Q1 2024 Smart Share Global Ltd Earnings Call

June 3, 2024

Yeah.

Okay.

[music].

Operator: Hello, and thank you for standing by for Energy Monster's first Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hansen Shi. Please go ahead.

Hello, and thank you for standing by for energy Bumsters first quarter 'twenty 'twenty four earnings conference call.

Speaker Change: At this time all participants are in listen only mode. Today's conference is being recorded.

Speaker Change: If you have any objections you may disconnect at this time.

Speaker Change: I would now like to turn the meeting over to your host for today's conference call Director of Investor Relations Henson Shay. Please go ahead.

Hansen Shi: Thank you. Welcome to our 2024 First Quarter Earnings Conference Call. Joining me on the call today are Mars Cai, Energy Monsters Chairman and Chief Executive Officer, and Maria Xun, Chief Financial Officer. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the first quarter of 2024. 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.

Hansen Shi: Thank you welcome to our 2024 first quarter earnings Conference call.

Speaker Change: On the call today are Mark tie energy Monsters, 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 first quarter of 2024 before we continue I refer you to.

Speaker Change: Safe Harbor statement in the earnings press release, which applies to this call as we will make forward looking statements.

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.

Speaker Change: Most directly comparable GAAP measures.

Hansen Shi: 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. Finally, please note that unless otherwise stated, all figures mentioned during this call are in RMB. I would now like to turn the call over to our Chairman and Chief Executive Officer, Mars Cai, for the business and operation highlights.

Speaker Change: Finally, please note that unless otherwise stated all figures mentioned during this call are in RMB.

Now I'd like to turn the call over its hard chairman and Chief Executive Officer, Mark tie for the business and operational highlights.

Mars Guangyuan Cai: Thank you very much, Hansen. Good day, everyone.

Thank you very much.

Mars Guangyuan Cai: Welcome to our 2024 first quarter earnings call. During the first quarter of 2024, our performance remained stable, with GME showing a slight year-over-year increase. This is a testament to our continued resilience and adaptability in navigating the post-pandemic economic environment. The 2024 Chinese New Year holiday period was particularly robust, with daily GNV increasing by 23% year-over-year, compared to the same period last year. This significant growth during the holiday season highlights a strong recovery in consumer activity, and the effectiveness of our strategic initiatives. However, we experienced a slight decline in March, which we attribute to seasonal fluctuations and decline in consumption confidence.

Speaker Change: Good day, everyone and welcome to our 2020 for fourth quarter earnings call.

Mark Tie: During the fourth quarter of 2024 hour performance remained stable with G. M showed a slight year over year increase this is a testament to our continued resilience and adaptability in navigating the post pandemic.

Comic environment.

Speaker Change: The 'twenty 'twenty four Chinese new year holiday period was particularly robust with daily JV, increasing by 23% year over year.

Speaker Change: Compared to the same period last year.

Speaker Change: This significant growth during the holiday season highlights a strong recovery in consumer activities.

Speaker Change: And the effectiveness of our strategic.

Speaker Change: And the initiatives.

Speaker Change: However, we experienced a slight decline in March, which we attribute to seasonal fluctuations and decline in consumption confidence.

Mars Guangyuan Cai: In terms of performance by city tier, 1st tier and 2nd tier cities experienced a slight decline in GMV, reflecting the general softness in consumption. However, growth was observed in lower tier cities, where we are increasing our presence in and seeing increased adoption of our service. Specifically, third tier cities and lower tier cities saw a 4% year-over-year increase. This growth in lower tier cities demonstrates the effectiveness of our localized strategy, and the untapped potential in these markets.

Speaker Change: In terms of performance by city tier first.

Speaker Change: And second tier cities experienced a slight decline in <unk>, reflecting the general softness in consumption.

Speaker Change: However growth was observed in lower tier cities.

Speaker Change: Where we are increasing our presidency and see increased adoption of I'll say this.

Specifically third tier cities and lower tier cities, so and 4% year over year increase.

Speaker Change: This growth in lower tier cities demonstrate the effectiveness of our localized strategies and the untapped potential in these markets.

Mars Guangyuan Cai: We're looking into POIs by type, transportation, health care, public locations, and education segments showed the fastest growth, with year-over-year increase of 42%, 30%, 27% and 23% respectively. This diversification in usage scenarios is encouraging, as it indicates a broadening of our user base, and an expansion into high demand sectors. Conversely, entertainment, hotels, and shopping segments saw a slight decline.

Speaker Change: We're looking into P O wise by type.

Speaker Change: Transportation Health care puppet locations and education segment showed the fortis to close with year over year increase of 42%, 30%, 27% and 23% respectively.

Speaker Change: This diversification and usage scenarios is encouraging.

Speaker Change: As it indicates a broadening of our user base.

Speaker Change: And and expansion into high demand sectors.

Speaker Change: Conversely entertainment hotels and shopping segments saw slight declines.

