Full Truck Alliance - Earnings Call - Q3 2025

Transcript

Speaker 2

Ladies and gentlemen, good day and welcome to Full Truck Alliance's Third Quarter 2025 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.

Speaker 0

Thank you, Operator. 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. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect FTA's business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only.

For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from FTA's senior management are Mr. Hui Zhang, our Founder, Chairman, and CEO, and Mr. Simon Chai, our Chief Financing and Investment Officer. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on FTA's investor relations website at ir.fulltruckalliance.com. I will now turn the call over to our Founder, Chairman, and CEO, Mr. Zhang. Please go ahead.

Speaker 1

大家好，欢迎各位参加满帮2025年第三季度业绩电话会。今年三季度面临复杂多变的市场环境，满帮坚持以数字化科技推动公务物流行业降本增效。秉承用户为根的价值观，我们聚焦用户保障体系，持续优化平台生态，提升私货双端的获得感。基于我们的交易效率和服务体验优势，本季度集团的履约订单量达到了6,340万单，同比增长了22.3%。再次反映了数字化物流对于传统线下物流交易模式的持续升级。

Speaker 0

Hello everyone, thank you for joining us today on our third quarter 2025 earnings conference call. In the third quarter, FTA continued to reduce logistics costs and enhance efficiency across the road freight industry by leveraging digital and intelligent technologies amid a complex and evolving macro environment. Anchored by our core user-centric ethos, we strengthened our user protection mechanisms, enhanced our platform ecosystem, and further elevated the overall experience for both shippers and truckers. Our ongoing enhancements to transaction efficiency and service quality drove total fulfilled orders to 63.4 million, a year-over-year increase of 22.3%. This continued growth underscores the industry's accelerating transformation from traditional offline logistics transactions to digital and intelligent logistics solutions.

Speaker 1

本季度我们在用户运营、运力生态和技术赋能三个维度持续发力，各项运营指标实现稳步提升。首先，针对广大中小货主，我们坚持推进品牌建设和精准拉新，并聚焦分行业分场景的体验优化。三季度发货货主平均月活提升到了335万人，同比增长是17.6%。其中会员货主规模同比显著增长，用户联系持续加强。同时，直客货主履约单量占比攀升至了54%，反映出了用户结构的不断优化。

Speaker 0

Furthermore, we consistently improved operating matrix across three key areas during the quarter: user operations, ecosystem development, and technology enablement. For shipper users, we further expanded our brand visibility and drove targeted user acquisition of SME shippers while refining the user experience across different cargo categories and freight scenarios. As a result, average monthly active shippers reached 3.35 million in the quarter, up 17.6% year-over-year. The number of shipper members grew significantly year-over-year, reflecting rising user engagement and stickiness. In addition, fulfilled orders contributed by direct shippers increased to 54%, demonstrating ongoing optimization of our user structure.

Speaker 1

在运力生态方面，我们持续发力，司机行为分以及会员体系，牵引司机提供优质服务，从而获得更多权益，推动运力生态进化升级。优质的运力供给带来了履约率同比大幅提升6个百分点，达到了40.6%。同时，我们聚焦司机保障体系，保护司机的合法权益。截止本季度末，滚动12个月履约的司机年活达到了448万，再创历史新高。

Speaker 0

In terms of trucker ecosystem, we continue to promote and enhance our trucker credit rating and membership program to incentivize high-quality service and elevate trucker benefits. These initiatives boosted capacity and increased reliability of truckers, driving the overall fulfillment rate to 40.6%, an increase of approximately 6 percentage points year-over-year. Simultaneously, we reinforced our trucker protection framework to better safeguard their rights and interests. By the end of the quarter, the number of active truckers fulfilling orders over the past 12 months reached 4.48 million, marking another historical high.

