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SHANGHAI, Aug. 24, 2023 /PRNewswire/ -- 111, Inc. ("111" or the "Company") (NASDAQ: YI), a leading tech-enabled healthcare platform company committed to digitally connecting patients with medicine and healthcare services in China, today announced its unaudited financial results for the second quarter ended June 30, 2023. Second Quarter 2023 Highlights Net revenues were RMB3.5 billion (US$479.6 million), representing an increase of 14.5% year-over-year. Gross segment profit(1) increased by 8.3% year-over-year, with B2B segment profit increasing by 11.6% year-over-year. Total operating expenses were RMB249.3million (US$34.4million), compared to RMB271.7 million in the same quarter of last year. As a percentage of net revenues, total operating expenses decreased to 7.2% from 8.9% in the same quarter of last year, which reflected continuous improvement in our operation efficiency. Loss from operations was RMB41.4 million (US$5.7 million), compared to RMB79.8 million in the same quarter of last year. As a percentage of net revenues, loss from operations decreased to 1.2% from 2.6% in the same quarter of last year. Non-GAAP loss from operations(2) was RMB17.2 million (US$2.4 million), compared to RMB52.8 million in the same quarter of last year. As a percentage of net revenues, non-GAAP loss from operations decreased to 0.5% from 1.7% in the same quarter of last year. (1) Gross segment profit represents net revenues less cost of goods sold. (2) Non-GAAP loss from operations represents loss from operations excluding share-based compensation expenses. Mr. Junling Liu, Co-Founder, Chairman, and Chief Executive Officer of 111, commented, "We're delighted to announce yet another robust quarter in terms of top-line expansion with narrowed losses both on a GAAP and a Non-GAAP operational basis. Our net revenue saw a rise of 14.5% year-over-year, reaching RMB3.5 billion. This represents the 20th consecutive quarter of year-over-year progression for 111 since our NASDAQ IPO. Additionally, our gross segment profit for this quarter rose by 8.3% compared to the same period last year. Consequently, our operational loss stood at RMB41.4 million (US$5.7 million), down from RMB79.8 million during the same quarter the previous year. When viewed as a percentage of net revenues, the operational loss reduced to 1.2%, compared to 2.6% in the corresponding quarter of the prior year. Meanwhile, Non-GAAP operational loss reduced to RMB17.2 million, dropping to 0.5% of net revenues from the previous 1.7% during the same quarter of the preceding year." Mr. Liu added, "Furthermore, we've made strides in improving our operational efficiency, with total operating expenses as a percentage of net revenues falling to 7.2% this quarter, down from 8.9% in the corresponding quarter of the previous year. We anticipate maintaining this positive trajectory as we expand. Concurrently, our dedication remains steadfast in providing top-tier services to our customers and patients." "Our recent achievements are a direct result of our unwavering strategic focus, particularly on digitization. In June, we forged a strategic alliance with Tencent to amplify the reach of online pharmaceutical services. By July, 111 secured a spot on the Shanghai Data Exchange, propelling the digital transformation of the pharmaceutical landscape. That same month, we unveiled a pivotal digital supply chain product, bolstering the momentum of supply-side digitization. This quarter, in acknowledgment of 111's digital prowess, the Ministry of Commerce distinguished us as an E-commerce Demonstration Enterprise, placing us among the top 132 nationwide. Capitalizing on our reinforced digital capabilities and robust relationships with over 500 pharmaceutical allies, as well as optimizing operations for 435,000 retail pharmacies, we remain committed to fine-tuning our strategies, and will keep on capitalizing on innovative tools like "Telescope" and tapping into the latest tech advancements, ensuring sustained growth and efficiency. "We are confident that our initiatives aimed at margin expansion, cost optimization, and organizational alignment have yielded tangible outcomes. Our focus remains on refining our product selection in line with customer preferences, driving down costs through direct sourcing, and enhancing our market edge with smart pricing strategies. Our commitment to supply chain efficiency and relentless digitization bolsters process enhancement and sparks innovation. With our robust technological prowess, we're poised to scale further, ensure profitability, and consistently amplify value for our shareholders." Second Quarter 2023 Financial Results Net revenues were RMB3.5 billion (US$479.6 million), representing an increase of 14.5% from RMB3.0 billion in the same quarter of last year. (In thousands RMB) For the three months ended June 30, 2022 2023 YoY B2B Net Revenue Product 2,919,468 3,367,732 15.4 % Service 15,155 20,974 38.4 % Sub-Total 2,934,623 3,388,706 15.5 % Cost of Products Sold(3) 2,765,701 3,200,156 15.7 % Segment Profit 168,922 188,550 11.6 % Segment Profit % 5.8 % 5.6 % (In thousands RMB) For the three months ended June 30, 2022 2023 YoY B2C Net Revenue Product 95,879 83,251 -13.2 % Service 6,643 5,540 -16.6 % Sub-Total 102,522 88,791 -13.4 % Cost of Products Sold 79,477 69,454 -12.6 % Segment Profit 23,045 19,337 -16.1 % Segment Profit % 22.5 % 21.8 % (3) For segment reporting purposes, purchase rebates are allocated to the B2B segment and B2C segments primarily based on the amount of cost of products sold for each segment. Cost of products sold does not include other direct costs related to cost of product sales such as shipping and handling expense, payroll and benefits of logistic staff, logistic centers rental expenses and depreciation expenses, which are recorded in the fulfillment expenses. Cost of service revenue is recorded in the operating expense. Operating costs and expenses were RMB3.5 billion (US$485.3 million), representing an increase of 12.9% from RMB3.1 billion in the same quarter of last year. Cost of products sold was RMB3.3 billion (US$450.9 million), representing an increase of 14.9% from RMB2.8 billion in the same quarter of last year. The increase was primarily due to the revenue growth in B2B business, which increased by 15.4% from the same quarter last year. Fulfillment expenses were RMB95.0 million (US$13.1 million), representing an increase of 8.0% from RMB87.9 million in the same quarter of last year. Fulfillment expenses accounted for 2.7% of net revenues this quarter as compared to 2.9% in the same quarter of last year. Selling and marketing expenses were RMB90.1 million (US$12.4 million), representing a decrease of 10.9% from RMB101.2 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB4.4 million for the quarter and RMB8.4 million for the same quarter last year, respectively, selling and marketing expenses as a percentage of net revenues, accounted for 2.5% in the quarter as compared to 3.1% in the same quarter of last year. General and administrative expenses were RMB39.1 million (US$5.4 million), representing an increase of 1.5% from RMB38.5 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB15.7 million for the quarter and RMB17.0 million for the same quarter last year, respectively, general and administrative expenses as a percentage of net revenues, accounted for 0.7% in the quarter, which was same as last year. Technology expenses were RMB24.5 million (US$3.4 million), compared with RMB33.7 million in the same quarter of last year. Excluding the share-based compensation expenses of RMB4.2 million for the quarter and RMB1.6 million for the same quarter last year, respectively, technology expenses as a percentage of net revenues, accounted for 0.6% in the quarter as compared to 1.1 % in the same quarter of last year. Loss from operations was RMB41.4 million (US$5.7 million), compared to RMB79.8 million in the same quarter of last year. As a percentage of net revenues, loss from operations decreased to 1.2 % in the quarter from 2.6% in the same quarter of last year. Non-GAAP loss from operations was RMB17.2 million (US$2.4 million), compared to RMB52.8 million in the same quarter of last year. As a percentage of net revenues, non-GAAP loss from operations decreased to 0.5% in the quarter from 1.7% in the same quarter of last year. Net loss was RMB45.4 million (US$6.3 million), compared to RMB84.8 million in the same quarter of last year. As a percentage of net revenues, net loss decreased to 1.3% in the quarter from 2.8% in same quarter of last year. Non-GAAP net loss(4) was RMB21.2 million (US$2.9 million), compared to RMB57.8 million in the same quarter of last year. As a percentage of net revenues, non-GAAP net loss decreased to 0.6% in the quarter from 1.9% in same quarter of last year Net loss attributable to ordinary shareholders was RMB57.2 million (US$7.9 million), compared to RMB95.3 million in the same quarter of last year. As a percentage of net revenues, net loss attributable to ordinary shareholders decreased to 1.6% in the quarter from 3.1% in same quarter of last year. Non-GAAP net loss attributable to ordinary shareholders(5) was RMB33.0 million (US$4.6 million), compared to RMB68.3 million in the same quarter of last year. As a percentage of net revenues, non-GAAP net loss attributable to ordinary shareholders decreased to 0.9% in the quarter from 2.2% in same quarter of last year. (4) Non-GAAP net loss represents net loss excluding share-based compensation expenses, net of tax. Considering the impact of accretion of redeemable non-controlling interest for the second quarter 2023, non-GAAP net loss is used as a more meaningful measurement of the operation performance of the Company. (5) Non-GAAP net loss attributable to ordinary shareholders represents net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. As of June 30, 2023, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB735.8 million (US$101.5 million), compared to RMB922.7 million as of December 31, 2022. Conference Call 111's management team will host an earnings conference call at 7:30 AM U.S. Eastern Time on Thursday, August 24, 2023 (7:30 PM Beijing Time on the same day). Details for the conference call are as follows: Event Title: 111, Inc. Second Quarter 2023 Unaudited Financial Results Registration Link: https://s1.c-conf.com/diamondpass/10032701-ygfhis.html All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique Registration ID, which can be used to join the conference call. Please dial in 15 minutes before the call is scheduled to begin and provide the Direct Event passcode and unique Registration ID you have received upon registering to join the call. A telephone replay of the call will be available after the conclusion of the conference call until August 31, 2023 on: China: 4001 209 216Hong Kong: 800 930 639United States: +1 855 883 1031International: +61 7 3107 6325Conference ID: 10032701 A live and archived webcast of the conference call will be available on the website at https://edge.media-server.com/mmc/p/iw7ck9oc. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS, as supplemental measures to review and assess its operating performance. The Company defines non-GAAP loss from operations as loss from operations excluding share-based compensation expenses. The Company defines non-GAAP net loss as net loss excluding share-based compensation expenses, net of tax. The Company defines non-GAAP net loss attributable to ordinary shareholders as net loss attributable to ordinary shareholders excluding share-based compensation expenses, net of tax. The Company defines non-GAAP loss per ADS as net loss attributable to ordinary shareholders per ADS excluding share-based compensation expenses, net of tax per ADS. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company believes that non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS help identify underlying trends in its business that could otherwise be distorted by the effect of certain expenses that it includes in loss from operations and net loss. Share-based compensation expenses is a non-cash expense that varies from period to period. As a result, management excludes the items from its internal operating forecasts and models. Management believes that the adjustments for share-based compensation expenses provide investors with a reasonable basis to measure the company's core operating performance, in a more meaningful comparison with the performance of other companies. The Company believes that non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders, and non-GAAP loss per ADS provide useful information about its operating results, enhances the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the management in their financial and operational decision-making. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders, or non-GAAP loss per ADS is that it does not reflect all items of income and expense that affect the Company's operations. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP measures, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliation of the non-GAAP financial measures to the most comparable U.S. GAAP measures is included at the end of this press release. Exchange Rate Information Statement This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2513 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30, 2023. Forward-Looking Statements This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "confident" and similar statements. Among other things, the Business Outlook and quotations from management in this announcement, as well as 111's strategic and operational plans, contain forward-looking statements. 111 may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Forward-looking statements involve inherent risks, uncertainties and other factors that could cause actual results to differ materially from those contained in any such statements. Potential risks and uncertainties include, but are not limited to, uncertainties as to the Company's ability comply with extensive and evolving regulatory requirements, its ability to compete effectively in the evolving PRC general health and wellness market, its ability to manage the growth of its business and expansion plans, its ability to achieve or maintain profitability in the future, its ability to control the risks associated with its pharmaceutical retail and wholesale businesses, and the Company's ability to meet the standards necessary to maintain listing of its ADSs on the Nasdaq Global Market, including its ability to cure any non-compliance with Nasdaq's continued listing criteria. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and 111 does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law. About 111, Inc. 111, Inc. (NASDAQ: YI) ("111" or the "Company") is a leading tech-enabled healthcare platform company committed to digitally connecting patients with medicine and healthcare services in China. The Company provides consumers with better access to pharmaceutical products and healthcare services directly through its online retail pharmacy, 1 Pharmacy, and indirectly through its offline virtual pharmacy network. The Company also offers online healthcare services through its internet hospital, 1 Clinic, which provides consumers with cost-effective and convenient online consultation, electronic prescription service, and patient management service. In addition, the Company's online platform, 1 Medicine, serves as a one-stop shop for pharmacies to source a vast selection of pharmaceutical products. With the largest virtual pharmacy network in China, 111 enables offline pharmacies to better serve their customers with cloud-based services. 111 also provides an omni-channel drug commercialization platform to its strategic partners, which includes services such as digital marketing, patient education, data analytics, and pricing monitoring. For more information on 111, please visit: http://ir.111.com.cn/. For more information, please contact: 111, Inc.Investor RelationsEmail: ir@111.com.cn 111, Inc.Media Relations Email: press@111.com.cnPhone: +86-021-2053 6666 (China) 111, Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except for share and per share data) As of As of December 31, 2022 June 30, 2023 RMB RMB US$ ASSETS Current Assets: Cash and cash equivalents 673,669 576,414 79,491 Restricted cash 43,122 36,360 5,014 Short-term investments 205,861 123,049 16,969 Accounts receivable, net 488,875 452,003 62,334 Notes Receivable 43,332 63,934 8,817 Inventories 1,498,900 1,387,646 191,365 Prepayments and other current assets 282,066 192,692 26,574 Total current assets 3,235,825 2,832,098 390,564 Property and equipment, net 48,497 41,538 5,728 Intangible assets, net 3,267 2,666 368 Long-term investments 2,000 2,000 276 Other non-current assets 20,348 21,435 2,956 Operating lease right-of-use asset 163,877 150,418 20,744 Total Assets 3,473,814 3,050,155 420,636 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' DEFICIT Current Liabilities: Short-term borrowings 178,990 309,698 42,709 Accounts payable 1,764,849 1,512,859 208,633 Accrued expense and other current liabilities 781,271 498,256 68,713 Total Current liabilities 2,725,110 2,320,813 320,055 Long-term operating lease liabilities 100,469 88,638 12,224 Total Liabilities 2,825,579 2,409,451 332,279 MEZZANINE EQUITY Redeemable non-controlling interests 1,056,939 1,084,753 149,594 SHAREHOLDERS' DEFICIT Ordinary shares Class A 31 32 5 Ordinary shares Class B 25 25 3 Treasury shares (40,859) (40,859) (5,635) Additional paid-in capital 2,977,174 3,028,583 417,661 Accumulated deficit (3,426,556) (3,515,582) (484,821) Accumulated other comprehensive income 75,586 81,715 11,269 Total shareholders' deficit (414,599) (446,086) (61,518) Non-controlling interest 5,895 2,037 281 Total Deficit (408,704) (444,049) (61,237) Total liabilities, mezzanine equity and deficit 3,473,814 3,050,155 420,636 111, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands, except for share and per share data) For the three months ended June 30, For the six months ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Net Revenues 3,037,145 3,477,497 479,568 6,019,736 7,174,258 989,376 Operating Costs and expenses: Cost of products sold (2,845,178) (3,269,610) (450,900) (5,635,234) (6,730,158) (928,131) Fulfillment expenses (87,908) (94,950) (13,094) (182,441) (197,600) (27,250) Selling and marketing expenses (101,174) (90,117) (12,428) (216,028) (179,357) (24,734) General and administrative expenses (38,493) (39,079) (5,389) (86,488) (80,396) (11,087) Technology expenses (33,711) (24,541) (3,384) (72,732) (49,857) (6,876) Other operating income, net (10,434) (605) (83) (8,718) (27) (4) Total Operating costs and expenses (3,116,898) (3,518,902) (485,278) (6,201,641) (7,237,395) (998,082) Loss from operations (79,753) (41,405) (5,710) (181,905) (63,137) (8,706) Interest income 1,421 2,206 304 3,464 4,155 573 Interest expense (3,185) (4,820) (665) (6,369) (9,092) (1,254) Foreign exchange loss (4,934) (2,808) (387) (4,543) (1,174) (162) Other Income, net 1,687 1,450 200 3,600 4,514 623 Loss before income taxes (84,764) (45,377) (6,258) (185,753) (64,734) (8,926) Income tax expense - - - - - - Net Loss (84,764) (45,377) (6,258) (185,753) (64,734) (8,926) Net Loss attributable to non-controlling interest 3,489 2,122 293 7,966 3,522 486 Net Loss attributable to redeemable non-controlling interest 7,121 3,728 514 16,256 5,276 728 Adjustment attributable to redeemable non-controlling interest (21,104) (17,712) (2,443) (44,070) (33,090) (4,563) Net Loss attributable to ordinary shareholders (95,258) (57,239) (7,894) (205,601) (89,026) (12,275) Other comprehensive loss Unrealized gains of available-for-sale securities, 1,478 788 109 2,776 2,923 403 Realized gains of available-for-sale debt securities (1,128) (815) (112) (2,463) (2,717) (375) Foreign currency translation adjustments 7,183 9,037 1,246 6,227 5,924 817 Comprehensive loss (87,725) (48,229) (6,651) (199,061) (82,896) (11,430) Loss per ADS: Basic and diluted (1.14) (0.68) (0.10) (2.48) (1.06) (0.14) Weighted average number of shares used in computation of loss per share Basic and diluted 166,595,078 168,102,392 168,102,392 166,463,376 167,718,135 167,718,135 111, Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the three months ended June 30, For the six months ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Net cash used in operating activities (29,935) (164,111) (22,632) (98,176) (285,439) (39,365) Net cash (used in) provided by investing activities (52,294) 139,938 19,298 (29,435) 86,750 11,964 Net cash provided by financing activities 6,394 15,281 2,107 41,672 93,778 12,933 Effect of exchange rate changes on cash and cash equivalents, and restricted cash 6,695 2,385 329 5,964 894 123 Net decrease in cash and cash equivalents, and restricted cash (69,140) (6,507) (898) (79,975) (104,017) (14,345) Cash and cash equivalents, and restricted cash at the beginning of the period 749,837 619,281 85,403 760,672 716,791 98,850 Cash and cash equivalents, and restricted cash at the end of the period 680,697 612,774 84,505 680,697 612,774 84,505 111, Inc. Unaudited Reconciliation of GAAP and Non-GAAP Results (In thousands, except for share and per share data) For the three months ended June 30, For the six months ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Loss from operations (79,753) (41,405) (5,710) (181,905) (63,137) (8,706) Add: Share-based compensation expenses 26,997 24,208 3,338 56,754 48,416 6,677 Non-GAAP loss from operations (52,756) (17,197) (2,372) (125,151) (14,721) (2,029) Net Loss (84,764) (45,377) (6,258) (185,753) (64,734) (8,926) Add: Share-based compensation expenses, net of tax 26,997 24,208 3,338 56,754 48,416 6,677 Non-GAAP net Loss (57,767) (21,169) (2,920) (128,999) (16,318) (2,249) Net Loss attributable to ordinary shareholders (95,258) (57,239) (7,894) (205,601) (89,026) (12,275) Add: Share-based compensation expenses, net of tax 26,997 24,208 3,338 56,754 48,416 6,677 Non-GAAP net Loss attributable to ordinary shareholders (68,261) (33,031) (4,556) (148,847) (40,610) (5,598) Loss per ADS(6): Basic and diluted (1.14) (0.68) (0.10) (2.48) (1.06) (0.14) Add: Share-based compensation expenses per ADS(6), net of tax 0.32 0.30 0.04 0.68 0.58 0.08 Non-GAAP Loss per ADS(6) (0.82) (0.38) (0.06) (1.80) (0.48) (0.06) (6) Every one ADSs represent two Class A ordinary shares.
