarter, validating the considerable growth potential in the small and medium-sized direct shipper market. Going forward, we will continue to uphold our user-centered value proposition while empowering enterprises with greater logistics competitiveness."

Mr. Simon Cai, Chief Financial Officer of FTA, added, "As our businesses expanded in the third quarter, our monetization capabilities also strengthened, evidenced by sustained growth momentum in both our top line and bottom line. Our total revenue and non-GAAP adjusted net income grew 25.2% and 67.6% year over year, respectively, beating market expectations. Alongside a continuous increase in revenue scale during the quarter, we continued to refine our revenue mix and elevate monetization efficiency, aiming to create more value for our shareholders."

Third Quarter 2023 Financial Results

Net Revenues (including value added taxes, or "VAT," of RMB955.5 million and RMB1,137.9 million for the three months ended September 30, 2022, and 2023, respectively). Total net revenues in the third quarter of 2023 were RMB2,263.9 million (US$310.3 million), representing an increase of 25.2% from RMB1,808.6 million in the same period of 2022, primarily attributable to an increase in revenues from freight matching services.

Freight matching services. Revenues from freight matching services in the third quarter of 2023 were RMB1,904.4 million (US$261.0 million), representing an increase of 25.8% from RMB1,514.0 million in the same period of 2022. The increase was primarily due to an increase in revenues from freight brokerage service as well as continued growth in transaction commissions.

• Freight brokerage service. Revenues from freight brokerage service in the third quarter of 2023 were RMB1,070.2 million (US$146.7 million), an increase of 18.4% from RMB904.1 million in the same period of 2022, primarily attributable to the continued growth in transaction volume as a result of strong user demand.
  
  
• Freight listing service. Revenues from freight listing service in the third quarter of 2023 were RMB232.1 million (US$31.8 million), an increase of 5.6% from RMB219.7 million in the same period of 2022, primarily due to an increased number of total paying members.
  
  
• Transaction commission. Revenues from transaction commissions amounted to RMB602.1 million (US$82.5 million) in the third quarter of 2023, an increase of 54.3% from RMB390.2 million in the same period of 2022, primarily driven by an increased order volume as well as higher per-order transaction commission.

Value-added services. Revenues from value-added services in the third quarter of 2023 were RMB359.5 million (US$49.3 million), an increase of 22.1% from RMB294.5 million in the same period of 2022, mainly attributable to an increase in revenues from credit solutions and other value-added services.

Cost of Revenues (including VAT net of refund of VAT of RMB687.8 million and RMB870.0 million for the three months ended September 30, 2022, and 2023, respectively). Cost of revenues in the third quarter of 2023 was RMB1,142.1 million (US$156.5 million), compared with RMB953.0 million in the same period of 2022. The increase was primarily due to increases in VAT, related tax surcharges and other tax costs, and net of tax refunds from government authorities. These tax-related costs net of refunds totaled RMB1,032.5 million, representing an increase of 19.1% from RMB866.7 million in the same period of 2022, primarily due to the continued increase in transaction activities involving our freight brokerage service.

Sales and Marketing Expenses. Sales and marketing expenses in the third quarter of 2023 were RMB290.8 million (US$39.9 million), compared with RMB232.9 million in the same period of 2022. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions.

General and Administrative Expenses. General and administrative expenses in the third quarter of 2023 were RMB290.4 million (US$39.8 million), compared with RMB206.6 million in the same period of 2022. The increase was primarily due to higher share-based compensation expenses and settlement in principle of certain U.S. securities class action, which was disclosed in the Form 6-K filed on September 18, 2023.

Research and Development Expenses. Research and development expenses in the third quarter of 2023 were RMB237.7 million (US$32.6 million), compared with RMB226.6 million in the same period of 2022. The increase was primarily due to higher share-based compensation expenses.

Income from Operations. Income from operations in the third quarter of 2023 was RMB247.1 million (US$33.9 million), an increase of 74.4% from RMB141.7 million in the same period of 2022.

Non-GAAP Adjusted Operating Income.[4] Non-GAAP adjusted operating income in the third quarter of 2023 was RMB458.5 million (US$62.8 million), an increase of 88.8% from RMB242.8 million in the same period of 2022.

Net Income. Net income in the third quarter of 2023 was RMB618.4 million (US$84.8 million), an increase of 56.4% from RMB395.5 million in the same period of 2022.

Non-GAAP Adjusted Net Income. Non-GAAP adjusted net income in the third quarter of 2023 was RMB826.6 million (US$113.3 million), an increase of 67.6% from RMB493.0 million in the same period of 2022.

Basic and Diluted Net Income per ADS[5] and Non-GAAP Adjusted Basic and Diluted Net Income per ADS.[6]Basic and diluted net income per ADS were RMB0.58(US$0.08) in the third quarter of 2023, compared with basic and diluted net income per ADS of RMB0.37 in the same period of 2022. Non-GAAP adjusted basic and diluted net income per ADS were RMB0.78(US$0.11) in the third quarter of 2023, compared with non-GAAP adjusted basic and diluted net income per ADS of RMB0.46 in the same period of 2022.

Balance Sheet and Cash Flow

As of September 30, 2023, the Company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits and wealth management products of RMB27.4 billion (US$3.8 billion) in total, compared with RMB26.3 billion as of December 31, 2022.