Speaker 1

在技术赋能方面，我们着眼于公务物流的痛点，依托海量真实的物流场景数据，推动AI技术的全链条渗透。此外，芝加中国的成功合并将充实我们在AI领域的资源储备与技术实力，为平台未来的发展打下坚实的基础。

Speaker 0

On technology, we accelerated full-chain AI deployment across the platform, leveraging our extensive scenario-based logistics data to address critical pain points in freight matching. Moreover, the successful acquisition of Giga AI, previously known as Plug PRC, significantly bolstered our AI capabilities and technological foundation, positioning us for sustained innovation and operational excellence.

Speaker 1

本季度稳健的经营数据带来了健康的财务回报。集团总营收达到了人民币33.6亿元，同比增长了10.8%。其中交易服务收入达到了人民币14.6亿元，同比增长39%，但总收入比例达到了43%，标志着集团收入结构的持续优化。本季度非美国通用会计准则下的调整后营业利润达到了人民币8.5亿元，调整后净利润达到了人民币9.9亿元。

Speaker 0

Our robust operational performance this quarter translated into healthy financial results. Total revenues reached RMB 3.36 billion, representing a year-over-year increase of 10.8%. Transaction service revenues grew 39.0% year-over-year to RMB 1.46 billion, accounting for 43% of total revenues and reflecting continued optimization of our revenue mix. Non-GAAP adjusted operating income reached RMB 849.1 million, while non-GAAP adjusted net income reached RMB 988.1 million.

Speaker 1

展望未来，满帮将继续推动平台私货生态的健康良性发展，并坚持以技术创新驱动行业数字化升级，积极开拓新市场，赋能企业根据物流竞争力。下面我把时间交给 Simon 为大家详细介绍三季度业绩表现。

Speaker 0

Looking ahead, FTA will continue to penetrate the road freight market and cultivate a resilient and sustainable ecosystem for both shippers and truckers, driving the industry's digital and intelligent transformation and empowering enterprises with greater logistics competitiveness through continuous technological innovation. Thank you all once again. Now I'll pass the call over to Simon, who will provide an update on our third quarter's business progress and the financial results.

Speaker 3

Thank you, Mr. Zhang, and thank you all for joining today's earnings conference call. I will now provide an overview of our operational highlights and financial results for the third quarter of 2025. Starting with our operational performance, during the quarter, we sustained solid growth momentum with continued improvements in key operating metrics, highlighting the strength and resilience of our business model. Despite challenging macro conditions and adverse weather, such as typhoons in certain regions that temporarily disrupted freight demand during the quarter, we continued to deliver strong order volume growth. Total fulfilled orders once again significantly outperformed the broader freight industry, reaching 63.4 million in the third quarter, representing a year-over-year increase of 22.3%. The steady growth in fulfilled orders was driven by the healthy engagement of our shipper users and the ongoing enhancement of our fulfillment service infrastructure, leading to improvements in both scale and service quality.

In the third quarter, our overall fulfillment rate reached 40.6%, increasing by more than 6 percentage points from the prior year period. Specifically, the average fulfillment rate of mid and low-frequency shippers reached nearly 60%, and their contribution to total fulfilled orders increased to 54%. The positive outcomes are the results of our ongoing optimization in shipper structure, which further strengthened the reliability and sustainability of our ecosystem. These achievements underscore the effectiveness of our long-standing refined operations strategy, laying a solid foundation for the platform's long-term high-quality growth. Turning to user growth, average monthly active shippers reached 3.35 million in the third quarter, increasing by 17.6% year-over-year. Our shipper membership program continued to gain traction, with over 370,000 active members in the 288 Membership Program during the quarter, representing a significant year-over-year increase.

In the meantime, the 12-month rolling retention rate for shipper members held steady at around 80%, underscoring the strong appeal of our services and the high stickiness of our user base. In addition, the number of active truckers fulfilling orders over the past 12 months hit a new record, increasing to 4.48 million in the third quarter, while the next month's retention rate for the truckers who responded to orders was consistently above 85%. We're delighted to see that our trucker users continue to demonstrate strong platform loyalty. During the quarter, we also continued to enhance our trucker infrastructure by expanding the breadth and the depth of the rights protection program, which helped improve truckers' order acceptance rate and experience. For example, supported by targeted incentive programs and diversified protection mechanisms, the number of trucker members continued to grow.

