Full Truck Alliance Co. Ltd. (YMM) 2026 Q2 法說會逐字稿

Ladies and gentlemen, good day, and welcome to Full Truck Alliance's second-quarter 2026 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mao Mao, Head of Investor Relations. Please go ahead.

Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the Safe Harbor from liability as established by the US Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion.

A general discussion of the risk factors that could affect FDA's business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update this forward-looking information, except as required by law.

During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial results, measures, and the reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.

Joining us today on the call from FTA's senior management [team] are Mr. Hui Zhang, our Founder, Chairman, and CEO; and Mr. Simon Cai, our Chief Financial and Investment Officer. We will open the call to questions following brief opening remarks from Mr. Zhang.

As a reminder, the conference is being recorded. In addition, a webcast replay of this call will be available on FTA's investor relations website at ir.fulltruckalliance.com.

I will now turn the call over to our Founder, Chairman, CEO, Mr. Zhang. Please go ahead, sir.

(spoken in Chinese)

(interpreted) Hello, everyone. Thank you for joining us today for our second-quarter 2026 earnings conference call. In the second quarter, despite a challenging market environment, our business delivered resilient growth, with fulfilled orders reaching RMB68.5 million, up 12.7% year over year. Operationally, we remained focused on enhancing user experience and transaction efficiency. By broadening and strengthening transaction protection for both shippers and truckers, we significantly improved satisfaction across both sides of the platform.

Average shipper MAUs reached RMB3.57 million this quarter, up 12.8% year over year, while the number of active truckers responding to orders over the past couple of months continued to grow, further amplifying our nationwide network effect.

Rising order density and trucker capacity lifted the fulfillment rate by 6.3 percentage points year over year to 47%, with median freight matching time further shortened. In terms of our new business initiatives, Qmove continued to gain strong momentum overseas, with rapid growth in both fulfilled orders and fulfillment rate. We also achieved nationwide coverage for our less-than-truckload offerings through our network of dedicated line carriers and expanded autonomous delivery vehicle partnerships to multiple cities.

On the AI front, we continued rolling out our [cheaper] AI systems to a broader user base and fully deployed AI-powered customer service across applicable use cases, further deepening AI applications throughout the fulfillment process.

(spoken in Chinese)

(interpreted) Financially, in the quarter, total net revenues reached RMB3.38 billion, up 4% year over year. Transaction service revenues grew 33.1% year over year to RMB1.77 billion, accounting for 52% of total net revenues. Net income reached RMB1.35 billion, up 6.3% year over year, while non-GAAP adjusted net income increased 6% to RMB1.43 billion.

Net cash provided by operating activities grew significantly year over year to RMB2.15 billion, contributing to a total cash position of RMB33.4 billion by the end of the quarter. This provides ample liquidity to support the rollout of new business initiatives and execution of our long-term strategy, and we are committed to continuously returning value to shareholders through quarterly cash dividends.

Looking ahead, our comprehensive product portfolio, robust platform ecosystem, and expanding two-sided network give our AI initiative the fuel they needed. Transaction data [scale] of practical user cases. We will continue to advance AI innovation and applications across the platform to strengthen our ecosystem, improve the experience for shippers and truckers, and create sustainable long-term value for our shareholders.

Thank you all once again. That concludes our opening remarks. I would now like to open the call to Q&A. Operator, please?

(Operator Instructions) Eddy Wang, Morgan Stanley.

(spoken in Chinese) My question is: given the ongoing fuel price volatility and the rising penetration of electric trucks, do you expect these trends to significantly affect the freight industry's capacity mix and the competitive landscape? Thank you.

Thank you, Eddy. This is Simon here. Let me address your question. Our platform data over the past few quarters does show the rising penetration of electric trucks, which now accounted for roughly over 20% of our total fulfilled orders. However, we do not expect this shift in the capacity mix to have a material impact on the long-haul full-truckload market. Instead, we believe that a diverse energy mix across the truck fleet will benefit our platform ecosystem overall.

