Q3 2025 Full Truck Alliance Co Ltd Earnings Call
At this time I would like to turn the conference over to Nam out head of Investor Relations. Please go ahead.
Thank you.
Please note that today's discussion will contain forward looking statements relating to the company's future performance, which are intended to qualify for the safe Harbor from liability as established by the U S. Private Securities Litigation Reform Act.
Such statements are not guarantees of future performance and are subject to southern risks and uncertainties assumptions and other factors.
Some of these risks are beyond company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion.
A general discussion of the risk factors that could affect <unk> business and financial results are included in certain filings of the company with the SEC. The company does not undertake any obligation to update forward looking information, except as required by law during.
During today's call management will also discuss certain non-GAAP financial measures for comparison purpose only.
For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today.
Joining us on our call from FDA to senior management are Mr. Li Zhang our founder Chairman and CEO and Mr. Son is high our chief financing and investment Officer, Matt.
Management will begin with prepared remarks, and the call will conclude with a Q&A session.
As a reminder, this conference is being recorded in addition, a webcast replay of this call will be available on <unk> Investor Relations website at IR Dot photo aligns dot Com I will now turn the call over to our founder Chairman and CEO. Mr. Jumper. Please go ahead Sir.
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Hello, everyone. Thank you for joining us today on our second quarter 2025 earnings conference call in the third quarter FTA continue to reduce logistics costs and he has efficiency across the road freight industry by leveraging digital and intelligence technology amid a complex and evolving macro environment.
Anchored by our core user centric ethos, we strengthened our user protection mechanisms enhanced our platform ecosystem and further elevated the overall experience for both shippers and truckers.
Our ongoing enhancements to transaction efficiency and service quality drove total fulfilled orders to $63 4 million a year over year increase of 22, 3% just continue the growth underscores the company's the industries out of accelerating transformation from traditional offline logistics transactions to digital.
And intelligent logistics solution.
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Furthermore, we consistently improved operating matrix across three key areas during the quarter using operations ecosystem development and technology enablement for shipper users. We further expanded our brand visibility and drove targeted user acquisition of S. M E shippers while refining.
User experience across different Pago academies, and afraid scenarios as a result average monthly active shippers reached 335 million in the quarter up 17, 6% year over year. The number of ship her members grew significantly year over year, reflecting rising user engagement and stickiness.
In addition, fulfilled orders contributed by direct shippers increased to 54% demonstrating ongoing optimization of our user structure.
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In terms of trucker ecosystem, we continue to promote and enhance our truck a private rating and the membership program to incentivize high quality service and elevated trucker benefits.
These initiatives boosted capacity and increased reliability of truckers driving the overall fulfillment rate to 46% an increase of approximately six percentage points year over year simultaneously, we reinforced our chocolate production framework to better safeguard their rights and interests.
By the end of the quarter, the number of active trucker and fulfilling orders over the past 12 months reached 448 million, marking another historical high.
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On technology, we accelerated the full chain.
Three months across the platform leveraging our extensive scenario based logistics data to address critical pain points in freight matching. Moreover, the successful acquisition of Giga AI previously known as plug PRT significantly bolstered our AI capabilities and technological.
Foundation positioning us for sustained innovation and operational excellence.
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Our robust operational performance this quarter translated into healthy financial results total revenues reached RMB 336 billion, representing a year over year increase of 10, 8%.
Transaction service revenues grew 30, 390% year over year to RMB 146 billion accounting for 43% of total revenues and reflecting continued optimization of our revenue mix.
non-GAAP adjusted operating income reached RMB $849 1 million, while non-GAAP adjusted net income reached RMB $988 1 million.
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Looking ahead FDA will continue to penetrate the road freight market and cultivate a resilient and sustainable ecosystem for both shippers and truckers driving the industry's digital and intelligence transformation and empowering enterprises with greater logistics competitiveness through continued technological innovation.
I think you always again now I'll pass the call over to Simon who will provide an update on our third quarter's business progress and financial results.
Thank you Mr. Joan and thank you all for joining today's earnings conference call I will now provide an overview of our operational highlights and financial results for the third quarter of 2021st starting with our operational performance during the quarter, we sustained solid growth momentum with continued improvements in key operating metrics.
I think the strength and resilience of our business model, despite challenging macro conditions and uppers, whether such as typhoons in certain regions that are temporarily disrupted freight demand during the quarter. We continued to deliver strong volume growth total fulfilled orders once again significantly outperform.
For the broader freight industry, reaching $63 4 million in the third quarter, representing a year over year increase of 22, 3%.
The steady growth and fulfill the others was driven by the healthy engagement of our shipper users and the ongoing enhancement of our fulfillment service infrastructure, leading to improvements in both scale and service quality and.
In the third quarter, our overall fulfillment rate reached 40 point.
6%, increasing by more than six percentage points from the prior year period spin.
Specifically, the average fulfillment rates of mid and low frequency shippers reached nearly 60%.
The study growth in fulfilled orders was driven by the healthy engagement of our shipper users and the ongoing enhancement of our fulfillment service infrastructure, leading to improvements in both scale and service quality.
Their contribution to total fulfilled orders increased to 54%.
The positive the positive outcomes are the result.
In the third quarter, our overall fulfillment rate reached 40.6%, increasing by more than 6 percentage points from the prior year period.
Our ongoing optimization in shippers structure, which further strengthened the reliability and sustainability of our ecosystem.
These achievements almost score the effectiveness of our long term long standing refine operations strategy.
Specifically, the average fulfillment rate of mid- and low-frequency shippers reached nearly 60%, and their contribution to total fulfilled orders increased to 54%.
A solid foundation for the platform long term high quality growth.
Turning to user growth.
The positive outcomes are the results of our ongoing optimization in shipper structure, which further strengthened the reliability and sustainability of our ecosystem.
<unk> monthly active shippers reached 335 million in the third quarter, increasing by 17, 6% year over year.