SHANGHAI, Aug. 24, 2023 /PRNewswire/ -- Cango Inc. (NYSE: CANG) ("Cango" or the "Company"), a leading automotive transaction service platform in China, today announced its unaudited financial results for the second quarter of 2023. Second Quarter 2023 Financial and Operational Highlights Total revenues were RMB675.4 million (US$93.1 million), a 133.6% increase from RMB289.2 million in the same period of 2022. Car trading transactions revenues were RMB562.8 million (US$77.6 million) in the second quarter of 2023, representing 83.3% of total revenues in the same period, a 157.4% increase from RMB218.6 million in the same period of 2022. The total outstanding balance of financing transactions the Company facilitated was RMB16,628.1 million (US$2,293.1 million) as of June 30, 2023. M1+ and M3+ overdue ratios for all financing transactions that remained outstanding and were facilitated by the Company were 2.12% and 1.09%, respectively, as of June 30, 2023, compared with 2.33% and 1.29%, respectively, as of March 31, 2023. "Cango Haoche" had engaged 11,066 dealers in China's 31 provinces and 305 cities as of June 30, 2023. During the second quarter, total sales were 5,893 cars. Since the "Cango Haoche" APP was launched at the end of the second quarter of 2022, it had attracted a total of over one million page views and more than 98,000 unique visitors as of the end of June 2023. "Cango U-Car" had engaged 6,900 dealers in China's 30 provinces and 225 cities as of June 30, 2023. During the second quarter, total sales were 651 cars. As of June 30, 2023, the "Cango U-Car" APP and mini program had attracted a total of over 611,000 page views and more than 31,000 unique visitors. Mr. Jiayuan Lin, Chief Executive Officer of Cango, commented, "Despite the release of various consumption stimulus policies targeting the automotive market in the first half of the year, consumer confidence and consumption willingness remained weak. Amid challenging market conditions overall, we leveraged our deep insights into the industry's pain points to continuously refine our product offerings. " "In the second quarter, we updated functions and products on 'Cango Haoche,' adding the car loan program, cross-regional delivery service, as well as auto insurance and non-auto insurance products. These offerings empowered our dealers with enhanced service capabilities and broadened profit streams, resulting in a year-over-year increase of 34.3% in the total number of dealers engaged on 'Cango Haoche.' Meanwhile, we assembled a dedicated team of professional technicians and broadened service coverage across the used car transaction value chain with our onsite service team of over 100 experts beginning to engage in basic vehicle inspection and other relevant services." "Digital technology capabilities are key to improving service capabilities across the platform. Beyond revamping our transaction business across the platform, we have also been actively working towards group-wide digital transformation. Our 'Car Dealer Operational Index Query' was launched and listed on the Shanghai Data Exchange in May 2023, which is believed to be the first data index available in the market and could be served as a tool for assessing the financial stability of car dealers in lower-tier markets." "Moving into the second half of the year, we will prudently manage inventory to address the potential risk of market and vehicle price fluctuation while continuing to invest in transaction infrastructure and enhancing our platforms' overall capabilities," concluded Mr. Lin. Mr. Yongyi Zhang, Chief Financial Officer of Cango, stated, "Our resilient second quarter results demonstrated the effectiveness of our business model amid a dynamic operating environment. We made encouraging progress with our diversified and enhanced service offerings across our business in the second quarter, propelling our dealers' growth and helping them achieve their goals. We believe that our dedication to technology innovation and operating efficiency has set Cango firmly on a path toward sustainable and healthy growth." Accounting Policy Changes The Company has adopted the Financial Instruments – Credit Losses (ASC 326): Measurement of Credit Losses on Financial Instruments on January 1, 2023, using the modified retrospective transition method. This standard requires the measurement of all expected credit losses for financial assets measured at amortized cost and off-balance sheet credit exposures not accounted for as insurance at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Upon adoption of the standard on January 1, 2023, the Company recorded RMB302.4 million (US$41.7 million) increase in risk assurance liabilities, RMB14.5 million (US$2.0 million) increase in the allowance for finance lease receivables, RMB13.8 million (US$1.9 million) increase in the allowance for financing receivables and RMB3.2 million (US$0.4 million) increase in the allowance of other current and non-current assets. After adjusting for deferred taxes, RMB306.9 million (US$42.3 million) decrease was recorded in beginning retained earnings on January 1, 2023 through a cumulative-effect adjustment. Second Quarter 2023 Financial Results REVENUES Total revenues in the second quarter of 2023 increased by 133.6% to RMB675.4 million (US$93.1 million) from RMB289.2 million in the same period of 2022. Revenues from car trading transactions in the second quarter of 2023 were RMB562.8 million (US$77.6 million), representing 83.3% of total revenues in the second quarter of 2023 and a 157.4% increase from RMB218.6 million in the same period of 2022. The guarantee income, which represented the fee income earned on the non-contingent aspect of a guarantee, was RMB55.9 million (US$7.7 million) in the second quarter of 2023, which was presented separately from the contingent aspect of a guarantee pursuant to the adoption of ASC 326 since January 1, 2023. OPERATING COST AND EXPENSES Total operating cost and expenses in the second quarter of 2023 were RMB684.4 million (US$94.4 million) compared with RMB643.3 million in the same period of 2022. Cost of revenue in the second quarter of 2023 was RMB615.8 million (US$84.9 million) compared with RMB272.7 million in the same period of 2022. As a percentage of total revenues, cost of revenue in the second quarter of 2023 was 91.2%, compared with 94.3% in the same period of 2022. Sales and marketing expenses in the second quarter of 2023 decreased to RMB12.2 million (US$1.7 million) from RMB41.8 million in the same period of 2022. As a percentage of total revenues, sales and marketing expenses in the second quarter of 2023 was 1.8%, compared with 14.5% in the same period of 2022. General and administrative expenses in the second quarter of 2023 decreased to RMB36.8 million (US$5.1 million) from RMB124.7 million in the same period of 2022. As a percentage of total revenues, general and administrative expenses in the second quarter of 2023 was 5.5%, compared with 43.1% in the same period of 2022. Research and development expenses in the second quarter of 2023 decreased to RMB7.7 million (US$1.1 million) from RMB12.9 million in the same period of 2022. As a percentage of total revenues, research and development expenses in the second quarter of 2023 was 1.1%, compared with 4.4% in the same period of 2022. Net loss on contingent risk assurance liabilities in the second quarter of 2023 was RMB1.6 million (US$0.2 million). Provision for credit losses in the second quarter of 2023 decreased to RMB10.2 million (US$1.4 million) from RMB138.2 million in the same period of 2022. Provision for credit losses included the special provisions of RMB57.3 million on the Company's prepayments and other receivables due from two car trading suppliers based on the assessments of their probabilities of delinquency. LOSS FROM OPERATIONS Loss from operations in the second quarter of 2023 was RMB8.9 million (US$1.2 million), compared with RMB354.1 million in the same period of 2022. NET INCOME Net income in the second quarter of 2023 was RMB36.2 million (US$5.0 million). Non-GAAP adjusted net income in the second quarter of 2023 was RMB48.2 million (US$6.6 million). Non-GAAP adjusted net income excludes the impact of share-based compensation expenses. For further information, see "Use of Non-GAAP Financial Measure." NET INCOME PER ADS Basic and diluted net income per American Depositary Share (the "ADS") in the second quarter of 2023 were RMB0.27 (US$0.04) and RMB0.26 (US$0.04), respectively. Non-GAAP adjusted basic and diluted net income per ADS in the second quarter of 2023 were RMB0.36 (US$0.05) and RMB0.35 (US$0.05), respectively. Each ADS represents two Class A ordinary shares of the Company. BALANCE SHEET As of June 30, 2023, the Company had cash and cash equivalents of RMB589.4 million (US$81.3 million), compared with RMB696.6 million as of March 31, 2023. As of June 30, 2023, the Company had short-term investments of RMB2,055.7 million (US$283.5 million), compared with RMB2,017.7 million as of March 31, 2023. Business Outlook For the third quarter of 2023, the Company expects total revenues to be between RMB300 million and RMB350 million. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change. Share Repurchase Program Pursuant to the share repurchase program announced on April 22, 2022, the Company had repurchased 2,846,285 ADSs with cash in the aggregate amount of approximately US$5.7 million up to April 25, 2023, the day on which the program expired. Pursuant to the share repurchase program announced on April 21, 2023 (the "New Share Repurchase Program"), the Company had repurchased 24,845,983 ADSs with cash in the aggregate amount of approximately US$32.2 million up to June 30, 2023. The ADS purchase agreement entered into between an institutional investor and the Company on June 1, 2023 was settled on June 26, 2023, pursuant to which the Company repurchased an aggregate of 24,300,562 ADSs for an aggregate purchase price of approximately US$31.6 million. The above share repurchases were conducted pursuant to resolutions of the Company's board of directors, which authorized that the Company's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades, and/or through other legally permissible means, in accordance with applicable rules and regulations. The repurchases will be funded from the Company's existing cash balance. Conference Call Information The Company's management will hold a conference call on Wednesday, August 23, 2023, at 9:00 P.M. Eastern Time or Thursday, August 24, 2023, at 9:00 A.M. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers: International: United States Toll Free: Mainland China Toll Free: Hong Kong, China Toll Free: Conference ID: +1-412-902-4272+1-888-346-89824001-201-203 800-905-945Cango Inc. The replay will be accessible through August 30, 2023 by dialing the following numbers: International: United States Toll Free: Access Code: +1-412-317-0088+1-877-344-75295299487 A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cangoonline.com/. About Cango Inc. Cango Inc. (NYSE: CANG) is a leading automotive transaction service platform in China, connecting car buyers, dealers, financial institutions, and other industry participants. Founded in 2010 by a group of pioneers in China's automotive finance industry, the Company is headquartered in Shanghai and has a nationwide network. Leveraging its competitive advantages in technological innovation and big data, Cango has established an automotive supply chain ecosystem, and developed a matrix of products centering on customer needs for auto transactions, auto financing and after-market services. By working with platform participants, Cango endeavors to make car purchases simple and enjoyable, and make itself customers' car purchase service platform of choice. For more information, please visit: www.cangoonline.com. Definition of Overdue Ratios The Company defines "M1+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 30 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due. The Company defines "M3+ overdue ratio" as (i) exposure at risk relating to financing transactions for which any installment payment is 90 to 179 calendar days past due as of a specified date, divided by (ii) exposure at risk relating to all financing transactions which remain outstanding as of such date, excluding amounts of outstanding principal that are 180 calendar days or more past due. Use of Non-GAAP Financial Measure In evaluating the business, the Company considers and uses Non-GAAP adjusted net income (loss), a Non-GAAP measure, as a supplemental measure to review and assess its operating performance. The presentation of the Non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines Non-GAAP adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. The Company presents the Non-GAAP financial measure because it is used by the management to evaluate the operating performance and formulate business plans. Non-GAAP adjusted net income (loss) enables the management to assess the Company's operating results without considering the impact of share-based compensation expenses, which are non-cash charges. The Company also believes that the use of the Non-GAAP measure facilitates investors' assessment of its operating performance. Non-GAAP adjusted net income (loss) is not defined under U.S. GAAP and is not presented in accordance with U.S. GAAP. This Non-GAAP financial measure has limitations as analytical tools. One of the key limitations of using Non-GAAP adjusted net income (loss) is that it does not reflect all items of expense that affect the Company's operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of Non-GAAP adjusted net income (loss). Further, the Non-GAAP measure may differ from the Non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the Non-GAAP financial measure to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company's performance. The Company encourages you to review its financial information in its entirety and not rely on a single financial measure. Reconciliations of Cango's Non-GAAP financial measure to the most comparable U.S. GAAP measure are included at the end of this press release. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.2513 to US$1.00, the noon buying rate in effect on June 30, 2023, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the "Business Outlook" section and quotations from management in this announcement, contain forward-looking statements. Cango may also make written or oral forward-looking statements in its periodic reports to the SEC, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Cango's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Cango's goal and strategies; Cango's expansion plans; Cango's future business development, financial condition and results of operations; Cango's expectations regarding demand for, and market acceptance of, its solutions and services; Cango's expectations regarding keeping and strengthening its relationships with dealers, financial institutions, car buyers and other platform participants; general economic and business conditions; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Cango's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Cango does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Investor Relations Contact Yihe LiuCango Inc.Tel: +86 21 3183 5088 ext.5581Email: ir@cangoonline.com Twitter: https://twitter.com/Cango_Group Helen WuPiacente Financial CommunicationsTel: +86 10 6508 0677Email: ir@cangoonline.com CANGO INC.UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data） As of December 31, 2022 As of June 30, 2023 RMB RMB US$ ASSETS: Current assets: Cash and cash equivalents 378,917,318 589,447,322 81,288,503 Restricted cash - current 152,688,510 26,675,304 3,678,693 Short-term investments 1,941,432,848 2,055,688,107 283,492,354 Accounts receivable, net 266,836,951 314,776,512 43,409,666 Finance lease receivables - current, net 799,438,656 448,592,918 61,863,792 Financing receivables, net 73,818,025 28,769,129 3,967,444 Short-term contract asset 500,389,654 242,352,163 33,421,892 Prepayments and other current assets 1,356,822,028 707,701,413 97,596,488 Total current assets 5,470,343,990 4,414,002,868 608,718,832 Non-current assets: Restricted cash - non-current 750,877,306 612,227,612 84,430,049 Goodwill 148,657,971 148,657,971 20,500,872 Property and equipment, net 14,689,988 12,980,199 1,790,051 Intangible assets 48,317,878 48,012,470 6,621,222 Long-term contract asset 173,457,178 67,598,628 9,322,277 Deferred tax assets 62,497,781 137,212,359 18,922,450 Finance lease receivables - non-current, net 260,049,967 110,848,658 15,286,729 Operating lease right-of-use assets 80,726,757 74,203,806 10,233,173 Other non-current assets 6,633,517 6,886,069 949,632 Total non-current assets 1,545,908,343 1,218,627,772 168,056,455 TOTAL ASSETS 7,016,252,333 5,632,630,640 776,775,287 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term debts 349,299,134 230,729,960 31,819,117 Long-term debts—current 565,143,340 117,346,048 16,182,760 Accrued expenses and other current liabilities 890,836,699 471,055,350 64,961,500 Deferred guarantee income - 178,334,757 24,593,488 Contingent risk assurance liabilities - 208,316,116 28,728,106 Risk assurance liabilities 402,303,421 - - Income tax payable 313,406,680 339,584,975 46,830,910 Short-term lease liabilities 9,913,073 10,690,027 1,474,222 Total current liabilities 2,530,902,347 1,556,057,233 214,590,103 Non-current liabilities: Long-term debts 75,869,353 2,774,809 382,664 Deferred tax liability 10,724,133 10,724,133 1,478,926 Long-term operating lease liabilities 76,533,208 69,622,114 9,601,329 Other non-current liabilities 314,287 278,451 38,400 Total non-current liabilities 163,440,981 83,399,507 11,501,319 Total liabilities 2,694,343,328 1,639,456,740 226,091,422 Shareholders' equity Ordinary shares 204,260 204,260 28,169 Treasury shares (559,005,216) (781,365,647) (107,755,250) Additional paid-in capital 4,805,240,472 4,818,705,269 664,529,846 Accumulated other comprehensive income 66,359,902 138,390,834 19,084,969 Retained earnings 9,109,587 (182,760,816) (25,203,869) Total Cango Inc.'s equity 4,321,909,005 3,993,173,900 550,683,865 Total shareholders' equity 4,321,909,005 3,993,173,900 550,683,865 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 7,016,252,333 5,632,630,640 776,775,287 CANGO INC.UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OFCOMPREHENSIVE INCOME(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data) Three months ended June 30 Six months ended June 30 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Revenues 