First, electric trucks are currently most competitive in short- to medium-haul and local freight operations. Lower energy costs give them a strong position at ports, mining areas, and on fixed-route short- to medium-haul transportation. While some fast-charging and high-capacity battery models can now travel between 400 and 500 kilometers per charge, that's up from roughly 200 to 300 kilometers per charge, their economics still depend heavily on fixed routes, high vehicle utilization, and convenient access to charging or battery-swapping facilities.

Second, the electrification of ad hoc long-haul trucking still faces clear physical and infrastructure hurdles. The average shipping distance for full-truckload transactions on our platform exceeds 500 kilometers, and many of these transactions involve cross-regional transportation, variable routes, and uncertain backhaul demand. In these settings, electric trucks are constrained by limited driving range, fast-charging and battery-swapping coverage, payload loss from battery weight, and reduced route-planning flexibility.

As a result, they are not positioned to replace diesel- and natural-gas-powered heavy-duty trucks across this market anytime soon. Overall, we believe the evolution of truck capacity will create long-term value for our platform. Changes in transportation equipment do not reduce shippers' underlying freight demand. Instead, they allow it to be fulfilled at more competitive freight rates.

Our long-term vision is to become a one-stop logistics platform, serving millions of small- and medium-sized direct shippers whose logistics needs are often on-demand, dynamic, and fragmented. As truck capacity becomes more diversified, we can further leverage our vast pool of authentic freight demand, extensive route data, and advanced algo to match different powertrain types with the shipping distance and use case, the distance and use cases they are best suited for.

At the same time, by providing complementary services such as truck leasing and purchasing, charging, and battery swapping, we can help truckers meaningfully improve vehicle utilization. As battery technologies advance and roadside charging and battery-swapping infrastructure expands, electric trucks should gradually extend into selected long-haul use cases. We expect our platform to benefit from this ongoing capacity upgrade and create greater value for millions of shippers.

Ronald Keung, Goldman Sachs.

(spoken in Chinese) I want to ask about fulfilled order growth, which was around 12.7% in the second quarter. What were the key growth drivers this quarter? And given that domestic fuel prices have declined significantly from the late-March highs, has the impact of high fuel prices on road freight demand fully subsided? How do you view order growth over the next few quarters?

Thank you, Ronald. The second-quarter order volume growth was broadly in line with our expectations, driven primarily by continued improvements in freight order quality and fulfillment efficiency.

First, our ecosystem governance work and optimized user mix continued to pay off. Since the fourth quarter of last year, we have implemented targeted governance initiatives addressing misclassified carpooling orders, freight resetting, and low-priced freight listings, which have significantly improved the authenticity of freight demand and fulfillment reliability.

Meanwhile, direct shippers have continued to grow as a share of our shipper base, further shifting our order mix toward genuine shipping demand. These improvements have strengthened truckers' willingness to accept orders leading to greater fulfillment reliability and efficiency.

Second, more refined operations further improved our supply-demand dynamics. During the past quarter, we continued to enhance our trucker credit-rating program and freight-payment protection mechanism. We directed more high-quality freight demand and core platform benefits toward truckers with strong fulfillment track records, increasing order acceptance among high-quality capacity.

Meanwhile, freight-payment protection helped alleviate truckers' concerns about payment defaults and other transaction risks, improving fulfillment reliability post-match. As a result, the median matching time of orders on our platform was shortened to 5 minutes for the first time, reflecting further gains in matching efficiency.

Third, solid growth in our full-truckload long-haul business remained a key driver. Fulfilled orders in the segment grew faster than overall platform orders during the quarter on the strength of the supply-demand network, price-discovery capabilities, and capacity-matching efficiency we have built in the ad hoc trucking market. These capabilities widened our online platform's advantages over offline channels and supported high-quality growth at scale.

Fuel price volatility since the beginning of the second quarter temporarily impacted both overall growth freight demand and the growth of fulfilled orders on our platform. Domestic diesel prices remained elevated from late March through May, in particular, dampening shipping demand for certain low-value, price-sensitive freight.

Since June, consecutive diesel price cuts have gradually eased transportation cost pressures, supporting a recovery in year-over-year order growth on our platform. Looking ahead, we remain cautiously optimistic about long-term order growth. Externally, the recent moderation in fuel prices should support a gradual recovery in freight demand, although the road freight market continues to face a challenging and evolving macro environment.