Our Super membership program continued to gain traction with over 300 370000 active members in the 288 membership program during the quarter, representing a significant year over year increase.
These achievements, along with those scores, reflect the effectiveness of our long-standing, refined operations and strategy, laying a solid foundation for the platform's long-term, high-quality growth.
Turning to user growth, the average monthly active shippers reached 3.35 million in the third quarter, increasing by 17.6% year-over-year.
In the meantime, the 12 months rolling retention rates for shipper members how to study at around 80% underscoring the strong appeal of our service services and the high stickiness of our user base.
In addition, the number of active truckers fulfilling orders over the past 12 months for the new new record, increasing 244 8 million in the third quarter. While the next month's retention next month retention rate for the truckers, who responded to others.
To gain traction with over 300 370,000, active members in the 288 membership program during the quarter representing, a significant year-over-year increase in the meantime, the 12-month rolling retention rate for shipper members held steady at around 80% underscoring the strong appeal of our service services and the highest thickness of our user base.
Consistently above 85%, we're delighted to see that our trucker users continued to demonstrate strong platform loyalty during the quarter. We also continued to enhance our trucker infrastructure by expanding the breadth and the depth of the rights protection program, which helped improve truckers order acceptance.
Right and experience.
Example, supported by targeted incentive programs and diversified protection mechanisms.
In addition, the number of active truckers for filling orders over the past 12 months has reached a new record, increasing to 4.48 million in the third quarter. The retention rate for truckers who responded to orders consistently remained above 85% over the next month. We are delighted to see that our trucker users continue to demonstrate strong platform loyalty.
The number of trucker members continue to grow these truck remembers have significantly higher order, except acceptance rates as compared to non members, creating a positive flywheel of user engagement or are there other growth platform stickiness.
During the quarter, we also continued to enhance our trucker infrastructure by expanding the breadth and depth of the Rights Protection Program, which helped improve truckers' order acceptance rate and experience. For example, this was supported by targeted incentive programs and diversified protection mechanisms.
Now turning to monetization building on a solid foundation of steady growth in order volume, we continue to explore and unlock the monetization opportunities. These efforts enable us to deliver another quarter of robust topline performance. Despite strategic changes do some noncore businesses such as freight broker.
The number of trucker members continues to grow. These trucker members have significantly higher order acceptance rates as compared to non-members, creating a positive flywheel of user engagement, growth, and platform stickiness.
<unk> backed by significant improvements in operating leverage.
As a result of transaction service revenue grew 39% year over year to RMB 146 billion.
To further breakdown monetized all their penetration rate reached 88, 6%.
Now, turning to monetization, building on a solid foundation of steady growth in all the volume, we continue to explore and unlock monetization opportunities. These efforts enable us to deliver another quarter of robust topline performance, despite strategic changes to some non-core business, such as freight brokerage, backed by significant improvements in operating leverage.
Up nearly six percentage points from the prior year period, and average monetization per order increased to RMB 25 nine.
As a result, transaction service revenue grew 39% year-over-year to RMB 1.46 billion.
From RMB 24, four in the prior year period. These improvements stem from our deepened understanding of high value users and our ability to meet the increasingly diversified needs through upgraded services and tailored incentive programs at the same time, our growing scale and enable us to drive down unit operating costs leading.
To further break down monetized other penetration rate, it reached 88.6%, up nearly 6 percentage points from the prior year period. The average monetization per order increased to RMB 25.9 from RMB 24.4 in the prior year period. These improvements...
Two enhanced monetization efficiency and profitability, while maintaining fair truck or earnings and strong order fulfillment.
Looking ahead, we remain keenly focused on further unlocking the monetization potential of high value users leveraging our intelligent freight matching system and flexible subsidy strategies. In addition, our refined and tiered membership system enables us to cultivate and empower our core transportation capacity.
Or deepened understanding of high-value users and our ability to meet their increasingly diversified needs through upgraded services and tailored incentive programs. At the same time, our growing scale enables us to drive down unit operating costs, leading to enhanced monetization efficiency and profitability while maintaining fair trucker earnings and strong order fulfillment.
Further reinforcing a virtuous cycle of user growth operating excellence and profitability improvements.
Looking at this, we remain keenly focused on further unlocking the monetization potential of high-value users, leveraging our intelligent freight matching system and flexible subsidy strategies.
We're confident that we are well positioned to achieve our full year targets and deliver long term sustainable value to our platform and stakeholders.
Now I'd like to provide a brief overview of our 2025 third quarter financial results.
Total net revenues in the third quarter were RMB 3 billion $358 2 million, representing a 10, 8% increase year over year, primarily attributable to an increase in revenues from freight matching services.
Profitability improvements. We're confident that we are well positioned to achieve our full-year targets and deliver long-term sustainable value to our platform and stakeholders.
Now, I'd like to provide a brief overview of our Q3 2025 financial results.
Net revenues from freight matching services, including service fees from freight brokerage models membership fees from listing models and commissions from transaction services were RMB 2 billion $797 6 million in the third quarter, representing an increase of nine 6% year over year.
Our total net revenues in the third quarter were R&B 3 billion, 358.2 million, representing a 10.8% increase year-over-year, primarily attributable to an increase in revenues from freight matching services.
Primarily due to the rapid increase in transaction service revenues.
Revenues from the freight brokerage service in the third quarter were RMB 1 billion and $94 3 million compared to.
RMB, one 1 billion and 200 $280 9 million in the same period of 2024.
Net revenues from freight matching services, including service fees from freight brokerage models, membership fees from listing models, and commissions from transaction service or R&B, reached $2 billion, $797.6 million in the third quarter, representing an increase of 9.6% year-over-year, primarily due to the rapid increase in transaction service revenues.
Primarily attributable to a decrease in transaction volume and partially offset by an increase in service fee rate revenues from free listing services in the third quarter were RMB $247 1 million up 10, 6% year over year, primarily due to the growing number of total paying no premium members.