Mars Guangyuan Cai: Despite a stable performance in this quarter due to a softer consumption environment, we continue to achieve new operational milestones. We have successfully expanded our POI coverage to a record high scale and reached a remarkable milestone for over 400 million cumulative registered users. Our POI network saw a net increase of 11,000 POIs this quarter, bringing our total POI count to over 1.2 million.

Speaker Change: Despite a stable performance in this quarter due to a softer consumption environment, we continue to achieve new operational milestones as well.

Speaker Change: We have successfully expanded L. P. O Y coverage are you caught high scale and reached a remarkable milestone for over 400 million accumulative registered users.

Our pure network. So a net increase of 11000 people this quarter.

Speaker Change: Our total P O Y count to over $1 2 million.

Mars Guangyuan Cai: This expansion is important, as it enhances our service availability and user convenience. Additionally, we have strategically rebalanced our operational model towards the network partner model, while maintaining our core direct model portfolio. To do this, we continue to review the performance of each and every one of direct model POIs based on the current user traffic. As a result of this evaluation, we've transitioned a portion of these POIs to our network partners, optimizing our portfolio for maximum effectiveness. This transition is anticipated to deliver substantial economic benefits for our economy in the long term. Notably, this quarter marks the fifth consecutive quarter of non-gap probability since the pandemic.

Speaker Change: This expansion is important as it enhances our service availability and the user convenience.

Speaker Change: Additionally, we have strategically we balanced our operational model towards the network partner model.

Speaker Change: While maintaining our core direct model portfolios.

Speaker Change: To do this we continue to review the performance of each and every one of director model P. Wise based on the part of the user traffic.

Speaker Change: As a result of this evaluation, we have transitioned a portion of these P wise to our network partners optimizing our portfolio for maximum effectiveness.

Speaker Change: This transition is anticipated to deliver substantial economic benefits for all comedy in a long time.

Speaker Change: Notably this quarter marks the fifth consecutive quarter of non-GAAP profitability things the pandemic.

Mars Guangyuan Cai: Our cash and cash equivalents remain healthy, providing us with the financial stability to continue our strategic initiatives as well as investing in opportunities to drive future growth. Overall, we remain stakeholders in our commitment to delivering sustainable value to all our stakeholders and are optimistic about the future prospects of the mobile device charging sector in China. Now, let me walk you through our key initiatives in coverage expansion and efficiency improvements in greater detail.

Our cash and cash equivalents remained healthy.

Speaker Change: Providing us with the financial stability to continue our strategic initiatives as well as investing in opportunities to drive future growth.

Speaker Change: Overall, we remain steadfast in our commitment to delivering sustainable value to all our stakeholders and are optimistic about the future prospects of the mobile device charging sector in China.

Speaker Change: Now, let me walk you through our key initiatives in coverage expansion and efficiency improvements in greater details.

Mars Guangyuan Cai: Our commitment to expanding our POI network is driven by the immense potential we see in untapped regions and POI categories. This quarter, we made progress to the expansion of our POI network, adding a net of 11,000 new POIs. In terms of our approach with models, growth was achieved through a balanced way, leveraging our network partner model primarily, but as well our direct model for KAs. New POIs were primarily added in entertainment, shopping, office buildings, and hotels.

Speaker Change: Our commitment to expanding our P. O Y network, it's driven by the mass potential we see in untapped regions and categories.

Speaker Change: This quarter, we made progress to the expansion of all pure network.

Speaker Change: And that's of 11000, new P wise.

Speaker Change: In terms of our approach with the models growth was achieved through a balanced way.

Speaker Change: Leveraging our network partner model, primarily but as well our direct model Okay Ace.

Speaker Change: <unk>, we're primarily added entertainment shocking office buildings and hotels.

Mars Guangyuan Cai: Healthcare and bank POIs saw substantial growth, with quarter-over-quarter increase of around 6%. We also expanded into 38 new county-level areas this quarter, now covering nearly 2,100 county-level cities. Our user base increased by 12.8 million, reaching over 404.3 million cumulative users.

Speaker Change: Health care and bank P O I's saw substantial growth with quarter over quarter increase of around 6%.

We also expanded into 38, new country level areas this quarter now.

Speaker Change: Now covering nearly 2000 and a hungry county level cities.

Speaker Change: Our user base increased by $12 8 million, reaching over $404 3 million cumulated users.

Mars Guangyuan Cai: This substantial user growth is a testament to the effectiveness of our expansion strategies and the increasing demand for our service. The ongoing expansion of our PY network is part of our broader strategy to enhance our service availability across diverse regions, ensuring that we meet the needs of a growing user base. Our transition to network partner model is being executed with precision, carefully balancing the rate of transition with quality. We are consistently reducing underperforming POIs and optimizing the operational efficiency of our direct model.

Speaker Change: This substantial user growth is a testament to the effectiveness of our expansion strategies and the increasing demand for our service.

Speaker Change: The ongoing expansion of our P Y network as part of our broader strategy to enhance our service availability across diverse regions.