These trucker members have significantly higher order acceptance rate as compared to non-members, creating a positive flywheel of user engagement, order growth, and platform stickiness. Now turning to monetization, building on a solid foundation of steady growth in order volume, we continue to explore and unlock monetization opportunities. These efforts enable us to deliver another quarter of robust top-line performance despite strategic changes to some non-core business, such as freight brokerage, backed by significant improvements in operating leverage. As a result, transaction service revenue grew 39% year-over-year to RMB 1.46 billion. To further break down, monetized order penetration rate reached 88.6%, up nearly 6 percentage points from the prior year period. An average monetization per order increased to RMB 25.9 from RMB 24.4 in the prior year period.

These improvements stem from our deepened understanding of high-value users and our ability to meet their increasingly diversified needs through upgraded services and tailored incentive programs. At the same time, our growing scale enables us to drive down unit operating costs, leading to enhanced monetization efficiency and profitability while maintaining fair trucker earnings and strong order fulfillment. Looking ahead, we remain keenly focused on further unlocking the monetization potential of high-value users, leveraging our intelligent freight matching system and flexible subsidy strategies. In addition, our refined and tiered membership system enables us to cultivate and empower our core transportation capacity, further reinforcing a virtuous cycle of user growth, operating excellence, and profitability improvements. We're confident that we are well positioned to achieve our full-year targets and deliver long-term sustainable value to our platform and stakeholders. Now I'd like to provide a brief overview of our 2025 third quarter financial results.

Our total net revenues in the third quarter were RMB 3,358.2 million, representing a 10.8% increase year-over-year, primarily attributable to an increase in revenues from freight matching services. Net revenues from freight matching services, including service fees from freight brokerage models, membership fees from listing models, and commissions from transaction service, were RMB 2,797.6 million in the third quarter, representing an increase of 9.6% year-over-year, primarily due to the rapid increase in transaction service revenues. Revenues from the freight brokerage service in the third quarter were RMB 1,094.3 million, compared to RMB 1,280.9 million in the same period of 2024, primarily attributable to a decrease in transaction volume and partially offset by an increase in service fee rate. Revenues from freight listing service in the third quarter were RMB 247.1 million, up 10.6% year-over-year, primarily due to the growing number of total paying members.

Revenues from the transaction service in the third quarter were RMB 1,456.1 million, up 39% year-over-year, primarily driven by an increase in order volume penetration rate and per order transaction service fee. Revenues from value-added services in the third quarter were RMB 560.7 million, up 16.9% year-over-year. The increase was primarily due to growing demand for credit solutions. Third quarter cost of revenues was RMB 1,605.2 million, compared with RMB 1,364.9 million in the same period of 2022, primarily due to increases in VAT-related tax surcharges and other tax costs net of grants from government authorities. These tax-related costs net of government grants totaled RMB 1,427.2 million, compared with RMB 1,221.6 million in the same period of 2024, primarily due to an increase in tax costs net of government grants related to the company's freight brokerage service.

Our sales and marketing expenses in the third quarter were RMB 438.8 million, compared with RMB 412.5 million in the same period of 2024. The increase was primarily due to further investments in enhancing user ecosystem construction and protecting user rights and interests. General and administrative expenses in the third quarter were RMB 161.6 million, compared with RMB 222.9 million in the same period of 2024. The decrease was primarily due to lower share-based compensation expenses. R&D expenses in the third quarter were RMB 233.3 million, compared with RMB 195.1 million in the same period of 2024. The increase was primarily due to the inclusion of Giga AI, previously known as Plus PRC's R&D costs.

Following the completion of our further investment in Giga AI on July 9, 2025, and its subsequent consolidation into our financial results, income from operations in the third quarter was RMB 776.3 million, an increase of 1.9% from RMB 762 million in the same period of 2024. Net income in the third quarter was RMB 921 million, compared with RMB 1,121.9 million in the same period of 2024. Under non-GAAP measures, our adjusted operating income in the third quarter was RMB 849.1 million, compared with RMB 884.5 million in the same period of 2024. Our adjusted net income in the third quarter was RMB 988.1 million, compared with RMB 1,241.2 million in the same period of 2024. Basic and diluted net income per ADS were RMB 0.87 in the third quarter, compared with RMB 1.06 in the same period of 2024.