Revenues from the freight brokerage service in the third quarter were R&B 1 billion and 94.3 million, compared to...
Revenue from the transaction service in the third quarter.
Were RMB 1 billion $456 1 million up 39% year over year, primarily driven by increase in other volume penetration rates and per other per other transaction services.
Uh, R&B, $1 billion and $202.0 million in the same period of 2024, are primarily attributable to a decrease in transaction volume and partially offset by the increase in service fee rates. Revenues from the freight listing service in the third quarter of our R&D were $247.1 million, up 10.6% year-over-year.
Primarily due to the calling number of total pain, pain members.
Revenue from value added services in the third quarter were RMB $560 7 million up 16, 9% year over year. The increase was primarily due to growing demand for credit solutions.
Revenues from the transaction service in the third quarter were $1,456.1 million.
Third quarter cost of revenues was RMB 1 billion $605 2 million compared with RMB 1 billion $364 9 million in the same period of 2022, primarily due to increases in <unk>.
39% year-over-year, primarily driven by an increase in the other volume penetration rate and per order transaction service fee.
Revenue from value-added services in the third quarter was R&B 560.7 million, up 16.9% year-over-year. The increase was primarily due to growing demand for credit solutions.
<unk> related tax surcharges and other types of cost net of grants from government authorities. These tax related costs net of government grants totaled RMB 1 billion 400.
$27 2 million compared with RMB, one bit and $221 6 million in the same period of 2024, primarily due to an increase in tax cost us net of government grants related to the company's freight brokerage service.
Our sales and marketing expenses in the third quarter.
Were RMB $438 8 million compared with RMB $412 5 million in the same period of 2022 for the increase was primarily due to further investments in enhancing user ecosystem construction and protecting user rights and interests.
Third quarter cost of revenues was RMB 1 billion, 1652 million compared with RMB 1 billion, 3664.9 million in the same period of 2022, primarily due to increases in VAT-related taxes, search charges, and other tax costs, net of grants from government authorities. These tax-related costs, now, the government grants totaled RMB 1 billion, 427.2 million compared with RMB 1 billion, 221.6 million in the same period of 2024, primarily due to an increase in tax costs net of development grants related to the government in the company's freight brokerage service.
Our sales and marketing expenses in the third quarter.
General and administrative expenses in the third quarter were RMB $161 6 million compared with RMB $222 9 million in the same period of 2024 at the <unk> decrease was primarily due to lower share based compensation expenses R&D expenses in the third quarter.
R&B 438.8 million compared with R&B 412.5 million. In the same period of 2024, the increase was primarily due to further investments in enhancing the user ecosystem construction and protecting user rights and interests.
<unk> or RMB, $233 3 million compared with RMB $195 1 million in the same period of 2024. The increase was primarily due to the inclusion of Giga AI previously known as plus.
General and administrative expenses in the third quarter were R&B 161.6 million, compared with R&B 200 million and R&B 222.9 million in the same period of 2024. The decrease was primarily due to lower share-based compensation expenses.
Trc's R&D.
Plus trc's R&D costs.
Following the completion of our further investment in Giga AI on.
July nine 2025, and its subsequent consolidation into our financial results.
R&D expenses in the third quarter were $233.3 million compared with $195.1 million in the same period of 2024. The increase was primarily due to the inclusion of Giga AI, previously known as Plus.
prc's R&D.
Income from operations in the third quarter was RMB $776 3 million an increase of one nine percentage from RMB 762 million in the same period of 2024.
Uh, plus prc's R&D costs.
Uh, following the completion of our further investment in Giga AI on July 9, 2025, and its subsequent consolidation into our financial results.
Net income in the third quarter was RMB.
921 million compared with RMB 1 billion $121 9 million in the same period of 24.
On the non-GAAP measures or adjusted operating income in the third quarter was.
Income from operations in the third quarter was R&B 776.3 million, an increase of 1.9% from R&B 762 million in the same period of 2024.
RMB $849 1 million compared with RMB $884 5 million in the same period of 2024.
Um, net income in the third quarter was RMB 921 million, compared with RMB 1.1219 billion in the same period of 2024.
Our adjusted net income in the third quarter was RMB $988 1 million compared with RMB 1 billion $241 2 million in the same period of 2024.
Basic and diluted net income per ads were RMB <unk> 87 in the third quarter compared with RMB 1.06 in the same period of 2024 non-GAAP adjusted basic net income per ads was RMB <unk> 90.
$988.1 million compared with R&B $1.241 billion in the same period of 2024.
<unk> 94 in the third quarter of 2025, compared with RMB 1.18 in the same period of 2024 non-GAAP adjusted diluted net income per ads was RMB <unk> 96 in the third quarter of 2024 compared with RMB 117 in the same period.
'twenty 'twenty four.
As of September 32025, the company had cash and cash equivalents restricted cash and short term investments long term time deposits and wealth management products with with maturities over one year of RMB 31, 1 billion in total compared with RMB $29 2 billion.
Basic and diluted net income per ADS was R&B 0.87 in the third quarter compared with R&B 1.06 in the same period of 2024. Adjusted basic net income per ADS was R&B 0.94 in the third quarter of 2025 compared with R&B 1.18 in the same period of 2024. Non-GAAP adjusted diluted net income per ADS was R&B 0.96 in the third quarter of 2025 compared with R&B 1.17 in the same period of 2024.
As of December 31, 2024.
For our fourth quarter of 2025 business outlook, we expect our total revenues to be between RMB three points 8 billion and RMB 318 billion compared with RMB 3.1 dollars 6 billion in the same $1 7 billion in the same period of 'twenty 'twenty four excluding freight brokerage serve.
As of September 30, 2025, the company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products with maturities over 1 year totaling RMB 31.1 billion, compared with RMB 29.2 billion as of December 31, 2024.