Speaker Change: Ensuring that we meet the needs of a growing user base.

Speaker Change: Our transition to network partner model is being executed with precision carefully balancing the rate of transmission with quality.

Speaker Change: We are consistently reducing underperforming P O i's and optimizing the operational efficiency of our direct model.

Mars Guangyuan Cai: Despite the challenging environment, we have maintained POI expansion momentum through the acquisition of new key accounts and by replacing instead emphasize on the network partner model for core expansion. This strategy ensures that we leverage the strength of both models to drive our coverage expansion and profitability, with the continued development of a network part of the model and adjustment in direct operation, network partner POIs reached 79.7% by the end of this quarter, compared to a 59% the same time last year, and 73% as of the end of 2020.

Speaker Change: Despite the challenging environment, we have maintained P Y expansion momentum through the acquisition of new key accounts and about replacing instead.

Speaker Change: Emphasize and that's what part of the model for core extension.

Speaker Change: This strategy ensures that we leverage the strengths of both models to drive all coverage expansion and profitability.

Speaker Change: The continued development of our network partner model and adjustment in direct operations network partner P. O I's reached 17 nine 7% by the end of this quarter compared to a 59% at the same time last year and 73% is at the end.

Speaker Change: 2023.

Mars Guangyuan Cai: The direct model suite execution and high-quality service to location partners are particularly effective, for high-yield locations in higher-tier cities in K8. Meanwhile, the network partner model offers distinct advantages in providing comprehensive coverage across all regions. Seamlessly complementing our direct model strength.

Speaker Change: The direct model suites, I think is key.

Speaker Change: Houston and high quality service to location partners are particularly effective for.

Speaker Change: For high yield locations in higher tier cities and K as me.

Speaker Change: Meanwhile, the network partner model offers distinct advantages in providing comprehensive coverage across all regions.

Speaker Change: Industry complementing our direct model strengths.

Mars Guangyuan Cai: We had over 11,000 active network partners, adding more than 600 since the end of last year, and 3,800 year-over-year. This growth in network partners is pivotal in enhancing our market penetration and service reach. The acquisition of new partners is now, however, just the first step in our network partner model. Our dedicated network partner team is committed to unlocking the full potential of each partner upon onboarding, providing hands-on and timely guidance. Our network partner support team ensures that partners receive the necessary assistance for their everyday operations.

Speaker Change: We had over 11000 active network partners.

Speaker Change: Adding more than 600 things at the end of last year.

Speaker Change: And 3800 year over year.

Speaker Change: This growth and that's what partner is conducting a pivotal a enhancing our market penetration and so there's two weeks.

Speaker Change: Acquisition of New partners is not however.

Speaker Change: The first step in our network partner model.

Our dedicated network part of the team is committed to unlocking the full potential of each partner upon onboarding.

Speaker Change: Providing hands on and timely guidance, our network partner support team ensures that partners receive the necessary assistance for their everybody appreciate it.

Mars Guangyuan Cai: We continue to polish and improve the support we provide to our network partners this quarter, through more dedicated support to each and one of our partners. We have set up a more direct channel for communication between our network partners and others, so that their day-to-day questions or inquiries can be addressed more quickly. We plan to continue to drive the service capabilities of our network partners, going forward, in order to develop a stronger competitive advantage under the network partner.

Speaker Change: We continue to Polish and improve the support we provide to our network partners this quarter.

Speaker Change: Through more dedicated to support to each one of our partners.

Speaker Change: We have set up a more direct channel for communication between all of that to our partners and us so that the day to day questions or inquiries can be addressed and more quickly.

Speaker Change: We plan to continue to drive in the service capabilities of our natural partner team going forward.

Speaker Change: Did you give out a stronger competitive advantage under the network partner model.

Mars Guangyuan Cai: We also launched an award system for network partners offering VIP services to enhance their experience and loyalty, motivating their development. This system includes regular training, performance incentives, and exclusive support services, which have been well received by our partners. We continue to optimize low-efficiency and underperforming POIs, ensuring that our network remains robust and efficient.

Speaker Change: We also launched and award system for network partners offering VIP services to enhance the experience and loyalty.

Speaker Change: Motivating their development.

Speaker Change: This system includes regular training performance incentives and exclusive support services, which have been well received by our partners.

Speaker Change: We continue to optimize load efficiency and underperforming piceance.

Speaker Change: Sure.

Speaker Change: No.

Speaker Change: And efficient.

Mars Guangyuan Cai: Our directorial team focused on high tier cities and major KAs to enhance our brand influence. This quarter, our KA team expanded and secured partnerships with leading chains across various sectors such as grocery stores, tourism groups, and shopping sectors. These high-profile partnerships are instrumental in boosting our brand visibility and driving user engagement. For 2024, we will continue to put more emphasis on the network partner model as the core driver for growth and direct model focusing on high tier cities and major KAs.

Speaker Change: Oh yeah.

