Full Truck Alliance Co. Ltd. (NYSE: YMM) is a leading digital freight platform that connects shippers with truckers to facilitate shipments across various distance ranges, cargo weights, and types. Operating primarily in China, the company aims to improve logistics efficiency and reduce the carbon footprint of the logistics industry through technology-driven solutions. Full Truck Alliance offers a range of services, including freight matching and value-added services, to enhance the logistics experience for shippers and truckers alike.  **[0001193125-24-066326_d811106dex991.htm:1]** **[0001193125-24-144380_d812593dex991.htm:5]** **[0001193125-24-262523_d858520dex991.htm:5]** **[0001193125-24-204848_d889283dex991.htm:5]** **[0001193125-23-016730_d414212dex991.htm:0]** **[0001193125-23-219545_d541266dex991.htm:5]** **[0001193125-24-061297_d765121dex991.htm:7]** **[0001193125-23-281044_d927136dex991.htm:5]** **[0001193125-23-152309_d447155dex991.htm:5]** **[0001193125-23-065099_d349875dex991.htm:7]** 

1. **Freight Matching Services** - Provides a platform for shippers to list freight requirements and matches them with truckers for efficient transportation. Includes online transaction services to facilitate secure and seamless transactions between shippers and truckers.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]** **[0001193125-24-066326_d811106dex991.htm:1]** **[0001193125-24-144380_d812593dex991.htm:5]** **[0001193125-24-262523_d858520dex991.htm:5]** **[0001193125-24-204848_d889283dex991.htm:5]** **[0001193125-23-016730_d414212dex991.htm:0]** **[0001193125-23-219545_d541266dex991.htm:5]** **[0001193125-24-061297_d765121dex991.htm:7]** **[0001193125-23-281044_d927136dex991.htm:5]** **[0001193125-23-152309_d447155dex991.htm:5]** **[0001193125-23-065099_d349875dex991.htm:7]** 
   - **Freight Brokerage** - Matches shippers with truckers to ensure efficient transportation of goods.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]** 
   - **Freight Listings** - Allows shippers to list their freight requirements on the platform.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]** 
   - **Transaction Commission** - Facilitates secure transactions between shippers and truckers.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]** 

2. **Value-Added Services** - Offers additional services to meet the diverse needs of shippers and truckers, including partnerships with financial institutions, highway authorities, and gas station operators.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]** **[0001193125-24-066326_d811106dex991.htm:1]** **[0001193125-24-144380_d812593dex991.htm:5]** **[0001193125-24-262523_d858520dex991.htm:5]** **[0001193125-24-204848_d889283dex991.htm:5]** **[0001193125-23-016730_d414212dex991.htm:0]** **[0001193125-23-219545_d541266dex991.htm:5]** **[0001193125-24-061297_d765121dex991.htm:7]** **[0001193125-23-281044_d927136dex991.htm:5]** **[0001193125-23-152309_d447155dex991.htm:5]** **[0001193125-23-065099_d349875dex991.htm:7]** 
   - **Credit Solutions** - Provides financial solutions to support logistics operations.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]** 
   - **Other Value-Added Services** - Includes various services to enhance the logistics experience.  **[0001193125-24-095461_d569306d20f.htm:196]** **[0001193125-24-095461_d569306d20f.htm:205]**