This net revenues are expected to range from RMB 2.1 dollars 8 billion to RMB 2.28 billion, representing an estimated year over year growth rate of 17, 1% to 2022, 5%. These.
These forecasts are based on the company's current and preliminary views on the market and operational condition.
Conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.
That concludes our prepared remarks, we'd now like to open the call to Q&A operator. Please go ahead.
Our fourth quarter, 2025 business Outlook, we expect our total revenues to be between R&B 3.08 billion and R&B 3.18 billion compared with R&B 3.16 billion in the same 1 7 billion in the same period of 2024 excluding Freight brokerage service. Net revenue are expected to range from R&B 2.18 billion to R&B 2.28 billion. Representing an estimated year-over-year growth rate of 17.1% to 20 222.5 percent.
Thank you.
Do you wish to ask a question. Please press star one on your telephone and then with your name to be announced.
These forecasts are based on the company's current and preliminary reviews of the market and operational capacity conditions, which are subject to change and cannot be predicted with reasonable accuracy. As of the date hereof,
If you wish to cancel your request please press star two.
You're on a speakerphone, please pick up the handset to ask your question.
Uh, that concludes our prepared remarks. We would now like to open the call to Q&A.
Operator. Please go ahead.
For the benefit of all participants on today's call. If you wish to ask you a question to management in Chinese. Please immediately repeat your question in English.
Thank you. If you wish to ask a question, please press *1 on your telephone and wait for your name to be announced.
Your first question comes from Ronald Keung from Goldman Sachs. Please go ahead.
If you wish to cancel your request, please press *2.
If you're on a speakerphone, please pick up the handset to ask your question.
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For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.
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Your first question comes from Ronald Kung from Goldman Sachs. Please go ahead.
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Ask about field orders.
I still maintain very solid growth momentum increasing 22%.
So what were the main growth drivers and can you share the outlook for the fourth quarter and next year. Thank you.
Yes. Thank you every one of our fulfilled others continues to outgrow the broader freight market in the past quarter due to key three factors.
First solid user acquisition provided a strong foundation for growth.
Thank you, management, for taking my questions. I want to ask about fulfilled orders that have still maintained very solid growth momentum, increasing 22%. What were the main growth drivers? And can you share the outlook for the fourth quarter and next year? Thank you.
With deeper brand penetration, among Smes and city steady improvements in the market acceptance of online freed mentioned models. The number of Muni registers shippers continue to grow organically. In addition, we continue to focus on proactively reaching.
Yeah. Thank you, Ron. Our fulfilled orders continue to go out. We have seen growth in the broader freight market in the past quarter due to three key factors.
Uh, first, solid user acquisition provided a strong foundation for growth.
Potential users through key touch points by a highly efficient marketing channels, including.
App stores in high traffic offline placements such as high speed railway stations.
As a result, the first order conversion rate of new users new users improved substantially year over year.
With deeper brand penetration among SMS and City, steady improvements in the markets, and acceptance of online freight matching models, the number of newly registered shippers continues to grow organically. In addition, we continue to focus on proactively reaching potential users through key touch points by highly efficient marketing channels, including
Secondly, higher engagement from existing users are coupled with ongoing product optimization continue to enhance our matching efficiency during the quarter fulfillment frequency amongst shipper members further improved year on year, demonstrating strong customer loyalty and stickiness.
Uh, App Store and high traffic offline placements such as high-speed railway stations.
On the truckload side, we introduced the new cargos zone, which highlights newly posted high quality orders and help truckers secure attractive opportunities more efficiently and driving improved performance and matching that fulfillment.
Um as a result, the first order conversion rate of new users uh new users improved to substantially year-over-year. Uh secondly higher engagement from existing users, coupled with ongoing product optimization continue to enhance our matching efficiency during the quarter. Uh, fulfillment free frequency among shipper members further improved year on year demonstrating strong, customer loyalty, and stickiness.
On the shipper side, we further streamlined the other posting interface by removing or reducing unrelated entries in product and product sections. These initiatives made the other placement process more intuitive and efficient significantly improve user experience and effectively boosted repeat order in <unk>.
On the trucker side, we introduced the new Cargo Zone, which highlights newly posted, high-quality orders and helps truckers secure attractive opportunities more efficiently, driving improved performance in matching and fulfillment.
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Third.
The new business a.
Related entries and product, uh, and product sections.
New business continued to drive incremental other incremental growth momentum supported by improving service quality and growing user base both of our less than truckload and interested businesses continued to deliver delivered robust growth in the third quarter.
This initiative made the order placement process more intuitive and efficient, significantly improving user experience and effectively boosting repeat order intent.
It's two businesses continue to mature and improving operational efficiency, we expect that on top of the solid growth in our core food truckload business. They will further satisfy the diversified needs from both our new and existing shippers and supporting our long term automotive growth.
Looking ahead, we remain confident in our platforms other volume growth momentum.
<unk> ongoing macro uncertainty our dominant position in rising digital digitalization penetration has driven deeper engagement among SME shippers and maintain stable member retention and host matching efficiency consistently all supporting sustained order growth.
Third, the new business, uh, uh, new business continued to drive incremental order, uh, incremental growth momentum supported by improving service quality and a growing user base. Both our Less-than-Truckload and Intermodal businesses continue to deliver robust growth in the third quarter. As these two businesses continue to mature and improve in operational efficiency, we expect that on top of the solid growth in our core Truckload business, they will further satisfy the diversified needs from both our new and existing shippers and support our long-term order routing growth.
At the same time, we will continue to optimize our user ecosystem by strengthening quantification reviews and credit rating systems to attract and retain highly credible Heidi active users.
And laying a solid foundation for our high quality order book.
Thank you.
Thank you Simon.
Thank you. Your next question comes from Eddy Wang from Morgan Stanley. Please go ahead.
