Q3 2023 Smart Share Global Ltd Earnings Call
Speaker 1: Hello, and thank you for standing by for Energy Monster's 2023 Third Quarter Earnings Conference Call. At this time, all participants
Hello, and thank you for standing by for LNG Monsters, 2022 third quarter earnings conference call.
At this time, all participants are in listen only mode.
Speaker 1: Today's conference is being recorded. If you have any objections, you may disconnect at this time.
Today's conference is being recorded if you have any objections you may disconnect at this time.
Speaker 1: I would now like to turn the meeting over to your host for today's conference call, Director of Inventory Relations, Hanson Shade.
Now, let's try to you know what's your host for today's conference call director of Investor Relations and Sanjay.
Yes.
Thank you welcome to our 2023rd quarter earnings Conference call. Joining me on the call today are Marc Hi, Inner City Monsters, Chairman and Chief Executive Officer, and Maria Shields, Chief Financial Officer.
Speaker 2: Thank you. Welcome to our 2023 Third Quarter Earnings Conference Call. Joining me on the call today are Mark Tsai, Energy Monsters Chairman and Chief Executive Officer, and Maria Xun, Chief Financial Officer.
Speaker 2: For today's agenda, management will discuss business updates, operation highlights, and financial performance for the third quarter of 2020.
Today's agenda management will discuss business updates operation highlights and financial performance for the third quarter of 2023.
Speaker 2: Before we continue, I refer you to our Safe Harbor Statement in the earnings press release which will slide through this call, as we will make forward-looking safe
Before we continue I refer you to our Safe Harbor statement in the earnings press release, which will apply to this call as we will make forward looking statements.
Speaker 2: Also, this call includes discussion of certain non-GAAP financial...
Also this call includes discussion of certain non-GAAP financial measures.
Speaker 2: Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
Speaker 2: Finally, please note that unless otherwise stated, all figures mentioned during this call are in R&D.
Finally, please note that unless otherwise stated all figures mentioned during this call alright RMB.
Speaker 2: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mark Tsai, for the business and operation highlight.
I would now like to turn the call over to our chairman and Chief Executive Officer, Mark tie for the business and operational highlights.
Speaker 3: Thank you, Hans. Good day, everyone. Welcome to our 2023 third quarter earnings call.
Thank you.
Good day, everyone and welcome to our 2020.
Third quarter earnings call.
Speaker 3: We are very pleased to announce that our operation continues to achieve new heights during the third quarter of 2023, with both Mobile Device Charging Service GMV and POI count both reaching historical highs.
Well they were pleased to announce that our accretion continues to achieve new heights during the third quarter of 2023 with both mobile device charging service GMB N P O I count both in reaching historical high.
Speaker 3: Mobile device charging GNV increased by 18% year-over-year as the progression towards normalization of offline food traffic continues its recovery.
Mobile device charging G&A increased by 18% year over year as the progression towards normalization of offline.
Traffic continues its recovery trained.
Speaker 3: Performance in third quarter showcased a consistent monthly growth pattern.
Performance in third quarter showcased a consistent monthly growth pattern.
Speaker 3: July marked a 16% year-over-year GND increase, followed by an 18% increase in August and a stronger 22% growth in September .
July marked a 16% year over year <unk> increase followed by an 18% increase in August and a stronger 22% growth in September.
Speaker 3: The growth in GMB was particularly pronounced in higher tier cities.
The growth in GSV was particularly pronounced in higher tier cities with Shanghai, Xi'an, Chengdu and Beijing.
Speaker 3: with Shanghai, Xi'an, Chengdu, and Beijing.
Speaker 3: driving the recovery with impressive year-over-year growth of 65 percent.
Driving the recovery with impressive year over year growth of 65%, 55%, 32% and 28% respectively.
Speaker 3: 32% and 28% respectively.
Speaker 3: Both in terms of POI types was all encompassing as well with every type of POI growing year over year.
Both in terms of <unk> was all income passing as well with every type of growing year over year.
Speaker 3: Transportation hub filled by the surge in summer travel achieved a notable 62% year-over-year growth.
Transportation hub field by the surge in summer travel achieved a notable 62% year over year growth.
Speaker 3: Other POI types such as office buildings, family centers, banks, and government institutions exhibit robust growth with a year-over-year increase of 57%, 65%, 72%, and 75% respectively.
Other people I types, such as office buildings family Center banks and government institutions exhibit robust growth with a year over year increases of 57%, 65%, 72% and 75% respectively.
Speaker 3: The recovery in our GNV continues to be driven by the diversification of coverage, both in terms of city tier, as well as POI time.
The recovery in <unk> continues to be driven by the diversification of coverage both in terms of city tier as well as <unk>.
Speaker 3: which reiterates the adaptability of our services to diverse environments and general demand for our service across the globe.
Should we get two weeks.
That stability about services to diverse environments and general demand for our centers Cross China.
Speaker 3: In terms of network expansion, we added nearly 80,000 new POIs during the third quarter of 2023, with restaurants, entertainment and shopping hubs locations leading the growth.
In terms of network expansion, we added nearly 80000, new P lives during the third quarter of 2023.
With the restaurants entertainment and shopping hops locations leading to growth.
Speaker 3: We were also able to onboard leading KAs in various industries.
We were also able to on board, leading K as in various industries.
Speaker 3: as the benefit of our brand value and network effect of our operation continues to scale.
The benefits about brand value and network effect of our accretion continues to scale.
Speaker 3: This dynamic expansion reiterates our commitment to providing charging solutions across diverse locations.
This dynamic expansion reiterate our commitment to providing charging solutions across diverse locations.
Speaker 3: so that more users in need of our service can more easily access our service.
So that won't use as a neat about service can more easily access our solutions.
We are excited that expansion of our network coverage is unlocking new opportunities to reach and stuff.
Speaker 3: We are excited that the expansion of our network coverage is unlocking new opportunities to reach and serve a broader user base.
Broader user base.
Our accumulated registered user base expanded by $16 4 million during the third quarter.
Speaker 3: As of the end of the quarter, we reached a cumulative user base of 379 million, making a 17% year-over-year increase.
As of the end of the quarter, we reached accumulated user base of 379 million, making a 17% year over year increase.
Speaker 3: Mobile device charging orders increased by 9% year over year to over 176.5 million during the quarter, as both new and existing users continue to seek EnergyMonster for their everyday charging needs.
What about device charging orders increased by 9% year over year to over $176 5 million during the quarter as both new and existing users continue to seek energy amongst us for their everyday charging me.
Speaker 3: We are also continuously rebalancing our network coverage between our direct and network partner models during the third quarter.
We are also continuously imbalance rebalancing our network coverage between our direct and network partner models during the third quarter.
Speaker 3: As POIs under the network partner model and active network partner count both reach new heights.
<unk> and the network partner model and active network partner Count both reached new highs.
Speaker 3: Not only were we able to effectively the scale and network coverage of our operation during third quarter, the probability of our operation is
Not only were we able to effectively this.
Scale, and that's where our coverage of our operation during the third quarter.
The profitability of all accretion is also make a recovery.
Speaker 3: non-GAAP net income reached $55.2 million for the third quarter.
non-GAAP net income reached 55.2 million for the third quarter.
Speaker 3: increasing from $17.1 million in the first quarter and $30.1 million in the second quarter.
Increasing from $17 1 billion in the first quarter and $30 1 million in the second quarter.
Speaker 3: The increasing trend is clear and the recovery compared to the same period of last year is significant.
The increasing trained is clear and the recovery compared to the same period of last year is significant.
Speaker 3: Three consecutive quarters of probability reflects our enduring commitment to operational efficiency, despite the weaker-than-expected recovery of line food traffic and consumption power.
So he can sequence.
Three consecutive quarters of profitability reflects our enduring commitment to operational efficiency.
The weaker than expected recovery offline food traffic and consumption power.
Speaker 3: The increased scale coupled with an improvement to our profitability reflects that our commitment to our strategies in operational efficiency and POR expansion is effective and continues to be a driver for growth and improved profitability.
The increased scale, coupled with an improvement to our profitability.
Flex that our commitment to our strategies operational efficiency and the <unk> expansion is effective and continues to be a driver for growth and improved profitability.
Speaker 3: Now let me walk you through our key initiatives in coverage and efficiency in greater detail.
Now, let me walk you through our key initiatives and coverage and efficiency in greater details.
Speaker 3: First is our commitment to expanding our network.
First is our commitment to expanding our network.
Speaker 3: where our service is available to over 2,000.
Keith we're all services available to over 2000.
Speaker 3: The consistent growth in POI count and expansion of regional coverage indicate that there continues to be...
The consistent growth in Py count and expansion of original coverage indicate that there continues to.
Speaker 3: untapped opportunity in the mobile device charging service market here in China.
Untapped opportunity in the mobile device charging service market here in China.
Our user acquisition assets yielded a remarkable $16 4 million new users during the third quarter, representing a 17% year over year increase in terms of our accumulative registered users.
Speaker 3: Our user acquisition efforts yielded a remarkable 16.4 million new users during the third quarter, representing a 17% year-over-year increase in terms of our accumulated registered users.
Speaker 3: The large user base is directly translating into record high number of unique users and mobile device charging orders, which totally to more than 176 million orders for the quarter.
The large user base is directly translating into the high number of unique users and mobile device charging orders, which totally.
More than 176 million orders for the quarter.
Speaker 3: the network effect of our operation continues to scale and become increasingly apparent.
The network effect of our operations continue to scale and become increasingly apparent.
Speaker 3: For users, they are able to see our cabinets throughout their day, cementing the EnergyMonster brand as a reliable and expansive provider of mobile device charging service.
For users.