Non-GAAP adjusted basic net income per ADS was RMB 0.94 in the third quarter of 2025, compared with RMB 1.18 in the same period of 2024. Non-GAAP adjusted diluted net income per ADS was RMB 0.96 in the third quarter of 2024, compared with RMB 1.17 in the same period of 2024. As of September 30, 2025, the company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products with maturities over one year of RMB 31.1 billion in total, compared with RMB 29.2 billion as of December 31, 2024. For our fourth quarter 2025 business outlook, we expect our total revenues to be between RMB 3.08 billion and RMB 3.18 billion, compared with RMB 3.16 billion in the same period of 2024.

Excluding freight brokerage service, net revenues are expected to range from RMB 2.18 billion-2.28 billion, representing an estimated year-over-year growth rate of 17.1%-22.5%. These forecasts are based on 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. That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question.

For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Your first question comes from Ronald Kung from Goldman Sachs. Please go ahead. 嘿，谢谢两位总裁们，呃，妈妈和妈妈。那想问一下这个履约，呃，订单的，那三季度看到这个，呃，履约订单同比增速还非常快，22个点。那想问，呃，背后主要的驱动因素，然后我们对这个四季度和明年整体应该，呃，怎么怎么看这个展望。那让我翻译一下。 Thank you, management, for taking my question. I want to ask about fulfilled orders that had, still maintained very solid growth, momentum increasing 22%. so what were the main growth drivers, and, can you share the outlook for the fourth quarter and next year? Thank you. Yeah, thank you, Ronald. our fulfilled orders continue to outgrow the broader freight market in the past quarter due to key three factors. first, solid user acquisition, provided a strong foundation for growth with deeper brand penetration among SMEs and steady, steady improvements in the market's acceptance of online freight matching models. The number of newly registered shippers continued to grow organically.

In addition, we continue to focus on proactively reaching potential users through key touchpoints via highly efficient marketing channels, including app stores and high-traffic offline placements such as high-speed railway stations. As a result, the first order conversion rate of new users improved substantially year-over-year. Secondly, higher engagement from existing users, coupled with ongoing product optimization, continued to enhance our matching efficiency. During the quarter, fulfillment frequency among shipper members further improved year-on-year, demonstrating strong customer loyalty and stickiness. On the trucker side, we introduced the new cargo zone, which highlights newly posted high-quality orders and helps truckers secure attractive opportunities more efficiently, driving improved performance in matching and fulfillment. On the shipper side, we further streamlined the order posting interface by removing or reducing unrelated entries and product sections.

These initiatives made the order placement process more intuitive and efficient, significantly improved user experience and effectively boosted repeat order intent. Third, the new business, the new business continued to drive incremental order, incremental growth momentum supported by improving service quality and growing user base. Both our less-than-truckload and entrusted businesses continue to deliver robust growth in the third quarter. As these two businesses continue to mature and improve in operational efficiency, we expect that on top of the solid growth in our core full truckload business, they will further satisfy the diversified needs from both our new and existing shippers and support our long-term order volume growth. Looking ahead, we remain confident in our platform's order volume growth momentum.

Despite ongoing macro uncertainty, our dominant position and rising digitalization penetration has driven deeper engagement among SME shippers and maintained stable member retention and enhanced matching efficiency consistently, all supporting sustained order growth. At the same time, we will continue to optimize our user ecosystem by strengthening qualification reviews and credit rating systems to attract and retain highly credible, highly active users, and laying a solid foundation for our high-quality order growth. Thank you. Thank you, Sam. Thank you. Your next question, it comes from Eddie Wong from Morgan Stanley. Please go ahead. 哎，张辉总，张文总，啊，妈妈，妈妈，啊，感谢，感谢接受我的提问。啊，我的问题可能还是关于这个货主的。这三季度看到这个货主的月货达到了335万，同比提升了17.6个，呃，百分比。啊，想问一下这个背后主要的驱动因素是什么？那我自己翻译一下。 Thank you, management, for taking my question. In the third quarter, the number of the monthly active shippers reached 3.35 million, representing a year-over-year increase of 17.6%. What are the major drivers behind the growth? Thank you. Thank you, Eddie.