Speaker Change: Hi.

Speaker Change: And okay.

Speaker Change: And how does that influence.

Speaker Change: This quarter, Okay team extended and secure partnerships with leading change across various sectors.

Speaker Change: Grocery stores tourism groups and shopping centers.

Speaker Change: These high profile partnerships.

Speaker Change: Instrumental in boosting our brand visibility and driving user engagement.

Speaker Change: For 2024, we will continue to put more emphasize.

The network partner model as the core driver for growth and direct model focusing on high tier cities and major case.

Speaker Change: Yeah.

Mars Guangyuan Cai: In terms of operational efficiency, we continued to optimize contract structures and our direct market. In the first quarter, we transitioned 56,000 POIs for our direct model to our network partner model. This transaction, from the direct model to network partner model in certain regions has incurred one-time costs, but it is a strategic move that would benefit the financial health for the company in the long run. For new direct model signings during the quarter, PURE Entrance Fee Contracts are almost no longer used in new signings as we further optimize the structure of new direct PURE.

Speaker Change: In terms of operational efficiency, we continued to optimize contract structures and I'll do that tomorrow.

Speaker Change: In the first quarter, we transitioned.

Speaker Change: <unk> 6000 lives for all director model to our network partner model.

Nicholas: This transaction from the direct model to Nicholas pardon the modal in certain regions has incurred one time cost, but it is a strategic move that will benefit the financial health for the company in long run.

Speaker Change: Four new direct modal signings during the quarter pure interest speak contracts almost no longer used a new signings as we further optimized the structure of new direct P lives.

Mars Guangyuan Cai: Our network partner take rate for the first quarter was up, compared to the same period last year and the fourth quarter of last year. This increase in pay rate reflects our improved negotiation capability, and the value we're bringing to our partners. The efficiency of our network partner remains stellar, with network partner account growing by 49%, but the size of teeth growing only at a slight fraction of the growth. We are also developing a new series of power banks to improve battery detection, accuracy, and overall user experience.

Speaker Change: Our network partner take rate for the first quarter.

Speaker Change: By about 1% compared to the same period last lucky it ended fourth quarter of last year.

Speaker Change: This increase in take rate reflects our improved negotiation capabilities and the value we bring to our partners.

Speaker Change: The efficiency of our network partners remains stellar with.

Speaker Change: That's where our partner count growing by 49%, but the size of T growing only at like suppression of the globe.

Speaker Change: We are also developing a new series of power banks to improve battery detection accuracy and overall user experiences.

Mars Guangyuan Cai: These new power banks will feature, and advanced technologies to ensure a seamless user experience. Additionally, a new generation of cabinet machines is underdeveloped, incorporating modular design in aimed at streamlining maintenance and operation. These cabinets will feature enhanced waterproofing capability, rendering them more resilient for outdoor and extreme weather conditions.

Speaker Change: These new power banks where feature.

Speaker Change: And the last technology to ensure a seamless user experience.

Speaker Change: Additionally, a new generation of cabinet machines is under development incorporating modular design enhancement aimed at streamlining.

Speaker Change: Streamlining maintain as an operations.

Speaker Change: These cabinets, where feature enhanced water proofing capabilities.

Speaker Change: And then during the more resilient for Aldo and extreme weather conditions.

Mars Guangyuan Cai: These advancements underscore our unwavering commitment to innovation and cost. We continue to maintain a strong balance, providing us with the flexibility to navigate challenging environment and explore new opportunities that will drive further growth. We were confident that our initiatives will unlock our growth and value potential in the foreseeable future. In conclusion, Since the reopening in early 2023, we have achieved five consecutive quarters of non-gap profitability.

Speaker Change: These advancements underscore our unwavering commitment to innovation and cost effectiveness.

Speaker Change: We continue to maintain a strong balance sheet, providing us with the flexibility to navigate challenging environments and explore new opportunities that will drive further growth.

Speaker Change: We were confident that our initiatives, we unlock our growth and value potential.

Speaker Change: In the foreseeable future.

Speaker Change: In conclusion.

The reopening in early 2023.

Speaker Change: We have achieved five consecutive quarters of non-GAAP profitability.

Mars Guangyuan Cai: We continue to optimize our direct model and scale on the back of our network partner model. The contribution of network partners is rising as more high-quality network partners join Energy Monster. This sustained growth, both in terms of our G&E and network scale, is a testament to our robust business model and strategic vision. We need to continue to sharpen our competitive edge for the network partner model, even though it already delivers healthy unit economics.

Speaker Change: We continue to optimize our direct model and scale on the back of our network partner model.

Speaker Change: Contribution of network partner, it's rising as more high quality network partners joint energy amongst that.

Speaker Change: This sustained growth both in terms of algae N E and network scale is a testament to our robust business model and strategic vision.

Speaker Change: We need to continue to sharpen our competitive edge for the natural part of the model, even though it's already delivers healthy unit economics.