We're able to see our cabinets throughout the day.
Hunting the energy Monster brand as a reliable and expansive provider of mobile device charges service.
Speaker 3: During the quarter, we continue to roll out IP partnership with leading celebrities and brands for the promotion of tailored power banks, especially the one with Jay Chou's Fantasy World.
During the quarter, we continue to go out IP partnership with a leading celebrities and the grants for the promotion of payload pullbacks.
Actually the one with <unk> fantasy World.
Speaker 3: This continues to be one of the differentiators that Energy Monster excels at in terms of offering a different experience for our users.
This continue to be one of the Differentiators that energy monster itself that in terms of offering.
Excuse me for all users.
Speaker 3: We are also seeing an increasing number of users directly opening up our mini program to find out service in their nearby locations as we solidify EnergyMonster as the go-to brand for mobile device charging service.
We are also seeing an increasing number of users directly opening up our media program to find out service in the nearby locations as we solidify energy Master.
The go to brand for mobile device charging surveys.
We are also seeing a number of others, where users Paulo power banks from one cabinet and turning it into another cabinet continuously trading up.
Speaker 3: We are also seeing a number of orders where users borrow power banks from one cabinet and returning it into another cabinet, continuously training up.
Speaker 3: suggesting that the users are more comfortable with taking the power bank with them to their next location, as there will likely be a place to return the power bank later in the day.
Suggesting that the users are more comfortable with taking the power back with them to the next location.
There will likely be a place to return the call back later in the day.
Speaker 3: The increased POI count will be the main driver of our ability to acquire new users across China. But at the same time, we will innovate on more ways to attract and remain more users to our service.
The increase in <unk> account will be main driver of our ability to acquire new users across China, but at the same time, we will innovate.
A more ways to attract and retain more users to our service.
Speaker 3: As offline food traffic in our operation continues its recovery, we are also rebalancing the contribution by our two major models in terms of PY distribution.
As offline foot traffic in our accretion continues its recovery. We are also rebalancing the contribution by our two major models in terms of <unk> distribution.
Speaker 3: Our direct model team continue their strong performance in the third quarter.
Our direct model team continue their strong performance in the third quarter.
Speaker 3: A network partner model under the direct model team continues to bring the added layer of synergy between the two models together.
A partner model under the direct model team continues to bring the added layer of synergy between the two models together.
Speaker 3: This program leverages the coverage and manpower of our direct model to effectively expand our network partner model in larger cities.
This program Leverages, the coverage and manpower about developed model to effectively expand our network partner model in larger cities.
Speaker 3: increasing the efficiency and coverage capabilities of each.
Increasing the efficiency and coverage capabilities of HBV.
Speaker 3: Another benefit of this program is the strong execution capabilities of our direct model team can be extended for the promotion of our network partner model, allowing us to more quickly and effectively reach network partners.
Another benefit of this program is the strong execution capabilities of our direct model team can be extended for the promotion of our network partner model.
Wowing us to more quickly and effectively reached out to our partners.
On the K front, we continue to secure contracts with new chains, including supermarkets and large scale amusement parties on a Pos across China.
Speaker 3: On the CAE front, we continue to secure contracts with new chains, including supermarkets and large-scale amusement parks across China.
Speaker 3: Because our direct model team directly work with the KAs for the everyday operation of our cabinets and post sales support, the support to our KAs clients maintains its reputation as the best within the industry, given that most of our peers within the industry only has the network partner model.
Because our direct model team directly work with the case for the everyday operational about cabinets and post sales support.
Okay clients maintains its reputation as the best within the industry given that most of our peers within the industry only has done that to a partner model.
Speaker 3: This is one of the key reasons why we're able to continue attracting top tier KAs within the industry and through our service, consistently renew our contracts.
This is one of the key reasons, why we're able to continue attracting top tier within.
Within the industry and through our service consistently renew our contracts with them.
Speaker 3: This quarter, we adjusted our POI structure, focusing on KAs and urban KAs to optimize our direct model portfolio.
This quarter, we adjusted our <unk> structure, focusing on case and urban case to optimize our direct model portfolio.
Speaker 3: Going forward, our direct model will concentrate the advantage in terms of execution capabilities and ability to acquire KA accounts to focus primarily into high yielding locations in higher tier cities and KAs.
Going forward, our direct model will concentrate the advantage in terms of execution capabilities and ability to acquire <unk> accounts to focus primarily into high yielding locations in higher tier cities and case.
Our network partner model.
Speaker 3: which continue to be the driver of our network expansion.
Which continue to be the driver of our network expansion.
Speaker 3: We're primarily focused on expanding into lower tier.
We're primarily focused on expanding into lower tier cities and to complement our direct models coverage in higher tier cities as well.
Speaker 3: and to complement our direct models coverage in higher tier cities as well.
Speaker 3: During the quarter, the network partner model continues to play a pivotal role in the expansion of our POI coverage.
During the quarter. The network partner model continues to play a pivotal role in the expansion of <unk> coverage.
Speaker 3: and now can constitute to approximately 65.5% of our PY.
Now cause Congress toot to approximately 65, 5% of our <unk>.
Speaker 3: The growth of our network partner model is driven by the combination of new network partners and the support of existing partners.
The net the growth of our network partner model is driven by the combination of new network partners and the support of existing ones in.
Speaker 3: In the first quarter, we have over 10,000 active network partners, an increase of 1,100 from the previous quarter and 4,700 from the same period last year.
In first quarter, we have over 10000 active network partners, an increase of 1100 from the previous quarter and 4700 from the same period last year.
Speaker 3: Both our network partner team and our direct model program have contributed to the significant growth.
Both our network partner team and our direct model program have contributed to the significant growth.
However, the rapid increase in network partner is only one part of the equation.
Speaker 3: However, the rapid increase in network partner is only one part of the equation.
Speaker 3: As we strive to continue providing our network partners with the know-hows and data needed to successfully run their mobile device charging service operations.
As we strive to continue providing our network partners with a new house and data needed to successfully run their mobile device charging service operation.
Speaker 3: Looking forward, the combination of continuously acquiring new network partners, alongside with unlocking the growth potential of the existing ones, will serve as the core drivers of growth under the network partners.
Looking forward the combination of continuous the acquire new network partners alongside unlocking the growth potential of the existing ones with <unk> as the core drivers of growth under the network partner model.
Speaker 3: Both our direct and network partner models serve as drivers of our experience.
Both our direct and Thats what partner models.
As drivers of our expansion.
Speaker 3: Having the two models give us increased flexibility in terms of getting into new POIs.
Having the two models give us increased flexibility in terms of getting into new <unk>.
Speaker 3: both across different regions and POI types.
Both across different regions and tight.
Speaker 3: In the future, we will balance the two models based on the advantage of each in order to more efficiently expand our coverage.
In the future we will balance the two models based on the advantage of each in order to more efficiently expand our coverage.
Speaker 3: The models will fuel our expression towards more regions and POI types.
The models, we feel our expression towards more regions and P&I types.
<unk> in turn.
Speaker 3: ultimately allow more users to access our product and service.
Ultimately allow more users to access our product and service.
The next one is efficiency.
Speaker 3: In the third quarter, our cost optimization strategies continue to bear fruit.
In the third quarter, our cost optimization strategies continue to bear fruit.
Speaker 3: The primary reason for the substantial reduction in sales and marketing expenses is due to the new contractual arrangement with network partners.
Primary reason for the substantial reduction in sales and marketing expenses is due to the new contractual arrangement with network partners. However.
Speaker 3: However, the expense structure for the direct model is evolving accordingly. With Pew Revenue Sharing
However, the expense structure for the direct model is evolving accordingly.
With Q revenue sharing contracts.
Speaker 3: comprising 85% of total signed contracts in the third quarter of this year, up from 79% in the same period last year.
Compromise comp pricing, 85% of total signed contracts in the first quarter of the fee.
Up from 79% in the same period last year.
Speaker 3: The reduction in fixed expenses has played a crucial role in the transition of our financials back to a positive.
The reduction in fixed expenses has played a crucial role in the transition of our financials back to a positive profit.
Speaker 3: Especially, we further optimize our logistics and warehousing, reducing the warehousing expense as percentage of our revenue to reach better economics of scale for warehouse and logistics.
Especially we further optimized our logistics.
And we are housing, reducing the warehousing expense as percentage of our revenue to reach better economics of scale for warehouse and logistics costs.
Speaker 3: We are also continually to introduce more ways to improve the quality of our cabinets and power banks.
We are also continually to introduce more ways to improve the quality of <unk> cabinets and power banks.
Speaker 3: by implementing improved quality assurance measures throughout both design and manufacturing processes to reduce...
By implementing improved quality assurance measures throughout both design and manufacturing processes.
Reduce repellent cost.
Speaker 3: These moves are all aligned with our commitment to cost-efficiency and optimization.
These moves are all aligned with our commitment to cost efficiency and operational excellence.
Speaker 3: We also remain unswerving to being the leader in the market in terms of the hardware capabilities and quality.
We also remain on its worthy to being the leader in the market in terms of the hardware capabilities and quality.
Speaker 3: We will be introducing newer versions of our power bank next year that features longer lifespan and increased quality too.
We will be introducing newer versions of our power Bank next year that features longer lifespan and increased quality too.
Speaker 3: Our investments in the next generation of hardware showcases our commitment to stay at the forefront of innovation.
Our investments in the next generation of hardware showcases our commitment to stay at the forefront of innovation.
Speaker 3: This not only enhances our competitive advantage, but also contributes to the overall efficiency and reliability of our service, as well as improving the user experience.
This not only enhances our competitive advantage, but also contributes to the overall efficiency and reliability of our service as well as improving the user experience.