In the third quarter, the number of monthly active shippers continued to grow very steadily, supported by more efficient multi-channel user acquisition and organic growth driven by referrals. These drivers not only grew our user base, but also helped to strengthen the overall engagement and quality of our active users. First, our highly efficient multi-channel user acquisition efforts continue to drive steady growth in shipper users. We implemented a dual approach combining brand exposure and targeted conversion. We improved online acquisition efficiency by strengthening app store campaign management and optimized keyword search while refining download page design and user conversion funnels. Offline-wise, we expanded advertising in high-traffic areas such as high-speed rail stations, subway business districts, and key commercial hubs. We also leveraged the scenario-based outreach channels such as truck stickers to reach SMEs with actual shipping needs.

This integrated online and offline approach not only enhanced brand awareness, but also effectively attracted high-potential shippers, laying a solid foundation for sustained user growth. Second, word-of-mouth referrals continue to serve as the primary driver of organic shipper growth. Unlike consumer-facing businesses, most shippers are small and medium-sized businesses whose decisions are driven mostly by trust, often requiring longer conversion cycles but resulting in higher retention and repeat purchase rates. During the quarter, we continue to invest in service reliability, capacity assurance, and fulfillment experience optimization, further strengthening user trust. As a result, word-of-mouth referrals from existing shippers became the most efficient channel for user acquisition. Notably, new shippers acquired through referrals tend to be of higher quality with stronger fulfillment rates and long-term engagement as compared with other acquisition channels, while coming at lower acquisition costs.

Looking ahead, we will continue to pursue a dual-engine growth strategy combining brand-led acquisition and referral-driven expansion. On one hand, we'll continue to optimize our marketing strategy to improve acquisition efficiency and brand penetration within target user groups. On the other hand, we will enhance user satisfaction by improving service quality and strengthening protection mechanisms, reinforcing trust and professionalism within the shipper community. These initiatives will support high-quality, sustained growth across the shipper ecosystem, supporting our long-term growth. Thank you. Thank you, Sam. Thank you. Your next question comes from Brian Gong from Citi. Please go ahead. 哎，张辉总，三门总，妈妈，妈妈，晚上好。啊，我有个问题，就是想请教一下我们在持续改善司机生态这边的一个情况，就是我们司机会员啊，三季度的主要进展有哪些。 I will translate myself. Thanks, management, for taking my question. Have a quick question on ecosystem improvement on trucker side. Can you give an update on key developments of trucker memb, trucker members in the subquarter? Thank you. Thank you, Brian.

As of the end of September, our active trucker members continue to grow steadily, reaching almost 1 million members, achieving further growth compared with the previous quarter. Structurally, roughly 30% of trucker MAUs in the long-haul segments are membership subscribers and contribute to over 40% of order volume in the long-haul segment. This data underscores the higher engagement and stronger stickiness of our trucker members who have become the core pillar of our capacity network. During the quarter, we continue to upgrade our trucker membership tiering system. The current framework focuses on three key dimensions for truckers: cost reduction, fulfillment enhancement, and risk protection. Our commission coupons helped truckers effectively reduce service costs during order fulfillment, and our premium cargo bidding cards increase truckers' visibility and ranking priority in matching with high-quality shipments.