680e4ce864b937560ab0a44e9c997a7719a9fc89f2242d105a95eafb0895a768

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1. In the third quarter, you reported a **22% year-over-year growth in fulfilled orders**  **[YMM_3409551_1]** **[YMM_3409551_4]** , outpacing the growth rate of the overall freight market in China  **[YMM_3409551_7]** ; considering the subdued overall freight market activity  **[YMM_3409551_4]** **[YMM_3409551_7]** , how sustainable is this growth, and what strategies are in place to maintain it in future quarters?
2. Your fulfillment rate improved to **34.5%**, up **5.5 percentage points year-over-year**  **[YMM_3409551_4]** **[YMM_3409551_8]** , driven by a shift in shipper user structure and operational optimizations  **[YMM_3409551_8]** ; with the growth of your user base  **[YMM_3409551_4]** , especially as you approach saturation in segments like **1688 member shippers**  **[YMM_3409551_8]** , how do you plan to continue enhancing fulfillment rates in the future?
3. Transaction service revenues increased by nearly **69% year-over-year** in the third quarter  **[YMM_3409551_6]** **[YMM_3409551_10]** , driven by higher monetization per order  **[YMM_3409551_5]** **[YMM_3409551_10]** ; given this increase, how do you address potential pushback from truckers or shippers regarding increased fees, and how do you plan to balance monetization with user satisfaction?
4. You have been ramping up investment in user acquisition and branding campaigns  **[YMM_3409551_4]** **[YMM_3409551_2]** **[YMM_3409551_9]** , leading to a **33.6% year-over-year increase in shipper MAUs** to **2.84 million**  **[YMM_3409551_4]** **[YMM_3409551_9]** ; how do you assess the return on investment of these marketing expenses  **[YMM_3409551_4]** **[YMM_3409551_9]** , and what are your expectations for sales and marketing expenses going forward?
5. With your platform's rapid growth in user base and order volume  **[YMM_3409551_4]** **[YMM_3409551_2]** , exceeding **4 million active truckers**  **[YMM_3409551_5]** , what challenges do you foresee in maintaining service quality and platform scalability, and how are you addressing potential operational risks associated with this growth?

359a7ea865d073355f47d0a53ddd103fde091f68135d6ae3f639518d9e7b668b

- **Robust User Growth Driving Increased Order Volume**: YMM's average monthly active shippers increased by **32.8% year-over-year to 2.65 million** in Q2 2024, extending the first quarter's accelerated growth trajectory. Direct shippers contributed approximately **48% of total fulfilled orders**, boosting overall fulfillment rates and order volume growth. They expect to achieve **over 20% order volume growth for the full year**. [\[7\]](index 7), [\[10\]](index 10)
- **Rapid Expansion in LTL Business**: The Less Than Truckload (LTL) segment grew by **47% year-over-year** in Q2 2024, increasing its contribution to approximately **28% of total orders**. Leveraging industry shifts towards LTL and their platform's enhanced features, YMM expects the LTL business to play an increasingly important role in future development. [\[8\]](index 8)
- **Innovative Features Enhancing Matching Efficiency and User Engagement**: Introduction of features like **premium cargo bidding** and the **LTL carpool zone** has improved matching efficiency, increased trucker income, and enhanced user stickiness. Average monthly active truckers responding to orders grew by over **8% quarter-over-quarter to above 3 million**, ensuring adequate capacity supply. [\[7\]](index 7), [\[8\]](index 8), [\[13\]](index 13)

305f8ce6121f3e8b8bf17c7dda903963aa885791477df7d7ea151bd6ead937ca

- **Sales and marketing expenses increased by 41.8% year-over-year to RMB 412.5 million** due to higher advertising and marketing costs for user acquisition, which may impact profitability.  **[YMM_3409551_6]**
- The company's **monthly active 1688 member shippers have hit saturation**, with member counts remaining flat quarter-over-quarter and year-over-year, suggesting potential limits to growth in this segment.  **[YMM_3409551_10]**
- Despite recent growth, management mentioned **"very challenging macro freight market demand,"** indicating potential risks to future performance due to unfavorable market conditions.  **[YMM_3409551_8]**

464ca2052e6a712ef008c741860d9f463f287c989fe31b0d54e1fa85c7cfdd20

- **Strong Order Growth and Fulfillment Rates:** YMM reported a remarkable **40% year-over-year growth in fulfilled orders in Q4 2023**  **[YMM_3377413_6]** , significantly outpacing the broader logistics market. The fulfillment rate reached a record **32%**, an increase of over **8 percentage points year-over-year**  **[YMM_3377413_5]** , driven by an expanding user base and improved matching efficiency.
- **Rapid Expansion of User Base Enhancing Platform Network Effects:** The platform is experiencing rapid growth in both shippers and truckers, with an average of **around 20,000 new shippers and 10,000 new truckers registering daily** as of December.  **[YMM_3377413_6]**  Direct shippers now contribute over **45% of total fulfilled orders**, up **3 percentage points year-over-year**  **[YMM_3377413_5]** , enhancing order quality and fulfillment rates.
- **Significant Potential for Revenue Growth Through Commission Expansion:** The number of commission orders increased by **41% year-over-year** in Q4 2023.  **[YMM_3377413_8]**  The company believes that its current commission rates are conservative, with **ample room to boost commission revenues in the future**  **[YMM_3377413_8]** , expecting commission revenue growth in 2024 to remain strong and potentially surpass previous growth rates.