Speaker 3: Also, the efficiency of our network partner team has scaled significantly in the past year.
Also the efficiency of our network partner team has scaled significantly in the past year.
Speaker 3: During the year, our network partner count increased by almost 90%, while our network partner team increased by only 11%.
During the year, our network partner count increased by almost 90%, while all network partner team increased by only 11%.
Speaker 3: The increase in the number of network partner managed by each network partner personnel is unlocked throughout the software support as more and more tasks can be automated.
The increase in the number of network partners managed by each network partner personnel is unlocked throughout the software support.
More and more tasks can be automated.
Speaker 3: As the trend towards network partner continues, we believe the operating leverage that can be achieved will be increasingly apparent.
As the trend towards network partner continue we believe the operating leverage that can be achieved will be increasingly apparent.
Speaker 3: the shifting balance between the two models and the initiatives we have taken to improve.
The shifting balanced between the two models and the initiatives we have taken to improve.
Operational efficiency.
Speaker 3: all contribute to the improvements of our profitability during the quarter.
All contribute to the improvements of our profitability during the quarter.
Speaker 3: Going forward, we remain committed to our strategy in improving operational efficiency.
Going forward, we remain committed to our strategy gain improving operational efficiency as we continue to optimize our <unk> expenses and costs.
Speaker 3: as we continue to optimize our operating expenses and costs.
Speaker 3: Overall, third quarter was a peak season with mobile device charging service displaying strong growth and uptrending profitability.
Overall third quarter was our peak season with mobile device charging service displaying strong growth and up trading profitability.
Speaker 3: Operationally, our PY in terms of direct model and network partner model continue to rebalance based on their respective advantages.
Operationally, our <unk> in terms of direct model and network partner model continue to rebalance based on their respective advantages.
Speaker 3: The direct model will more focus on high-geared locations, while network partner will complement the coverage.
The direct model, we are more focused on high yet locations why our network partners where complement the coverage.
Speaker 3: The two models continue to differentiate ourselves from market peers as they all allow for increased flexibility and execution.
Two models continue to differentiate ourselves from market peers.
Allow for increased flexibility and execution.
Speaker 3: Our roadmap for the fourth quarter underscores our commitment to expanding our coverage.
Our roadmap for the fourth quarter underscores our commitment to expanding our coverage, namely through increasing network partner count and support.
Speaker 3: Namely, through increasing network partner count and support, strengthening key account acquisition, and enhancing our POI.
And in key account acquisition and enhancing our composition.
Speaker 3: We will also continue to reduce fixed expenses and optimize variable expenses and costs.
We will also continue to reduce fixed expenses and optimize variable expenses and costs and drive increased efficiency of our teams by introducing more automated tool.
Speaker 3: and drive the increase in efficiency of our teams by introducing more automated tools.
These will all help us.
Speaker 3: spearhead the standards of operating efficiency within the model.
<unk> had the standards of operating efficiency within the market.
Speaker 3: Looking ahead, in the fourth quarter, the consumption power remains soft, although there continue to be signs of a recovery in progress.
Looking ahead in the fourth quarter the consumption power. It remained soft although there continue to be signs of a recovery in progress.
Speaker 3: GMV increased by 30% year-over-year during October , and 32% in the first three weeks of November .
<unk> increased by 30% year over year due in October.
32% in the first three weeks of November.
Speaker 3: Despite these challenges, our unwavering commitment to our strategical pillars remains our guiding force.
Despite these challenges our unwavering commitment to our strategic pillars remain our guiding force.
Speaker 3: In conclusion, EnergyMonster stands at the cusp of sustained growth with our mobile device charging service continuously, reaching new operating milestones and general recovery in profitability in progress.
In conclusion energy amongst our stand at the cusp of sustained growth with our mobile device charging service continuously reaching new operating milestones and general recovery and profitability progress.
Speaker 3: Our strong cash position and robust cash flow serve as the back rock for driving the continuous growth and value for our stakeholders.
Our strong cash position and robust cash flow.
The backdrop for driving the continuous growth and value for stakeholders.
Speaker 3: and to optimistically explore new initiatives that may drive energy monsters to new heights.
And to Opportunistically explore new initiatives that May drive energy monster to new Heights.
Speaker 4: Thank you very much. I'll now turn the call over to Maria Xin, our Chief Financial Officer, for the financial highlights. Thank you, Mark. Now let me walk you through the third quarter 2023 financial results in greater detail. For the third quarter of 2023, revenues were $613.5 million, representing a 24.7% year-on-year decrease.
Thank you very much I'll now turn the call over to Maria <unk>, Our Chief Financial Officer for the financial highlights.
Thank you Mark.
Now, let me walk you through the third quarter 2023 financial results in greater detail.
Third quarter of 2023, Samuel for 613 quantify mainly representing about 24, 7% year on year decrease.
Decrease.
Speaker 4: Mobile device charging revenues, which consists of revenue generated from both direct and network partners models, were $564.2 million and accounted for 92% of our total revenues for the quarter.
Mobile device charging revenue, which consists of revenue generated from both direct and then that's what pattern or small dose.
564 climb too many and accounted for 92% of our total revenues for the quarter.
Speaker 4: Revenues generated from direct model, which comprise of mobile device charging service fee of 278.1 million and power bank sales of 6.1 million, or 284.2 million for the third quarter of 2023, down 36.4 percent year-on-year,
Revenue generated from direct model, which comprised of mobile device charging service fee of $278 1 million and the par bank South.
Three one penny or $284 2 million.
Third quarter 293036, 4% year on year.
Speaker 4: The decrease was primarily due to the decrease in number of POIs operated through the direct model.
The decrease was primarily due to the decrease in number of appeal is operated through a direct model.
Speaker 4: Revenues generated from network partner model, which comprise of the mobile device charging solution fee of 58.8 million and cells of cabinet and the power banks of 221.2 million
Revenue generated from not where our partner modal Lee is comprised of the mobile device charging solutions the fifth.
A learning and south of carbonate and the par banks of 221 client too many or 280 million for the third quarter of 293 down 22, 7% year over year.
Speaker 4: or $280 million for the third quarter of 2023, down
Speaker 4: 22.7 percent year-over-year. The decrease was primarily due to the change in contractual arrangement with network partners.
Decrease was primarily due to the change in contractual arrangement with more partners.
Speaker 4: under the new contractual arrangement, mobile device charging revenue generated under the network partner is not of incentive fees paid to network.
And Theres, a new contractual arrangements.
<unk> charging revenue generating and they're not who our partner is not of incentive fees paid to narrow our partners there.
Speaker 4: The decrease was partially offset by the increase in cabinets and power bank sales to network partners.
Decrease was partially offset by the increase in carbonate and the par banks out to and our partners.
Other revenues, which accounted for 80% of our total revenues.
Speaker 4: Other revenues, which accounted for 8% of our total revenues, were $49.3 million for the third quarter of 2023, compared with $5.8 million in the same period last year. The increase was primarily attributable to new business initiatives.
49% remaining for the third quarter of 2093 comparatively five point a many in the same period last year.
Increase was primarily attributable to new.
New business initiatives.
Speaker 4: Cost of revenues was up 71.1 percent year-over-year to 214.8 million for the third quarter of 2023. The increase was primarily due to the increase in sales of cabinets and power banks under the new contractual arrangement with network partners. The increase was partially offset by the decrease in depreciation cost.
Cost of revenues was.
71, 1% year over year to 200 and for our team.
Meaning for the third quarter of 2023, the increase was primarily due to the increase in south of carbonate and the prior banks and there is a new contractual arrangement with nacco a patent on the.
The increase was partially upside by.
The decrease in depreciation cost.
Speaker 4: Gross profit was down 42.2% year-over-year to $398.6 million for the third quarter of 2023.
Gross profit was down 42, 2% year to 398 6 million for the third quarter of 2023.
Speaker 4: Operating expenses for the third quarter of 2023 were $364.6 million, down 53.6% year-over-year.
Operating expenses for the third quarter of 2023 or 364 clients as many down 53, 6% year over year.
Speaker 4: excluding share-based compensation, non-GAAP operating expenses were $359.5 million, representing a year-over-year decrease of 53.9 percent.
Excluding share based compensation non-GAAP operating expenses was 359 quantify many representing a year over year decrease of 53.9%.
Speaker 4: Research and development expenses for the third quarter of 2023 were 23.8 million, down 2% year-on-year. The decrease was primarily due to the decrease in personnel-related expenses. Sales and marketing expenses for the third quarter of 2023 were $298 million.
Research and development expenses for the third quarter of 2023, or 23 point, a mini down 2% year over year. The decrease was primarily due to the decrease in personnel related expenses.
Sales and marketing expenses for the third quarter of 2023 or 200 and.
Speaker 4: 98.2 million, 60% year-on-year. The decrease was primarily due to the decrease in incentive fees paid to network partners as a result of the change in contractual arrangement with network partners and the decrease in incentive fees paid to location partners.
$98 2 million down 16% year. The decrease was primarily due to the decrease in incentive fees.
Paid to now our partners as a result.
And contractual arrangements with our partners.
The decrease is that you please pay two location pattern.
Speaker 4: General and administrative expenses were $37.1 million in the third quarter of 2023, up 26.1% year-on-year.
General and administrative expenses.
37, 1 million in the third quarter of 2023.
Up 21, 1% a year.
<unk>.
Speaker 4: The increase was primarily due to the increase in personnel-related expenses and the professional service expenses.
The increase was primarily due to the increase in personnel related expenses and professional service expenses.
Income from operations was.
Speaker 4: 34 million in the operating and operating margin for the third quarter of 2023 was 5.5 percent compared to a negative 11.9 percent in the same period of last year.