As of September 30, 2023, the total outstanding balance of the on-balance sheet loans, consisting of the total principal amounts and all accrued and unpaid interests (net of provisions) of the loans funded through our small loan company, was RMB3,375.7 million (US$462.7 million), compared with RMB2,648.4 million as of December 31, 2022. The total non-performing loan ratio[7] for these loans was 1.7% as of September 30, 2023, compared with 2.0% as of December 31, 2022.

In the third quarter of 2023, net cash provided by operating activities was RMB717.1 million (US$98.3 million).

Business Outlook

The Company expects its total net revenues to be between RMB2.27 billion and RMB2.32 billion for the fourth quarter of 2023, representing a year-over-year growth rate of approximately 18.2% to 20.6%. These forecasts reflect the Company's current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.

Share Repurchase Update

On March 3, 2023, the Company's Board of Directors authorized a share repurchase program, under which the Company may repurchase up to US$500 million of the Company's ADSs during a period of up to 12 months starting from March 13, 2023. As of November 17, 2023, the Company had repurchased an aggregate of approximately 22.8 million ADSs for approximately US$147.3 million from the open market under the share repurchase program.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at a rate of RMB7.2960 to US$1.00, the exchange rate in effect as of September 29, 2023, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all.

Conference Call

The Company's management will hold an earnings conference call at 7:00 A.M. U.S. Eastern Time on November 20, 2023, or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the third quarter of 2023.

Dial-in details for the earnings conference call are as follows:

The replay will be accessible through November 27, 2023, by dialing the following numbers:

A live and archived webcast of the conference call will also be available on the Company's investor relations website at ir.fulltruckalliance.com.

About Full Truck Alliance Co. Ltd.

Full Truck Alliance Co. Ltd. (NYSE: YMM) is a leading digital freight platform connecting shippers with truckers to facilitate shipments across distance ranges, cargo weights and types. The Company provides a range of freight matching services, including freight listing, freight brokerage and online transaction services. The Company also provides a range of value-added services that cater to the various needs of shippers and truckers, such as financial institutions, highway authorities, and gas station operators. With a mission to make logistics smarter, the Company is shaping the future of logistics with technology and aspires to revolutionize logistics, improve efficiency across the value chain and reduce its carbon footprint for our planet. For more information, please visit ir.fulltruckalliance.com.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to ordinary shareholders, non-GAAP adjusted basic and diluted net income per share and non-GAAP adjusted basic and diluted net income per ADS, each a non-GAAP financial measure, as supplemental measures to review and assess its operating performance.

The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP adjusted operating income as income from operations excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions and (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) settlement in principle of U.S. securities class action. The Company defines non-GAAP adjusted net income as net income excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions; (iv) settlement in principle of U.S. securities class action, which is non-recurring; and (v) tax effects of non-GAAP adjustments. The Company defines non-GAAP adjusted net income attributable to ordinary shareholders as net income attributable to ordinary shareholders excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions; (iv) settlement in principle of U.S. securities class action, which is non-recurring; and (v) tax effects of non-GAAP adjustments. The Company defines non-GAAP adjusted basic and diluted net income per share as non-GAAP adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted ordinary shares, respectively. The Company defines non-GAAP adjusted basic and diluted net income per ADS as non-GAAP adjusted net income attributable to ordinary shareholders divided by the weighted average number of basic and diluted ADSs, respectively.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as an analytical tool. The non-GAAP financial measures do not reflect all items of expense that affect its operations. Share-based compensation expense, amortization of intangible assets resulting from business acquisitions, compensation cost incurred in relation to continuing service terms in business acquisitions and tax effects of non-GAAP adjustments have been and may continue to be incurred in its business and are not reflected in the presentation of its non-GAAP financial measures.

The Company reconciles the non-GAAP financial measures to the nearest U.S. GAAP performance measures. Non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to ordinary shareholders and non-GAAP adjusted basic and diluted net income per share should not be considered in isolation or construed as an alternative to operating income/(loss), net income/(loss), net income/(loss) attributable to ordinary shareholders and basic and diluted net income/(loss) per share or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review FTA's non-GAAP financial measures to the most directly comparable GAAP measures. FTA's non-GAAP financial measure may not be comparable to similarly titled measures presented by other companies.

For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this release.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements which are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: FTA's goal and strategies; FTA's expansion plans; FTA's future business development, financial condition and results of operations; expected changes in FTA's revenues, costs or expenses; industry landscape of, and trends in, China's road transportation market; competition in FTA's industry; FTA's expectations regarding demand for, and market acceptance of, its services; FTA's expectations regarding its relationships with shippers, truckers and other ecosystem participants; FTA's ability to protect its systems and infrastructures from cyber-attacks; PRC laws, regulations, and policies relating to the road transportation market, as well as general regulatory environment in which FTA operates in China; the results of regulatory review and the duration and impact of any regulatory action taken against FTA; the impact of COVID-19 outbreaks, extreme weather conditions and production constraints brought by electricity rationing measures; general economic and business condition; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

Full Truck Alliance Co. Ltd.
Mao Mao
E-mail: IR@amh-group.com

Piacente Financial Communications
Hui Fan
Tel: +86-10-6508-0677
E-mail: FTA@thepiacentegroup.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: FTA@thepiacentegroup.com