Uh, looking ahead, we remain confident in our platforms and otherworldly enforcement momentum, uh, despite ongoing macro uncertainty. Uh, our dominant position and rising digitalization penetration have driven deeper engagement among SME shippers, maintained stable member retention, and enhanced matching efficiency, consistently all supporting, um, sustained order growth. At the same time, we will continue to optimize our user ecosystem by strengthening qualification reviews and credit rating systems to attract and retain highly credible, highly active.
Hey, Tom any thoughts on that.
Users, uh, and laying a solid foundation for our high-quality order growth.
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Thank you. Your next question comes from Eddie Wong from Morgan Stanley. Please go ahead.
So I'll, let you touch it.
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Thank you management for taking my question.
In the third quarter the number of monthly active shippers reached three three.
So $5 million, representing a year over year results 17, 6%.
The major drivers behind the growth. Thank you.
Thank you Eddie in the third quarter. The number of monthly active shippers continue to grow very steadily supported by a more efficient and multichannel user acquisition.
Uh, thank you for taking my question. In the third quarter, the number of monthly active shippers reached 3.35 million, representing a year-over-year increase of 17.6%.
Organic growth driven by referrals these drivers.
What are the major drivers behind the growth? Thank you.
Not only grew our user base, but also help to strengthen the overall engagement and quantity of our active.
Users.
First our highly efficient multichannel user acquisition acquisition efforts continue to drive steady growth in shipper shippers users.
We implemented a dual approach combining brand exposure and targeted conversion we improved on acquisitions.
Thank you, Eddie. In the third quarter, the number of monthly active shippers continued to grow very steadily, supported by more efficient multi-channel user acquisition and organic growth driven by referrals. These drivers not only grew our user base but also helped to strengthen the overall engagement and quality of our active users.
Musician efficiency by strengthening App store campaign management, and optimize keyword search while refining download page design and user conversion funnels.
Uh, uh, first, our highly efficient multi-channel user acquisition efforts continue to drive steady growth in shipper users.
I'll fly wise, we expanded advertising in high traffic areas, such as high speed rail stations.
Subway business.
Subway business districts in key commercial hubs, we also leveraged our scenario based outreach channels, such as truck stickers to reach smbs with actual shipping needs.
Uh, we implemented a dual approach combining brand exposure and targeted conversion. We improved online acquisition efficiency by strengthening App Store campaign management and optimizing keyword search, while refining the download page design and user conversion funnels.
This integrated online and offline approach not only enhance our brand awareness, but also effectively attracted high potential shippers laying a solid foundation for sustained user growth.
Offline, we expanded advertising in high-traffic areas, such as high-speed rail stations.
And word of mouth referrals continue to serve as the primary driver of organic shipper growth. Unlike unlike a consumer facing businesses. Most shippers are small and medium sized business, whose decisions are driven mostly by trust often with often requiring longer conversion cycles, but.
Subway business, uh, Subway business districts and key commercial hubs. We also leverage the scenario-based outreach channels, such as truck stickers, to reach SMS with actual shipping needs.
This integrated online and offline approach not only enhances brand awareness, but also effectively attracts high-potential shippers, laying a solid foundation for sustained user growth.
Second, word-of-mouth referrals continue to serve as the primary driver of organic growth.
In higher retention and repeat purchase rates during the quarter, we continue to invest in service reliability capacity assurance and fulfillment experience optimization further strengthening user trust as a result word of mouth referrals from existing shippers became the most efficient channel for user acquisition.
Acquisition.
Unlike unlike a consumer-facing businesses, most shippers are more and medium-sized business whose decisions are driven. Mostly by trust often we often requiring longer conversion Cycles but resulting in higher retention and a repeat purchase rates. During the quarter we continue to invest in service reliability.
Notably <unk>.
New shippers acquired through referrals tend to be of higher quality with stronger fulfillment rates and long term engagement as compare with other acquisition channels, while coming at lower acquisition costs.
Capacity assurance and fulfillment experience optimization further strengthened user trust as a result. Word of mouth referrals from existing shippers became the most efficient channel for user acquisition.
Looking ahead, we will continue to pursue a do engine growth strategy, combining brand led acquisition and.
Referral driven expansion.
One hand, we will continue to optimize our marketing strategy to improve acquisition efficiency and a brand brand penetration within target user groups on the other hand, we will enhance the user satisfaction by improving service quality and it's strengthening protection mechanisms reinforcing trust and professionalism with within the shipper community.
Notably, new shippers acquired through referrals tend to be of higher quality, with stronger fulfillment rates and long-term engagement, as compared to other acquisition channels, while coming at lower acquisition costs.
These initiatives will support high quality sustained growth across the shipper ecosystem supporting our long term growth.
Thank you.
Thank you every one of them.
Thank you. Your next question comes from Brian Gong from Citi. Please go ahead.
Hey, John it's on someone's own Marvell M. A y O Y we're going to see Jason shall change I always tell my side, because you've got some institutional right. So you get your quote to Shlomo. So do you believe in.
Providing brand Le acquisition and um, uh referral driven expansion on 1 hand. We'll continue to optimize our marketing strategy to improve acquisition, efficiency and a brand uh, brand penetration within Target user groups. On the other hand, we will enhance user Satisfaction by improving service quality and strengthening protection mechanisms reinforcing, trust and professionalism with the within the shipper Community, these initiatives will support high quality sustainable growth across the shipper, ecosystem supporting our long-term growth
Thank you.
Thank you.
Since you talked about launching last year.
Thank you. Your next question comes from Brian Gong from City. Please go ahead.
I'll translate myself.
For taking my question how about a quick question on ecosystem improve improvement on truckers side can you update on case, you've asked myself trucker trucker members a sub quarter.
Do you.
Yeah.
Thank you Brian as of the end of September our active trucker members.
<unk> continues to grow steadily reaching almost 1 million members, achieving further growth compared with the previous quarter structurally roughly 30% of truck or M. A use in the long haul segments, our membership subscribers and contribute to over 40% of other volume in the long haul segment. This data underscores the higher engagement.