Mars Guangyuan Cai: But we need to do more for our network partner in order to continue acquiring new ones and support existing ones to scale up. We are introducing the award system for network partners, providing better support and experience for our partners.

Speaker Change: But we need to do more for our walk to a partner in order to continue acquiring new ones and supporting existing ones to scale up.

Speaker Change: We are introducing the award system for next for partners, providing better support experience for our partners. We are also enhancing our hardware with new generations of power banks and cabinet machines under development with reduced cost. So that's the number of partners can onboard with less initial investment.

Mars Guangyuan Cai: We are also enhancing our hardware with new generations of power banks and cabinet machines under development with reduced cost so that the network partners can onboard with less initial investment. These initiatives are designed to ensure that we remain the forefront of innovation and continue to provide exceptional service to our partners and users. In the first quarter, we continue to explore new initiatives in the renewable sector that can leverage our competitive advantages in distribution channel and technology, both hardware and software.

Speaker Change: These initiatives are designed to ensure that remains the forefront of innovation and continue to provide exceptional service to our partners and they use us.

In the first quarter.

We continue to explore new initiatives and then your renewable sector that can leverage our competitive advantages in distribution channel and technology.

Both hardware and software we.

Mars Guangyuan Cai: We hope the new initiatives can grow into our engine of growth, and the New Future. Our power bank recycling campaign, which received positive responses from users, continues to make traction. This campaign is a part of a broader commitment to environmental sustainability and social responsibility, reinforcing our position as a leader in the market, despite the ongoing soft consumption power going into the first quarter of this year, signs of recovery are still in progress. Average daily GNV during the 2024 Chinese New Year holiday was up more than 20%. Year-to-Year, Year-over-Year, compared to in the last year.

Speaker Change: We hope the new initiatives can grow into our engine of growth.

Speaker Change: In the near future.

Speaker Change: Oh, Paul Bank recycling campaign, which received a positive responses from users continue to make traction.

Speaker Change: This campaign is a part of a broader commitment to environmental sustainability and social responsibility.

Speaker Change: Reinforcing our position as a leader in the market.

Speaker Change: Despite the ongoing soft consumption power going into the first quarter of this year.

Speaker Change: So the recovery is still in progress.

Speaker Change: Average daily G N V dreamed of 'twenty 'twenty, four Chinese new year holiday was.

Speaker Change: Then more than 20%.

Speaker Change: Year to year year over year compared to its lost in the last year, we call. It we're confident that in long term recovery of the consumption power in China, which is why we continue to focus on the strengthening of our operational scale and efficiency.

Mars Guangyuan Cai: We are confident that in long-term recovery of the consumption power in China, which is why we continue to focus on the strengthening of our operational scale and efficiency. In the first quarter of 2024, we will further strengthen KA acquisition under our direct operations, expand network partner coverage and operational support, and optimize quality of POI to enhance our margin. In conclusion, we are optimistic about the future of mobile device charging service in China, and remain steadfast in our commitment to delivering sustainable value to all stakeholders.

In the first quarter of 'twenty 'twenty four we were further strengthened K a acquisition under our direct operations.

Speaker Change: And that's what partner coverage and nutritional support and optimize quality P O y to enhance our margins.

Speaker Change #100: In conclusion, we are optimistic about the future of mobile device charging service in China.

Speaker Change #101: And remain steadfast in our commitment to delivering sustainable value to all stakeholders.

Mars Guangyuan Cai: Our focus remains on delivering long-term value for our shareholders as exemplified by our previously announced share repurchase program and special dividend. Energy Monster is poised for sustained and healthier growth, as the transition between direct and network partner models will help refine the quality of our direct model portfolio, while the Network Partner Model continues to fuel growth. Our robust cash reserves and cash flow provide a solid foundation for driving continued growth and value creation for stakeholders, as we remain active in exploring new initiatives to prepare Energy Monster to even greater heights. Thank you very much. I will now turn the call to Maria, our Chief Financial Officer, for the financial highlight.

Speaker Change #102: Our focus remains on delivering long term value for all shareholders as exemplified by our previously announced share repurchase program and a special dividend.

Speaker Change #103: And as you monster is poised for sustained and healthier growth.

Speaker Change #104: As the transaction between direct and network partner models will help refine the quality about go back to motor portfolio.

Speaker Change #104: While the network partner model continues to feel growth.

Speaker Change #105: Our robust cash reserves and cash flow provides a solid foundation for driving continued growth and value creation for stakeholders as we remain active in exploring new initiatives to prepare energy amongst two to even greater heights.

Speaker Change #105: Thank you very much I'll now turn the call to Maria our Chief Financial Officer for the financial highlights.

Maria Shields: Thank you Omar.