289,191,585 675,430,076 93,146,067 1,076,885,456 1,218,043,439 167,975,872 Loan facilitation income and other related income 14,599,571 13,957,481 1,924,825 120,498,214 16,272,881 2,244,133 Guarantee income - 55,875,460 7,705,578 - 120,004,206 16,549,337 Leasing income 42,718,041 16,645,952 2,295,582 92,840,092 38,859,633 5,358,988 After-market services income 10,544,538 10,529,314 1,452,059 36,323,244 27,248,790 3,757,780 Automobile trading income 218,612,145 562,758,493 77,607,945 817,913,471 992,608,136 136,886,922 Others 2,717,290 15,663,376 2,160,078 9,310,435 23,049,793 3,178,712 Operating cost and expenses: Cost of revenue 272,661,870 615,829,103 84,926,717 959,643,012 1,096,347,083 151,193,177 Sales and marketing 41,798,207 12,153,129 1,675,993 95,643,408 24,691,691 3,405,140 General and administrative 124,670,110 36,834,735 5,079,742 175,553,986 76,637,265 10,568,762 Research and development 12,857,670 7,748,158 1,068,520 27,343,292 15,850,521 2,185,887 Net loss (gain) on contingent risk assurance liabilities - 1,556,164 214,605 - (66,392) (9,156) Net loss on risk assurance liabilities 53,144,802 - - 152,065,685 - - Provision (net recovery on provision) for credit losses 138,198,835 10,238,843 1,412,001 209,854,830 (38,315,257) -5,283,916 Total operation cost and expense 643,331,494 684,360,132 94,377,578 1,620,104,213 1,175,144,911 162,059,894 (Loss) income from operations (354,139,909) (8,930,056) (1,231,511) (543,218,757) 42,898,528 5,915,978 Interest income, net 7,153,803 20,718,511 2,857,213 12,500,971 39,499,391 5,447,215 Net gain (loss) on equity securities 1,655,350 4,668,993 643,884 (17,589,345) 8,401,348 1,158,599 Interest expense (4,245,737) (1,652,610) (227,905) (8,585,969) (3,946,695) (544,274) Foreign exchange gain, net 3,641,027 3,820,047 526,809 3,251,940 2,835,740 391,066 Other income 3,047,649 3,138,715 432,849 37,537,026 7,598,612 1,047,897 Other expenses (691,665) (96,249) (13,273) (823,210) (227,134) (31,323) Net (loss) income before income taxes (343,579,482) 21,667,351 2,988,066 (516,927,344) 97,059,790 13,385,158 Income tax benefits 57,794,491 14,559,258 2,007,813 94,980,503 17,931,896 2,472,922 Net (loss) income (285,784,991) 36,226,609 4,995,879 (421,946,841) 114,991,686 15,858,080 Net (loss) income attributable to Cango Inc.'s shareholders (285,784,991) 36,226,609 4,995,879 (421,946,841) 114,991,686 15,858,080 Earnings (loss) per ADS attributable to ordinary shareholders: Basic (2.08) 0.27 0.04 (3.05) 0.86 0.12 Diluted (2.08) 0.26 0.04 (3.05) 0.82 0.11 Weighted average ADS used to compute earnings (loss) per ADS attributable to ordinary shareholders: Basic 137,612,565 133,052,781 133,052,781 138,416,992 133,906,218 133,906,218 Diluted 137,612,565 138,366,712 138,366,712 138,416,992 139,610,743 139,610,743 Other comprehensive income, net of tax Foreign currency translation adjustment 173,077,605 78,051,511 10,763,796 156,790,750 72,030,932 9,933,520 Total comprehensive (loss) income (112,707,386) 114,278,120 15,759,675 (265,156,091) 187,022,618 25,791,600 Total comprehensive (loss) income attributable to Cango Inc.'s shareholders (112,707,386) 114,278,120 15,759,675 (265,156,091) 187,022,618 25,791,600 CANGO INC.RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(Amounts in Renminbi ("RMB") and US dollar ("US$"), except for number of shares and per share data) Three months ended June 30 Six months ended June 30 2022 2023 2022 2023 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB RMB US$ RMB RMB US$ Net (loss) income (285,784,991) 36,226,609 4,995,879 (421,946,841) 114,991,686 15,858,080 Add: Share-based compensation expenses 96,217,718 11,980,577 1,652,197 119,072,008 26,039,675 3,591,035 Cost of revenue 1,104,953 728,462 100,460 2,000,393 1,475,878 203,533 Sales and marketing 2,253,413 2,345,570 323,469 6,773,229 5,138,966 708,696 General and administrative 92,068,794 8,376,396 1,155,158 108,407,806 18,283,664 2,521,433 Research and development 790,558 530,149 73,110 1,890,580 1,141,167 157,373 Non-GAAP adjusted net (loss) income (189,567,273) 48,207,186 6,648,076 (302,874,833) 141,031,361 19,449,115 Net (loss) income attributable to Cango Inc.'s shareholders (189,567,273) 48,207,186 6,648,076 (302,874,833) 141,031,361 19,449,115 Non-GAAP adjusted net (loss) income per ADS-basic (1.38) 0.36 0.05 (2.19) 1.05 0.15 Non-GAAP adjusted net (loss) income per ADS-diluted (1.38) 0.35 0.05 (2.19) 1.01 0.14 Weighted average ADS outstanding—basic 137,612,565 133,052,781 133,052,781 138,416,992 133,906,218 133,906,218 Weighted average ADS outstanding—diluted 137,612,565 138,366,712 138,366,712 138,416,992 139,610,743 139,610,743
GUIYANG, China, Aug. 23, 2023 /PRNewswire/ -- Full Truck Alliance Co. Ltd. ("FTA" or the "Company") (NYSE: YMM), a leading digital freight platform, today announced its unaudited financial results for the second quarter ended June 30, 2023. Second Quarter 2023 Financial and Operational Highlights Total net revenues in the second quarter of 2023 were RMB2,062.0 million (US$284.4 million), an increase of 23.5% from RMB1,670.1 million in the same period of 2022. Net income in the second quarter of 2023 was RMB609.0 million (US$84.0 million), compared with RMB12.7 million in the same period of 2022. Non-GAAP adjusted net income[1] in the second quarter of 2023 was RMB722.7 million (US$99.7 million), an increase of 170.8% from RMB266.9 million in the same period of 2022. Fulfilled orders[2] in the second quarter of 2023 reached 40.2 million, an increase of 44.5% from 27.8 million in the same period of 2022. Average shipper MAUs[3] in the second quarter of 2023 reached 2.00 million, an increase of 30.5% from 1.53 million in the same period of 2022. "Reinforced by our leading market position, our growth was robust in the second quarter of 2023, propelling further gains in market share amid a slow macroeconomic recovery," said Mr. Peter Hui Zhang, Founder, Chairman and Chief Executive Officer of FTA. "Our business continued to scale as we made considerable headway on user acquisition, with average shipper MAUs reaching a new milestone of two million, which demonstrates our visionary strategy and outstanding execution. Our commitment to creating value for shippers and truckers serves as the foundation of our business, positioning us to continue capturing opportunities in the vast digital freight market to deliver sustainable revenue growth." Mr. Simon Cai, Chief Financial Officer of FTA, commented, "We are pleased with the solid growth momentum we achieved in the second quarter, with strong year-over-year growth of 23.5% and 170.8% for revenue and non-GAAP adjusted net income, respectively, outstripping market expectations again. 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. Moving forward, we will remain disciplined in our efforts to sustain our growth and enhance our profitability while driving further value for our different stakeholders." [1] Non-GAAP adjusted net income is defined as net income/(loss) excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) tax effects of non-GAAP adjustments. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release. [2] Fulfilled orders on our platform in a given period are defined as all shipping orders matched through our platform during such period but exclude (i) shipping orders that are subsequently canceled and (ii) shipping orders for which our users failed to specify any freight prices as there are substantial uncertainties as to whether the shipping orders are fulfilled. [3] Average shipper MAUs in a given period are calculated by dividing (i) the sum of shipper MAUs for each month of a given period by (ii) the number of months in a given period. Shipper MAUs are defined as the number of active shippers on our platform in a given month. Active shippers are defined as the aggregate number of registered shipper accounts that have posted at least one shipping order on our platform during a given period. Second Quarter 2023 Financial Results Net Revenues (including value added taxes, or "VAT", of RMB896.6 million and RMB953.0 million for the three months ended June 30, 2022, and 2023, respectively). Total net revenues in the second quarter of 2023 were RMB2,062.0 million (US$284.4 million), representing an increase of 23.5% from RMB1,670.1 million in the same period of 2022, primarily attributable to an increase in revenues from freight matching services. Freight matching services. Revenues from freight matching services in the second quarter of 2023 were RMB1,731.2 million (US$238.7 million), representing an increase of 22.8% from RMB1,409.6 million in the same period of 2022. The increase was primarily due to an increase in revenues from freight brokerage service as well as continued growth in transaction commissions. Freight brokerage service. Revenues from freight brokerage service in the second quarter of 2023 were RMB948.9 million (US$130.9 million), an increase of 11.6% from RMB850.2 million in the same period of 2022, primarily attributable to continued growth in transaction volume as a result of expanded user coverage. Freight listing service. Revenues from freight listing service in the second quarter of 2023 were RMB227.1 million (US$31.3 million), an increase of 7.3% from RMB211.7 million in the same period of 2022, primarily due to an increase in total paying members. Transaction commission. Revenues from transaction commissions amounted to RMB555.2 million (US$76.6 million) in the second quarter of 2023, an increase of 59.6% from RMB347.8 million in the same period of 2022, primarily driven by an increase in order volume as well as an improvement in commission order coverage. Value-added services. Revenues from value-added services in the second quarter of 2023 were RMB330.8 million (US$45.6 million), an increase of 27.0% from RMB260.4 million in the same period of 2022, mainly attributable to an increase in revenues from credit solutions and other value-added services. Cost of Revenues (including VAT net of refund of VAT of RMB672.8 million and RMB774.9 million for the three months ended June 30, 2022, and 2023, respectively). Cost of revenues in the second quarter of 2023 was RMB975.3 million (US$134.5 million), compared with RMB925.9 million in the same period of 2022. The increase was primarily due to an increase in VAT, related tax surcharges and other tax costs, and net of tax refunds from government authorities. These tax-related costs net of refunds totaled RMB879.3 million, representing an increase of 4.0% from RMB845.4 million in the same period of 2022, primarily due to the continued increase in transaction activities involving our freight brokerage service. Sales and Marketing Expenses. Sales and marketing expenses in the second quarter of 2023 were RMB281.8 million (US$38.9 million), compared with RMB196.2 million in the same period of 2022. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions. General and Administrative Expenses. General and administrative expenses in the second quarter of 2023 were RMB201.7 million (US$27.8 million), compared with RMB344.8 million in the same period of 2022. The decrease was primarily due to lower share-based compensation expenses. Research and Development Expenses. Research and development expenses in the second quarter of 2023 were RMB223.7 million (US$30.8 million), compared with RMB216.4 million in the same period of 2022. The increase was primarily due to higher salary and benefits expenses. Income/(Loss) from Operations. Income from operations in the second quarter of 2023 was RMB333.8 million (US$46.0 million), compared with a loss of RMB46.4 million in the same period of 2022. Non-GAAP Adjusted Operating Income.[4] Non-GAAP adjusted operating income in the second quarter of 2023 was RMB450.7 million (US$62.2 million), an increase of 113.4% from RMB211.3 million in the same period of 2022. Net Income. Net income in the second quarter of 2023 was RMB609.0 million (US$84.0 million), compared with RMB12.7 million in the same period of 2022. Non-GAAP Adjusted Net Income. Non-GAAP adjusted net income in the second quarter of 2023 was RMB722.7 million (US$99.7 million), an increase of 170.8% from RMB266.9 million in the same period of 2022. Basic and Diluted Net Income per ADS[5] and Non-GAAP Adjusted Basic and Diluted Net Income per ADS.[6] Basic and diluted net income per ADS were RMB0.57 (US$0.08) in the second quarter of 2023, compared with basic and diluted net income per ADS of RMB0.01 in the same period of 2022. Non-GAAP adjusted basic and diluted net income per ADS were RMB0.68 (US$0.09) in the second quarter of 2023, compared with non-GAAP adjusted basic and diluted net income per ADS of RMB0.25 in the same period of 2022. Balance Sheet and Cash Flow As of June 30, 2023, the Company had cash and cash equivalents, restricted cash, short-term investments and long-term investments of RMB27.4 billion (US$3.8 billion) in total, compared with RMB26.3 billion as of December 31, 2022. As of June 30, 2023, the total outstanding balance of the on-balance sheet loans, consisting of the total principal amounts and all accrued and unpaid interests (net of provisions) of the loans funded through our small loan company, was RMB3,141.4 million (US$433.2 million), compared with RMB2,648.4 million as of December 31, 2022. The total non-performing loan ratio[7] for these loans was 1.7% as of June 30, 2023, compared with 2.0% as of December 31, 2022. In the second quarter of 2023, net cash provided by operating activities was RMB707.7 million (US$97.6 million). [4] Non-GAAP adjusted operating income is defined as income/(loss) from operations excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions and (iii) compensation cost incurred in relation to continuing service terms in business acquisitions. See "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release. [5] ADS refers to the American depositary shares, each of which represents 20 Class A ordinary shares. [6] Non-GAAP adjusted basic and diluted net income per ADS is net income/(loss) attributable to ordinary shareholders excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) tax effects of non-GAAP adjustments, divided by weighted average number of basic and diluted ADSs, respectively. For more information, refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release. [7] Non-performing loan ratio is calculated by dividing the outstanding principal and all accrued and unpaid interests of the on-balance sheet loans that were over 90 calendar days past due (excluding loans that are over 180 days past due and are therefore charged off) by the total outstanding principal and all accrued and unpaid interests of the on-balance sheet loans (excluding loans that are over 180 days past due and are therefore charged off) as of a specified date. Business Outlook The Company expects its total net revenues to be between RMB2.16 billion and RMB2.20 billion for the third quarter of 2023, representing a year-over-year growth rate of approximately 19.2% to 21.6%. These forecasts reflect the Company's current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof. Share Repurchase Update On March 3, 2023, the Company's Board of Directors authorized a share repurchase program, under which the Company may repurchase up to US$500 million of the Company's ADSs during a period of up to 12 months starting from March 13, 2023. As of August 22, 2023, the Company had repurchased an aggregate of approximately 19.4 million ADSs for approximately US$124.3 million from the open market under the share repurchase program. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at a rate of RMB7.2513 to US$1.00, the exchange rate in effect as of June 30, 2023, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all. Conference Call The Company's management will hold an earnings conference call at 8:00 A.M. U.S. Eastern Time on August 23, 2023, or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the second quarter of 2023. Dial-in details for the earnings conference call are as follows: United States (toll free): +1-888-317-6003 International: +1-412-317-6061 Mainland China (toll free): 400-120-6115 Hong Kong, SAR (toll free): 800-963-976 Hong Kong, SAR: +852-5808-1995 United Kingdom (toll free): 08082389063 Singapore (toll free): 800-120-5863 Access Code: 2653624 The replay will be accessible through August 30, 2023, by dialing the following numbers: United States: +1-877-344-7529 International: +1-412-317-0088 Replay Access Code: 4560638 A live and archived webcast of the conference call will also be available on the Company's investor relations website at ir.fulltruckalliance.com. About Full Truck Alliance Co. Ltd. Full Truck Alliance Co. Ltd. (NYSE: YMM) is a leading digital freight platform connecting shippers with truckers to facilitate shipments across distance ranges, cargo weights and types. The Company provides a range of freight matching services, including freight listing, freight brokerage and online transaction services. The Company also provides a range of value-added services that cater to the various needs of shippers and truckers, such as financial institutions, highway authorities, and gas station operators. With a mission to make logistics smarter, the Company is shaping the future of logistics with technology and aspires to revolutionize logistics, improve efficiency across the value chain and reduce its carbon footprint for our planet. For more information, please visit ir.fulltruckalliance.com. Use of Non-GAAP Financial Measures The Company uses non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to ordinary shareholders, non-GAAP adjusted basic and diluted net income per share and non-GAAP adjusted basic and diluted net income per ADS, each a non-GAAP financial measure, as supplemental measures to review and assess its operating performance. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP adjusted operating income as income/(loss) from operations excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions and (iii) compensation cost incurred in relation to continuing service terms in business acquisitions. The Company defines non-GAAP adjusted net income as net income/(loss) excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) tax effects of non-GAAP adjustments. The Company defines non-GAAP adjusted net income attributable to ordinary shareholders as net income/(loss) attributable to ordinary shareholders excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) tax effects of non-GAAP adjustments. The Company defines non-GAAP adjusted basic and diluted net income per share as non-GAAP adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted ordinary shares, respectively. The Company defines non-GAAP adjusted basic and diluted net income per ADS as non-GAAP adjusted net income attributable to ordinary shareholders divided by the weighted average number of basic and diluted ADSs, respectively. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as an analytical tool. The non-GAAP financial measures do not reflect all items of expense that affect its operations. Share-based compensation expense, amortization of intangible assets resulting from business acquisitions, compensation cost incurred in relation to continuing service terms in business acquisitions and tax effects of non-GAAP adjustments have been and may continue to be incurred in its business and are not reflected in the presentation of its non-GAAP financial measures. The Company reconciles the non-GAAP financial measures to the nearest U.S. GAAP performance measures. Non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to ordinary shareholders and non-GAAP adjusted basic and diluted net income per share should not be considered in isolation or construed as an alternative to operating income/(loss), net income/(loss), net income/(loss) attributable to ordinary shareholders and basic and diluted net income/(loss) per share or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review FTA's non-GAAP financial measures to the most directly comparable GAAP measures. FTA's non-GAAP financial measure may not be comparable to similarly titled measures presented by other companies. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this release. Safe Harbor Statement This press release contains statements that may constitute "forward-looking" statements which are made pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: FTA's goal and strategies; FTA's expansion plans; FTA's future business development, financial condition and results of operations; expected changes in FTA's revenues, costs or expenses; industry landscape of, and trends in, China's road transportation market; competition in FTA's industry; FTA's expectations regarding demand for, and market acceptance of, its services; FTA's expectations regarding its relationships with shippers, truckers and other ecosystem participants; FTA's ability to protect its systems and infrastructures from cyber-attacks; PRC laws, regulations, and policies relating to the road transportation market, as well as general regulatory environment in which FTA operates in China; the results of regulatory review and the duration and impact of any regulatory action taken against FTA; the impact of COVID-19 outbreaks, extreme weather conditions and production constraints brought by electricity rationing measures; general economic and business condition; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: In China: Full Truck Alliance Co. Ltd.Mao MaoE-mail: IR@amh-group.com Piacente Financial CommunicationsHui FanTel: +86-10-6508-0677E-mail: FTA@thepiacentegroup.com In the United States: Piacente Financial CommunicationsBrandi PiacenteTel: +1-212-481-2050E-mail: FTA@thepiacentegroup.com FULL TRUCK ALLIANCE CO. LTD. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share, ADS, per share and per ADS data) As of December 31, June 30, June 30, 2022 2023 2023 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 5,137,312 7,071,047 975,142 Restricted cash – current 83,759 84,327 11,629 Short-term investments 21,087,089 17,859,805 2,462,980 Accounts receivable, net 13,015 17,810 2,456 Loans receivable, net 2,648,449 3,141,406 433,220 Prepayments and other current assets 2,034,427 2,079,179 286,732 Total current assets 31,004,051 30,253,574 4,172,159 Restricted cash – non-current — 10,000 1,379 Long-term investments — 2,384,485 328,836 Property and equipment, net 108,824 156,628 21,600 Investments in equity investees 1,774,270 1,817,533 250,649 Intangible assets, net 502,421 475,235 65,538 Goodwill 3,124,828 3,124,828 430,933 Deferred tax assets 41,490 42,403 5,848 Operating lease right-of-use assets and land use rights 132,000 112,505 15,515 Other non-current assets 8,427 5,771 796 Total non-current assets 5,692,260 8,129,388 1,121,094 TOTAL ASSETS 36,696,311 38,382,962 5,293,253 LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable 27,953 34,593 4,771 Amount due to related parties 122,152 126,733 17,477 Prepaid for freight listing fees and other service fees 462,080 530,535 73,164 Income tax payable 52,233 74,895 10,328 Other tax payable 721,597 717,823 98,992 Operating lease liabilities – current 44,590 40,865 5,636 Accrued expenses and other current liabilities 1,301,160 1,384,926 190,992 Total current liabilities 2,731,765 2,910,370 401,360 Deferred tax liabilities 121,611 115,101 15,873 Operating lease liabilities – non-current 35,931 20,602 2,841 Total non-current liabilities 157,542 135,703 18,714 TOTAL LIABILITIES 2,889,307 3,046,073 420,074 MEZZANINE EQUITY Redeemable non-controlling interests 149,771 267,923 36,948 SHAREHOLDERS' EQUITY Ordinary shares 1,377 1,363 188 Treasury stock — (189,871) (26,184) Additional paid-in capital 47,758,178 47,502,397 6,550,880 Accumulated other comprehensive income 2,511,170 3,348,109 461,725 Accumulated deficit (16,613,492) (15,599,046) (2,151,207) TOTAL FULL TRUCK ALLIANCE CO. LTD. EQUITY 33,657,233 35,062,952 4,835,402 Non-controlling interests — 6,014 829 TOTAL SHAREHOLDERS' EQUITY 33,657,233 35,068,966 4,836,231 TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY 36,696,311 38,382,962 5,293,253 FULL TRUCK ALLIANCE CO. LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (All amounts in thousands, except share, ADS, per share and per ADS data) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, June 30, June 30, 2022 2023 2023 2023 2022 2023 2023 RMB RMB RMB US$ RMB RMB US$ Net Revenues (including value added taxes, "VAT", of RMB896.6 million and RMB953.0 million for the three months ended June 30, 2022 and 2023, respectively) 1,670,051 1,702,257 2,062,028 284,367 3,002,611 3,764,285 519,118 Operating expenses: Cost of revenues (including VAT net of refund of VAT of RMB672.8 million and RMB774.9 million for the three months ended June 30, 2022 and 2023, respectively)(1) (925,937) (849,373) (975,269) (134,496) (1,609,819) (1,824,642) (251,630) Sales and marketing expenses(1) (196,186) (245,677) (281,772) (38,858) (388,229) (527,449) (72,739) General and administrative expenses(1) (344,781) (179,507) (201,711) (27,817) (803,196) (381,218) (52,572) Research and development expenses(1) (216,373) (229,879) (223,696) (30,849) (437,329) (453,575) (62,551) Provision for loans receivable (40,080) (52,878) (51,146) (7,053) (90,060) (104,024) (14,346) Total operating expenses (1,723,357) (1,557,314) (1,733,594) (239,073) (3,328,633) (3,290,908) (453,838) Other operating income 6,891 20,821 5,355 738 27,606 26,176 3,610 (Loss) income from operations (46,415) 165,764 333,789 46,032 (298,416) 499,553 68,890 Other income (expense) Interest income 106,834 246,114 285,461 39,367 163,154 531,575 73,308 Interest expenses (68) — — — (161) — — Foreign exchange gain (loss) 10,195 (97) 272 38 11,321 175 24 Investment (loss) income (13,968) 2,713 4,471 617 516 7,184 991 Unrealized (loss) gain from fair value changes of trading securities and derivative assets (39,818) 9,961 8,268 1,140 (56,159) 18,229 2,514 Other (expenses) income, net (799) 6,663 4,259 587 8,083 10,922 1,506 Share of loss in equity method investees (608) (310) (696) (96) (821) (1,006) (139) Total other income 61,768 265,044 302,035 41,653 125,933 567,079 78,204 Net income (loss) before income tax 15,353 430,808 635,824 87,685 (172,483) 1,066,632 147,094 Income tax expense (2,613) (19,380) (26,832) (3,700) (6,785) (46,212) (6,373) Net income (loss) 12,740 411,428 608,992 83,985 (179,268) 1,020,420 140,721 Less: net income attributable to non-controlling interests 553 — 14 2 539 14 2 Less: measurement adjustment attributable to redeemable non- controlling interest 776 2,519 3,441 475 776 5,960 822 Net income (loss) attributable to ordinary shareholders 11,411 408,909 605,537 83,508 (180,583) 1,014,446 139,897 FULL TRUCK ALLIANCE CO. LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (CONTINUED) (All amounts in thousands, except share, ADS, per share and per ADS data) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, June 30, June 30, 2022 2023 2023 2023 2022 2023 2023 RMB RMB RMB US$ RMB RMB US$ Net income (loss) per ordinary share —Basic 0.00 0.02 0.03 0.00 (0.01) 0.05 0.01 —Diluted 0.00 0.02 0.03 0.00 (0.01) 0.05 0.01 Net income (loss) per ADS* —Basic 0.01 0.38 0.57 0.08 (0.17) 0.96 0.13 —Diluted 0.01 0.38 0.57 0.08 (0.17) 0.95 0.13 Weighted average number of ordinary shares used in computing net income (loss) per share —Basic 21,651,628,375 21,293,430,120 21,177,034,098 21,177,034,098 21,802,802,087 21,234,910,577 21,234,910,577 —Diluted(2) 21,695,922,654 21,352,354,948 21,218,841,485 21,218,841,485 21,802,802,087 21,285,276,797 21,285,276,797 Weighted average number of ADS used in computing net income (loss) per ADS —Basic 1,082,581,419 1,064,671,506 1,058,851,705 1,058,851,705 1,090,140,104 1,061,745,529 1,061,745,529 —Diluted(2) 1,084,796,133 1,067,617,747 1,060,942,074 1,060,942,074 1,090,140,104 1,064,263,840 1,064,263,840 * Each ADS represents 20 ordinary shares. (1) Share-based compensation expense in operating expenses are as follows: Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, June 30, June 30, 2022 2023 2023 2023 2022 2023 2023 RMB RMB RMB US$ RMB RMB US$ Cost of revenues 1,487 1,806 1,381 190 2,835 3,187 440 Sales and marketing expenses 10,350 11,197 13,075 1,803 19,510 24,272 3,347 General and administrative expenses 212,344 58,841 68,124 9,395 550,076 126,965 17,509 Research and development expenses 15,086 17,482 17,046 2,351 30,331 34,528 4,762 Total 239,267 89,326 99,626 13,739 602,752 188,952 26,058 (2) Weighted average number of ordinary shares/ADS used in computing diluted net income (loss) per share/ADS are adjusted by the potentially dilutive effects of ordinary shares/ADS issuable upon the exercise of outstanding share options. FULL TRUCK ALLIANCE CO. LTD. RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, except share, ADS, per share and per ADS data) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, June 30, June 30, 2022 2023 2023 2023 2022 2023 2023 RMB RMB RMB US$ RMB RMB US$ (Loss) income from operations (46,415) 165,764 333,789 46,032 (298,416) 499,553 68,890 Add: Share-based compensation expense 239,267 89,326 99,626 13,739 602,752 188,952 26,058 Amortization of intangible assets resulting from business acquisitions 14,121 13,021 13,021 1,796 28,242 26,042 3,591 Compensation cost incurred in relation to acquisitions 4,281 4,281 4,281 590 11,925 8,562 1,181 Non-GAAP adjusted operating income 211,254 272,392 450,717 62,157 344,503 723,109 99,720 Net income (loss) 12,740 411,428 608,992 83,985 (179,268) 1,020,420 140,721 Add: Share-based compensation expense 239,267 89,326 99,626 13,739 602,752 188,952 26,058 Amortization of intangible assets resulting from business acquisitions 14,121 13,021 13,021 1,796 28,242 26,042 3,591 Compensation cost incurred in relation to acquisitions 4,281 4,281 4,281 590 11,925 8,562 1,181 Tax effects of non-GAAP adjustments (3,530) (3,255) (3,255) (449) (7,060) (6,510) (898) Non-GAAP adjusted net income 266,879 514,801 722,665 99,661 456,591 1,237,466 170,653 FULL TRUCK ALLIANCE CO. LTD. RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (CONTINUED) (All amounts in thousands, except share, ADS, per share and per ADS data) Three months ended Six months ended June 30, March 31, June 30, June 30, June 30, June 30, June 30, 2022 2023 2023 2023 2022 2023 2023 RMB RMB RMB US$ RMB RMB US$ Net income (loss) attributable to ordinary shareholders 11,411 408,909 605,537 83,508 (180,583) 1,014,446 139,897 Add: Share-based compensation expense 239,267 89,326 99,626 13,739 602,752 188,952 26,058 Amortization of intangible assets resulting from business acquisitions 14,121 13,021 13,021 1,796 28,242 26,042 3,591 Compensation cost incurred in relation to acquisitions 4,281 4,281 4,281 590 11,925 8,562 1,181 Tax effects of non-GAAP adjustments (3,530) (3,255) (3,255) (449) (7,060) (6,510) (898) Non-GAAP adjusted net income attributable to ordinary shareholders 265,550 512,282 719,210 99,184 455,276 1,231,492 169,829 Non-GAAP adjusted net income per ordinary share —Basic 0.01 0.02 0.03 0.00 0.02 0.06 0.01 —Diluted 0.01 0.02 0.03 0.00 0.02 0.06 0.01 Non-GAAP adjusted net income per ADS —Basic 0.25 0.48 0.68 0.09 0.42 1.16 0.16 —Diluted 0.25 0.48 0.68 0.09 0.42 1.16 0.16
SHANGHAI, Aug. 23, 2023 /PRNewswire/ -- ATRenew Inc. ("ATRenew" or the "Company") (NYSE: RERE), a leading technology-driven pre-owned consumer electronics transactions and services platform in China, today announced its unaudited financial results for the second quarter ended June 30, 2023. Second Quarter 2023 Highlights Total net revenues grew by 38.1% to RMB2,963.7 million (US$408.7 million) from RMB2,145.7 million in the second quarter of 2022. Loss from operations narrowed down to RMB61.0 million (US$8.4 million) from RMB168.2 million in the second quarter of 2022. Adjusted income from operations (non-GAAP)[1] was RMB52.0 million (US$7.2 million), compared to an adjusted loss from operations (non-GAAP) of RMB42.3 million in the second quarter of 2022. Number of consumer products transacted[2] was 7.7 million, compared to 7.8 million in the second quarter of 2022. Mr. Kerry Xuefeng Chen, Founder, Chairman, and Chief Executive Officer of ATRenew, commented, "We are pleased to announce a post-COVID performance that exceeded our guidance. During the second quarter of 2023, total net revenues increased by 38.1% year over year to RMB2,963.7 million, further demonstrating the circular economy business model's capacity for resilient growth. We remain unwavering in our commitment to our strategic priorities centering the self-operated business and consumer electronics recycling and transaction services. At the same time, we retain our sharp focus on ensuring ample supply sources and a stable supply chain, while enhancing our competitive edges through improved customer experience and fulfillment capabilities of new categories. Furthermore, we will continue to strengthen our brand influence nationally and collaborate more closely with e-commerce platforms and electronics brands. These partnerships foster greater synergies among fast-moving consumer goods brands and provide users with a seamless circular consumption experience. By successfully executing these initiatives, we will generate higher levels of long-term value at a larger scale in the second-hand economy." Mr. Rex Chen, Chief Financial Officer of ATRenew, added, "During the quarter, we made another profitability breakthrough on the back of a strong recovery of revenue growth. Non-GAAP operating income reached a new high of RMB52.0 million and our non-GAAP operating profit margin was 1.8%, representing healthy upticks. Notably, our 1P business' gross profit margin, calculated as product revenue net of merchandise costs as a percentage of product revenues, increased by 1 percentage point on a year-over-year basis, as we realized more value creation through refurbishing and retailing our device inventories. Thanks to the improvements to our automation technologies and big data algorithm that contributed to inspection and logistics efficiencies, the cost efficiency related to our fulfillment expenses continued to improve. Going forward, we will continue to maximize efficiency by leveraging cutting-edge technologies, maintain healthy revenue growth and enhance our overall efficiency to maximize profits and create greater value." 1. See "Reconciliations of GAAP and Non-GAAP Results" for more information. 