Hey, uh, we're going to discuss the women. Uh, I will translate myself, uh, since management is taking my question. I have a quick question on ecosystem improvements on the trucker side. Can you give an update on key developments of trucker members in the sub-quarter? Thank you.
Stronger stickiness of our trucker members, who has become a core pillar of our capacity network.
Thank you, Brian. As of the end of September, our active trucker members continue to grow steadily, reaching almost 1 million members, achieving further growth compared with the previous quarter.
During the quarter, we continued to upgrade our trucker memberships hearing system. The current framework focuses on three key dimensions for truckers cost reduction fulfillment in Huntsman and risk protection are commissioned coupons helped truckers effectively reduce service costs.
Structurally, roughly 30% of trucker members use the Long Haul segment, or membership subscribers, and contribute to over 40% of other volume in the Long Haul segment. This data underscores the higher engagement and stronger stickiness of our trucker members, who have become the core pillar of our capacity network.
In order fulfillment and our premium cargo bidding costs increase.
This visibility and ranking priority in matching with high quantity shipments. We also relaunched the freight payment protection program expanding its coverage scope.
During the quarter, we continue to upgrade our trucker membership tiering system. The current framework focuses on three key dimensions for truckers.
Which further strengthened truckload trust and security.
Cost reduction for human enhancement and risk protection. Our commission coupons helped truckers effectively reduce service costs during order fulfillment, and our premium cargo bidding cards increase.
Doing transactions directly addressing many.
Many of the fundamental operation needs.
Overall, the trucker membership program has become a key driver in securing high quality truckload capacity and improving fulfillment efficiency on our platform looking ahead as we further expand membership benefits and refi incentive programs, we expect trucker programs to contribute to a growing share of our total transportation capacity.
Truckers' visibility and ranking priority in matching with high-quality shipments. We also relaunched the Freight Payment Protection Program, expanding its coverage scope.
This further strengthened trust and security during transactions, directly addressing many of their fundamental operational needs.
And building a stronger and more sustained sustainable foundation for continued continued order growth and fulfillment stupidity.
Thank you.
Yeah.
Thank you Simon.
Thank you. Your next question comes from you all know from Citigroup. Please go ahead.
In some ways on someone's home.
Overall, the trucker membership program has become a key driver in securing, high-quality trucker capacity and improving fulfillment efficiency in our on our platform looking ahead as we further expand membership benefits and refine incentive programs. We expect trucker programs to contribute to a growing share of our total transportation capacity, and building a stronger and more sustained sustainable foundation for continued. Order of growth and fulfillment stability.
Thank you.
Thanks, guys.
So just wondering if.
Thank you, Simon.
When he should.
Jim <unk>.
And Adrian will go down.
No woman shuffle.
Thank you. Your next question comes from Zhou on Sedex. Please go ahead.
<unk> generally seen that just yet.
Hey, Jim.
Good.
Uh huh.
<unk> got someone that you can dream about jamba.
Hi.
Thanks management for taking my questions.
The current policy environment.
The vision.
So how has the company and then any measures to align with these objectives and offer.
Enhance the protection benefits to ship person truckers.
Thank you.
Thank you under the current policy environment of N T evolution the.
Hum.
So.
We basically.
Thank you, management, for taking my questions. Under the current policy environment of anti-innovation, how has the company implemented any measures to align with these policy objectives and offer enhanced protection or benefits to shippers and truckers?
That's a good against the overall background of N T evolution and promoting high quality growth our strategic direction remains clear.
Thank you.
We will continue to pursue sustainable high quality growth through our ecosystem with five minutes structural optimization and user protection enhancement.
Thank you. Under the current policy environment of anti-evolution, the...
um,
Um, so we basically, um,
First we remain committed to enhancing ecosystem integrity with a key focus on advancing healthier user protocols by implementing I'd verification and fulfillment credit scoring.
As well as refining user theory.
Against the, the overall background anti-evolution and and promoting high quality growth. Our strategic direction is remain, clear. We will continue to pursue sustainable, uh, high quality growth through, uh, ecosystem refinement structural optimization and user protection in Huntsman.
We enhance the value of user accounts and increase <unk>.
<unk> cost, which in turn accelerates to the exit of low quality users at the same time, we have shifted the focus of our credit rating system for both shippers and truckers.
Uh, First will remain committed to enhancing ecosystem integrity, with a key focus on advancing healthier user protocols by implementing ID verification and fulfillment, credit scoring.
Frequency of transaction to quantity of their behaviors. The system. This system evaluate evaluates metrics such as fulfillment rates positive feedback right.
We enhance the value of user accounts and increase.
A complaint rate reinforce reinforcing pull through rewards and disciplinary measures to guide users towards higher standards and stronger trust fostering a healthier platform ecosystem.
Second we have focused on emphasizing fair pricing and healthy competition on our platform for example.
To prevent malicious pricing competition, we employee algorithms to identify and block up normally low prices in real time, removing or restricting orders, that's four significantly outside a reasonable market price ranges.
Switching cost which in turn accelerates the the exit of low quality users. At the same time, we have shifted, the focus of our credit rating system for both shippers and truckers of frequency of transaction to quality of their behaviors. This system, this system evaluate evaluates metrics such as fulfillment rates, positive feedback rate and complaint rate. Reinforced reinforcing both through rewards and disciplinary measures to guide users towards higher standards and stronger. Trust fostering a healthier platform ecosystem.
Uh, second, we have focused on emphasizing fair pricing and healthy competition on our platform.
Additionally, we incorporated incorporated a price rationality wading into our older matching prioritizing the pairing of high quality fleet with reliable truckers. This approach protects truckers earnings and enhances shippers fulfillment certainty.
For example, to prevent malicious pricing competition, we employ algorithms to identify and block abnormally low prices in real time, removing or restricting orders that fall significantly outside reasonable market price ranges.
Together these measures provide a robust technological foundation to promote healthy market behaviors between truckers and shippers.
