Full Truck Alliance Co. Ltd. Announces Third Quarter 2021 Unaudited Financial Results

GUIYANG, China, Nov. 18, 2021 /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, 2021.

Third Quarter 2021 Financial and Operational Highlights

• Total net revenues in the third quarter of 2021 were RMB1,241.7 million (US$192.7 million), an increase of 68.9% from RMB735.0 million in the same period of 2020.
• Net loss in the third quarter of 2021 was RMB178.3 million (US$27.7 million), compared with RMB334.3 million in the same period of 2020.
• Non-GAAP adjusted net loss¹ in the third quarter of 2021 was RMB4.7 million (US$0.7 million), compared with non-GAAP adjusted net income of RMB145.8 million in the same period of 2020.
• Gross Transaction Value ("GTV")²in the third quarter of 2021 reached RMB67.3 billion (US$10.4 billion), an increase of 48.8% from RMB45.2 billion in the same period of 2020.
• Fulfilled orders³in the third quarter of 2021 reached 35.3 million, an increase of 78.4% from 19.8 million in the same period of 2020.
• Average shipper MAUs⁴in the third quarter of 2021 reached 1.61 million, an increase of 32.2% from 1.22 million in the same period of 2020.

"Our relentless focus on improving logistics for both shippers and truckers and developing our logistics network supported our third quarter performance and empowers our sustainable future growth," said Mr. Peter Hui Zhang, Founder, Chairman of the Board and Chief Executive Officer of FTA. "Our commitment to innovation and broadening our technological capabilities through in-house R&D remains the cornerstone of our business. Looking ahead, we will continue to leverage technology to create an exceptional user experience, and we are confident that FTA will continue to grow and generate long-term value for both users and shareholders."

"Our total net revenues increased by 68.9% year-over-year to RMB1.2 billion, despite multiple headwinds, powered by substantial year-over-year growth in GTV and user engagement," said Mr. Simon Cai, Chief Financial Officer of FTA. "Our solid third quarter 2021 results reflect FTA's leadership in China's fast-growing road transportation industry, where we continue to capitalize on our core strengths in technology and grow on all fronts. We believe our sound financial condition and strong cash position will support our strategic initiatives, strengthen our competitive edge and allow us to explore new opportunities for future growth."

Third Quarter 2021 Financial Results                                                                                                                             

Net Revenues (including value added taxes ("VAT") of RMB404.6 million and RMB720.8 million for the three months ended September 30, 2020 and 2021, respectively). Total net revenues in the third quarter of 2021 were RMB1,241.7 million (US$192.7 million), representing an increase of 68.9% from RMB735.0 million in the same period of 2020, primarily attributable to an increase in revenues from freight matching services.

Freight matching services. Revenues from freight matching services in the third quarter of 2021 were RMB1,085.2 million (US$168.4 million), representing an increase of 102.6% from RMB535.6 million in the same period of 2020. The increase was primarily due to an increase in revenues from freight brokerage service as well as rapid growth in transaction commissions.

• Freight brokerage service. Revenues from freight brokerage service in the third quarter of 2021 were RMB689.2 million (US$107.0 million), an increase of 79.1% from RMB384.8 million in the same period of 2020, primarily driven by significant growth in transaction volume, partially offset by a decrease in average fee rate to attract more shippers to our service.
• Freight listing service. Revenues from freight listing service in the third quarter of 2021 were RMB213.7 million (US$33.2 million), an increase of 49.6% from RMB142.9 million in the same period of 2020, primarily attributable to an increase in total paying members amid increased shipper demand for our services as our business continued to expand.
• Transaction commission. Revenues from transaction commissions amounted to RMB182.2 million (US$28.3 million) in the third quarter of 2021, an increase of 22 times from RMB7.9 million in the same period of 2020, primarily driven by a rapid ramp-up of commissioned GTV penetration.

Value-added services. Revenues from value-added services in the third quarter of 2021 were RMB156.5 million (US$24.3 million), as compared with RMB199.4 million in the same period of 2020, mainly attributable to the reduction of revenue recorded as a result of our strategic customer incentive plans in connection with new monetization initiatives.

Cost of Revenues (including VAT net of refund of VAT of RMB241.9 million and RMB656.7 million for the three months ended September 30, 2020 and 2021, respectively). Cost of revenues in the third quarter of 2021 was RMB842.1 million (US$130.7 million), compared with RMB349.7 million in the same period of 2020. The increase was primarily attributable to an increase in VAT, related tax surcharges and other tax costs, net of tax refunds from government authorities. These tax-related costs net of refunds totaled RMB768.9 million, representing an increase of 161.3% from RMB294.2 million in the same period of 2020, primarily due to an increase in transaction activities involving our freight brokerage service.

Sales and Marketing Expenses. Sales and marketing expenses in the third quarter of 2021 were RMB190.6 million (US$29.6 million), compared with RMB139.3 million in the same period of 2020. The increase was primarily due to an increase in salary and benefits expenses driven by an increase in sales and marketing headcount as well as an increase in advertising and marketing expenses related to promotion of new initiatives, partially offset by a decrease in share-based compensation expenses.

General and Administrative Expenses. General and administrative expenses in the third quarter of 2021 were RMB190.0 million (US$29.5 million), compared with RMB442.6 million in the same period of 2020. The decrease was primarily due to a decrease in share-based compensation expenses and a decrease in compensation cost resulting from repurchase of ordinary shares in excess of fair value, partially offset by compensation cost incurred in relation to continuing service terms in business acquisitions.