Certainly for many in the operating and.
And the operating margin for the third quarter of 2023 was quite quantify per cent compared to a negative 11, 9%.
Same period last year.
Speaker 4: Net income was $50 million in the third quarter of 2023, compared to a net loss of $95.8 million in the same period last year.
Net income was 15 million in the third quarter of 2000.
2003, compared to a net loss.
95, one is meeting in the same period last year.
Speaker 4: Net margin for the third quarter of 2023 was 8.2%, compared to a net margin of negative 11.7% in the same period last year.
Net margin for the third quarter of 2023 was eight 2% compared to a net margin of negative one 7% in the same period last year.
Speaker 4: non-GAAP net income, which excludes share-based accommodation expenses, was $55.2 million in the third quarter of 2023, compared to a non-GAAP net loss of $88.6 million in the same period last year.
non-GAAP net income, which excludes share based compensation expenses was <unk> five point to many in the third quarter of 2023 compared to a non-GAAP net loss.
88, 6 million in the same period last year.
Speaker 4: As of September 30, 2023, the company had cash and cash equivalents, restricted cash and short-term investments of $3.3 billion. Cash flow generated from operations for the third quarter of 2023 was $165.6 million.
As of September 32023, the company had cash and cash equivalents.
<unk> cash and short term investments.
One 3 billion.
Cash flow generated from operations for the third quarter of 2023 or 165.6 meeting.
Speaker 4: capital expenditure for the third quarter were $2.8 million.
Capital expenditure for the third quarter of two.
<unk> a leading.
Speaker 4: Thank you for listening. We are now ready for your questions. Operator.
Lessening we are now ready for your questions operator.
Speaker 1: Yes, thank you. The question and answer session of this conference call will start in a moment.
Yes. Thank you.
<unk> and answer session of this conference call will start in a moment.
Speaker 1: In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller.
Would it be fair to all callers, who wish to ask questions. We will take one question at a time from each caller.
Speaker 1: If you have more than one question, please request to join the question queue again after your first question has been addressed.
If you have more than one question. Please request to join the question queue again. After your first question has been addressed.
Speaker 1: If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star.
If you wish to ask a question. Please press Star then one on your telephone and wait for it and we announced Mr. Wish to cancel your request. Please press Star then two.
Speaker 1: And the first question comes from Victor Tang with Goldman Sachs.
And the first question comes from Victor Tang with Goldman Sachs.
Hi, Thank you management for taking my question I'm asking this question on behalf of Ron or Q or animals.
Speaker 5: Thank you, management, for taking my question. I'm asking this question on behalf of Ronald Kuhn, my analyst. You mentioned during your opening remark that there's a rebalance between the network partner and direct models. Can management clarify how exactly this is done and what is the right balance to think about in the future? Thank you.
You mentioned during your opening remarks that Theres, a rebalance between the network partner and direct models okay.
Can you can management clarify how exactly your business and what is the right balance.
To think about in the future.
Speaker 3: Thanks for the question. That's correct. We are actively rebalancing the contribution between the two models, but I would like to note that the recalibration has been going for the past few years.
Thanks for the question.
That's correct we are actively rebalancing the contribution between the two models.
But I would like to note that the Recalibration has been going for the past few years as of the third quarter of this year 65, 5% of our <unk> under the network partner model. This is a significant increase from the 47 four.
Speaker 3: As of the third quarter of this year, 65.5 percent of our POIs are under the network partner model. This is a significant increase from the 47.4 percent of the same time last year.
Percent all at the same time last year.
Speaker 3: This rebalance will take form with time, actually. I would like to emphasize that this does not mean that we will only have our network partner model.
This rebalance will take from a form with them with time actually I would like to emphasize that this does not mean that we will only have our network partner model in the future.
Speaker 3: Our direct model's advantages in terms of rapid execution and ability to acquire KA remains clear. That's why going forward, we would like to focus these advantages for the direct model to key regions and POI types, namely POIs in higher tier cities and KAs.
Direct models advantages in terms of rapid execution and the ability to acquire <unk> remains clear that's why going forward, we would like to focus these advantages for the direct model to key regions and <unk> types, namely.
A higher tier cities in case this increased precision in terms of the direct model. We are allowed to have a greater focus on the larger regions and local local location partners I think the balance between the two is still a work in progress as we don't set specific targets for the <unk>.
Speaker 3: This increased precision in terms of the direct model will allow to have a greater focus on the larger regions and local location partners.
Speaker 3: I think the balance between the two is still a work in progress as we don't set specific targets for the contribution for either models. However, given the increased focus of our direct model, we would expect the contribution by our network partner model to continue increasing for the near future. Thank you.
<unk> for either models. However, given the increased focus of our direct model would expect the contribution by our network partner model to continue increasing for the near future. Thank you.
Yeah.
Thank you and our next question comes from Vicky Wei with Citi.
Speaker 6: Hi, management. Thanks for taking my question. Can management give more insight on the fourth quarter outlook and how the changing way to change the food models will impact the company's bottom line in the future? Thank you.
Hi, Thanks for taking my question.
Thank you more insight on the fourth quarter outlook.
Changing wages.
While those will impact the company.
Thank you.
Speaker 4: Sure, thanks for your question. We are still observing the fourth quarter, but so far the consumption is a bit below expectation.
Sure.
Sure.
We are still <unk> almost doubled in the first quarter, but so far the consumption is a bit below expectation.
Speaker 4: GLA increased by 30% year-over-year during October and 32% in the first three weeks of November .
<unk> increased by 30% year on year during October and 32% in the first three weeks of November.
Speaker 4: There are signs of gradual improvement, but it will take a bit more time for it to fully normalize.
There are signs of a gradual improvement, but the heat.
They will take a bit more time.
To fully normalize.
Speaker 4: As for the probability part, the general rebalance of POI based on the true model will positively benefit on our model.
As for the profitability part the general Rebalance appeal I based on the two model little possibility benefited our margins.
And there is a network partner model leads the updated contractual arrangement, we sell the mobile device targeting <unk> to our network partners.
Speaker 4: and then generate a long-term mobile device charging solution revenue. Also, gradually.
And then generate long term mobile device charging solutions revenue.
Also gradually with time.
Speaker 4: The reduction in direct model will also lower our operating expenses.
The reduction in direct model will also lower our operating expenses.
Speaker 4: This will both be positive for our long-term margins in the future.
This will both be positive for our long term margins in the future.
Thanks.
Speaker 1: Thank you. And the next question comes from Charlie Chen with China Red.
Thank you and the next question comes from Charlie Chen with China Renaissance.
Speaker 7: Hi, Marth and Maria. Congratulations on this strong quarter. I just want to get a bit more color on the other revenue, which seems to increase quite a bit this quarter. How much of this is driven by the advertising portion, and how much by new business initiatives? And can management share a bit on what initiatives are actively being explored by the company? Thanks a lot.
Hi, Martin and Maria Congratulations on the strong quarter I just want to get.
<unk> got a bit more color on the other revenue, which seems to increased quite a bit this quarter. How much of this is driven by the advertising portion and how much by new business initiatives and can management share a bit on what initiatives are actually being explored by the company. Thanks a lot.
Speaker 3: Hi, and thanks for the question. First of all, I would like to break it down a bit by the segment.
Hi, and thanks for the question.
First of all I would like to break down a bit by the segments.
Speaker 3: Advertising revenue is growing as our registered user base grows, and also, very important, we improve the advertising efficiency.
Advertising revenue is growing as our registered user base growth and also very important we improve the housing efficiency.
Speaker 3: So it continues to scale accordingly to our mobile device charging service.
<unk> has continued to scale accordingly to our mobile device charging service.
Speaker 3: This quarter, new initiatives' contribution has increased a lot as well, and we are excited about that. But given that the new initiative currently is still in its very early stage, we will disclose these initiatives once it consistently delivers a more meaningful contribution to our finances.
This quarter new initiatives contribution has increased a lot as well and we are excited about that but given that the new initiatives. Currently is still in its very early stage. We will disclose these initiatives once it's consistently deliver a more meaningful contribution to our financials.
Speaker 3: I think in terms of new initiatives, our approach has always been to firstly identify large industries where demands and unit economics are proven. Next, we are also seeing to how existing model mobile device charging service advantages can synergize with the new operation.
I think in terms of new initiatives, our approach has always been to firstly.
Genius via large industries, where demands and unit economy.
Proven next we are.
So seeing too how existing model.
Mobile device charging service advantages can synergize with the new operation.
Speaker 3: For Energy Monster, we have two strong capabilities that serve as foundation to our potential entry into other industries.
For energy Monster, we have two strong capabilities that serve as foundation to our potential entry into other industries. When is our vast distribution capability developed throughout our direction network partner models. Another of our advantages is our ability to create.
Speaker 3: One is our vast distribution capability developed throughout our direct network partner models. Another of our advantages is our ability to create solutions and our strong IoT foundation.
Solutions and our strong Iot formation.
Speaker 3: Going forward, we will actively explore opportunities that can leverage our advantages in the two to unlock the addition of the avenues of growth for the company. Thank you very much.
Going forward, we will actively explore opportunities that can leverage our advantages in the two to lock. The addition, the avenues of growth for the company. Thank you very much.
Yeah.
Speaker 1: Thank you. We are now approaching the end of the conference call. I will now turn the call over to Engine Monster's CFO , Maria Sheenan, for any closing
Thank you we are now approaching the end of the conference call I would now.
I'll turn the call over to Andrew Monstrous CFO Maria <unk> for any closing comments.
Speaker 4: Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months.
Once again, thank you all for joining US today, please don't hesitate to contact US. If you have any further questions. Thank you for your continued support and we look forward to speaking with you in the coming months.