Unknown Executive: Now, let me walk you through the first quarter 2024 financial results in greater detail. For the first quarter of 2024, revenues were 397.2 million, representing a 51.7% year-over-year decrease. Mobile device charging revenues, which consist of revenues generated from both direct and network partner models, were 378.1 million and accounted for 95.2% of our total revenues for the quarter. Revenues generated from direct model, which comprise of mobile device charging services fee of 152.1 million and power bank sales of 3.1 million, or 155.2 million for the quarter. Down 345.1% year-over-year, the decrease was primarily due to the decrease in number of POIs operated under direct model.

Maria Shields: Now let me walk you through the first quarter 2024, and that's what we've got in greater detail.

So the first quartile of suicide Anthony far revenues was 300, and the Nike side with one too many they presented a 51, 7% year over year.

Maria Shields: Great.

Maria Shields: Mobile device, having animals. These countries are revenues generated from both Iraq, and that's what patent them all those well actually handed out of 78.1 of many and accounted for 95, one took us out of our total revenue for the quarter.

Speaker Change #107: Revenues generated from direct model, which comprised of mobile device charging surveys to see 150 to one of our many and apart fast out of 311 million.

Speaker Change #108: Or why Henry and 55 point too many for the quarter.

Speaker Change #109: So, let's say 45, one lumpiness that you know of a year.

Speaker Change #110: Decrease was primarily due to the decrease in number of appeal eye opener, AP and AR Iraq motto.

Unknown Executive: Revenues generated from Network Partners model, which comprise of Mobile Device Charging Solution C of $59 million and sales of cabinets and power banks of $163.8 million or $222.9 million for the first quarter of 2024, down 58% year-on-year. The decrease was primarily due to the change in the contractual arrangement with network partners. Under the new contractual arrangement, mobile device charging revenues generated under the network partner model are not of incentive fees paid to network partners.

Speaker Change #111: Revenues generated from that's where part of nice motto, which comprised of mobile device charging solutions C. O 15, 9 million and the south or terminate and pop out of 163.8, many walk to Henry and the 22.9 many by that.

Speaker Change #111: First quarter up 274 down 15, 8% year on year.

Speaker Change #112: The decrease was primarily due to the change in the contractual arrangements is and that's where our partners.

Speaker Change #113: And there's a new contractual arrangement mobile device charging revenue generating and there's a nice pattern of motto not only incentive fees tape Tonight location, let's walk past at nice.

Unknown Executive: The decrease was partially offset by the increase in the sales of cabinets and power banks to network partners. Other revenues, which accounted for 4.8% of our total revenues, or $19.1 million for the first quarter of 2024, up 95.4% year-on-year. The increase was primarily attributable to new business initiatives and the increase in users and advertisement efficiency. Cost of revenues were up 31.7% year-to-year to 167.7 million for the first quarter of 2024. The increase was primarily due to the increase in sales of cabinets and power banks under the new contractual arrangement with network partners.

Speaker Change #113: The decrease was partially offset by the increase in the south of carbonate and the power battery to a net loss pattern us.

Speaker Change #113: Other revenue accounted for 4.8% of our total revenue or 19 point of my money for the first quarter of 2024.

Speaker Change #114: 19, five one forecast that you know are the English was primarily accident go to new business in Asia.

Speaker Change #114: And the increase in user and out of our catchment efficiency.

Cost of revenue were up 31 class seven class that you know year to about 167 plants that are making for the first quarter of 2020 for the increase was primarily due to the increase in south of culminate at a pop out and there's a new contractual arrangements and that's what happened.

Speaker Change #115: Possibly upside by the decrease in depreciation cost.

Unknown Executive: Partially offset by the decrease in depreciation cost. Gross profit was down 37% year-on-year to $229.5 million for the first quarter of 2024. Operating expenses for the first quarter of 2024 were $252.2 million, down 64.5% year-on-year, excluding share-based compensation. Non-GAAP operating expenses were $248 million, representing a year-on-year decrease of 64.8%. Research and development expenses for the first quarter of 2024 were 19.7 million, down 8.3% year-to-year. The decrease was primarily due to the decrease in personnel-related expenses.

Speaker Change #115: Gross profit was down 37% year over year to 229th one five maybe for the first quarter. It was without Anthony for operating expenses for the first quarter. So that in 24 or 252 planned too many down 64, 5%.

Speaker Change #116: Our ear, excluding share based compensation non-GAAP operating expenses were 200, and fuzzy eight mainly representing a year over year increase of 64, 8%.

Speaker Change #117: Research and development expenses for the first quarter of 2024 hour 19 clients that are in Manhattan.

Speaker Change #118: A clients representing year over year. The decrease was primarily due to the decrease in personnel related expenses.

Unknown Executive: Sales and marketing expenses for the first quarter of 2024 were 204.5 million down 69.3% 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 arrangements with network partners. The decrease in incentive fees paid to location partners and the reduction in personnel-related expenses under the direct model.

Speaker Change #119: So on the marketing expenses for the first quarter of 2024 hour work 200, all four plants by money down 16, nightclubs root cause and you know year. The decrease was primarily due to the decrease in incentive fees paid to NASCAR partners as a result of the change in contractual regimen.