2. "Number of consumer products transacted" represents the number of consumer products distributed to merchants and consumers through transactions on the Company's PJT Marketplace, Paipai Marketplace and other channels the Company operates in a given period, prior to returns and cancellations, excluding the number of consumer products collected through AHS Recycle; a single consumer product may be counted more than once according to the number of times it is transacted on PJT Marketplace, Paipai Marketplace and other channels the Company operates through the distribution process to end consumer. Second Quarter 2023 Financial Results REVENUE Total net revenues increased by 38.1% to RMB2,963.7 million (US$408.7 million) from RMB2,145.7 million in the same period of 2022. Net product revenues increased by 42.2% to RMB2,636.7 million (US$363.6 million) from RMB1,854.1 million in the same period of 2022. The increase was primarily attributable to an increase in the sales of pre-owned consumer electronics. Net service revenues increased by 12.1% to RMB327.0 million (US$45.1 million), compared to RMB291.6 million in the same period of 2022. This increase was primarily due to the recovery of Paipai and PJT marketplaces from the COVID-19 pandemic. OPERATING COSTS AND EXPENSES Operating costs and expenses were RMB3,032.5 million (US$418.2 million), compared to RMB2,327.4 million in the same period of 2022, representing an increase of 30.3%. Merchandise costs were RMB2,325.8 million (US$320.7 million), compared to RMB1,653.8 million in the same period of 2022, representing an increase of 40.6%. This was primarily due to the growth in product sales. Fulfillment expenses were RMB268.8 million (US$37.1 million), compared to RMB275.2 million in the same period of 2022, representing a decrease of 2.3%. The decrease was primarily due to the decreases in logistics expenses and operation center related expenses as the Company kept optimizing its store and operation station networks, but was partially offset by an increase in personnel costs as the Company's recycling activities developed compared with the same period of 2022. Selling and marketing expenses were RMB335.3 million (US$46.2 million), compared to RMB293.4 million in the same period of 2022, representing an increase of 14.3%. The increase was primarily due to (i) an increase in advertising expenses and promotional campaign related expenses, (ii) an increase in commission expenses in relation to channel service fees, and (iii) an increase in office and traveling related expenses. The increase was partially offset by a decrease in personnel cost and amortization of intangible assets and deferred cost resulting from assets and business acquisitions, after recognizing the impairment loss of intangible assets and deferred cost in the fourth quarter of 2022. General and administrative expenses were RMB57.5 million (US$7.9 million), compared to RMB45.2 million in the same period of 2022, representing an increase of 27.2%, primarily due to (i) an increase in expected credit loss relating to credit risk, (ii) an increase in professional service and consulting fees. The increase was partially offset by a decrease in personnel cost. Technology and content expenses decreased by 24.6% to RMB45.0 million (US$6.2 million) from RMB59.7 million in the same period of 2022. The decrease was primarily due to the changes in technological personnel cost and technology expenses in relation to platforms as the Company's platforms matured. LOSS FROM OPERATIONS Loss from operations was RMB61.0 million (US$8.4 million), compared to a loss from operations of RMB168.2 million in the same period of 2022. Adjusted income from operations (non-GAAP)[1] was RMB52.0 million (US$7.2 million), compared to an adjusted loss from operations of RMB42.3 million in the same period of 2022. NET LOSS Net loss was RMB64.8 million (US$8.9 million), compared to a net loss of RMB125.3 million in the same period of 2022. Adjusted net income (non-GAAP)[1] was RMB36.4 million (US$5.0 million), compared to adjusted net loss of RMB13.2 million in the same period of 2022. BASIC AND DILUTED NET LOSS PER ORDINARY SHARE Basic and diluted net loss per ordinary share were RMB0.40 (US$0.05), compared to RMB0.78 in the same period of 2022. Adjusted basic and diluted net income per ordinary share (non-GAAP)[1] were RMB0.22 (US$0.03), compared to negative RMB0.08 in the same period of 2022. CASH AND CASH EQUIVALENTS, RESTRICTED CASH, SHORT-TERM INVESTMENTS AND FUNDS RECEIVABLE FROM THIRD PARTY PAYMENT SERVICE PROVIDERS Cash and cash equivalents, restricted cash, short-term investments and funds receivable from third party payment service providers were RMB2,543.1 million (US$350.7 million) as of June 30, 2023, as compared to RMB2,802.1 million as of December 31, 2022. Business Outlook For the third quarter of 2023, the Company currently expects its total revenues to be between RMB3,150.0 million and RMB3,250.0 million. This forecast only reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change. Recent Development On December 9, 2022, ATRenew announced an extension of the Company's existing share repurchase program under which the Company may repurchase up to US$100 million of its shares for another twelve-month period starting from December 28, 2022, with all other terms unchanged. During the second quarter of 2023, the Company repurchased 2,289,309 American depositary shares ("ADSs") in the open market at an average price of US$2.81 per ADS, with a total cash consideration of US$6.4 million. As of June 30, 2023, the Company had repurchased a total of 12,264,772 ADSs for approximately US$44.4 million under this share repurchase program. On June 20, 2023, ATRenew released its third annual environmental, social, and governance ("ESG") report, highlighting its key achievements in these three areas. On the environmental front, greenhouse gas emission intensity associated with the purchase of electricity (scope 2) has continued to decrease, following the downward trend from when the Company first disclosed this metric in its 2020 ESG report. In 2022, ATRenew oversaw the responsible recycling and green disposal of approximately 270,000 units of electronic devices, reducing e-wastes by 43.2 tons. The Company also reused 18 tons of packaging fillers for B2B businesses and 36,000 cardboard boxes for B2C businesses. In terms of social responsibility, the Company obtained ISO 9001 quality management system certification and donated a cumulative amount of RMB1 million to charity programs during the reporting period. Furthermore, it remained committed to recruiting and training talents, and provided themed training sessions to over 8,000 of PJT Marketplace's merchants. In the corporate governance sphere, ATRenew made significant strides in bolstering its risk and incident management capabilities. ATRenew has also taken steps to enhance the diversity of its board of directors, achieving a composition of 37.5% independent directors and 25% female directors as of June 2023. On June 30, 2023, AHS Recycle, ATRenew's C2B recycling brand, debuted as a trade-in service provider on Apple's official website and in its flagship stores in mainland China, opening up the back-end supply chain to Apple. By offering attractive recycling prices for more brand partners' trade-in programs, AHS Recycle helps them meet consumer demand for a seamless smartphone upgrade experience. Conference Call Information The Company's management will hold a conference call on Wednesday, August 23, 2023 at 08:00 A.M. Eastern Time (or 08:00 P.M. Beijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers: International: 1-412-317-6061 United States Toll Free: 1-888-317-6003 Mainland China Toll Free: 4001-206115 Hong Kong Toll Free: 800-963976 Access Code: 9633225 The replay will be accessible through August 30, 2023 by dialing the following numbers: International: 1-412-317-0088 United States Toll Free: 1-877-344-7529 Access Code: 4883084 A live and archived webcast of the conference call will also be available at the Company's investor relations website at ir.atrenew.com. About ATRenew Inc. Headquartered in Shanghai, ATRenew Inc. operates a leading technology-driven pre-owned consumer electronics transactions and services platform in China under the brand ATRenew. Since its inception in 2011, ATRenew has been on a mission to give a second life to all idle goods, addressing the environmental impact of pre-owned consumer electronics by facilitating recycling and trade-in services, and distributing the devices to prolong their lifecycle. ATRenew's open platform integrates C2B, B2B, and B2C capabilities to empower its online and offline services. Through its end-to-end coverage of the entire value chain and its proprietary inspection, grading, and pricing technologies, ATRenew sets the standard for China's pre-owned consumer electronics industry. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2513 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 30, 2023. Use of Non-GAAP Financial Measures The Company also uses certain non-GAAP financial measures in evaluating its business. For example, the Company uses adjusted income from operations, adjusted net (loss) income and adjusted net (loss) income per ordinary share as supplemental measures to review and assess its financial and operating performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation, or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. Adjusted income from operations is loss from operations excluding the impact of share-based compensation expenses and amortization of intangible assets and deferred cost resulting from assets and business acquisitions. Adjusted net (loss) income is net loss excluding the impact of share-based compensation expenses and amortization of intangible assets and deferred cost resulting from assets and business acquisitions and tax effects of amortization of intangible assets and deferred cost resulting from assets and business acquisitions. Adjusted net (loss) income per ordinary share is adjusted net (loss) income attributable to ordinary shareholders divided by weighted average number of shares used in calculating net loss per ordinary share. The Company presents non-GAAP financial measures because they are used by the Company's management to evaluate the Company's financial and operating performance and formulate business plans. The Company believes that adjusted income from operations and adjusted net (loss) income help identify underlying trends in the Company's business that could otherwise be distorted by the effect of certain expenses that are included in loss from operations and net loss. The Company also believes that the use of non-GAAP financial measures facilitates investors' assessment of the Company's operating performance. The Company believes that adjusted income from operations and adjusted net (loss) income provide useful information about the Company's operating results, enhance the overall understanding of the Company's past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company's management in its financial and operational decision making. The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using non-GAAP financial measures is that they do not reflect all items of income and expense that affect the Company's operations. The share-based compensation expenses, amortization of intangible assets and deferred cost resulting from assets and business acquisitions and tax effects of amortization of intangible assets and deferred cost resulting from assets and business acquisitions have been and may continue to be incurred in the Company's business and is not reflected in the presentation of non-GAAP financial measures. Further, the non-GAAP measures may differ from the non-GAAP measures used by other companies, including peer companies, potentially limiting the comparability of their financial results to the Company's. In light of the foregoing limitations, the non-GAAP financial measures for the period should not be considered in isolation from or as an alternative to loss from operations, net loss, and net loss attributable to ordinary shareholders per share, or other financial measures prepared in accordance with U.S. GAAP. The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S. GAAP performance measures, which should be considered when evaluating the Company's performance. For reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures, please see the section of the accompanying tables titled, "Reconciliations of GAAP and Non-GAAP Results." Safe Harbor Statement This press release contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to" and similar statements. Among other things, quotations in this announcement, contain forward-looking statements. ATRenew may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about ATRenew's beliefs, plans and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: ATRenew's strategies; ATRenew's future business development, financial condition and results of operations; ATRenew's ability to maintain its relationship with major strategic investors; its ability to facilitate pre-owned consumer electronics transactions and provide relevant services; its ability to maintain and enhance the recognition and reputation of its brand; general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in ATRenew's filings with the SEC. All information provided in this press release is as of the date of this press release, and ATRenew does not undertake any obligation to update any forward-looking statement, except as required under applicable law. Investor Relations Contact In China:ATRenew Inc.Investor RelationsEmail: ir@atrenew.com In the United States:ICR LLC.Email: atrenew@icrinc.comTel: +1-212-537-0461 ATRENEW INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share and otherwise noted) As of December 31, As of June 30, 2022 2023 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 1,703,626 1,492,949 205,887 Restricted cash — 210,000 28,960 Short-term investments 782,230 599,009 82,607 Amount due from related parties, net 115,501 168,008 23,169 Inventories 433,467 735,407 101,417 Funds receivable from third party payment service providers 316,277 241,178 33,260 Prepayments and other receivables, net 539,077 468,035 64,545 Total current assets 3,890,178 3,914,586 539,845 Non-current assets: Amount due from related parties, net, non-current 180,000 — — Long-term investments 219,583 485,372 66,936 Property and equipment, net 118,600 121,039 16,692 Intangible assets, net 544,650 404,420 55,772 Other non-current assets 95,744 82,496 11,377 Total non-current assets 1,158,577 1,093,327 150,777 TOTAL ASSETS 5,048,755 5,007,913 690,622 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings 123,983 278,983 38,474 Accounts payable 73,335 70,364 9,704 Contract liabilities 195,369 257,670 35,534 Accrued expenses and other current liabilities 449,489 320,933 44,259 Accrued payroll and welfare 132,468 119,171 16,434 Amount due to related parties 47,604 73,647 10,156 Total current liabilities 1,022,248 1,120,768 154,561 Non-current liabilities: Operating lease liabilities, non-current 33,523 17,857 2,463 Deferred tax liabilities 111,312 87,753 12,102 Total non-current liabilities 144,835 105,610 14,565 TOTAL LIABILITIES 1,167,083 1,226,378 169,126 TOTAL SHAREHOLDERS' EQUITY 3,881,672 3,781,535 521,496 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 5,048,755 5,007,913 690,622 ATRENEW INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Amounts in thousands, except share and per share and otherwise noted) Three months ended June 30, Six months ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Net revenues Net product revenues 1,854,133 2,636,676 363,614 3,763,065 5,211,854 718,748 Net service revenues 291,586 326,983 45,093 589,158 623,599 85,998 Operating (expenses) income (1)(2) Merchandise costs (1,653,834) (2,325,763) (320,737) (3,293,856) (4,577,884) (631,319) Fulfillment expenses (275,201) (268,823) (37,072) (571,421) (535,209) (73,809) Selling and marketing expenses (293,405) (335,303) (46,240) (601,199) (634,344) (87,480) General and administrative expenses (45,227) (57,528) (7,933) (90,185) (133,968) (18,475) Technology and content expenses (59,726) (45,042) (6,212) (123,265) (92,475) (12,753) Other operating income, net 13,447 7,836 1,081 24,688 9,872 1,361 Loss from operations (168,227) (60,964) (8,406) (303,015) (128,555) (17,729) Interest expense (2,516) (2,501) (345) (3,519) (3,312) (457) Interest income 2,053 5,623 775 3,777 13,575 1,872 Other income (loss), net 32,739 (1,721) (237) (5,884) (2,291) (316) Loss before income taxes and share of loss in equity method investments (135,951) (59,563) (8,213) (308,641) (120,583) (16,630) Income tax benefits 13,876 11,700 1,614 26,989 23,560 3,249 Share of loss in equity method investments (3,175) (16,978) (2,341) (4,950) (17,817) (2,457) Net loss (125,250) (64,841) (8,940) (286,602) (114,840) (15,838) Net loss per ordinary share: Basic (0.78) (0.40) (0.05) (1.78) (0.71) (0.10) Diluted (0.78) (0.40) (0.05) (1.78) (0.71) (0.10) Weighted average number of shares used in calculating net loss per ordinary share Basic 161,498,812 162,923,637 162,923,637 161,374,917 162,541,334 162,541,334 Diluted 161,498,812 162,923,637 162,923,637 161,374,917 162,541,334 162,541,334 Net loss (125,250) (64,841) (8,940) (286,602) (114,840) (15,838) Foreign currency translation adjustments (10,885) 32,103 4,427 (10,386) 21,573 2,975 Total comprehensive loss (136,135) (32,738) (4,513) (296,988) (93,267) (12,863) ATRENEW INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (CONTINUED) (Amounts in thousands, except share and per share and otherwise noted) Three months ended June 30, Six months ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ (1) Includes share-based compensation expenses as follows: Fulfillment expenses (7,518) (7,041) (971) (22,281) (12,548) (1,730) Selling and marketing expenses (4,147) (4,297) (593) (19,553) (8,101) (1,117) General and administrative expenses (16,401) (17,944) (2,475) (32,984) (36,943) (5,095) Technology and content expenses (5,170) (5,745) (792) (9,729) (10,431) (1,439) (2) Includes amortization of intangible assets and deferred cost resulting from assets and business acquisitions as follows: Selling and marketing expenses (91,126) (77,430) (10,678) (176,881) (155,925) (21,503) Technology and content expenses (1,580) (482) (66) (3,160) (964) (133) Reconciliations of GAAP and Non-GAAP Results (Amounts in thousands, except share and per share and otherwise noted) Three months ended June 30, Six months ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Loss from operations (168,227) (60,964) (8,406) (303,015) (128,555) (17,729) Add: Share-based compensation expenses 33,236 35,027 4,831 84,547 68,023 9,381 Amortization of intangible assets and deferred cost resulting from assets and business acquisitions 92,706 77,912 10,744 180,041 156,889 21,636 Adjusted (loss) income from operations (non-GAAP) (42,285) 51,975 7,169 (38,427) 96,357 13,288 Net loss (125,250) (64,841) (8,940) (286,602) (114,840) (15,838) Add: Share-based compensation expenses 33,236 35,027 4,831 84,547 68,023 9,381 Amortization of intangible assets and deferred cost resulting from assets and business acquisitions 92,706 77,912 10,744 180,041 156,889 21,636 Less: Tax effects of amortization of intangible assets and deferred cost resulting from assets and business acquisitions (13,876) (11,700) (1,614) (26,989) (23,560) (3,249) Adjusted net (loss) income (non-GAAP) (13,184) 36,398 5,021 (49,003) 86,512 11,930 Adjusted net (loss) income per ordinary share (non-GAAP): Basic (0.08) 0.22 0.03 (0.30) 0.53 0.07 Diluted (0.08) 0.22 0.03 (0.30) 0.51 0.07 Weighted average number of shares used in calculating net loss per ordinary share Basic 161,498,812 162,923,637 162,923,637 161,374,917 162,541,334 162,541,334 Diluted 161,498,812 168,037,389 168,037,389 161,374,917 168,910,942 168,910,942