Thank you for your.
Participation in today's conference. This concludes the presentation now disconnect good day.
Speaker 1: This concludes the presentation. We now disconnect. Good day.
Yeah.
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Speaker 1: Hello, and thank you for standing by for Energy Monster's 2023 Third Quarter Earnings Conference Call. At this time, all participants
Hello, and thank you for standing by for LNG Monsters to 123 third quarter earnings Conference call.
At this time, all participants are in listen only mode.
Speaker 1: Today's conference is being recorded. If you have any objections, you may disconnect at this time.
Today's conference is being recorded if you have any objections you may disconnect at this time I would now.
Speaker 1: I would now like to turn the meeting over to your host for today's conference call, Director of Inventory Relations, Hanson Schafer.
Now I'll turn the meeting over to your host for today's conference call Director of Investor Relations.
Okay.
Speaker 2: Thank you. Welcome to our 2023 3rd Quarter Earnings Conference Call. Joining me on the call today are Mark Tsai, Energy Monsters Chairman and Chief Executive Officer, and Maria Shin, Chief Financial Officer.
Welcome to our 2023rd quarter earnings Conference call. Joining me on the call today are Mark High energy monitors, Chairman and Chief Executive Officer, and Maria Shields, Chief Financial Officer.
For today's agenda management will discuss business updates operation highlights and financial performance for the third quarter of 2023.
Speaker 2: Before we continue, I refer you to our safe harbor statement in the earnings press release which applies to this call, as we will make forward-looking
Before we continue I refer you to our Safe Harbor statement in the earnings press release, which applies to this call as we will make forward looking statements.
Speaker 2: Also, this call includes discussion of certain non-GAAP financial
Also this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
Speaker 2: Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
Speaker 2: Finally, please note that unless otherwise stated, all figures mentioned during this call are in R&D.
Finally, please note that.
Otherwise stated all figures mentioned during this call alright in RMB.
Speaker 2: I would now like to turn the call over to our Chairman and Chief Executive Officer, Mark Tsai, for the business and operation highlight.
I would now like to turn the call over to our chairman and Chief Executive Officer, Mark time for the business and operation highlights.
Speaker 3: Thank you, Hans. Good day, everyone. Welcome to our 2023 third quarter earnings call.
Thank you Heng.
Good day, everyone welcome to our 25th.
Third quarter earnings call.
Speaker 3: We are very pleased to announce that our operation continues to achieve new heights during the third quarter of 2023, with both Mobile Device Charging Service GMB and POI count both reaching historical highs.
We're very pleased to announce that our accretion continues to achieve new heights during the third quarter of 2023 with both mobile device charging service GMB and Viscount both reaching historical high.
Speaker 3: Mobile device charging GNV increased by 18% year-over-year as the progression towards normalization of offline food traffic continues its recovery.
Mobile device charging <unk> increased by 18% year over year as the progression towards normalization of offline.
Traffic continues its recovery trend.
Speaker 3: Performance in third quarter showcased a consistent monthly growth pattern.
Performance in third quarter showcased a consistent monthly growth pattern.
Speaker 3: July marked a 16% year-over-year GND increase, followed by an 18% increase in August and a stronger 22% growth in...
July marked a 16% year over year <unk> increase followed by an 18% increase in August and a stronger 22% growth in September.
Speaker 3: The growth in GME was particularly pronounced in higher tier cities.
The growth in GSV was particularly pronounced in higher tier cities with Shanghai, Xi'an, Chengdu and Beijing.
Speaker 3: with Shanghai, Xi'an, Chengdu, and Beijing.
Speaker 3: driving the recovery with impressive year-over-year growth of 55%.
Driving the recovery with impressive year over year growth of 65%, 55%, 32% and 28% respectively.
Speaker 3: 32% and 28% respectively.
Speaker 3: Both in terms of POI types was all encompassing as well with every type of POI growing year over year.
Both in terms of P&I types was all encompassing as well with every type of growing year over year.
Speaker 3: Transportation hub filled by the surge in summer travel achieved a notable 62% year-over-year growth.
Transportation hub field by the surge in summer travel achieved a notable 62% year over year growth.
Speaker 3: Other POI types such as office buildings, family centers, banks, and government institutions exhibit robust growth with a year-over-year increase of 57%, 65%, 72%, and 75% respectively.
Other py types, such as office buildings, 70 center banks and government institutions exhibited robust growth with a year over year increases of 57%, 65%, 72% and 75% respectively.
Speaker 3: The recovery in our GNV continues to be driven by the diversification of coverage, both in terms of CTT, as well as POI time.
The recovery in <unk> continues to be driven by the diversification of coverage both in terms of city tier as well as <unk>.
Speaker 3: which reiterates the adaptability of our services to diverse environments and general demand for our service across the world.
Should we get two weeks.
That stability of our services to diverse environments and general demand for our services across China.
Speaker 3: In terms of network expansion, we added nearly 80,000 new POIs during the third quarter of 2023, with restaurants, entertainment and shopping hubs locations leading the growth.
In terms of network expansion, we added nearly 80000, new <unk> during the third quarter of 2023, with the restaurants entertainment and shopping hops locations leading to growth.
Speaker 3: We were also able to onboard leading KAs in various industries.
We were also able to onboard leading K as in various industries.
Speaker 3: as the benefit of our brand value and network effect of our operation continues to scale.
The benefit of our brand value and network effect of our accretion continues to scale.
Speaker 3: This dynamic expansion reiterates our commitment to providing charging solutions across diverse locations.
This dynamic expansion reiterate our commitment to providing charging solutions across diverse locations.
Speaker 3: so that more users in need of our service can more easily access our service.
So that more users in need of our service can more easily access our solutions.
Speaker 3: We are excited that the expansion of our network coverage is unlocking new opportunities to reach and serve a broader user base.
We are excited to that expansion of our network coverage is unlocking new opportunities to reach and serve.
A broader user base.
Speaker 3: Our accumulated registered user base expanded by 16.4 million during the third quarter.
Our accumulated registered user base expanded by $16 4 million during the third quarter.
Speaker 3: As of the end of the quarter, we reached a cumulative user base of 379 million, making a 17% year-over-year increase.
As of the end of the quarter, we reached accumulated user base of 379 million, making a 17% year over year increase.
Speaker 3: Mobile device charging orders increased by 9% year over year to over 176.5 million during the quarter, as both new and existing users continue to seek EnergyMonster for their everyday charging needs.
Mobile device charging orders increased by 9% year over year to over $176 5 million during the quarter as both new and existing users continue to seek energy monster for their everyday charging needs.
Speaker 3: We are also continuously rebalancing our network coverage between our direct and network partner models during the third quarter.
We are also continuously imbalance rebalancing our network coverage between our direct and network partner models during the third quarter.
Speaker 3: As POIs under the network partner model and active network partner count both reach new heights.
<unk> network partner model and active network partner Count both reached new highs.
Speaker 3: Not only were we able to effectively the scale and network coverage of our operation during third quarter, the probability of our operation is
Not only were we able to effectively the scale and network coverage of our operation during the third quarter.
The profitability of our operation is also make a recovery non.
Speaker 3: Nungap net income reached $55.2 million for the third quarter.
non-GAAP net income reached $55 2 million for the third quarter, increasing from $17 1 billion in the first quarter and $30 1 million in the second quarter being.
Speaker 3: increasing from $17.1 million in the first quarter and $30.1 million in the second quarter.
Speaker 3: The increasing trend is clear and the recovery compared to the same period of last year is significant.
The increasing trained is clear and the recovery compared to the same period of last year is significant.
Speaker 3: Three consecutive quarters of profitability reflects our enduring commitment to operational efficiency despite the weaker than expected recovery of line food traffic and consumption power.
So we can sequence.
Three consecutive quarters of profitability reflects our enduring commitment to operational efficiency, despite the weaker than expected recovery offline food traffic and consumption power.
Speaker 3: The increased scale coupled with an improvement to our profitability reflects that our commitment to our strategies in operational efficiency and the POR expansion is effective and continues to be a driver for growth and improved profitability.
The increased scale, coupled with an improvement to our profitability.
<unk> <unk> our.
Our commitment to our strategies and operational efficiency and the <unk> expansion.
<unk> and continues to be a driver for growth and improved profitability.
Speaker 3: Now let me walk you through our key initiatives in coverage and efficiency in greater detail.
Now, let me walk you through our key initiatives and coverage and efficiency in greater details.
Speaker 3: First is our commitment to expanding our network.
First is our commitment to expanding our network.
Speaker 3: where our service is available to over 2,000.
Keith we're all services available to over 2000.
Speaker 3: The consistent growth in POI count and expansion of regional coverage indicate that there continues to...
The consistent growth in <unk> count and expansion of original coverage indicate that there continues to.
Speaker 3: untapped opportunity in the mobile device charging service market here in China.
Untapped opportunity in the mobile device charging service market here in China.
Speaker 3: Our user acquisition efforts yielded a remarkable 16.4 million new users during the third quarter, representing a 17% year-over-year increase in terms of our accumulated registered users.
Our user acquisition assets yielded a remarkable $16 4 billion new users during the third quarter, representing a 17% year over year increase in terms of our accumulated registered users.
Speaker 3: The large user base is directly translating into record high number of unique users and mobile device charging orders, which totally to more than 176 million orders for the quarter.
The large user base is directly translating into the high number of unique users and mobile device charging orders.
Which totally to more than 176 million orders for the quarter.
Speaker 3: the network effect of our operation continues to scale and become increasingly apparent.
The network effect of our operation continues to scale and become increasingly apparent.
For users.
They are able to see our covenants throughout the day.