Speaker Change #120: Isn't that what patronize the decrease in incentive fees paid to locations had a nice and that the reduction in personnel related expenses and there's a theoretical model.

Unknown Executive: General and administrative expenses remained relatively stable at 26.6 million in the first quarter of 2024. Loss from operation was 22.8 million and operating margin for the first quarter of 2024 was negative 5.7 percent compared to negative 1.9 percent in the same period last year. Net loss was 0.3 million in the first quarter of 2024 compared to a net income of 10.8 million in the same period last year. Net margin for the first quarter of 2024 was negative 0.1% compared to a net margin of 1.3% in the same period last year, non-gap net income which excludes share-based compensation expense, was 3.8 million in the first quarter of 2024 compared to a non-gap net income of 17.1 million in the same period last year.

Speaker Change #120: General and administrative expenses remained relatively stable at how do you see clients save money in the first quarter of 2024.

Speaker Change #121: Loss from operations was 22.8 mini and operating margin for the first quarter of 2024 was negative five clients, 7% compared to a negative 1.9% in the same period last year.

Speaker Change #122: Net loss was zero point, sorry, many in the first quarter of 2024 compared to a net income of a 10.8 million in the same period last year.

Speaker Change #123: That's a matter for the first quarter of 2024 was negative there they're up one 1% comp.

Speaker Change #123: Compared to a nice margin of one 3% in the same period of last year.

Speaker Change #124: non-GAAP net income, which excludes share based compensation expense.

Speaker Change #125: Well, it's 3.8, many in the first quarter, which was on the 20th floor compared to a non-GAAP net income of 17, one what many in the same period last year.

Unknown Executive: As of March 31, 2024, the company had cash and cash equivalents, restricted cash, and short-term investment of $3.3 billion. Cash flow used in operation for the first quarter of 2024 was $47.1 million. Capital expenditure for the first quarter of 2024 were $2 million. Thank you for listening. We are now ready for your questions.

Speaker Change #126: As of March 31, 2024, the company had a cash and cash equivalents restricted cash and the startup investment of three points or in billing.

Speaker Change #127: Cash flow used in operations for the fourth quarter of 2024, or 40 711, meaning.

Speaker Change #127: Capital expenditure for the first quarter of 2024 or two milling.

Speaker Change #128: Thank you for listening we are now ready for your questions operator.

Operator: The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the question queue again after your first question has been addressed. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced.

Speaker Change #129: A question and answer session of this conference call will start in a moment in order to be fair to all callers who wish to ask questions. We will take one question at a time from each caller.

Speaker Change #129: If you have more than one question. Please request to join the question queue again. After your first question has been addressed.

Speaker Change #130: If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star two.

Operator: If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Vicky Wei with Citi. Please go ahead. Good evening.

Speaker Change #131: If you're on a speaker phone please pick up the handset to ask you a question.

Speaker Change #131: Your first question comes from Vicky Wei with Citi. Please go ahead.

Yi Jing Wei: Good evening, management. Thanks for taking my question. I just want to get a bit more color on the outlook for the next quarter and rest of the year in terms of GNV growth and profitability. First quarter's environment was a bit weak, but are we seeing a general recovery in the April or May? Thank you.

Yi Jing Wei: Good evening management. Thanks for taking my question I, just wanted to get a bit more color on the outlook for the next quarter and that's what they get in terms of G M D growth and profitability.

Speaker Change #133: First quarters in my mind was a bit weak, but are we seeing a general recovery in the April or may.

Yi Jing Wei: Kim.

Yi Jing Wei: Yeah.

Mars Guangyuan Cai: Thanks for the question. Our operation is closely tied to the overall offline market because our operation relies on food traffic. The trend of food traffic is a bit different from before. Weekend is good, but weekday is still weaker than before.

Speaker Change #134: That's where the collection operation is closely tied to the offline market because our operations Eli also traffic.

Speaker Change #135: The plan also traffic is a big difference from before we can it's good but at least they if they're later than before the party is closely related.

Mars Guangyuan Cai: The problem is closely related to general consumption of the market. Given that, there still are fluctuations in both consumption and traffic. We do not provide a guidance at this point. As for April and May... Consumption is still a bit weak, but we will still continue to execute our strategies in network expansion and rebalancing our models to comprehend the challenges in the consumption environment. Thank you.

Speaker Change #136: Two general consumption of them okay.

Speaker Change #136: And that there's still a fluctuation you can boast a contraction on the traffic.

Speaker Change #137: Do not provide a guidance at this point.

Speaker Change #137: For April and May.

Speaker Change #138: Conception is still a bit leak bothers me, a little feel continuing to execute our strategies and that's work our expansion and the rebalancing of our models to compressing the challenges in the consumption environment. Thank you.

Speaker Change #138: Okay.

Thank you.

Operator: Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Do you now have a follow-up question from Vicky Wei with Citi? Please go ahead.