We also relaunched the freight payment protection program, expanding its coverage scope, which further strengthened trucker trust and security during transactions, directly addressing many of their fundamental operation needs. Overall, the trucker membership program has become a key driver in securing high-quality trucker capacity and improving fulfillment efficiency on our platform. Looking ahead, as we further expand membership benefits and refine incentive programs, we expect trucker programs to contribute to a growing share of our total transportation capacity and building a stronger and more sustainable foundation for continued order growth and fulfillment stability. Thank you. Thank you, Sam. Thank you. Your next question, it comes from Yuan Lao from Citics. Please go ahead. 哎，张辉总，三门总，妈妈，妈妈，晚上好。呃，感谢接受我的一个提问啊。呃，我的问题是，呃，目前在呃，整个国内的一个反内卷的一个政策背景下，那我们是否呃，有采取针对性的这些措施去响应这些政策的一些号召，尤其是对于货主和司机群体啊，提供这个相关的一些权益保障吧。啊，我自己翻译一下。 thanks, management, for taking my questions.

Under the current policy environment of anti-innovation, how has the company implemented any measures to align with these policy objectives and offer enhanced protection or benefits to shippers and truckers? Thank you. Thank you. Under the current policy environment of anti-evolution, we basically, against the overall background of anti-evolution and promoting high-quality growth, our strategic directions remain clear. We will continue to pursue sustainable, high-quality growth through ecosystem refinement, structural optimization, and user protection enhancement. First, we remain committed to enhancing ecosystem integrity with a key focus on advancing healthier user protocols by implementing ID verification and fulfillment credit scoring, as well as refining user tiering. We enhance the value of user accounts and increase switching costs, which in turn accelerates the exit of low-quality users.

At the same time, we have shifted the focus of our credit rating system for both shippers and truckers from frequency of transaction to quality of their behaviors. This system evaluates metrics such as fulfillment rate, positive feedback rate, and complaint rate, reinforcing both rewards and disciplinary measures to guide users towards higher standards and stronger trust, fostering a healthier platform ecosystem. Second, we have focused on emphasizing fair pricing and healthy competition on our platform. For example, to prevent malicious pricing competition, we employ algorithms to identify and block abnormally low prices in real time, removing or restricting orders that fall significantly outside reasonable market price ranges. Additionally, we incorporated a price rationality weighting into our order matching, prioritizing the pairing of high-quality freight with reliable truckers. This approach protects truckers' earnings and enhances shippers' fulfillment certainty.

Together, these measures provide a robust technological foundation to promote healthy market behaviors between truckers and shippers. At the same time, we achieved notable progress in strengthening user protection and trust. Our upgraded comprehensive protection program currently provides full coverage for key risks for both user groups, including freight payment defaults, empty runs, and cargo damages. To address truckers' top concerns of timely freight settlement, we have implemented a guaranteed compensation mechanism that provides trucker members with expedited reimbursement for freight, empty runs, and cancellations, ensuring prompt payment and minimizing trust barriers throughout the fulfillment process. Overall, we are building a more sustainable, efficient, and transparent freight ecosystem by continuously optimizing our user base, fulfillment certainty, and matching and protection framework. Our focus on high-quality growth is reflected not only in a healthier user base, but also in continuous improvements in our service quality and governance.

Looking ahead, we will continue to focus on improving user trust, operational efficiency, and fulfillment quality, driving the long-term sustained development of the freight industry and laying a solid foundation for our growth. Thank you. Your next question, it comes from Wenji Zhang from CICC. Please go ahead. 啊，关于早晚上好，谢谢接受我的提问。那我的问题是关于货运经济业务，想了解在8月份我们公布调整策略之后，目前这项业务的最新进展如何，包括我们用户的留存，还有该业务调整之后的运营利润情况。嗯，我自己翻译一下。 Thank you, management, for taking my question. My question is regarding freight brokerage business. I wonder what's the latest progress of the business since the pricing adjustment in August. Could you give an update on user retention and profitability following these changes? Yeah, thank you. The business generally performed better than we expected. In the third quarter, our freight brokerage business transitioned to a higher service fee rate steadily, and overall performance was good.