Mentoring the energy Monster brand as a reliable and expansive provider of mobile device charging service.
Speaker 3: During the quarter, we continue to roll out IP partnership with leading celebrities and brands for the promotion of tailored power banks, especially the one with Jay Chou's Fantasy World.
During the quarter, we continue to roll out IP partnership with a leading celebrities and the brands for the promotion of payload power banks, especially the one with <unk> fantasy World.
Speaker 3: This continues to be one of the differentiators that Energy Monster excels at in terms of offering a different experience for our users.
This continue to be one of the.
H S antigen monster itself.
In terms of offering.
Excuse me for all users.
We are also seeing an increasing number of users directly opening up our mini program to find out service anywhere nearby locations as we solidify energy Master.
The go to brand for mobile device charging service.
Speaker 3: We are also seeing a number of orders where users borrow power banks from one cabinet and returning it into another cabinet, continuously training up.
We are also seeing a number of others, where users Paulo power banks from one cabinet and turning it into another cabinet continuously training up.
Speaker 3: Suggesting that the users are more comfortable with taking the power bank with them to their next location As there will likely be a place to return the power bank later in the day
Suggesting that the users are more comfortable with taking the power back with them to their next location.
There will likely be a place to return the call back later in the day.
Speaker 3: The increased POI count will be the main driver of our ability to acquire new users across China. But at the same time, we will innovate on more ways to attract and remain more users to our service.
The increase in <unk> account will be main driver of our ability to acquire new users across China, but at the same time, we will innovate.
Always attract more users to our service.
Speaker 3: As offline food traffic in our operation continues its recovery, we are also rebalancing the contribution by our two major models in terms of PY distribution.
As of life with traffic and our accretion continues its recovery. We're also rebalancing the contribution by our two major models in terms of <unk> distribution.
Speaker 3: Our direct model team continue their strong performance in the third quarter.
Our direct model team continue their strong performance in the third quarter.
Speaker 3: The network partner model under the direct model team continues to bring added layer of synergy between the two models together.
Network partner model under the direct model team continues to bring the added layer of synergy between the two models together.
Speaker 3: This program leverages the courage and manpower of our direct model to effectively expand our network partner model in larger cities.
This program Leverages, the coverage and manpower about developed model to effectively expand our network partner model in larger cities.
Speaker 3: increasing the efficiency and coverage capabilities of each.
Increasing the efficiency and coverage capabilities of HBV.
Speaker 3: Another benefit of this program is the strong execution capabilities of our direct model team can be extended for the promotion of our network partner model, allowing us to more quickly and effectively reach network partners.
Another benefit of this program is the strong execution capabilities of our direct model team can be extended for the promotion of our network partner model.
Allowing us to more quickly and effectively reached network partners.
Speaker 3: On the CAE front, we continue to secure contracts with new chains, including supermarkets and large-scale amusement parks across China.
On the K front, we continue to secure contracts with new chains, including supermarkets and large scale abusing the parties on a Pos across China.
Speaker 3: Because our direct model team directly work with the KAs for the everyday operation of our cabinets and post sales support, the support to our KAs clients maintains its reputation as the best within the industry, given that most of our peers within the industry only has the network partner model.
Because our direct model team directly work with the case, while the everyday operation of our cabinets and post sales support.
<unk> clients maintains its reputation as the best within the industry given that most of our peers within the industry only has done that to a partner model.
Speaker 3: This is one of the key reasons why we're able to continue attracting top tier KAs within the industry and through our service, consistently renew our contracts.
This is one of the key reasons why we're able to continue attracting top tier case within the industry and through our service consistently renew our contracts with them.
Speaker 3: This quarter, we adjusted our POI structure, focusing on KAs and urban KAs to optimize our direct model portfolio.
This quarter, we adjusted our <unk> structure, focusing on case and urban case to optimize our direct model portfolio.
Speaker 3: Going forward, our direct model will concentrate the advantage in terms of execution capabilities and ability to acquire KA accounts to focus primarily into high yielding locations in higher tier cities and KAs.
Going forward.
Our direct model will concentrate the advantage in terms of execution capabilities and ability to acquire <unk> accounts to focus primarily into high yielding locations in higher tier cities and case.
Our network partner model.
Speaker 3: which continue to be the driver of our network expansion.
Which continue to be the driver of our network expansion.
Speaker 3: We're primarily focused on expanding into lower tier.
We're primarily focused on expanding into lower tier cities and to complement our direct models coverage in higher tier cities as well.
Speaker 3: and to complement our direct models coverage in higher TSTs as well.
Speaker 3: During the quarter, the network partner model continues to play a pivotal role in the expansion of our POI coverage.
During the quarter. The network partner model continues to play a pivotal role in the expansion of <unk> coverage.
Speaker 3: and now can constitute to approximately 65.5% of our PY.
And now can constitute to approximately 65, 5% of our <unk> life.
Speaker 3: The growth of our network partner model is driven by the combination of new network partners and the support of existing partners.
The net the growth of our network partner model is driven by the combination of new network partners and the support of existing ones in.
Speaker 3: In first quarter, we have over 10,000 active network partners, an increase of 1,100 from the previous quarter and 4,700 from the same period last year.
In first quarter, we have over 10000 active network partners, an increase of 1100 from the previous quarter and 4700 from the same period last year.
Speaker 3: Both our network partner team and our direct model program have contributed to the significant growth.
Both our network partner team and all direct model program have contributed to the significant growth.
Speaker 3: However, the rapid increase in network partner is only one part of the equation.
However, the rapid increase in network partner is only one part of the equation.
Speaker 3: As we strive to continue providing our network partners with the know-hows and data needed to successfully run their mobile device charging service operations.
As we strive to continue providing our network partners with a new house and data needed to successfully run their mobile device charging service operation.
Speaker 3: Looking forward, the combination of continuously acquiring new network partners, alongside with unlocking the growth potential of the existing ones, will serve as the core drivers of growth under the network partners.
Looking forward the combination of continuously acquire new network partners alongside with unlocking the growth potential of the existing ones will serve as the core drivers of growth under the network partner model.
Speaker 3: Both our direct and network partner models serve as drivers of our experience.
Both our direct and network partner models.
As drivers of our expansion.
Speaker 3: Having the two models give us increased flexibility in terms of getting into new POIs.
Having the two models give us increased flexibility in terms of getting into new <unk>.
Speaker 3: both across different regions and POI types.
Both across different regions and types.
Speaker 3: In the future, we will balance the two models based on the advantage of each in order to more efficiently expand our coverage.
In the future we will balance the two models based on the advantage of each in order to more efficiently expand our courage.
Speaker 3: The models will fuel our expansion towards more regions and POI types.
The models, we feel our expression towards more regions and P&I types.
<unk> in turn.
Speaker 3: ultimately allow more users to access our product and service.
Ultimately allow more users to access our product and service.
The next one is efficiency.
Speaker 3: In the third quarter, our cost optimization strategies continue to bear fruit.
In the third quarter, our cost optimization strategies continue to bear fruit.
Speaker 3: The primary reason for the substantial reduction in sales and marketing expenses is due to the new contractual arrangement with network partners.
Primary reason for the substantial reduction in sales and marketing expenses is due to the new contractual arrangement with network partners. However.
Speaker 3: However, the expense structure for the direct model is evolving accordingly. With Pew Revenue Sharing
However, the expense structure for the direct model is evolving accordingly.
With Q revenue sharing contracts.
Speaker 3: comprising 85% of total signed contracts in the third quarter of this year, up from 79% in the same period last year.
Compromise comp pricing, 85% of total signed contracts in the third quarter of D C.
Up from 79% in the same period last year.
Speaker 3: The reduction in fixed expenses has played a crucial role in the transition of our financials back to a positive.
The reduction in fixed expenses has played a crucial role in the transition of our financials back to a positive profit.
Speaker 3: Especially, we further optimize our logistics and warehousing, reducing the warehousing expense as percentage of our revenue to reach better economics of scale for warehouse and logistics.
Especially we further optimize our logistics.
Warehousing, reducing the warehousing expense as a percentage of our revenue to reach better economics of scale for warehouse and logistics costs.
Speaker 3: We are also continually to introduce more ways to improve the quality of our cabinets and power banks.
We're also continually to introduce more ways to improve the quality of our cabinets and power banks.
Speaker 3: by implementing improved quality assurance measures throughout both design and manufacturing processes to reduce...
By implementing improved quality assurance measures throughout both design and manufacturing processes.
You reduce repellent cost.
Speaker 3: These moves are all aligned with our commitment to cost efficiency and operation.
These moves are all aligned with our commitment to cost efficiency and operational excellence.
Speaker 3: We also remain unswerving to being the leader in the market in terms of the hardware capabilities and quality.
We also remain a swerving to being the leader in the market in terms of the heart with capabilities and quality.
Speaker 3: We will be introducing newer versions of our power bank next year that features longer lifespan and increased quality too.
We will be introducing new versions of our power Bank next year that features longer lifespan and increased quality too.
Speaker 3: Our investments in the next generation of hardware showcases our commitment to stay at the forefront of innovation.
Our investments in the next generation of hardware showcases our commitment to stay at the forefront of innovation.
Speaker 3: This not only enhances our competitive advantage, but also contributes to the overall efficiency and reliability of our service, as well as improving the user experience.
This not only enhances our competitive advantage, but also contributes to the overall efficiency and reliability of our service as well as improving the user experience.
Speaker 3: Also, the efficiency of our network partner team has scaled significantly in the past year.
Also the efficiency of our network partner team has scaled significantly in the past year.
Speaker 3: During the year, our network partner count increased by almost 90%, while our network partner team increased by only 11%.