10633769127b7f6fa41896c900d5b4605de8472d5c52b5e6420763d272a87cb1

1. **Transaction Revenue Growth**  
   **Q:** What's driving 69% YoY growth in transaction revenue?  
   **A:** Our transaction service revenue increased by nearly **69% year-over-year** in Q3.  **[YMM_3409551_10]**  This growth was driven by an increase in monetized orders and a higher average commission per order.  **[YMM_3409551_10]**  Monetized orders grew due to more fulfilled orders and a higher monetization coverage ratio, which reached nearly **83%**, up almost **13 percentage points year-over-year**.  **[YMM_3409551_10]**  The average commission per order rose to **RMB 24.4**, an increase of about **17% year-over-year**, due to a higher proportion of high-quality orders.  **[YMM_3409551_10]** 

2. **Fulfillment Rate Improvement**  
   **Q:** What drove the fulfillment rate to 34.5%?  
   **A:** The fulfillment rate reached a record high of **34.5%** in Q3, up **5.5 percentage points year-over-year** and **0.8 percentage points sequentially**.  **[YMM_3409551_8]**  This was largely due to a shift toward direct shippers, who now contribute around **49%** of total orders and tend to have higher fulfillment rates.  **[YMM_3409551_8]**  Operational strategies like improving data application and freight matching also enhanced matching efficiency.  **[YMM_3409551_8]** 

3. **Order Volume Growth**  
   **Q:** What fueled 22.1% YoY growth in fulfilled orders?  
   **A:** Fulfilled orders grew by **22.1% year-over-year** in Q3, outpacing China's freight market growth.  **[YMM_3409551_7]**  This was fueled by new user acquisition, improvements in matching efficiency, and strong growth in new businesses like truckload services.  **[YMM_3409551_7]**  Our average monthly active shippers increased by **34% year-over-year** to reach **2.84 million**.  **[YMM_3409551_7]** 

4. **Active Shippers Growth**  
   **Q:** What's driving the 33.6% YoY increase in active shippers?  
   **A:** Monthly active shippers reached **2.84 million**, a **33.6% year-over-year** increase.  **[YMM_3409551_9]**  This growth was driven by effective user acquisition strategies, including online promotions and offline marketing campaigns, and by refining membership strategies to boost user engagement.  **[YMM_3409551_9]**  New shippers are widely distributed across sectors like building materials, food and beverages, and chemicals.  **[YMM_3409551_9]** 

5. **Entrusted Shipment Business**  
   **Q:** How is the entrusted shipment business performing?  
   **A:** The entrusted shipment segment fulfilled nearly **40,000 orders per day** in Q3, almost **double** from last year.  **[YMM_3409551_11]**  Growth was driven by strategic allocation of user resources, product enhancements, and refined pricing strategies that improved user retention and satisfaction.  **[YMM_3409551_11]** 

341f4ab194fab4dbce3e511d1405202a736e49ca202aae3f415096365ea0afdc

- **Transaction service revenues surged by 68.6% year-over-year to RMB 1.05 billion**, driven by increased monetized order penetration and higher average commission per order.  **[YMM_3409551_5]**
- **Fulfillment rate reached a record high of 34.5%, up 5.5 percentage points year-over-year**, due to improved user structure and operational strategies, enhancing matching efficiency.  **[YMM_3409551_8]**
- **Number of fulfilled orders grew by 22.1% year-over-year**, significantly outpacing the overall freight market growth in China, powered by new user acquisition and product enhancements.  **[YMM_3409551_7]**

