Full Truck Alliance records strong revenue growth

The trucking app operator reported its revenue rose 23.5% in the second quarter, and forecast a slight deceleration in the growth rate in the current quarter


By Teri Yu

Truck app operator Full Truck Alliance Co. Ltd. (YMM.US) reported strong revenue and profit growth in the second quarter, as normal trucking patterns resumed with the end of China’s strict pandemic control measures. The company also gained momentum after being allowed to resume new user registrations in June last year, ending a yearlong ban while it underwent a required data security review that it failed to obtain before its June 2021 U.S. listing.

Full Truck Alliance operates several apps that match millions of truckers with companies shipping goods around China across a wide range of distances, cargo weights and vehicles types. The company was founded in 2017 through the merger of two of the industry’s leading trucking apps, Huochebang and Yunmanman.

Full Truck Alliance’s revenue increased 23.5% year-on-year to 2.06 billion yuan ($284 million) in the quarter through June, largely the result of strong growth in commissions collected for transactions processed over its apps. Such commissions rose almost 60% to 555 million year-on-year, reflecting strong growth in order volumes and user activity among the truckers and shippers that use its app.

The company’s other two business segments, freight brokerage and freight listing services, recorded revenue increases of 11.6% and 7.3%, respectively, while its value-added services segment recorded a solid 27% gain. 

On the company’s investor call, Chairman and CEO Zhang Hui, who also uses the name Peter, said the company’s focus on the long-haul, full truckload business enabled Full Truck Alliance to achieve greater market penetration and broaden its user base and drive revenue growth.

As a result, the company achieved a record 2 million average shipper monthly active users (MAUs) in the quarter, up 30.5% from the same period last year. During the second quarter, order volume jumped almost 45% to 402 million fulfilled orders. Structural changes in the industry during the pandemic and subsequent recovery have seen a growing number of shippers requiring more direct, faster and convenient shipping services on the platform.

The company’s non-GAAP adjusted net income in the quarter, which excludes costs related to share-based compensation, leapt 170.8% to 723 million yuan. Management pointed out that the platform’s online penetration rate remains relatively low in terms of both users and order scale, leaving potential for further upside from China’s millions of small and medium sized enterprises (SMEs) and the country’s growing logistics sector.

The company said its revenue growth would slow slightly to about 20% in the third quarter, forecasting revenue of 2.16 billion yuan to 2.2 billion yuan for the period, versus 1.8 billion yuan a year earlier, as China’s broader economy shows signs of decelerating following a brief post-pandemic boom in the first half of the year.

“We expect to reap additional benefits as we accelerate our progress to an optimized revenue structure with increasing contribution from transaction commissions and continue to improve both monetization and operational efficiencies,” CFO Simon Cai said on the investor call.

Full Truck Alliance’s shares rose 11.4% in Wednesday trade in New York to close at $6.95 after the results were published. The stock is down about 22% this year.

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