Full Truck Alliance Co. Ltd. (YMM) Q2 2026 Earnings Call Transcript

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'd like to turn the conference over to Mau Mau, 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 allowability, as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainty, 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. The general discussion of the risk factors that could affect FTA business and financial results is included in certain findings 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 measures and a reconsideration of GAAP to non-GAAP financial results, Please see the earnings released issued earlier today. Joining us today on the call from FTA's senior management side are Mr. Hui Zhang, our founder, chairman, and CEO, and Mr. Sametai, our chief financing 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.foodtruckalliance.com. I will now turn the call over to Founder Chairman B.O. Mr. John, please go ahead, sir. Thank you for listening to the story, Hi 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 orders reaching 68.5 million, up to 12.7% year over year. Operationally, we remain 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 3.57 million this quarter, up 12.8% year-over-year, while the number of active truckers fulfilling orders over the past month continued to grow, further amplifying our nationwide network effects. Rising order density and trucker capacity lifted the fulfillment rate by 6.3% year-over-year to 47% with median rate matching time further shortened. In terms of our new business initiatives, Q-Move continues to gain strong momentum overseas with rapid growth in both fulfillment rates and fulfillment rates. We also achieved nationwide coverage for our less-than-truck load offerings through our network of dedicated line carriers and expanded autonomous delivery vehicle pilots to multiple On AI front, we continued rolling out our Shaper AI assistance to a broader user base and fully deployed AI-powered customer service across applicable user cases, further deepening AI applications throughout the fulfillment process. 金利润达到13.5亿元 通比增长6.3% 非美国通用会计准则价 调整后 金利润达到了使通比增长 百分性活动现金流 公司现金及企业务落地的长期战略推进 仅用了坚实的保障 同时 公司将继续通过 我们将依托完善的产品举认健康的生态和持续扩大的方专用户网络体验 生物化AI创新应用 为用户和股东创造长期可持续价值 billion, up 4.4% year-over-year. Transaction service revenues grew 33.1% year-over-year to R&B 1.77 billion, accounting for 52% of total net revenues. Net income reached R&B 1.35 billion, up 6.3% year-over-year, while the gap-adjusted net income increased 6% to R&B 1.43 billion. Net cash provided by operating activities grew significantly year-over-year to RMB 2.15 billion, contributing to a total cash transition of RMB 33.4 billion by 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 networks give our AI initiatives the fuel they needed. Transaction data at scale across a wide range of practical user cases. We will continue to advance AI innovation and application 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 a call to Q&A operator please thank you if you wish to ask a question please press star 1 on your telephone and wait for your name to be announced 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 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.

Your first question comes from Ronald Kung with Goldman Sachs. Please go ahead.

Ronald Kung, your line is live. Please proceed with your question.

We'll move on to the next question. Your next question is from Eddie Wang with Morgan Stanley.

Please go ahead. 张总 三门总 妈妈 Emma 你们好 感谢接受我的提问 那我的问题是关于这个油价和新能源卡车的 其实过去这个大半年感觉到这个市场油价的波动也很大 然后呢新能源卡车渗透率也在不断的提升 我想问一下就是说在这两个条件下 会不会对我们整个货运行业的这个运力供给的结构 以及这个竞争环境产生冲击 我自己翻译一下 Thank you for taking my question My question is that Given the ongoing fuel price volatility and the rising penetration of electric trucks Do you expect this trend to significantly affect the freight industry's capacity mix

and the competitive landscape? Thank you, Eddie This is Simon here Let me address your question Our platform data over the past few quarters does show gradually rising penetration of electric trucks, which now accounted for roughly over 20% of our total full-fueled orders. However, we do not expect this shift in the capacity mix to have a material impact on the long-haul food truckload market. Instead, we believe that more diverse energy mix across the truck fleet will benefit our platform. 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 fixed routes, short to medium-haul transportation. While some fast charging and high-capacity battery models can now travel between 400 to 500 kilometers, that's up from roughly 200 to 300 kilometers per charge. Their economics do 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 truck load long-haul 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, sparse charging and battery swapping coverage, pay low loss from battery weight, and reduced route planning flexibility. As a result, they are not positioned to replace diesel and natural gas power heavy-duty trucks across this market anytime soon. Overall, we believe the evolving mix 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. six 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 cases they are best suited for. At the same time, by providing complementary services such as truck leasing and purchasing, charging, and battery swapping, meaningfully improve vehicle utilization. As battery technologies advance and roadside charging and battery swapping, infrastructure 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.

Your next question will be from Ronald Kung with Goldman Sachs.

Please go ahead. 谢谢张伟总和Simon,刚才那个线路有点问题,不好意思,这个那想问一下我们看到这个二季度旅月的订单增长了大概12.7%嘛,那能分享这个季度这个驱动因素有哪些,然后考虑到目前那个国内油价已经有三月的这个下旬的一个非常高位,那明显回落了,那那个高油价对那个公路货运需求的影响是否已经消除, Now, if we look at the future of several times of this increase, let me explain it. Thank you, management and apologies for the technical glitch. Just then, I want to ask about the fulfilled order growth was around 12.7% in the second quarter. So what were the key growth drivers this quarter? And given that the domestic fuel prices have declined significantly from their late end-March highs, Has the impact on high fuel prices on road freight demand fully subsided? And how do you view order growth over the next few quarters?