Speaker Change #139: Thank you if you wish to ask a question. Please press star one on your telephone and wait for your name to be announced.

Speaker Change #139: Yeah.

Speaker Change #139: Yeah now I'll have a follow up question from Vicki Wang with Citi. Please go ahead.

Yi Jing Wei: Thanks for taking my questions again. I have another two follow-up questions.

Unknown Executive: Thanks for taking my questions again, I'm I have another two follow up questions would you. Please elaborate a bit more on how the transition to the network partner model will benefit the company, maybe shed a bit more on the profitability of the two models and my second question is on new initiatives.

Mars Guangyuan Cai: Would you please elaborate a bit more on how the transition to the network partner model will benefit the company? Maybe share a bit more on the profitability of the two models. And my second question is on new initiatives that you just mentioned. Would you please share a bit on this and when will it start making a more meaningful financial impact? Thank you. Sure, thank you for the question.

Speaker Change #141: That you just mentioned would you please share a bit on this and when will it stop making a more meaningful financial impact. Thank you.

Unknown Executive: Yeah.

Mars Guangyuan Cai: Sure, thank you for the question. I have to say the two models are both important to us because of their respective advantages. Network Partner Model is better in terms of the economics to the company, as well as increasing our coverage overall. The direct model, on the other hand, excels at helping us acquire KAs, which generally have significant presence and positive brand impact. That is the reason why we need to have them both, in to work in conjunction to one another with network partner serving as the engine of growth in terms of POI count and The direct model serving as the billboard for our brand in KAs and higher TSA, As for now, the direct model, to be frank, is still a bit under the water in terms of profitability.

Speaker Change #142: Sure. Thank you for the question Oh I have to say the two models are both important to us because of their respective advantages nitro. Upon a motorist. That's in terms of the comics economics to the company as well as increasing our coverage of war.

Speaker Change #143: The direct model on the other hand excels at helping us acquire case.

Speaker Change #143: Which generally have significant presence and positive brand impact.

Speaker Change #143: That is the reason why we need to have them both.

Speaker Change #143: Our aim to work in conjunction to one another with a network partner serving as the engine of growth in terms of P. O I count and to do X Moto setting as the billboards for our brands and K as in higher tier cities.

Speaker Change #144: As for now the director model to be ought to be think is still a bit under the water in terms of profitability. That's why we need to continue optimizing our portfolio to reduce the underperforming ones.

Mars Guangyuan Cai: That's why we need to continue optimizing our portfolio to reduce the underperforming ones. However, this is a work in progress as we don't want to do it too quickly if it is at the cost of our core direct model portfolio. The economics of our network partner model is stronger due to network partner purchasing the cabinets and power banks up front. And then we take a portion of the GME generated by these machines.

That this is a work in progress as we don't want to do it too quickly.

Speaker Change #145: If it is after the cost of all Kohl's director motor portfolio.

Speaker Change #146: The economics of our network partner model is stronger due to natural partner purchasing the cabinets and power banks upfront and then we take a portion of the G. N V generated by these machines.

Mars Guangyuan Cai: The network partner model generates positive economics for us at this moment, regardless of the market environment. This is why the transition between the two will benefit our financials in the long run. As for your second question, we always keep a low key on the new initiatives. We are actively exploring opportunities in the renewable energy sector. For us, our network of partners and technology has always been a strength. That's why we are actively exploring opportunities that can leverage the two advantages to help us develop a second driver for our growth in the future. Again, it is still relatively at an early stage, but it has the potential of making a more significant contribution to our financials in the second half of this year. Thank you.

Speaker Change #146: But that's where our partner model generates positive economics for us at this moment, regardless of the market environment that is.

Speaker Change #147: Why the transition between the two will benefit all financials in long run.

Speaker Change #148: As for your second question, we always keep a low key on the new initiatives and we are actively exploring opportunities.

Speaker Change #149: In the new renewable energy sector for Us our network of partners and technology has always been a strength.

Speaker Change #149: That's why we are actively exploring opportunities that can leverage the two advantages to help us develop a second driver for growth in the future again, it is still relatively at and really straight early stage, but it's worth it but it has the potential of making a more significant.

Fusion to all financials in the second half of this year. Thank you.

Speaker Change #149: Thank you.

Speaker Change #149: Okay.

Unknown Executive: We are now approaching the end of the conference call. I will now turn the call over to Energy Monster's CFO, Maria Sin, for closing remarks.

Speaker Change #149: I'll now approaching the end of the conference call I will now turn the call over to energy Monster and see if I am Arya Sen for closing remarks.

Unknown Executive: 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. Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day. Yi Wei, Hansen Shi, Mars Cai, Yi Xin, Weiting Tang, Smart Share Glo, [inaudible]

Arya Sen: 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 convenience to Paul and I really look forward to speaking with you in the coming months.

Operator: Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.

Speaker Change #151: Thank you for your participation in today's conference. This concludes the presentation you may now disconnect.

Speaker Change #152: Good day.