During the year, our network partner count increased by almost 19%, while our network partner team increased by only 11%.
Speaker 3: The increase in the number of network partner managed by each network partner personnel is unlocked throughout the software support as more and more tasks can be automated.
The increase in the number of network partners managed by each network partner personnel, if unlocked throughout the software support.
More and more tasks can be automated.
Speaker 3: As the trend towards network partners continues, we believe the operating leverage that can be achieved will be increasingly apparent.
As the trend towards network partner continue we believe the operating leverage that can be achieved will be increasingly apparent.
Speaker 3: the shifting balance between the two models and the initiatives we have taken to improve.
The shifting balanced between the two models and the initiatives we have taken to improve.
Operational efficiency.
Speaker 3: all contribute to the improvements of our profitability during the quarter.
All contribute to the improvements about profitability during the quarter.
Speaker 3: Going forward, we remain committed to our strategy in improving operational efficiency.
Going forward, we remain committed to our strategy gain improving operational efficiency as we continue to optimize our operating expenses and costs.
Speaker 3: as we continue to optimize our operating expenses and costs.
Speaker 3: Overall, third quarter was a peak season with mobile device charging service displaying strong growth and uptrending profitability.
Overall third quarter was our peak season with mobile device charging service displaying strong growth and up trading profitability.
Speaker 3: Operationally, our PY in terms of direct model and network partner model continue to rebalance based on their respective advancements.
Operationally <unk>.
In terms of direct model and network partner model continue to rebalance based on their respective advantages.
Speaker 3: The direct model will more focus on high-geared locations, while network partner will complement the coverage.
The direct model, we are more focused on high yet locations, while network partners, where complement the coverage.
Speaker 3: The two models continue to differentiate ourselves from market peers, as they all allow for increased flexibility and execution.
The two models continue to differentiate ourselves from market peers.
All allow for increased flexibility and execution.
Speaker 3: Our roadmap for the fourth quarter underscores our commitment to expanding our courage.
Our roadmap for the fourth quarter underscores our commitment to expanding our coverage, namely through increasing network partner count and support.
Speaker 3: Namely, through increasing network partner count and support, strengthening key account acquisition, and enhancing our POI.
<unk> in key account acquisition and Henry <unk> composition.
Speaker 3: We will also continue to reduce fixed expenses and optimize variable expenses and costs.
We will also continue to reduce fixed expenses and optimize variable expenses and costs and drive increased efficiency of our teams by introducing more automated tool.
Speaker 3: and drive the increase in efficiency of our teams by introducing more automated tools.
These will all help us.
Speaker 3: spearhead the standards of operating efficiency within the market.
Spearhead the standards of operating efficiency within the market.
Speaker 3: Looking ahead, in the fourth quarter, the consumption power remains soft, although there continue to be signs of a recovery in progress.
Looking ahead in the fourth quarter the consumption power. It remains soft although they will continue to be signs of a recovery in progress.
Speaker 3: GME increased by 30% year-over-year during October and 32% in the first three weeks of November .
<unk> increased by 30% year over year due in October.
And 32% in the first three weeks of November.
Speaker 3: Despite these challenges, our unwavering commitment to our strategical pillars remains our guiding force.
Despite these challenges our unwavering commitment to our strategic pillars remains our guiding force.
Speaker 3: In conclusion, Energy Monster stands at the cusp of sustained growth with our mobile device charging service continuously, reaching new operating milestones and general recovery in profitability in progress.
In conclusion energy Monster stand at the cusp of sustained growth with our mobile device charging service continuously reaching new operating milestones and general recovery in profitability a progress.
Speaker 3: Our strong cash position and robust cash flow serve as the back rock for driving the continuous growth and value for our stakeholders.
Our strong cash position and robust cash flow serves as the backdrop for driving the continuous growth and value for stakeholders.
Speaker 3: and to optimistically explore new initiatives that may drive energy monsters to new heights.
And to Opportunistically explore new initiatives that May drive energy monster to new Heights.
Speaker 4: Thank you very much. I'll now turn the call over to Maria Xin, our Chief Financial Officer, for the financial highlights. Thank you, Mark. Now let me walk you through the third quarter 2023 financial results in greater detail.
Thank you very much I'll now turn the call over to Maria <unk>, Our Chief Financial Officer for the financial highlights.
Thank you Mark.
Now, let me walk you through the third quarter 2023 financial results in greater detail.
Speaker 4: For the third quarter of 2023, revenues were 613.5 million, representing a 24.7% year-over-year decrease.
The third quarter of 2023, Samuel for 613 quantify many representing about 24, 7% year on year decrease.
Speaker 4: Mobile device charging revenues, which consists of revenue generated from both direct and network partners models, were $564.2 million and accounted for 92% of our total revenues for the quarter.
<unk> chartering revenue, which consists of revenue generated from both direct and network partners models, where our 564. According to many and the comdata for 92% of our total revenues for the quarter.
Speaker 4: Revenues generated from direct model, which comprise of mobile device charging service fee of $278.1 million and power bank sales of $3.1 million, or $284.2 million for the third quarter of 2023, down 36.4 percent year-on-year,
Revenues generated from direct model, which comprised of mobile device charging service fee of $278 1 million and the par banks out of $3, one penny or $284 2 million for the third quarter of 2023.
Down 36, 4% year over year.
Speaker 4: The decrease was primarily due to the decrease in number of POIs operated through the direct model.
Decrease was primarily due to the decrease in number of <unk> operators through the direct model.
Speaker 4: Revenues generated from network passenger model, which comprised of the mobile device charging solution C of 58.8 million, and the cells of Kamin-8 and the power banks of 221.2 million.
Revenues generated from that where our partner model leisure comprised of the mobile device charging solutions for a living.
Sales of carbonate and the par banks of 221 too many.
Speaker 4: or $280 million for the third quarter of 2023, down
Or 280 million for the third quarter, which was 193 down 22, 7% year over year. The decrease was primarily due to the change in contractual arrangement with network partners.
Speaker 4: 22.7% year-over-year. The decrease was primarily due to the change in contractual arrangement with network partners.
Speaker 4: under the new contractual arrangement, mobile device charging revenue generated under the network partner is not of incentive fees paid to network.
There's a new contractual arrangement mobile device charging revenue generated under the network partner is net of incentive fees paid to network partners.
Speaker 4: The decrease was partially offset by the increase in cabinets and power bank sales to network partners.
The decrease was partially offset by the increase in cabinet and the par banks out to and our partners.
Speaker 4: Other revenues, which accounted for 8% of our total revenues, were $49.3 million for the third quarter of 2023, compared with $5.8 million in the same period last year. The increase was primarily attributable to new business initiatives.
Other revenues, which accounted for 8% of our total revenues.
49% remaining for the third quarter of 2023 comparatively five point a many in the same period last year. The increase was primarily attributable to new business initiatives.
Speaker 4: Cost of revenues was up 71.1% year-over-year to 214.8 million for the third quarter of 2023. The increase was primarily due to the increase in sales of cabinets and power banks under the new contractual arrangement with network partners. The increase was partially offset by the decrease in depreciation cost.
Cost of revenues.
71, 1% year over year to 200 and for our team.
For the third quarter of 2023, the increase was primarily due to the increase in sales of carbonate and the par balance and Theres, a new contractual arrangement with nacco our patent.
The increase was partially offset by the decrease in depreciation cost.
Speaker 4: Gross profit was down 42.2% year-over-year to $398.6 million for the third quarter of 2023.
Gross profit was down 42, 2% year over year to 398 point saves money for the third quarter of 2023.
Speaker 4: Operating expenses for the third quarter of 2023 were $364.6 million, down 53.6% year-over-year.
Operating expenses for the third quarter of 2023 or 350 for our clients with many down 53, 6% year over year.
Speaker 4: excluding share-based compensation, non-GAAP operating expenses were 359.5 million, representing a year-over-year decrease of 53.9%.
Excluding share based compensation non-GAAP operating expenses was 359 5 million, representing a year over year decrease of 53.9%.
Speaker 4: Research and development expenses for the third quarter of 2023 were $23.8 million, down 2% year-on-year. The decrease was primarily due to the decrease in personnel-related expenses. Sales and marketing expenses for the third quarter of 2023 were $298 million.
Research and development expenses for the third quarter of 2023, or 23 point, a mini down 2% year over year. The decrease was primarily due to the decrease in personnel related expenses.
Sales and marketing expenses for the third quarter of 2023 were 200 and.
Speaker 4: 98.2 million, 60% year-on-year. The decrease was primarily due to the decrease in incentive fees paid to network partners as a result of the change in contractual arrangement with network partners and the decrease in incentive fees paid to location partners.
$98 2 million down 60% year over year. The decrease was primarily due to the decrease in incentive fees paid to now our partners.
As a result.
In contractual a regimen with a lot of our partners and the decrease is thank you. Please pay two location pattern.
Speaker 4: General and administrative expenses were $37.1 million in the third quarter of 2023, up 26.1% year-on-year.
General and administrative expenses.
37, <unk> in the third quarter of 2023.
<unk> six point of 1% year on year.
Speaker 4: The increase was primarily due to the increase in personnel-related expenses and the professional service expenses.
The increase was primarily due to the increase in personnel related expenses and professional service expenses.
Income from operations was.
Speaker 4: 34 million in the operating and operating margin for the third quarter of 2023 was 5.5 percent compared to a negative 11.9 percent in the same period last year.
34 million in the operating.
And the operating model for the third quarter of 2023 was quite quantified percent compared to a negative 11, 9% in the same period last year.
Speaker 4: Net income was $50 million in the third quarter of 2023, compared to a net loss of $95.8 million in the same period last year.