At the same time, we achieved notable progress in strengthening user protection and trust our upgraded comprehensive protection program. Currently provides full coverage for key risks for both user groups, including freight payment defaults empty ones and cargo damages.
Additionally, we incorporated a price rationality weighting into our order matching for prioritizing the pairing of high-quality freight with reliable truckers. This approach protects truckers' earnings and enhances shippers' certainty.
Together, these measures provide a robust technological foundation to promote healthy market behaviors between truckers and shippers.
To address truckers top concerns of timely freight settlement, we have implemented a guaranteed compensation, but kind of in that provides a trucker members with expedited reimbursement for freight MTO runs and cancellations, ensuring prompt payment and minimizing trust areas throughout the fulfillment process overall.
At the same time, we achieved notable progress in strengthening user protection and trust through our upgraded comprehensive Protection Program. Currently, it provides full coverage for key risks for both user groups, including freight payment defaults, empty runs, and cargo damages.
All we are building a more sustained sustainable efficient and transparent freight ecosystem by continuously optimizing user or user base fulfillment uncertainty and matching and protection framework. Our focus on high quality growth is reflected not only in a healthier user base, but also in continuous improvements and our.
To address truckers' top concerns of timely freight settlement, we have implemented a guaranteed compensation mechanism that provides trucker members with expedited reimbursement for freight, empty runs, and cancellations, ensuring prompt payment and minimizing trust barriers throughout the fulfillment process.
Our service quality and governance looking ahead, we will continue to focus on improving user trust operational efficiency and fulfillment quality driving long term sustained development of the freight industry and maintenance solid foundation for our growth.
Yeah.
Thank you. Your next question comes from <unk> Zhang from CIC. Please go ahead.
Good morning, gentlemen.
Overall, we are building a more sustained, sustainable, efficient, and transparent freight ecosystem by continuously optimizing our user base for human certainty and matching and protection framework. Our focus on high-quality growth is reflected not only in a healthier user base but also in continuous improvements in our service quality and governance. Looking ahead, we will continue to focus on improving user trust, operational efficiency, and fulfillment quality, driving the long-term sustained development of the freight industry and laying a solid foundation for our growth.
Yeah definitely.
Now with <unk>.
Sounds good.
Kombu Telegent forgot your whole once you understand that.
I'll quote you won't put their notes than high yield.
Thank you. Your next question comes from Wi Jiang from CIC. Please go ahead.
Thank you Jose even seen.
Thank you management for taking my question. My question is regarding freight brokerage business I wonder what's the latest progress of the business since the pricing adjustment in August could you give any update on user retention and profitability useful in these changes.
Yes. Thank you what the business generally performed better than we expected so in the third quarter, our freight brokerage business transition transition to a higher service fee rate.
Thank you, management, for taking my question. My question is regarding the freight brokerage business. I wonder what's the latest progress of the business since the pricing adjustment in August. Could you give an update on user retention and profitability for industries?
Steadily and overall performance was a it was good following the expected gradual removal of tax rebates and increasing service fee rates too.
Between 10% to 11% user behavior showed healthy structural improvements.
From a user perspective.
John foam shippers in the third quarter was primarily concentrated among those who demanded frequent the ATM invoicing service only and contribute it to limited value to the platform beyond invoicing fees, Conversely retention rates, among shippers with small and medium value.
Yeah, thank you. The the business generally, uh, performed better than we expected. So in the third quarter, our freight brokerage business transition uh transition to a higher service fee rate, uh, steadily and overall performance was uh was good. Following the expected, gradual removal of tax, rebates and increasing service fee rates to uh, between uh, 10 to 11% user Behavior. Showed healthy, uh, structural improvements
Invoices remained above 80% significantly exceeding our expectations and these users are generally less price sensitive and care more about the convenience of freight matching and fulfillment certainty, which kept their engagement rates stable following the policy adjustments.
Currently invoicing plus in plus freight matching others.
Represent over 70% of the total orders in our freight brokerage services highlighting the growth importance of our matching service and and the strong alignment between this business and the platform's core capabilities.
From from a user perspective, uh, term from shippers. In third quarter was primarily concentrated among those who demanded frequent v18 invoicing service, only and contributed to limited value to the platform Beyond invoicing fees. Conversely retention rates. Uh, among shippers with uh, small and medium value, uh vat, invoices remained above 80% significantly, exceeding our expectations. These users are generally Less Price, sensitive and care more about the convenience of freight matching and fulfillment certainty, which kept their engagement rates, stable following the policy adjustments,
At the same time, we are closely monitoring monitoring user retention and structural shifts in our user base with a particular focus on the long run with stability of small and medium sized shippers and ongoing conversions of new users ensuring that the benefits of these structure structural optimizations are sustained and reinforced.
Alignment between this business and the platform's core capabilities.
A financial standpoint.
The freight brokerage business.
At the same time, we are closely monitoring user retention and structural shifts in our user base, with a particular focus on the long-run stability of small.
Mary aimed to increase stickiness by enhancing ship her experience and platform engagement rather than a major profit profit contributors.
Sized shippers and ongoing conversions of new users, ensuring that the benefits of this structure are maintained. Structural optimizations are sustained and reinforced.
This its emphasis on invoicing results and relatively low margins.
And a limited impact on our overall profit is still plays a strategic role in strengthening our user engagement and refining more or a few minutes.
From a financial standpoint, the freight brokerage business is primarily aimed at increasing thickness by enhancing shipper experience and platform engagement, rather than being a major contributor to profit.
Looking ahead, we will continue to focus on improving the experience for small and medium sized shippers gradually expanding contribution from high quality users and ensuring that the freight brokerage business deliver sustainable performance under the new under the new policy.
Uh, although this, uh, its emphasis on invoicing results in relatively low margins.
Uh, while it has a limited impact on our overall profit, it still plays a strategic role in strengthening our user engagement and refining more orders for humans.