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. Our ecosystem governance work and optimized user mix continues to pay off. Since the fourth quarter of last year, we have implemented targeted governance initiatives addressing misclassified carpooling orders, freight reselling, and low-priced freight listing, 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 towards generating shipping demand. These improvements have strengthened truckers' willingness to accept orders, leading to greater fulfillment reliability and efficiency. 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. We directed more high-quality freight demand and core platform benefits towards truckers with strong fulfillment truck 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 five 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. A few orders in this segment grew faster than the strength of the supply-demand network, price discovery capabilities, and capacity matching efficiency we have built in the ad hoc trucking market. These capacities widened our online platform's advantages of offline channels and supported high-quality growth at scale. Fuel price volatility since the beginning of the second quarter temporarily impacted both overall road freight demand and growth of fulfilled orders on our platform. Domestic diesel prices remain elevated from the 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 pressure year-over-year order growth. As we remain cautiously optimistic about long-term older growth. Externally, the recent moderation in few prices should support gradual recovery in freight demand, although the road freight market continues to face a challenging and evolving macro environment. In addition, the recent typhoon, 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 into fuel 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.

The next question comes from Brian Gong with Citi. Please go ahead.

I have translated myself, my question is regarding fulfillment rate. Our fulfillment rate hit a record high of 47% in the second quarter. Management share what was the key drivers in the second quarter, and how do you expect this metric to trend going forward? Thank you.

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, 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 continue 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 in terms of matching efficiency, we resegmented our freight product offering into four clear categories, express, entrusted shipping, and less-than-trust load. Each of them is designed for a distinct use case, rapid and satisfying short-term matching, higher-quality pricing services, standard matching, and LTL shipments through partnerships with dedicated line carriers, respectively. Product positioning enables to shape their transportation requirements more effectively and allows the platform to match them with 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 the fulfillment among broker shippers also continued to improve. This demonstrates that the increase in the platform-wide fulfillment rate was driven not only by a growing share of high-quality direct shippers, but also by 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 machine and fulfillment process. We expect to unlock further gains in transaction efficiency.

Your next question comes from Sun Chen with UBS. Please go ahead.

Thank you for your time. Thank you for your time. I'm UBS. My question is about the transaction service revenue. continued to grow rapidly in the second quarter, increasing by 33% in the year. What are the key growth drivers, and how do you view the outlook for this revenue?

Yes, the transaction service revenue reached approximately R&B 1.77 billion in the second quarter. That's up 33% over the year. And 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. Firstly, 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 continue 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 continue to improve monetization efficiency. We dynamically optimized 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 prerequisite. Our commission strategy considers truckers' take-home earnings, willingness to accept others' 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 the transaction scale and monetization. As we move forward, we expect transaction service running 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.

Your next question comes from Wenjie Zhang with CICC. Please go ahead.

Thank you, management, for taking my question. My question is about freight brokerage business. Can you give some update on the progress of transforming this business during the second quarter?

In the second quarter, we made steady progress in transitioning our freight brokerage business from a traditional self-operated model to a dual-track structure combining self-operated and aggregator operations. We're taking a phased approach to 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 skill 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 the 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 remains stable at approximately 10% during the quarter. Second, the aggregator model continues 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 on their 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. We continue to manage a smooth transition between the self-operated and aggregator models, and this will enable us to meet shippers' compliance demand, deepen user engagement, and better support and reinforce our core freight matching business. As the SLI revenue contribution from the aggregator model gradually scales, we expect the revenue mix and overall earning quality of the freight brokerage business to improve further.

The next question comes from Rich Chishan with HSBC.

Please go ahead. 增长还是比较强的, to other 这个原因是什么? Thank you, management, for taking my questions. I want to ask about the operating cash flow, which was 2.15 billion in the second quarter. It's been a very strong growth. For what are the key drivers behind it?

Our net cash provided by operating activities reached 2.15 billion in RMB, while free cash flow totaled RMB $2.04 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 it 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. Core-platform businesses, such as transaction services, are not only growing quickly, but also benefit from an asset-like model with short cash collection silos. As these businesses contribute a growing share of our revenue, our revenue and profit mix is becoming increasingly weighted towards businesses with higher cash conversion and significantly reinforcing the core business ability to generate cash organically. Second, we continue transitioning our credit business towards the SLI 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 the operating cash flow during the quarter. In addition, we maintained a stable collection and settlement cycles and managed our working capital efficiently. And given the inherent asset-like 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 settlement, tax payments, and changes in working capital. Nevertheless, as our revenue mix continues to shift towards higher margin, less allied platform businesses, we expect our long-term cash generation capabilities to strengthen steadily.

And 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 PS&T Financial Communications. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a good day.