In addition, recent typhoons, flooding, earthquakes, and other extreme weather events and natural disasters across various parts of China may cause some near-term disruption to freight shipping and transportation activities.

Over the long term, we believe online penetration in the long-haul freight market still has substantial room to grow. We will continue to drive growth in fulfilled orders by expanding our direct shipper base, increasing penetration in the full-truckload long-haul segment and further improving order quality through ongoing ecosystem governance initiatives.

Brian Gong, Citi.

(spoken in Chinese) My question is regarding fulfillment rate. Our fulfillment rate hit a record high of 47% in the second quarter. Management share, what were the key drivers were in the second quarter? And how do you expect this metric to trend going forward?

Thank you, Brian. Our fulfillment rate reached 47% in the second quarter. That's up 6.3 percentage points year over year and 2.9 percentage points quarter over quarter, setting another record high. Fulfillment rates improved across all major business lines and shipper segments, primarily driven by systemic improvements in capacity allocation, freight demand quality, and matching efficiency.

On the capacity side, the effective truck supply remained abundant. Monthly active truckers responding to orders increased by nearly 5% year over year in the second quarter, supporting timely order responses and reliable fulfillment. Notably, the fulfillment rate for our full-truckload long-haul business increased by nearly 7 percentage points, making it an important driver of the overall improvement during the quarter.

Second, our ongoing ecosystem governance initiatives continued to improve freight demand quality across the platform, laying a solid foundation for the increase in the overall fulfillment rate.

In terms of product, further segmentation of our product portfolio and [income matching] efficiency. We re-segmented our freight product offering into four clear categories: express, entrusted shipping, general freight, and less-than-truckload, or LTL. Each is designed for a distinct use case: rapid and satisfying short-haul matching, higher-quality pricing services, standard matching, and LTL shipments through partnerships with dedicated line carriers, respectively.

Clear product positioning enables shippers to communicate their transportation requirements more effectively and allows the platform to [match the] most suitable capacity, reducing mismatches throughout the transaction and fulfillment process.

From a user-mix perspective, fulfillment performance improved across all shipper segments. The average fulfillment rate among direct shippers exceeded 65%, while fulfillment among broker shippers also continued to improve. This demonstrates that the increase in the platform-wide fulfillment rate was driven not only by the growing share of high-quality direct shippers, but also by the organic improvement in order quality and conversion efficiency across the broader shipper base.

We expect the platform's fulfillment rate to maintain a steady upward trajectory going forward. As we continue to refine our operating strategies and product mechanisms while progressively integrating AI across the full matching and fulfillment process, we expect to unlock further gains in transaction efficiency. Thank you.

Xin Chen, UBS.

(spoken in Chinese) This is Xin Chen from UBS. My question is about transaction service revenue. This revenue continued to grow rapidly in the second quarter, increasing by 33% year on year. What were the key growth drivers? And how do you view the outlook for this revenue?

Yes. The transaction service revenue reached approximately RMB1.77 billion in the second quarter. That's up 33% year over year. This strong growth was primarily driven by the full rollout of our commission network, steady improvement in [monetization for order] and incremental contributions from emerging business use cases.

First, nearly full coverage of our commission network provided a solid foundation for our transaction service business. During the second quarter, we completed the rollout of the commission model across all eligible cities, lifting the commission penetration rate to 94.7%. At the same time, our ongoing ecosystem governance initiatives continued to improve freight demand quality and drive the overall fulfillment rate higher, providing a larger and more reliable base of high-quality transactions for our commission model.

Second, refined operations continued to improve monetization efficiency. We dynamically optimize our commission strategy based on city, route, vehicle type, and user segment. As we advance monetization, healthier trucker economics, and the long-term health of our platform ecosystem remain essential prerequisites.

Our [operation] strategy considers truckers' take-home earnings, willingness to accept orders, retention and fulfillment performance. We also improved truckers' operating efficiency through preferential access to high-quality freight demand, membership benefits, freight-payment protection, and operational subsidies. We firmly believe that protecting reasonable trucker earnings is fundamental to creating a sustainable virtuous cycle between transaction scale and monetization.