Okay.
Thank you Dennis.
Thank you. Your next question comes from Richard Eastman from HSBC. Please go ahead.
Looking ahead, we will continue to focus on improving the experience for small and medium-sized shippers. Gradually, we will expand contributions from high-quality users and ensure that the freight brokerage business delivers sustainable performance under the new policy.
Hey, Sam Mitchell.
Sure Hey, Mike gave with Q&A.
Thank you so much.
What's that way.
Do you think your phone or that guy.
He told me that my Gosh, I didn't know what percent telecom literally I don't nisha.
Thank you. Your next question comes from Rich E from HSBC. Please go ahead.
Wayne Hood for phase two.
Thank you.
Thanks for taking my questions.
First quarter revenue from Fright lifting Richard 247 median.
10, 6% year on year. So what were the main growth drivers and how do you see how do you use that payment conversion trends going forward. Thank you.
Thank you revenues from our fitness and service continues to grow steadily in the past quarter, primarily driven by.
Growth in paying users and the ongoing optimization of the membership structure.
Hey, thank you, management, for taking my questions. In the first quarter, revenue from Friday listing reached $247 million, up 10.6 percent year on year. So, what were the main growth drivers? And how do you feel about the user payment conversion trends going forward? Thank you.
As of September 2025, the number of ship from members on our platform reached 127 million.
The majority of the incremental growth came from the $2 88 membership program, which was launched last year. This program was designed to meet the needs of small and medium sized business owners are new to our platform by lowering the entry barrier and offering benefits such as freight rate coupons and other placement.
Thank you for the revenues. Um, from our faint listing, service continues to grow steadily in the past quarter, primarily driven by growth in paying users and the ongoing optimization of the membership structure.
As of September 2025, the number of shipper members on our platform reached 1.27 million.
Placement trucking the program significantly improved membership conversion and user satisfaction.
Looking at the membership mix, while the 688 memberships achieved steady year over year growth in this quarter to $2 88 membership showed the most robust growth across three memberships hearing with active members increasing by more than 300% compared with the same period last year.
The majority of the incremental growth came from the 288 membership program, which was launched last year. This program was designed to meet the needs of small and medium-sized business owners new to our platform, by lowering the entry barrier and offering benefits such as freight rate coupons and other placements.
Uh, placement tracking the program significantly improved membership conversion and user satisfaction.
The strong growth not only broadened our user base, but also strengthen the platform payment rate, notably the number of high frequency shippers under under the RMB 168 tier continued to decline, reflecting a structural shift in our shipper base. This change reflects the platform's ongoing optimization and Matt.
And the efficiency and fulfillment guarantees, which are gradually replacing traditional agent agent growth and further enhancing the quality of our user ecosystem.
Turning to use of conversion our latest data shows that around <unk> around 20% of the users who reach the limits of their 288 membership chose to upgrade to the RMB 688 tier. These results are aligned with our initial expectation when designing a program and underscore the effective.
Looking at the membership mix, while the 6888 membership, uh, achieved steady year-over-year growth in this quarter, the 2888 membership show, the the most robust growth, across 3 membership, hearing with active members, increasing, by more than 300%. Compared with the same period last year. The strong growth, not only broadened our user base, but also strengthened the platform payment rate, notably the number of high-frequency shippers under, uh, under the R&B, 1688 tier, continue to decline reflecting a structural shift and our shipper base. This change, reflects the platform's ongoing optimization and matching efficiency, and fulfillment guarantees, which are gradually replacing traditional agent agent roles and further enhancing the quality of our user ecosystem.
News of our tiered membership system.
Our membership business has established a healthy growth cycle that attracts users low entry barriers retain retains them with superior.
And drives upgrades through tiered benefits.
This modeling enables long term and steady penetration among direct shippers and supports the high quality growth before August.
In addition retention among existing members remains robust demonstrating solid user stickiness.
Starting to use a conversion, our latest data shows that around 80% of the users who reach the limit of their 288 membership choose to upgrade to the RMV 688 tier. These results are aligned with our initial expectations when designing a program to underscore the effectiveness of our tiered membership system. Our membership business has established a healthy growth cycle that attracts users with low entry barriers, retains them with a superior experience, and drives upgrades through tiered benefits.
At the end of the third quarter, our 12 months rolling retention rates for shipper members held steady at around 80% consistent with prior quarters. This validates our ongoing optimization team member experience and reflects strong recognition from shippers from our platform's reliable fulfillment capabilities and responsive service.
This model enables long-term and steady penetration among direct shippers and supports the high-quality growth of the overall business.
We expect the $2 88, and $6 88 membership to continue driving.
Growth in free listing service revenue.
As the platform continues to enhance features such as fulfillment protection and shipment tracking and payment conversion rates are expected to trend up instead of it we.
And capabilities and responsive service.
We will continue to optimize our membership program and benefits aiming to further strengthen our long term user retention and lifetime lifetime value.
We expect that 288 and 688 memberships will continue driving growth in free listing service revenue.
Thank you.
Thank you.
Meanwhile, as the platform continues in-house features such as fulfillment protection, shipment tracking, and payment, conversion rates are expected to trend up steadily.
Thank you that concludes the question and answer session I would like to turn the conference back over to management for any additional or closing comments.
We will continue to optimize our membership program and benefits, aiming to further strengthen long-term user retention and Lifeline lifetime value.
Thank you all for joining US today, if you have any further questions. Please feel free to contact us at <unk>.
Thank you.
Thank you.
Roughly or TPG Investor relations.
Good day.
Thank you. That concludes the question-and-answer session. I would like to turn the conference back over to management for any additional or closing comments.
That does conclude our conference for today. Thank you for participating you may now disconnect.
Thank you all for joining us today. If you have any further questions, please feel free to contact us at Food Truck Alliance directly, or TBG Investor Relations. Have a good day.
That does conclude our conference for today. Thank you for participating. You may now disconnect.