BEIJING, Aug. 21, 2023 /PRNewswire/ -- Jianpu Technology Inc. ("Jianpu," or the "Company") (NYSE: JT), a leading independent open platform for the discovery and recommendation of financial products in China, today announced its unaudited financial results for the second quarter ended June 30, 2023. Second Quarter 2023 Operational and Financial Highlights: Total revenues from recommendation services for the second quarter of 2023 decreased by 8.9% to RMB186.5 million (US$25.7 million) from RMB204.7 million in the same period of 2022. The decrease was mainly attributable to the decrease in revenues from recommendation services for credit cards, partially offset by the increase in revenues from recommendation services for loans. Credit card volume decreased by 25.0% to approximately 0.9 million in the second quarter of 2023 from 1.2 million in the same period of 2022. The number of loan applications for recommendation services increased by 27.9% to approximately 5.5 million in the second quarter of 2023 compared with that in the same period of 2022. Revenues from big data and system-based risk management services increased by 23.2% to RMB28.1 million (US$3.9 million) in the second quarter of 2023 from RMB22.8 million in the same period of 2022. The increase was mainly attributable to the increase in average spending per customer. Revenues from marketing and other services[1] increased by 88.6% to RMB70.9 million (US$9.8 million) in the second quarter of 2023 from RMB37.6 million in the same period of 2022. The increase was mainly attributable to the growth of insurance brokerage services and other new businesses. Loss from operations was RMB10.6 million (US$1.5 million) in the second quarter of 2023, compared with RMB35.9 million in the same period of 2022. Operating loss margin was 3.7% in the second quarter of 2023, compared with 13.5% in the same period of 2022. The improvement of loss from operations was mainly attributable to the increase in revenues and the decrease in operating expenses resulting from efficiency improvement and cost optimization. Net loss was RMB0.9 million (US$0.1 million) in the second quarter of 2023, compared with RMB35.9 million in the same period of 2022. Net loss margin was 0.3% in the second quarter of 2023, compared with 13.5% in the same period of 2022. Non-GAAP adjusted net loss[2] was RMB7.3 million (US$1.0 million) in the second quarter of 2023, compared with RMB32.2 million in the same period of 2022. Non-GAAP adjusted net loss margin[2] was 2.6% in the second quarter of 2023, compared with 12.1% in the same period of 2022. First Half Year 2023 Operational and Financial Highlights: Total revenues from recommendation services for the first half year of 2023 increased by 7.6% to RMB375.2 million (US$51.7 million) from RMB348.8 million in the same period of 2022. The increase was mainly attributable to the increase in revenues from recommendation services for loans, partially offset by the decrease in revenues from recommendation services for credit cards. The number of loan applications for recommendation services increased by 18.3% to approximately 9.7 million in the first half year of 2023 compared with that in the same period of 2022. The credit card volume decreased by 4.8% to approximately 2.0 million in the first half year of 2023 compared with that in the same period of 2022. Revenues from big data and system-based risk management services increased by 17.9% to RMB50.7 million (US$7.0 million) in the first half year of 2023 from RMB43.0 million in the same period of 2022. The increase was mainly attributable to the increase in average spending per customer. Revenues from marketing and other services[1] increased by 84.4% to RMB149.0 million (US$20.5 million) in the first half year of 2023 from RMB80.8 million in the same period of 2022. The increase was mainly attributable to the growth of insurance brokerage services and other new businesses. Loss from operations was RMB34.2 million (US$4.7 million) in the first half year of 2023, compared with RMB90.5 million in the same period of 2022. Operating loss margin was 5.9% in the first half year of 2023, compared with 19.1% in the same period of 2022. The improvement of loss from operations was mainly attributable to the increase in revenues and the decrease in operating expenses resulting from efficiency improvement and cost optimization. Net loss was RMB21.7 million (US$3.0 million) in the first half year of 2023, compared with RMB89.0 million in the same period of 2022. Net loss margin was 3.8% in the first half year of 2023, compared with 18.8% in the same period of 2022. Non-GAAP adjusted net loss[2] was RMB26.7 million (US$3.7 million) in the first half year of 2023, compared with RMB82.9 million in the same period of 2022. Non-GAAP adjusted net loss margin[2] was 4.6% in the first half year of 2023, compared with 17.5% in the same period of 2022. Mr. David Ye, Co-founder, Chairman and Chief Executive Officer of Jianpu, commented, "Through our capital-light platform model and diversified strategy, we registered a solid year-over-year revenue growth of 7.7% while making substantial progress approaching breakeven with a net loss margin of 0.3% in the second quarter of 2023. Despite macro headwinds, our commitment to the digital transformation of financial service providers and ecosystem partners has yielded fruitful results with impressive revenue growth of our loan recommendation services and big data and system-based services." "Moreover, our relentless focus on enhancing operational efficiency and optimizing cost structures brought us a remarkable ROI[3] improvement. Through seamless integration of AI technologies into our operations, we achieved heightened productivity and substantial cost savings," concluded Mr. Ye. "Our solid results in the second quarter of 2023 highlight our continued strategic focus on achieving a diversified revenue structure, improving operational efficiency and executing cost optimization initiatives. In the second quarter of 2023, our revenue growth was mainly attributable to the increase in the loan recommendation, the big data and system-based risk management and marketing and other services[1], leading to a more balanced revenue structure. Driven by our improved productivity and continued cost optimization, we trimmed our Non-GAAP adjusted net loss[2] substantially by 77.3% year-over-year to RMB7.3 million (US$1.0 million) in the second quarter of 2023," said Oscar Chen, Chief Financial Officer of Jianpu. Second Quarter 2023 Financial Results Total revenues for the second quarter of 2023 increased by 7.7% to RMB285.5 million (US$39.4 million) from RMB265.1 million in the same period of 2022. The increase was mainly attributable to the increase in revenues from big data and system-based risk management services and revenues from marketing and other services[1], partially offset by the decrease in the total revenues from recommendation services. Total revenues from recommendation services decreased by 8.9% to RMB186.5 million (US$25.7 million) in the second quarter of 2023 from RMB204.7 million in the same period of 2022. Revenues from recommendation services for credit cards decreased by 25.7% to RMB102.7 million (US$14.2 million) in the second quarter of 2023 from RMB138.2 million in the same period of 2022. As certain credit card issuers lowered their marketing budget in the second quarter of 2023, credit card volume decreased by 25.0% to approximately 0.9 million in the second quarter of 2023 from 1.2 million in the same period of 2022. The average fee per credit card was RMB113.5 (US$15.7) and RMB113.4 in the second quarter of 2023 and 2022, respectively. Revenues from recommendation services for loans increased by 26.0% to RMB83.8 million (US$11.6 million) in the second quarter of 2023 from RMB66.5 million in the same period of 2022, primarily due to an increase in the number of loan applications on the Company's platform. The number of loan applications was approximately 5.5 million in the second quarter of 2023, representing a 27.9% increase from that in the same period of 2022. The average fee per loan application was RMB15.2 (US$2.1) and RMB15.4 in the second quarters of 2023 and 2022, respectively. Revenues from big data and system-based risk management services increased by 23.2% to RMB28.1 million (US$3.9 million) in the second quarter of 2023 from RMB22.8 million in the same period of 2022, primarily due to the increase in average spending per customer. Revenues from marketing and other services[1] increased by 88.6% to RMB70.9 million (US$9.8 million) in the second quarter of 2023 from RMB37.6 million in the same period of 2022, primarily due to the growth of the Company's insurance brokerage services and other new businesses. Cost of promotion and acquisition was RMB190.4 million (US$26.3 million) in the second quarter of 2023, compared with RMB191.8 million in the same period of 2022. The change was primarily due to the decrease in revenues from recommendation services for credit cards, partially offset by the growth of the revenues from marketing and other services. Cost of operation decreased by 2.0% to RMB20.0 million (US$2.8 million) in the second quarter of 2023 from RMB20.4 million in the same period of 2022. The decrease was primarily attributable to the decrease in software development and maintenance costs, partially offset by the increase in data acquisition costs related to the big data and system-based risk management services. Sales and marketing expenses decreased by 0.9% to RMB 32.9 million (US$4.5 million) in the second quarter of 2023 from RMB33.2 million in the same period of 2022. The decrease was primarily due to the decrease in rental expenses and payroll expenses, partially offset by an increase in client service-related expenses. Research and development expenses decreased by 16.7% to RMB24.4 million (US$3.4 million) in the second quarter of 2023 from RMB29.3 million in the same period of 2022, primarily due to the decrease in payroll expenses resulting from the Company's continued efforts in cost optimization. General and administrative expenses increased by 8.0% to RMB28.4 million (US$3.9 million) in the second quarter of 2023 from RMB26.3 million in the same period of 2022, primarily due to an increase in allowance for credit losses. Loss from operations was RMB10.6 million (US$1.5 million) in the second quarter of 2023, compared with RMB35.9 million in the same period of 2022. Operating loss margin was 3.7% in the second quarter of 2023, compared with 13.5% in the same period of 2022. The decrease in operating loss was mainly attributable to the increase in revenues and the decrease in operating expenses resulting from efficiency improvement and cost optimization. Others, net increased by 478.6% to RMB8.1 million (US$1.1 million) in the second quarter of 2023 from RMB1.4 million in the same period of 2022. The Company recognized an investment gain of RMB7.1 million resulting from the deconsolidation of one of its subsidiaries[4] in the second quarter of 2023; while the Company recognized an impairment loss of RMB7.8 million on equity investments and an investment gain of RMB6.1 million resulting from the deconsolidation of another subsidiary[4] in the same period of 2022. Net loss was RMB0.9 million (US$0.1 million) in the second quarter of 2023 compared with RMB35.9 million in the same period of 2022. Net loss margin was 0.3% in the second quarter of 2023, compared with 13.5% in the same period of 2022. Non-GAAP adjusted net loss[2], which excluded share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries, was RMB7.3 million (US$1.0 million) in the second quarter of 2023, compared with RMB32.2 million in the same period of 2022. Non-GAAP adjusted net loss margin[2] was 2.6% in the second quarter of 2023 compared with 12.1% in the same period of 2022. Non-GAAP adjusted EBITDA[5], which excluded share-based compensation expenses, investment impairment loss, investment gain of deconsolidation of subsidiaries, depreciation and amortization, interest income and expenses, and income tax benefits from net loss, for the second quarter of 2023 was a loss of RMB7.8 million (US$1.1 million), compared with a loss of RMB29.4 million in the same period of 2022. As of June 30, 2023, the Company had cash and cash equivalents and restricted cash and time deposits of RMB668.5 million (US$92.2 million), and working capital of approximately RMB357.6 million (US$49.3 million). Compared to those as of December 31, 2022, cash and cash equivalents and restricted cash and time deposits decreased by RMB15.7 million, which was primarily attributable to net cash used in the operating activities. First Half Year 2023 Financial Results Total revenues for the first half year of 2023 increased by 21.6% to RMB574.9 million (US$79.3 million) from RMB472.6 million in the same period of 2022. The increase was mainly attributable to the increase in revenues from marketing and other services[1]. Total revenues from recommendation services increased by 7.6% to RMB375.2 million (US$51.7 million) in the first half year of 2023 from RMB348.8 million in the same period of 2022. Revenues from recommendation services for credit cards slightly decreased by 2.6% to RMB229.7 million (US$31.7 million) in the first half year of 2023 from RMB235.8 million in the same period of 2022. As certain credit card issuers lowered their marketing budget in the second quarter of 2023, credit card volume in the first half year of 2023 decreased by 4.8% to approximately 2.0 million from 2.1 million in the same period of 2022. The average fee per credit card were RMB113.9 (US$15.7) and RMB111.3 in the first half years of 2023 and 2022, respectively. Revenues from recommendation services for loans increased by 28.6% to RMB145.5 million (US$20.1 million) in the first half year of 2023 from RMB113.1 million in the same period of 2022, primarily due to the increases in both the number of loan applications on our platform and the average fee per loan application. The number of loan applications was approximately 9.7 million in the first half year of 2023, representing an 18.3% increase from that in the same period of 2022. The average fee per loan application increased to RMB15.0 (US$2.1) in the first half year of 2023 from RMB13.6 in the same period of 2022. Revenues from big data and system-based risk management services increased by 17.9% to RMB50.7 million (US$7.0 million) in the first half year of 2023 from RMB43.0 million in the same period of 2022, primarily due to the increase in average spending per customer. Revenues from marketing and other services[1] increased by 84.4% to RMB149.0 million (US$20.5 million) in the first half year of 2023 from RMB80.8 million in the same period of 2022, primarily due to the growth of the Company's insurance brokerage services and other new businesses. Cost of promotion and acquisition increased by 17.6% to RMB401.5 million (US$55.4 million) in the first half year of 2023 from RMB341.3 million in the same period of 2022, primarily due to the growth of the Company's revenues from marketing and other services. Cost of operation was RMB38.4 million (US$5.3 million) in the first half year of 2023, which was relatively stable compared with RMB38.9 million in the same period of 2022. Sales and marketing expenses decreased by 3.4% to RMB64.7 million (US$8.9 million) in the first half year of 2023 from RMB67.0 million in the same period of 2022. The decrease was primarily due to the decreases in payroll expenses, rental expenses and marketing and advertising expenses, partially offset by an increase in client service-related expenses. Research and development expenses decreased by 15.9% to RMB49.7 million (US$6.9 million) in the first half year of 2023 from RMB59.1 million in the same period of 2022, primarily due to the decreases in payroll expenses and rental expenses resulting from our continued efforts in cost optimization. General and administrative expenses decreased by 3.3% to RMB54.9 million (US$7.6 million) in the first half year of 2023 from RMB56.8 million in the same period of 2022, primarily due to the decreases in allowance for credit losses, payroll expenses and rental expenses, partially offset by an increase in professional fee. Loss from operations was RMB34.2 million (US$4.7 million) in the first half year of 2023, compared with RMB90.5 million in the same period of 2022. Operating loss margin was 5.9% in the first half year of 2023, compared with 19.1% in the same period of 2022. The decrease in operating loss was mainly attributable to the increase in revenues and the decrease in operating expenses resulting from efficiency improvement and cost optimization. Others, net increased by 145.2% to RMB10.3 million (US$1.4 million) in the first half year of 2023 from RMB4.2 million in the same period of 2022. The Company recognized an investment gain of RMB7.1 million resulting from the deconsolidation of one of its subsidiaries[4] in the first half year of 2023; while the Company recognized an impairment loss of RMB7.8 million on equity investments and an investment gain of RMB6.1 million resulting from the deconsolidation of another subsidiary[4] in the first half year of 2022. Net loss was RMB21.7 million (US$3.0 million) in the first half year of 2023 compared with RMB89.0 million in the same period of 2022. Net loss margin was 3.8% in the first half year of 2023 compared with 18.8% in the same period of 2022. Non-GAAP adjusted net loss[2], which excluded share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries, was RMB26.7 million (US$3.7 million) in the first half year of 2023, compared with RMB82.9 million in the same period of 2022. Non-GAAP adjusted net loss margin[2] was 4.6% in the first half year of 2023 compared with 17.5% in the same period of 2022. Non-GAAP adjusted EBITDA[5], which excluded share-based compensation expenses, investment impairment loss, investment gain of deconsolidation of subsidiaries, depreciation and amortization, interest income and expenses, and income tax benefits from net loss, for the first half year of 2023 was a loss of RMB26.7 million (US$3.7 million), compared with a loss of RMB77.5 million in the same period of 2022. Conference Call The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 21, 2023 (8:00 PM Beijing/Hong Kong Time on August 21, 2023). Dial-in details for the earnings conference call are as follows: United States (toll free): 1-888-346-8982 International: 1-412-902-4272 Hong Kong, China (toll free): 800-905-945 Hong Kong, China: 852-3018-4992 Mainland China: 400-120-1203 Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for "Jianpu Technology Inc." Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.jianpu.ai. A replay of the conference call will be accessible approximately one hour after the conclusion of the live call until August 28, 2023, by dialing the following telephone numbers: United States (toll free): 1-877-344-7529 International: 1-412-317-0088 Replay Access Code: 4076828 About Jianpu Technology Inc. Jianpu Technology Inc. is a leading independent open platform for the discovery and recommendation of financial products in China. The Company connects users with financial service providers in a convenient, efficient, and secure way. By leveraging its proprietary technology, Jianpu provides users with customized search results and recommendations tailored to each user's particular financial needs and profile. The Company also enables financial service providers with sales and marketing solutions to reach and serve their target customers more effectively through integrated channels and enhance their competitiveness by providing them with tailored data, risk management services and solutions. The Company is committed to maintaining an independent open platform, which allows it to serve the needs of users and financial service providers impartially. For more information, please visit http://ir.jianpu.ai. Use of Non-GAAP Financial Measures The Company uses adjusted EBITDA and adjusted net (loss)/income, each a Non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that adjusted EBITDA and adjusted net (loss)/income help identify underlying trends in its business that could otherwise be distorted by the effect of the expenses and gains that the Company include in (loss)/income from operations and net (loss)/income. The Company believes that adjusted EBITDA and adjusted net (loss)/income provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management in its financial and operational decision-making. Adjusted EBITDA and adjusted net (loss)/income should not be considered in isolation or construed as alternatives to net (loss)/income or any other measure of performance or as indicators of the Company's operating performance. Investors are encouraged to review the historical Non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted EBITDA and adjusted net (loss)/income presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company's data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. Adjusted EBITDA represents EBITDA before share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries. EBITDA represents net (loss)/income before interest, tax, depreciation and amortization. Adjusted net (loss)/income represents net (loss)/income before share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries. For more information on this Non-GAAP financial measure, please see the table captioned "Unaudited Reconciliations of GAAP and Non-GAAP results" set forth at the end of this press release. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goals and strategies; the Company's future business development, financial condition and results of operations; the Company's expectations regarding demand for, and market acceptance of, its solutions and services; the Company's expectations regarding keeping and strengthening its relationships with users, financial service providers and other parties it collaborates with; trends, competition and regulatory policies relating to the industries the Company operates in; general economic and business conditions globally and in China; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: In China: Jianpu Technology Inc. (IR) Liting Lu, E-mail: IR@rong360.com (PR) Amanda Hu, E-mail: Media@rong360.com Tel: +86 (10) 6242 7068 ChristensenSuri Cheng, E-mail: suri.cheng@christensencomms.com Tel: +86 185 0060 8364 Crystal Lai, E-mail: crystal.lai@christensencomms.com Tel: +852 2232 3907 In US: ChristensenLinda Bergkamp, E-mail: linda.bergkamp@christensencomms.com Tel: +1 480 353 6648 Jianpu Technology Inc. Unaudited Condensed Consolidated Balance Sheets (In thousands) As of December 31, As of June 30, 2022 2023 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 346,539 316,601 43,661 Restricted time deposits 297,634 308,796 42,585 Accounts receivable, net 189,665 206,378 28,461 Amount due from related parties 153 158 22 Prepayments and other current assets 46,537 42,574 5,871 Total current assets 880,528 874,507 120,600 Non-current assets: Property and equipment, net 12,578 13,126 1,810 Intangible assets, net 18,339 19,888 2,743 Restricted cash and time deposits 40,059 43,130 5,948 Other non-current assets 10,758 13,364 1,843 Total non-current assets 81,734 89,508 12,344 Total assets 962,262 964,015 132,944 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings 253,481 253,209 34,919 Accounts payable (including amounts billed through related party of RMB5,652 and RMB3,122 as of December 31, 2022 and June 30, 2023, respectively) 96,729 125,388 17,292 Advances from customers 46,920 45,489 6,273 Tax payable 9,662 10,372 1,430 Amount due to related parties 13,534 10,208 1,408 Accrued expenses and other current liabilities 88,871 72,202 9,957 Total current liabilities 509,197 516,868 71,279 Non-current liabilities: Deferred tax liabilities 3,644 3,496 482 Other non-current liabilities 13,096 12,542 1,731 Total non-current liabilities 16,740 16,038 2,213 Total liabilities 525,937 532,906 73,492 Shareholders' equity: Ordinary shares 286 286 39 Treasury stock, at cost (77,499) (74,671) (10,298) Additional paid-in capital 1,891,266 1,890,548 260,718 Accumulated losses (1,424,153) (1,445,349) (199,323) Statutory reserves 2,027 2,027 280 Accumulated other comprehensive income 37,941 57,985 7,997 Total Jianpu's shareholders' equity 429,868 430,826 59,413 Noncontrolling interests 6,457 283 39 Total shareholders' equity 436,325 431,109 59,452 Total liabilities and shareholders' equity 962,262 964,015 132,944 Jianpu Technology Inc. Unaudited Condensed Consolidated Statements of Comprehensive Loss (In thousands except for number of shares and per share data) For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Revenues: Recommendation services: Loans [a] 66,520 83,849 11,563 113,072 145,479 20,062 Credit cards 138,188 102,687 14,161 235,775 229,693 31,676 Total recommendation services 204,708 186,536 25,724 348,847 375,172 51,738 Big data and system-based risk management services [b] 22,788 28,093 3,874 43,017 50,740 6,997 Marketing and other services [b] [1] 37,568 70,904 9,778 80,758 149,009 20,549 Total revenues 265,064 285,533 39,376 472,622 574,921 79,284 Costs and expenses: Cost of promotion and acquisition [c] (191,767) (190,445) (26,264) (341,288) (401,498) (55,369) Cost of operation [d] (20,432) (19,962) (2,753) (38,908) (38,353) (5,289) Total cost of services (212,199) (210,407) (29,017) (380,196) (439,851) (60,658) Sales and marketing expenses (33,160) (32,936) (4,542) (67,022) (64,690) (8,921) Research and development expenses [e] (29,303) (24,368) (3,361) (59,068) (49,700) (6,854) General and administrative expenses (26,283) (28,442) (3,922) (56,831) (54,879) (7,568) Loss from operations (35,881) (10,620) (1,466) (90,495) (34,199) (4,717) Net interest expenses (1,583) 1,531 211 (2,904) 2,034 281 Others, net 1,398 8,067 1,112 4,171 10,295 1,420 Loss before income tax (36,066) (1,022) (143) (89,228) (21,870) (3,016) Income tax benefits 124 81 11 249 162 22 Net loss (35,942) (941) (132) (88,979) (21,708) (2,994) Less: net income/(loss) attributable to noncontrolling interests (1,087) 152 21 (2,406) (512) (71) Net loss attributable to Jianpu Technology Inc. (34,855) (1,093) (153) (86,573) (21,196) (2,923) Accretion of mezzanine equity (8,740) - - (8,740) - - Net loss attributable to Jianpu's shareholders (43,595) (1,093) (153) (95,313) (21,196) (2,923) Other comprehensive income Foreign currency translation adjustments 32,181 27,177 3,748 29,386 20,018 2,761 Total other comprehensive income 32,181 27,177 3,748 29,386 20,018 2,761 Total comprehensive income/(loss) (3,761) 26,236 3,616 (59,593) (1,690) (233) Less: total comprehensive income/(loss) attributable to noncontrolling interests (982) 154 21 (2,237) (538) (74) Total comprehensive income/(loss) attributable to Jianpu Technology Inc. (2,779) 26,082 3,595 (57,356) (1,152) (159) Accretion of mezzanine equity (8,740) - - (8,740) - - Total comprehensive income/(loss) attributable to Jianpu's shareholders (11,519) 26,082 3,595 (66,096) (1,152) (159) Net loss per share attributable to Jianpu's shareholders Basic (0.10) - - (0.22) (0.05) (0.01) Diluted (0.10) - - (0.22) (0.05) (0.01) Net loss per ADS attributable to Jianpu's shareholders Basic (2.06) (0.05) (0.01) (4.50) (1.00) (0.14) Diluted (2.06) (0.05) (0.01) (4.50) (1.00) (0.14) Weighted average number of shares Basic 423,707,654 424,587,819 424,587,819 423,692,650 424,521,907 424,521,907 Diluted 423,707,654 424,587,819 424,587,819 423,692,650 424,521,907 424,521,907 [a] Including revenues from related party of RMB117 and RMB383 for the three months ended June 30, 2022 and 2023, respectively, and RMB134 and RMB709 for the six months ended June 30, 2022 and 2023, respectively. [b] Including revenues from related party of RMB1,160 and RMB815 for the three months ended June 30, 2022 and 2023, respectively, and RMB2,332 and RMB1,628 for the six months ended June 30, 2022 and 2023, respectively. [c] Including cost of promotion and acquisition from related party of RMB140 and nil for the three months ended June 30, 2022 and 2023, respectively, and RMB140 and RMB8 for the six months ended June 30, 2022 and 2023, respectively. [d] Including cost of operation from related party of RMB97 and RMB295 for the three months ended June 30, 2022 and 2023, respectively, and RMB208 and RMB471 for the six months ended June 30, 2022 and 2023, respectively. [e] Including expenses from related party of RMB251 and RMB256 for the three months ended June 30, 2022 and 2023, respectively, and RMB367 and RMB256 for the six months ended June 30, 2022 and 2023, respectively. Jianpu Technology Inc. Unaudited Reconciliations of GAAP and Non-GAAP Results (In thousands) For the Three Months Ended June 30, For the Six Months Ended June 30, 2022 2023 2022 2023 RMB RMB US$ RMB RMB US$ Net loss (35,942) (941) (132) (88,979) (21,708) (2,994) Add: Share-based compensation expenses 2,118 709 98 4,439 2,086 288 Investment impairment loss 7,823 - - 7,823 - - Investment gain of deconsolidation of subsidiaries[4] (6,149) (7,057) (973) (6,149) (7,057) (973) Non-GAAP adjusted net loss[2] (32,150) (7,289) (1,007) (82,866) (26,679) (3,679) Add: Depreciation and amortization 1,289 1,134 156 2,724 2,216 306 Net interest expenses 1,583 (1,531) (211) 2,904 (2,034) (281) Income tax benefits (124) (81) (11) (249) (162) (22) Non-GAAP adjusted EBITDA[5] (29,402) (7,767) (1,073) (77,487) (26,659) (3,676) [1] Starting from the fourth quarter of 2022, the Company updated the description of its revenue stream "advertising, marketing and other services" to "marketing and other services", to provide more relevant and clear information. It also updated the revenue description in comparative periods to conform to the current classification. [2] Non-GAAP adjusted net loss represents net loss before share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries. There is no income tax impact of the Non-GAAP adjustment of share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries. See "Unaudited Reconciliations of GAAP and Non-GAAP Results" at the end of this press release for more details about Non-GAAP adjusted net loss. Non-GAAP adjusted net loss margin equals Non-GAAP adjusted net loss divided by total revenues. [3] ROI represents revenue of recommendation services, marketing services and other services divided by cost of promotion and acquisition. [4] In May 2023, the Group (Jianpu, its subsidiaries, and VIEs together are referred to as the "Group".) entered into a share transfer agreement with the founder and minority shareholder of Newsky Wisdom Treasure (Beijing) Co., Ltd. ("Newsky Wisdom"), which is one of the subsidiaries of the Group before the completion of the share transfer. During the second quarter of 2023, according to the share transfer agreement, the Group transferred 35.5% shares to the founder of Newsky Wisdom and consequently became a minority shareholder of Newsky Wisdom, and the Group no longer has control over Newsky Wisdom. The investment gain of RMB7.1 million was recognized in the second quarter of 2023 accordingly. In June 2022, Databook Tech Ltd ("Databook"), one of the Company's subsidiaries, made a cash distribution to its shareholders, through which the Company received a portion of the cash distribution. Databook also issued additional shares to one minority shareholder and changed the Company's board seat in Databook to one director. The Company consequently became a minority shareholder of Databook and no longer has control over Databook. The investment gain of RMB6.1 million was realized in the second quarter of 2022, and RMB17.0 million was realized in the fourth quarter of 2022. [5] Non-GAAP adjusted EBITDA represents EBITDA before share-based compensation expenses, investment impairment loss and investment gain of deconsolidation of subsidiaries. EBITDA represents net (loss)/income before interest income and expenses, income tax benefits from net loss and depreciation and amortization. See "Unaudited Reconciliations of GAAP and Non-GAAP Results" for more details.
AMSTERDAM, Aug. 21, 2023 /PRNewswire/ -- Zepp Health Corporation ("Zepp" or the "Company") (NYSE: ZEPP) today reported revenues of RMB0.65 billion (US$89.4 million); a basic and diluted net loss per share of RMB0.29 (US$0.04); and a basic and diluted net loss per ADS of RMB1.15 (US$0.16) for the second quarter ended June 30, 2023. Each ADS represents four Class A ordinary shares. "In the second quarter of 2023, we were delighted to witness our strategic transformation from a company heavily reliant on a single customer for revenue to becoming a self-reliant, global smart wearable and healthcare solution provider yielding early success, as our self-branded products contributed 68% of our top line and 85% of our total gross profit. The increased mix of our margin-accretive self-branded products, together with our optimized retail channels, drove our overall gross margin to 22.0%, reaching the highest level since the second quarter of 2021. Our Amazfit brand's gross margin percentage experienced a remarkable 51% increase year-over-year, which demonstrated the strength and resilience of the brand." said Mr. Wayne Wang Huang, Chairman and CEO of Zepp. "With unwavering commitment to enhancing user experiences, expanding our offerings and fostering a thriving user community, we anticipate sustained quarter-over-quarter revenue growth on self-branded products in the third quarter, fueled by the launch of new products." "During the second quarter, we leveraged on AI technology and our integrated supply chain to expand our product portfolio and enhance existing product lines with intelligent features. Notably, we introduced Amazfit Cheetah, our dedicated running smartwatch series, featuring AI Chat for personalized coach-to-athlete interactions and industry-leading GPS technology. Looking ahead, we remain committed to refining our AI-powered products and services, solidifying our global reputation for excellence and affordability in all markets. As post-pandemic opportunities arise, we are confident that our dedication to innovation and customer satisfaction will fuel our trajectory of success in the smart wearable and healthcare industry." Mr. Leon Deng, Zepp's Chief Financial Officer, added, "Our second quarter revenues came within our guidance range at RMB648.3 million, down by 41.5% year-over-year due to lower Mi Band sales. Nevertheless, our self-branded sales showed resilient recovery, achieving a 12.7% sequential growth during the second quarter, and a mild decline of 7.3% versus last year." "Moreover, we delivered on our quarterly expenses run rate target and successfully reduced our GAAP and non-GAAP operating expenses to RMB215 million and RMB204 million, respectively, thanks to our continued ROI-oriented expenses management strategies across supply chain, R&D, products and marketing. our operating loss for the second quarter shrank to RMB72.4 million as a result of higher self-branded products gross margin and tighter expenses control, compared with RMB110.6 million loss in the same quarter last year. Meanwhile, our inventory has decreased to RMB743 million, reaching the lowest level in three years. We have managed to maintain a positive operating cash flow, which we utilize to reduce the Company's debt level accordingly. Going forward, we will persist with our prudent stance towards expenses, while investing responsibly with great discipline in research and development and marketing activities to reinforce our long-term position. We are optimistic about returning to profitability in the near future." Second Quarter 2023 Financial Summary For the Three Months Ended For the Six Months Ended Number in millions, except for percentages and per- share/ADS amounts June 30, 2023 June 30, 2022[1] June 30, 2023 June 30, 2022[1] Revenue RMB 648.3 1,108.3 1,293.5 1,865.3 Revenue US$ 89.4 165.5 178.4 278.5 Gross margin 22.0 % 17.9 % 19.0 % 18.8 % Net (loss)/income attributable to Zepp Health Corporation RMB (69.9) (106.9) (206.7) (195.7) Adjusted net (loss)/income attributable to Zepp Health Corporation RMB[2] (59.2) (94.4) (172.0) (170.0) Diluted net (loss)/income per share RMB (0.29) (0.44) (0.85) (0.79) Diluted net (loss)/income per ADS US$ (0.16) (0.26) (0.47) (0.47) Adjusted diluted net (loss)/income per share RMB[3] (0.24) (0.38) (0.70) (0.69) Adjusted diluted net (loss)/income per ADS US$ (0.13) (0.23) (0.39) (0.41) Units shipped in millions 3.8 6.3 7.3 10.0 [1] The US$ numbers in 2022 are referenced with the prior 6-K disclosures, where translations from RMB to US$ are made at a rate of RMB6.6981 to US$1.00, the effective noon buying rate on June 30, 2022 as set forth in the H.10 statistical release of the Federal Reserve Board. [2] Adjusted net loss attributable to Zepp Health Corporation is a non-GAAP measure, which excludes share-based compensation expenses. The tax effect from the adjustment of the Share-based compensation expenses is nil. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release. [3] Adjusted diluted net loss is the abbreviation of adjusted net loss attributable to Zepp Health Corporation, which is a non-GAAP measure and excludes share-based compensation expenses attributable to Zepp Health Corporation, and is used as the numerator in computation of adjusted basic and diluted net loss per ADS attributable to Zepp Health Corporation. Second Quarter 2023 Financial Results Revenues Revenues for the second quarter of 2023 reached RMB0.65 billion (US$89.4 million), a decrease by 41.5% from the second quarter of 2022. The decrease in total revenues was mainly due to 67.2% and 7.3% year-over-year decreases in Xiaomi wearable products and our self-branded product sales, respectively. Total units shipped in the second quarter of 2023 decreased by 39.7% year-over-year to 3.8 million, compared with 6.3 million in the second quarter of 2022. Over 90% of the decrease in total units shipped was due to the decrease in Xiaomi wearable products. Gross Margin Gross margin in the second quarter of 2023 was 22.0%, 4.1% higher than the same period of 2022. Despite the inventory clearance efforts, we were able to improve the gross margin for self-branded products, which reached its peak since the third quarter of 2020, by making substantial improvement in the channel and product mix. Research and Development Research and development expenses in the second quarter of 2023 were RMB89.3 million, a decrease by 30.8% year-over-year. This comprised 13.8% of revenues, versus 11.6% for the same period in 2022. The decrease was mainly driven by our research projects optimizations. We focus on the products functionality strength on health and sports, and apply strict ROI approach in different projects and resource allocation among different product lines. This realignment contributed to expense savings while maintaining a high level of productivity. We are committed to make adequate investments in research and development while seeking opportunities to optimize productivity and pave the way for the Company's sustainable growth. Selling and Marketing Selling and marketing expenses in the second quarter of 2023 were RMB71.6 million, a decrease by 33.9% year-over-year. This reduction can be attributed to a series of expense efficiency improvement measures that we have implemented since last year. These measures include streamlining retail channels and optimizing personnel allocation in various sales regions. These allowed us to operate more efficiently while maintaining an active market presence. We will continue to invest strategically in our brand, adopting an ROI-based marketing strategy to ensure its ongoing growth and success. General and Administrative General and administrative expenses were RMB54.1 million in the second quarter of 2023, a decrease by 24.6% year-over-year. This comprised 8.3% of revenues, compared with 6.5% in the same period in 2022, and was largely attributable to our personnel optimization efforts and strict administrative expense control. Operating Expenses Total operating expenses for the second quarter of 2023 were RMB214.9 million, a decrease by 30.4% year-over-year, which accounted for 33.1% of revenues for the period, as compared with 27.9% in the second quarter of 2022. Adjusted operating expenses, which exclude share-based compensation, were RMB204.2 million. They hit a multi-year low record. The Company will continue to scrutinize its expense base and do whatever it takes to achieve the long-term profitability we have targeted on. Operating Income/(Loss) Operating loss for the second quarter of 2023 was RMB72.4 million, compared with operating loss of RMB110.6 million for the same period in 2022. The loss was mainly caused by smaller revenue scale. Although revenue showed recovery from quarter over quarter, it could not fully cover fixed operating expenses. The reduced loss was primarily attributed to the improved gross margin and decreased operating expenses. Adjusted operating loss, which excludes share-based compensation, was RMB61.7 million. Net Income/(Loss) Net loss attributable to Zepp Health Corporation for the second quarter of 2023 was RMB69.9 million, compared with RMB106.9 million of net loss in the second quarter of 2022. The adjusted net loss attributable to Zepp Health Corporation was RMB59.2 million, compared with RMB94.4 million for the same period of 2022. Liquidity and Capital Resources As of June 30, 2023, the Company had cash and cash equivalents and restricted cash of RMB1,064.0 million (US$146.7 million), compared with RMB1,001.5 million as of March 31, 2023 and RMB997.1 million as of June 30, 2022. The increased cash balance was largely from operating activities. In the meantime, we have managed to reduce our debt level, including short-term and long-term bank borrowing balance, by RMB34.3 million in the second quarter. The Company continued to manage its working capital and inventory efficiently and reduced inventory levels to RMB742.6 million as of June 30, 2023. Share Repurchase Program Update The Company announced in its third quarter 2021 earnings release that the board had authorized a share repurchase program of up to US$20 million through November 2022. On November 21, 2022, the board authorized a 12-month extension of the Company's share repurchase program. Pursuant to the extended share repurchase program, the Company may repurchase its shares in the form of American depositary shares and/or ordinary shares through November 2023 with an aggregate value equal to the remaining balance under the share repurchase program. As of June 30, 2023, the Company had used US$11.7 million to repurchase 4,143,127 ADSs. The Company expects to fund the repurchases under the extended share repurchase program out of its existing cash balance. Outlook For the third quarter of 2023, the Company's management currently expects net revenues to be between RMB600 million and RMB800 million, compared with RMB1.21 billion in the third quarter of 2022. This outlook is based on current market conditions and reflects the Company's current and preliminary estimates of market, operating conditions and customer demand, which are all subject to change. Conference Call The Company's management team will hold a conference call at 8:30 a.m. Eastern Time on Monday, August 21, 2023 (8:30 p.m. Beijing Time on August 21, 2023) to discuss financial results and answer questions from investors and analysts. Listeners may access the call by dialling: US (Toll Free): +1-888-346-8982 International: +1-412-902-4272 Mainland China (Toll Free): 400-120-1203 Hong Kong (Toll Free): 800-905-945 Hong Kong: +852-3018-4992 Participants should dial in at least 10 minutes before the scheduled start time and ask to be connected to the call for "Zepp Health Corporation". Additionally, a live and archived webcast of the conference call will be available at https://ir.zepp.com/investor. A telephone replay will be available one hour after the call until August 28, 2023 by dialing: US Toll Free: +1-877-344-7529 International: +1-412-317-0088 Replay Passcode: 6736760 About Zepp Health Corporation (NYSE: ZEPP) Zepp changed its name from Huami Corp. (HMI) on February 25, 2021 to emphasize its health focus with a name that resonates across languages and cultures globally. The Company's mission continues to be connecting health with technology. Since its inception in 2013, Zepp has developed a platform of proprietary technology including AI chips, biometric sensors, and data algorithms, which drive a broadening line of smart health devices for consumers, and data analytics services for population health. Zepp is one of the largest global developers of smart wearable health and consumer fitness devices, shipping 20 million units in 2022. Zepp Health Corporation is based in Hefei, China, with U.S. operations, Zepp Health USA, based in Cupertino, California. Use of Non-GAAP Measures We use adjusted net income/(loss), a non-GAAP financial measure, in evaluating our operating results and for financial and operational decision-making purposes. Adjusted operating expenses represent operating expenses excluding share-based compensation expenses. Adjusted operating income/(loss) represents operating income/(loss) excluding share-based compensation expenses. Adjusted net income/(loss) represents net income/(loss) excluding share-based compensation expenses, and such adjustment has no impact on income tax. Adjusted net income/(loss) attributable to Zepp Health Corporation is a non-GAAP measure, which excludes share-based compensation expenses attributable to Zepp Health Corporation, and is used as the numerator in computation of adjusted net income/(loss) per share and per ADS attributable to Zepp Health Corporation. We believe that adjusted net income/(loss) and adjusted net income/(loss) attributable to Zepp Health Corporation help identify underlying trends in our business that could otherwise be distorted by the effect of certain expenses that we include in net income/(loss) and net income/(loss) attributable to Zepp Health Corporation. We believe that adjusted net income/(loss) and adjusted net income/(loss) attributable to Zepp Health Corporation provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects and allows for greater visibility with respect to key metrics used by our management in its financial and operational decision-making. Adjusted net income/(loss) and adjusted net income/(loss) attributable to Zepp Health Corporation, should not be considered in isolation or construed as an alternative to net income/(loss), basic and diluted net income/(loss) per share and per ADS attributable to Zepp Health Corporation or any other measure of performance or as an indicator of our operating performance. Investors are encouraged to review the historical non-GAAP financial measures to the most directly comparable GAAP measures. Adjusted net income/(loss) and adjusted net income/(loss) attributable to ordinary shareholders, presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to our data. We encourage investors and others to review our financial information in its entirety and not rely on a single financial measure. Exchange Rate The Company's business is primarily conducted in China. This announcement contains currency conversions of RMB amounts into US$ solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to US$ are made at a rate of RMB7.2513 to US$1.00, the effective noon buying rate on June 30, 2023 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2023, or at any other rate. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the cooperation with Xiaomi, the recognition of the Company's self-branded products; the Company's growth strategies; trends and competition in global wearable technology market; changes in the Company's revenues and certain cost or expense accounting policies; governmental policies relating to the Company's industry and general economic conditions in China and the global. Further information regarding these and other risks is included in the Company's filings with the United States Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact: In China:Zepp Health CorporationGrace Yujia ZhangEmail: ir@zepp.com The Piacente Group, Inc.Yang SongTel: +86-10-6508-0677Email: zepp@tpg-ir.com Zepp Health Corporation UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) As of December 31, As of June 30, 2022 2023 RMB RMB US$ Assets Current assets: Cash and cash equivalents 886,632 1,008,921 139,137 Restricted cash 86,708 55,040 7,590 Term deposit - 5,000 690 Accounts receivable, net 682,103 458,358 63,210 Amounts due from related parties 138,614 185,554 25,589 Inventories, net 1,021,923 742,571 102,405 Short-term investments 34,316 30,882 4,259 Prepaid expenses and other current assets 108,252 125,831 17,353 Total current assets 2,958,548 2,612,157 360,233 Property, plant and equipment, net 100,605 78,727 10,857 Intangible asset, net 123,300 108,971 15,028 Goodwill 66,081 69,474 9,581 Long-term investments 1,686,628 1,694,778 233,721 Deferred tax assets 210,186 258,938 35,709 Amount due from a related party, non-current 6,333 6,746 930 Other non-current assets 50,389 61,466 8,477 Operating lease right-of-use assets 65,573 38,634 5,328 Total assets 5,267,643 4,929,891 679,864 Zepp Health Corporation UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) As of December 31, As of June 30, 2022 2023 RMB RMB US$ Liabilities Current liabilities: Accounts payable 456,585 439,891 60,664 Advance from customers 2,133 3,895 537 Amount due to related parties 40,978 32,933 4,542 Accrued expenses and other current liabilities 197,819 150,396 20,741 Income tax payables 2,715 14,926 2,058 Notes payable 456,438 495,457 68,327 Short-term bank borrowings 512,000 221,000 30,477 Total current liabilities 1,668,668 1,358,498 187,346 Deferred tax liabilities 35,552 33,863 4,670 Long-term borrowings 684,210 844,699 116,489 Other non-current liabilities 162,602 163,652 22,569 Non-current operating lease liabilities 31,690 11,597 1,599 Total liabilities 2,582,722 2,412,309 332,673 Zepp Health Corporation UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) As of December 31, As of June 30, 2022 2023 RMB RMB US$ Equity Ordinary shares 162 164 23 Additional paid-in capital 1,690,879 1,725,567 237,967 Treasury stock (67,163) (76,905) (10,606) Accumulated retained earnings 942,848 736,187 101,525 Accumulated other comprehensive income 105,796 120,549 16,624 Total Zepp Health Corporation shareholders' equity 2,672,522 2,505,562 345,533 Noncontrolling interests 12,399 12,020 1,658 Total equity 2,684,921 2,517,582 347,191 Total liabilities and equity 5,267,643 4,929,891 679,864 Zepp Health Corporation UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) For the Three Months Ended June 30, 2022 2023 RMB RMB US$ Revenues 1,108,288 648,343 89,411 Cost of revenues (909,945) (505,801) (69,753) Gross profit 198,343 142,542 19,658 Operating expenses: Selling and marketing (108,255) (71,550) (9,867) General and administrative (71,694) (54,072) (7,457) Research and development (128,991) (89,293) (12,314) Total operating expenses (308,940) (214,915) (29,638) Operating loss (110,597) (72,373) (9,980) Other income and expenses: Interest income 2,148 5,946 820 Interest expense (14,123) (12,317) (1,699) Other income/(expense), net 2,320 (783) (108) Gain/(Loss) from fair value change of long-term investment (11,398) 3,792 523 Loss before income tax and income from equity method investment (131,650) (75,735) (10,444) Income tax benefits 13,018 11,612 1,601 Loss before income from equity method investments (118,632) (64,123) (8,843) Net income/(loss) from equity method investments 11,450 (6,003) (828) Net loss (107,182) (70,126) (9,671) Less: Net loss attributable to noncontrolling interest (237) (185) (26) Net loss attributable to Zepp Health Corporation (106,945) (69,941) (9,645) Net loss per share attributable to Zepp Health Corporation Basic loss per ordinary share (0.44) (0.29) (0.04) Diluted loss per ordinary share (0.44) (0.29) (0.04) Net loss per ADS (4 ordinary shares equal to 1 ADS) ADS – basic (1.74) (1.15) (0.16) ADS – diluted (1.74) (1.15) (0.16) Weighted average number of shares used in computing net loss per share Ordinary share – basic 245,702,834 243,550,673 243,550,673 Ordinary share – diluted 245,702,834 243,550,673 243,550,673 Zepp Health Corporation Reconciliation of GAAP and Non-GAAP Results (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) For the Three Months Ended June 30, 2022 2023 RMB RMB US$ Total operating expenses (308,940) (214,915) (29,638) Share-based compensation expenses[2] 12,589 10,692 1,475 Total adjusted operating expenses (296,351) (204,223) (28,163) Operating loss (110,597) (72,373) (9,980) Share-based compensation expenses 12,589 10,692 1,475 Adjusted operating loss (98,008) (61,681) (8,505) Net loss attributable to Zepp Health Corporation (106,945) (69,941) (9,645) Share-based compensation expenses 12,589 10,692 1,475 Adjusted net loss attributable to Zepp Health Corporation[2] (94,356) (59,249) (8,170) Adjusted net loss per share attributable to Zepp Health Corporation Adjusted basic loss per ordinary share (0.38) (0.24) (0.03) Adjusted diluted loss per ordinary share (0.38) (0.24) (0.03) Adjusted net loss per ADS (4 ordinary shares equal to 1 ADS) ADS – basic (1.54) (0.97) (0.13) ADS – diluted (1.54) (0.97) (0.13) Weighted average number of shares used in computing adjusted net loss per share Ordinary share – basic 245,702,834 243,550,673 243,550,673 Ordinary share – diluted 245,702,834 243,550,673 243,550,673 Share-based compensation expenses included are follows: Selling and marketing 1,297 891 123 General and administrative 5,646 5,161 712 Research and development 5,646 4,640 640 Total 12,589 10,692 1,475 Zepp Health Corporation UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) For the Six Months Ended June 30, 2022 2023 RMB RMB US$ Revenues 1,865,338 1,293,526 178,385 Cost of revenues (1,514,755) (1,048,139) (144,545) Gross profit 350,583 245,387 33,840 Operating expenses: Selling and marketing (211,360) (157,528) (21,724) General and administrative (129,855) (103,973) (14,339) Research and development (275,399) (207,167) (28,570) Total operating expenses (616,614) (468,668) (64,633) Operating loss (266,031) (223,281) (30,793) Other income and expenses: Interest income 4,695 10,079 1,390 Interest expense (25,793) (25,635) (3,535) Other income/(expense), net 6,065 (2,768) (382) Gain from fair value change of long-term investment 40,300 6,919 954 Investment income - 234 32 Loss before income tax and income from equity method investment (240,764) (234,452) (32,334) Income tax benefits 29,765 36,346 5,012 Loss before income from equity method investments (210,999) (198,106) (27,322) Net income/(loss) from equity method investments 14,958 (8,934) (1,232) Net loss (196,041) (207,040) (28,554) Less: Net loss attributable to noncontrolling interest (371) (379) (52) Net loss attributable to Zepp Health Corporation (195,670) (206,661) (28,502) Net loss per share attributable to Zepp Health Corporation Basic loss per ordinary share (0.79) (0.85) (0.12) Diluted loss per ordinary share (0.79) (0.85) (0.12) Net loss per ADS (4 ordinary shares equal to 1 ADS) ADS – basic (3.16) (3.39) (0.47) ADS – diluted (3.16) (3.39) (0.47) Weighted average number of shares used in computing net loss per share Ordinary share – basic 247,598,751 243,947,113 243,947,113 Ordinary share – diluted 247,598,751 243,947,113 243,947,113 Zepp Health Corporation Reconciliation of GAAP and Non-GAAP Results (Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$") except for number of shares and per share data, or otherwise noted) For the Six Months Ended June 30, 2022 2023 RMB RMB US$ Total operating expenses (616,614) (468,668) (64,633) Share-based compensation expenses[2] 25,645 34,684 4,783 Total adjusted operating expenses (590,969) (433,984) (59,850) Operating loss (266,031) (223,281) (30,793) Share-based compensation expenses 25,645 34,684 4,783 Adjusted operating loss (240,386) (188,597) (26,010) Net loss attributable to Zepp Health Corporation (195,670) (206,661) (28,502) Share-based compensation expenses 25,645 34,684 4,783 Adjusted net loss attributable to Zepp Health Corporation[2] (170,025) (171,977) (23,719) Adjusted net loss per share attributable to Zepp Health Corporation Adjusted basic loss per ordinary share (0.69) (0.70) (0.10) Adjusted diluted loss per ordinary share (0.69) (0.70) (0.10) Adjusted net loss per ADS (4 ordinary shares equal to 1 ADS) ADS – basic (2.75) (2.82) (0.39) ADS – diluted (2.75) (2.82) (0.39) Weighted average number of shares used in computing adjusted net loss per share Ordinary share – basic 247,598,751 243,947,113 243,947,113 Ordinary share – diluted 247,598,751 243,947,113 243,947,113 Share-based compensation expenses included are follows: Selling and marketing 2,214 2,046 282 General and administrative 11,872 15,944 2,199 Research and development 11,559 16,694 2,302 Total 25,645 34,684 4,783
A12 藝術空間
Earnings projections or forecasts
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