Net income was 15 million in the third quarter of 2000.
23, compared to a net loss.
$95 eight meeting in the same period last year.
Speaker 4: Net margin for the third quarter of 2023 was 8.2%, compared to a net margin of negative 11.7% in the same period last year.
Net margin for the third quarter of 2023 was eight 2%.
<unk> to a net margin of negative 11, 7% in the same period last year.
Speaker 4: non-GAAP net income, which excludes share-based accommodation expenses, was $55.2 million in the third quarter of 2023, compared to a non-GAAP net loss of $88.6 million in the same period last year.
non-GAAP net income, which excludes share based compensation expenses was 55 point to many in the third quarter of 2023.
<unk> to our non-GAAP net loss of 88 6 million in the same period last year.
Speaker 4: As of September 30, 2023, the company had cash and cash equivalents, restricted cash, and short-term investments of $3.3 billion. Cash flow generated from operations for the third quarter of 2023 was $165.6 million.
As of September 32023, the company had cash and cash equivalents.
<unk> cash and short term investments.
Investments.
<unk> 3 billion.
Cash flow generated from operations for the third quarter of 2023.
$165 six meaning <unk>.
Speaker 4: capital expenditure for the third quarter or 2.8 million.
Capital expenditure for the third quarter was $2 eight living.
Speaker 4: Thank you for listening. We are now ready for your questions. Operator.
Thank you for listening we are now ready for your questions operator.
Speaker 1: Yes, thank you. The question and answer session of this conference call will start in a moment.
Yes. Thank you a question and answer session of this conference call will start in a moment.
Speaker 1: In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller.
To be fair to all callers, who wish to ask questions. We will take one question at a time from each caller if.
Speaker 1: If you have more than one question, please request to join the question queue again after your first question has been addressed.
If you have more than one question. Please request to join the question queue again. After your first question has been addressed.
Speaker 1: If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then 1.
If you wish to ask a question. Please press Star then one on your telephone and wait for it and we announced Mr which cancel your request. Please press Star then two.
Speaker 1: And the first question comes from Victor Tang with Goldman Sachs.
And the first question comes from Victor Tang with Goldman Sachs.
Speaker 5: Hi, thank you, management, for taking my question. I'm asking this question on behalf of Ronakume, my analyst. You mentioned during your opening remark that there's a rebalance between the network partner and direct models. Can management clarify how exactly this is done and what is the right balance to think about in the future? Thanks.
Hi, Thank you management for taking my question I'm asking this question on behalf of Corona Q Martin animals.
During your opening remarks that Theres, a rebalance between the network partner and direct models can.
Can you can management clarify how Jackie this is Don and what is the right balance.
Do you think about in the future.
Speaker 3: Thanks for the question. That's correct. We are actively rebalancing the contribution between the two models, but I would like to note that the recalibration has been going for the past few years.
Thanks for the question.
That's correct, we are actively rebalancing the contribution between the two models but.
But I would like to note that the Recalibration has been going for the past few years.
Speaker 3: As of the third quarter of this year, 65.5 percent of our POIs are under the network partner model. This is a significant increase from the 47.4 percent of the same time last year.
As of the third quarter of this year 65, 5% of <unk> under the network partner model. This is a significant increase from the 47, 4% on the same time last year.
Speaker 3: This rebalance will take form with time, actually. I would like to emphasize that this does not mean that we will only have our network partner model.
This rebalance will take from.
Formed with them with time actually I would like to emphasize that this does not mean that we will only have our network partner model in the future. Our direct models advantages in terms of rapid execution and the ability to acquire a remains clear that's why going forward, we would like to focus these advantage.
Speaker 3: Our direct model's advantages in terms of rapid execution and ability to acquire KA remains clear. That's why going forward, we would like to focus these advantages for the direct model to key regions and POI types, namely POIs in higher tier cities and KAs.
Just for the direct model to key regions and <unk> types, namely.
Hum.
A higher tier cities in case this increased precision in terms of the direct model, we allow to have a greater focus on the larger regions and local local location partners I think the balance between the two is still a work in progress as we don't set specific targets for the <unk>.
Speaker 3: This increased precision in terms of the direct model will allow to have a greater focus on the larger regions and location points.
Speaker 3: I think the balance between the two is still a work in progress as we don't set specific targets for the contribution for either models. However, given the increased focus of our direct model, we would expect the contribution by our network partner model to continue increasing for the near future. Thank you.
<unk> for either models. However, given the increased focus of our direct model. We would expect the contribution by our network partner model to continue increasing for the near future. Thank you.
Thank you and our next question comes from Vicky Wei with Citi.
Speaker 6: Hi, management. Thanks for taking my question. Can management give more insight on the fourth quarter outlook and how the changing way to change the food models will impact the company's bottom line in the future? Thank you.
And then.
Thanks for taking my question.
Thank you more insight on the fourth quarter outlook.
The change in wages.
Those will impact the company.
Thank you.
Speaker 4: Sure, thanks for your question. We are still observing the fourth quarter, but so far the consumption is a bit below expectation.
Sure <unk>.
We attribute our sale of silver in the first quarter, but so far the consumption is a bit below expectation.
Speaker 4: GLA increased by 30% year-on-year during October and 32% in the first three weeks of November .
Generally increased by 30% year over year during October and 32% in the first three weeks of November.
Speaker 4: There are signs of a gradual improvement, but it will take a bit more time for it to fully normalize.
Thanks.
Gradual improvement, but either way will take a bit more time.
To fully normalize.
Speaker 4: As for the probability part, the general rebalance of POI based on the true model will positively benefit on our margin.
As for the probability part the general balance.
Based on the two model little possibility benefited our margins.
Speaker 4: Under the network partner model with the updated contractual arrangement, we sell the mobile device charging cabinet to our network partners.
And there is a network partner model.
David contractual arrangement, we sell the mobile device targeting <unk> to our network partners.
Speaker 4: and then generate a long-term mobile device charging solution revenue. Also, graduate.
And then generate long term mobile device charging solutions revenue.
Also gradually lead time there.
Speaker 4: The reduction in direct model will also lower our operating expenses.
Reduction indirect model will also lower our operating expenses.
Speaker 4: This will both be positive for our long-term margins in the future.
This will both be positive for our long term margins in the future.
Thanks.
Okay.
Speaker 1: Thank you. And the next question comes from Charlie Chen with China Red.
Thank you and the next question comes from Charlie Chen with China Renaissance.
<unk>.
Speaker 7: Hi, Marth and Maria. Congratulations on this strong quarter. I just want to get a bit more color on the other revenue, which seems to increase quite a bit this quarter. How much of this is driven by the advertising portion, and how much by new business initiatives? And can management share a bit on what initiatives are actively being explored by the company? Thanks a lot.
Okay.
Hi, Mara Santa Maria Congratulations on the strong quarter I just want to.
Got a bit more color on the auto revenue, which seems to increased quite a bit this quarter. How much of this is driven by the advertising portion and how much by new business initiatives and can management share a bit on what the initiatives are actually being explored by the company. Thanks a lot.
Speaker 3: Hi, and thanks for the question. First of all, I would like to break it down a bit by the segment.
Hi, and thanks for the question.
First of all I would like to break it down a bit by the segments.
Speaker 3: Advertising revenue is growing as our registered user base grows, and also, very important, we improve the housing efficiency.
Advertising revenue is growing as our registered user base growth and also very important we improve the housing efficiency.
Speaker 3: So it continues to scale accordingly to our mobile device charging service.
It continues to scale accordingly to our mobile device charging service.
Speaker 3: This quarter, new initiatives contribution has increased a lot as well. And we are excited about that. But given that the new initiative currently is still in its very early stage, we will disclose these initiatives once it consistently delivers a more meaningful contribution to all financials.
This quarter new initiatives contribution has increased a lot as well and we're excited about that but given that the new initiatives. Currently is still in its very early stage. We will disclose these initiatives once it's consistently deliver a more meaningful contribution to our financials.
Speaker 3: I think in terms of new initiatives, our approach has always been to firstly identify large industries where demands and unit economics are proven. Next, we are also seeing to how existing model mobile device charging service advantages can synergize with the new operation.
I think in terms of new initiatives.
Our approach has always been to firstly.
Very large industries, where demands and unit economy.
Prove it.
Next we are.
So seeing too how existing model mobile device charging service advantages can synergize with the new operation for.
Speaker 3: For Energy Monster, we have two strong capabilities that serve as foundation to our potential entry into other industries.
For <unk>, we have two strong capabilities that serve as foundation to our potential entry into other industries. When is our vast distribution capability developed throughout our direct network partner models. Another of our advantages is our ability to create.
Speaker 3: One is our vast distribution capability developed throughout our direct network partner models. Another of our advantages is our ability to create solutions and our strong IoT foundation.
Solutions and our strong Iot Foundation.
Speaker 3: Going forward, we will actively explore opportunities that can leverage our advantages in the two to unlock the addition of the avenues of growth for the company. Thank you very much.
Going forward, we will actively explore opportunities that can leverage our advantages in the two to lock. The addition of avenues of growth for the company. Thank you very much.
Okay.
Speaker 1: We are now approaching the end of the conference call. I would now like to turn the call over to Energy Monster CFO Maria Sheehan for any closing remarks.
Thank you we are now approaching the end of the conference call.
Turn the call over to Andrew Monstrous CFO Morrison for any closing comments.
Speaker 4: Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months.
Once again, thank you for joining us today, please don't hesitate to contact us.
You have any further questions. Thank you for your continued support and we look forward to speaking with you in the coming months.
Thank you for your participation in today's conference. This concludes the presentation.
Speaker 1: That concludes the presentation. We now disconnect. Good day.
Connect good day.