As we move forward, we expect transaction service revenue to deliver high-quality, sustainable long-term growth, driven primarily by continued growth in fulfilled orders, higher monetization per order through refined and tiered operations, and the scaling of new business use cases.

Wenjie Zhang, CICC.

(spoken in Chinese) My question is about the freight brokerage business. Can you give us an update on the progress of transforming this business during the second quarter?

Thank you. In the second quarter, we've made steady progress in transitioning our freight brokerage business from a traditional self-operated model to a (inaudible) structure combining self-operated and aggregator operations. We're taking a phased approach to the transition and optimizing the business mix in line with customer needs and compliance requirements. This enables us to reduce our exposure to VAT refund risks while continuing to meet shippers' needs for compliant VAT invoicing and freight matching.

First, we proactively managed the scale of the self-operated business while further improving its customer mix. Under this model, the platform continues to handle invoicing and [settlement] workflows, primarily serving shippers with genuine freight-matching needs. During the second quarter, invoicing-only customers declined further to a single-digit percentage of total transaction volume.

Customers that continue to use this model primarily seek an integrated solution combining freight matching with VAT invoicing, reflecting continued improvement in the quality of this business. The take rate for the self-operated invoicing business remained stable at approximately 10% during the quarter.

Second, the aggregator model continued to grow steadily, diversifying the underlying risk across a larger base. Under this model, invoicing and fund-settlement workflows are handled by qualified third-party partners, while our own platform focuses primarily on matching freight demand and truck capacity and charges a low-single-digit channel service fee.

Beginning in the second quarter, the associated revenue was recognized under the freight brokerage business. This asset-light model significantly reduces the company's direct exposure to VAT refund, settlement, and operational risk while keeping shippers and their freight demand within our platform ecosystem.

Going forward, we will continue to manage a smooth transition between the self-operated and aggregator models. This will enable us to meet shippers' compliance demand, deepen user engagement, and better support and reinforce our core freight-matching business. As the asset-light revenue contribution from the aggregator model gradually scales, we expect the revenue mix and overall earnings quality of the freight brokerage business to improve further. Thank you.

Ritchie Sun, HSBC.

(spoken in Chinese) I want to ask about operating cash flow, which was RMB2.15 billion in the second quarter and saw very strong growth. What are the key drivers behind it?

In the second quarter, our net cash provided by operating activities reached RMB2.15 billion, while free cash flow totaled RMB2.04 billion, reflecting strong cash generation across the business. This performance was driven primarily by significantly improved profitability in our core platform business, the release of capital previously tied up in our credit business as we transitioned to a new model, and efficient working capital management.

First, the high-quality growth of our core business further strengthened our organic cash generation. Our platform businesses, such as transaction services, are not only growing quickly but also benefit from an asset-light model with short cash-collection cycles.

As these businesses contribute a growing share of our revenue, our revenue and profit mix is becoming increasingly weighted toward businesses with higher cash conversion, significantly reinforcing the core business's ability to generate cash organically.

Second, we continued transitioning our credit business toward an asset-light distribution model, reducing the deployment of our own capital for new loans while gradually recovering capital from the existing loan portfolio. The resulting reduction in capital tied up in this business contributed positively to operating cash flow during the quarter.

In addition, we maintained stable collection and settlement cycles and managed our working capital efficiently. Given the inherently asset-light nature of our platform model, rapid business expansion does not require a corresponding increase in capital deployment, providing further support for our operating cash flow.

Looking ahead, our cash flow may fluctuate from quarter to quarter due to the timing of business settlements, tax payments, and changes in working capital. Nevertheless, as our revenue mix continues to shift toward higher-margin, asset-light platform businesses, we expect our long-term cash-generation capabilities to strengthen steadily.

That concludes the question-and-answer session. I would like to turn the conference back over to management for any additional or closing comments.

Thank you once again for joining us today. If you have any further questions, please feel free to contact Full Truck Alliance directly or reach out to [the asset-based] financial communications. Our contact information for IR in both China and the US can be found in today's press release. Have a good day.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.