Research and Development Expenses. Research and development expenses in the third quarter of 2021 were RMB202.9 million (US$31.5 million), compared with RMB115.8 million in the same period of 2020. The increase was primarily due to an increase in salary and benefits expenses driven by higher headcount in research and development personnel, partially offset by a decrease in share-based compensation expenses.

Loss from Operations. Loss from operations in the third quarter of 2021 was RMB201.7 million (US$31.3 million), compared with RMB341.6 million in the same period of 2020.

Non-GAAP Adjusted Operating Income/(Loss)⁵. Non-GAAP adjusted operating loss in the third quarter of 2021 was RMB81.1 million (US$12.6 million), compared with non-GAAP adjusted operating income of RMB141.1 million in the same period of 2020.

Net Loss. Net loss in the third quarter of 2021 was RMB178.3 million (US$27.7 million), compared with RMB334.3 million in the same period of 2020.

Non-GAAP Adjusted Net Income/(Loss). Non-GAAP adjusted net loss in the third quarter of 2021 was RMB4.7 million (US$0.7 million), compared with non-GAAP adjusted net income of RMB145.8 million in the same period of 2020.

Basic and Diluted Net Income/(Loss) per ADS⁶ and Non-GAAP Adjusted Basic and Diluted Net Income/(Loss) per ADS⁷. Basic and diluted net loss per ADS were RMB0.17(US$0.03) in the third quarter of 2021, compared with basic and diluted net loss per ADS of RMB1.97 in the same period of 2020. Non-GAAP adjusted basic and diluted net loss per ADS were RMB0.00(US$0.00) in the third quarter of 2021, compared with non-GAAP adjusted basic net income per ADS of RMB0.86 and non-GAAP adjusted diluted net income per ADS of RMB0.23 in the same period of 2020.

Balance Sheet and Cash Flow

As of September 30, 2021, the Company had cash and cash equivalents, restricted cash, and short-term investments of RMB26.9 billion (US$4.2 billion) in total, compared with RMB18.9 billion as of December 31, 2020.

In the third quarter of 2021, net cash used in operating activities was RMB78.0 million (US$12.1 million).

Business Outlook

The Company expects its total net revenues to be between RMB1.24 billion and RMB1.31 billion in the fourth quarter of 2021, representing a year-over-year growth rate of approximately 46.0% to 54.0%. These forecasts reflect the Company's current and preliminary views on the market, operational conditions and the impact of the pending cybersecurity review, recurring COVID-19 related disruptions, extreme weather conditions and production constraints brought by electricity rationing measures in parts of China, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof. 

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 RMB6.4434 to US$1.00, the exchange rate in effect as of September 30, 2021 as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ 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 18, 2021 or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the third quarter of 2021.

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

The replay will be accessible through November 25, 2021 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 service, freight brokerage service and online transaction service. 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 stations operators. With a mission to make logistics better, the Company is shaping the future of logistics with technology and aspires to revolutionize logistics, improve efficiency across the value chain and reduce 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/(loss), non-GAAP adjusted net income/(loss), non-GAAP adjusted net income/(loss) attributable to ordinary shareholders, non-GAAP adjusted basic and diluted net income/(loss) per ordinary shareholder and non-GAAP adjusted basic and diluted net income/(loss) 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/(loss) as income/(loss) from operations excluding (i) share-based compensation expense, (ii) compensation expense resulting from repurchase of ordinary shares from certain employees in excess of fair value, (iii) amortization of intangible assets resulting from business acquisitions and (iv) compensation cost incurred in relation to continuing service terms in business acquisitions. The Company defines non-GAAP adjusted net income/(loss) as net income/(loss) excluding (i) share-based compensation expense, (ii) compensation expense resulting from repurchase of ordinary shares from certain employees in excess of fair value, (iii) amortization of intangible assets resulting from business acquisitions, (iv) compensation cost incurred in relation to continuing service terms in business acquisitions, (v) impairment of long-term investment, (vi) tax effects of non-GAAP adjustments and (vii) net income from discontinued operations, net of tax. The Company defines non-GAAP adjusted net income/(loss) attributable to ordinary shareholders as net income/(loss) attributable to ordinary shareholders excluding (i) share-based compensation expense, (ii) compensation expense resulting from repurchase of ordinary shares from certain employees in excess of fair value, (iii) amortization of intangible assets resulting from business acquisitions, (iv) compensation cost incurred in relation to continuing service terms in business acquisitions, (v) impairment of long-term investment, (vi) tax effects of non-GAAP adjustments and (vii) net income from discontinued operations, net of tax. The Company defines non-GAAP adjusted basic and diluted net income/(loss) per share as non-GAAP net income/(loss) 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/(loss) per ADS as non-GAAP net income/(loss) attributable to ordinary shareholders divided by the weighted average number of basic and diluted ADS, 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, compensation expense resulting from repurchase of ordinary shares from certain employees in excess of fair value, amortization of intangible assets resulting from business acquisitions, compensation cost incurred in relation to continuing service terms in business acquisitions, impairment of long-term investment 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/(loss), non-GAAP adjusted net income/(loss), non-GAAP adjusted net income/(loss) attributable to ordinary shareholders and non-GAAP adjusted basic and diluted net income/(loss) 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 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 is 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 pandemic, 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

The Piacente Group, Inc.
Emilie Wu
Tel: +86-21-6039-8363
E-mail: FTA@thepiacentegroup.com

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: FTA@thepiacentegroup.com

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SOURCE Full Truck Alliance Co. Ltd.