01941a66db0e2de79d4ec1a16e61e6ca51c554dc6c1da516688756ed689a08b7

- **Slowing Order Volume Growth:** Despite a **22% year-over-year increase** in fulfilled orders in the second quarter, the growth rate has slowed compared to the first quarter. This slowdown is due to **overall demand weakness in the road freight since Q2** and **extreme weather conditions**, including heavy rains and flooding in parts of China.  **[YMM_3399552_8]**
- **Potential Negative Impact of Increased Commission Rates on Trucker Activity:** There are concerns that the **continued increase in commission rates** might negatively affect trucker activity levels. While the company reported that active truckers remained above **3 million** with over **8% quarterly growth**, the possibility of decreased trucker engagement due to higher commissions could impact fulfillment rates and service quality.  **[YMM_3399552_11]**
- **Modest Revenue Growth from Freight Listing Services Despite High Shipper MAU Growth:** The company experienced a **32.8% year-over-year increase** in average shipper MAUs to **2.65 million**, yet revenues from freight listing services grew by only **5.6% year-over-year**. This discrepancy suggests challenges in monetizing the growing user base, possibly due to lowering membership fees and offering free trials to attract new users, which might affect profitability.  **[YMM_3399552_10]**

927d15448d947be6db2545621510bfc20561c08ea9ca7df27ad38f46af825122

- **Strong revenue growth driven by transaction services**: Revenues from transaction services surged by **61.5% year-over-year** in the first quarter, reaching **RMB 690 million**, primarily due to refined commission strategies and increased monetized order penetration to **approximately 77%**.  **[YMM_3390174_9]**
- **Rapid expansion of user base enhancing order volume**: Average shipper monthly active users (MAUs) reached **2.14 million**, up **22.3% year-over-year**, with daily new shipper registrations exceeding **20,000**. This strong user growth contributed to a first quarter order volume growth of **nearly 30%**, significantly outpacing the industry growth rate of **5%**.  **[YMM_3390174_8]** **[YMM_3390174_5]**
- **Record high fulfillment rate improving operational efficiency**: Fulfillment rate reached an all-time high of **33.5%** in the first quarter, up nearly **6 percentage points year-over-year**, driven by optimization of user structure and enhanced order distribution strategies, leading to better matching efficiency and user experience.  **[YMM_3390174_6]**

e0dcd3d093f288bfd504d0f5ebca56c9e990f3f0e6a2e72dc1ba4929aa2ff316

- **YMM expects its order volume growth to slow down to the mid-20% range in Q2 2024**, compared to nearly 30% year-over-year growth in Q1, due to high base effects, indicating potential deceleration in growth momentum.  **[YMM_3390174_5]**
- **Increasing marketing and user acquisition expenses** may pressure profitability, as the company plans to allocate **over half of its user acquisition budget to online initiatives in 2024** to drive user growth.  **[YMM_3390174_8]**
- **Aggressive commission rate increases and changes in commission strategies** may negatively impact user experience and lead to potential user attrition, as the company optimized commission rules by eliminating commission decay based on matching duration and increasing commission rates for high-quality orders.  **[YMM_3390174_9]**

2c0b945fd57d715e3aa878c114c3727ef7ba1676a57801023c0db4a3ffc9afd9

- **Non-GAAP sales and marketing expenses increased by 50.6% year-over-year in Q4**, outpacing revenue growth, potentially putting pressure on margins. Management expects sales and marketing expenses to continue increasing in 2024.  **[YMM_3377413_9]**
- **Revenue growth from freight listing services has been slower compared to the fast growth of monthly active shippers**, due to lower ARPU from new low-frequency direct shippers. This may affect overall revenue growth.  **[YMM_3377413_7]**
- **The company plans to maintain a prudent approach in raising commission rates**, which could indicate potential challenges in monetizing their platform services and increasing revenue from commissions.  **[YMM_3377413_8]**

e2d0005442377a9a6145630526627fa20afe0282a7bd5fc636e8d60847808d76

Full Truck Alliance Co Ltd (YMM)

Financials