Following the expected gradual removal of tax rebates and increasing service fee rates to between 10-11%, user behavior showed healthy, structural improvements. From a user perspective, churn from shippers in the third quarter was primarily concentrated among those who demanded frequent VAT invoicing service only and contributed to limited value to the platform beyond invoicing fees. Conversely, retention rates among shippers with small and medium value VAT invoices remained above 80%, significantly exceeding our expectations. These users are generally less price sensitive and care more about the convenience of freight matching and fulfillment certainty, which kept their engagement rates stable following the policy adjustments. Currently, invoicing plus freight matching orders represent over 70% of the total orders in our freight brokerage services, highlighting the growth importance of our matching service and the strong alignment between this business and the platform's core capabilities.

At the same time, we are closely monitoring user retention and structural shifts in our user base, with a particular focus on the long-term stability of small and medium-sized shippers and ongoing conversions of new users, ensuring that the benefits of these structural optimizations are sustained and reinforced. From a financial standpoint, the freight brokerage business primarily aims to increase stickiness by enhancing shipper experience and platform engagement rather than being a major profit contributor. Although its emphasis on invoicing results in relatively low margins and a limited impact on our overall profit, it still plays a strategic role in strengthening our user engagement and refining more order fulfillments. Looking ahead, we will continue to focus on improving the experience for small and medium-sized shippers, gradually expanding contribution from high-quality users, and ensuring that the freight brokerage business delivers sustainable performance under the new policy.

Thank you, Sam. Thank you. Your next question, it comes from Richie Sun from HSBC. Please go ahead. 哎，张辉总，三门总，妈妈，妈妈，晚上好。感谢你们给我提问的机会。呃，我想问一下，呃，三季度的会员费收入大概，呃，2.471，呃，同比增长10.6%，这个增长的主要动力是什么？如何看待未来用户的付费率转化的这个趋势？ Thank you, management, for taking my questions. In the third quarter, revenue from freight listing reached RMB 247 million, up 10.6% year on year. What were the main growth drivers, and how do you feel the user payment conversion trends going forward? Thank you. Thank you. Revenues from our freight listing service continue to grow steadily in the past quarter, primarily driven by growth in paying users and the ongoing optimization of the membership structure. As of September 2025, the number of shipper members on our platform reached 1.27 million. The majority of the incremental growth came from the 288 Membership Program, which was launched last year. This program was designed to meet the needs of small and medium-sized business owners new to our platform.

By lowering the entry barrier and offering benefits such as freight rate coupons and order placement, placement tracking, the program significantly improved membership conversion and user satisfaction. Looking at the membership mix, while the 688 memberships achieved steady year-over-year growth in this quarter, the 288 memberships showed the most robust growth across three membership tiering, with active members increasing by more than 300% compared with the same period last year. The strong growth not only broadened our user base, but also strengthened the platform payment rate. Notably, the number of high-frequency shippers under the RMB 1,688 tier continued to decline, reflecting a structural shift in our shipper base. This change reflects the platform's ongoing optimization in matching efficiency and fulfillment guarantees, which are gradually replacing traditional agent roles and further enhancing the quality of our user ecosystem.

Turning to user conversion, our latest data shows that around 80, around 20% of the users who reach at the limit of their 288 membership chose to upgrade to the RMB 688 tier. These results are aligned with our initial expectation when designing the program and underscore the effectiveness of our tiered membership system. Our membership business has established a healthy growth cycle that attracts users through low entry barriers, retains them with superior experience, and drives upgrades through tiered benefits. This model enables long-term and steady penetration among direct shippers and supports the high-quality growth of the overall business. In addition, retention among existing members remains robust, demonstrating solid user stickiness. As of the end of the third quarter, our 12-month rolling retention rate for shipper members held steady at around 80%, consistent with prior quarters.

This validates our ongoing optimization in member experience and reflects strong recognition from shippers for our platform's reliable fulfillment capabilities and responsive service. We expect that 288 and 688 memberships to continue driving growth in Freight Listing Service revenue. Meanwhile, as the platform continues to enhance features such as fulfillment protection and shipment tracking, payment conversion rates are expected to trend up steadily. We will continue to optimize our membership program and benefits, aiming to further strengthen long-term user retention and lifetime value. Thank you. That concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments. Thank you all for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investor Relations. Have a good day.

That does conclude our conference for today. Thank you for participating. You may now disconnect.