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spk04: called a schedule to begin shortly. Please continue to stand by. Thank you for your patience. Once again, today's conference is scheduled to begin shortly. Please continue to stand by. Thank you for your patience. Thank you all. So, Thank you. Hello, and thank you for standing by for Energy Monster's 2021 First Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hanson Shi. Thank you. Please go ahead.
spk11: Thank you. Welcome to our 2021 first quarter earnings conference call. Joining me on the call today are Mars Tsai, Energy Monster's chairman and CEO, and Maria Hsin, our CFO. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the first quarter of 2021. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call. as we will make forward-looking statements. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&D. I would now like to turn the call over to our Chairman, CEO, Mark Tsai, for the business and operation highlights.
spk05: Thank you, Hanson. Good day, everyone. Welcome to EnergyMonster 2021 first quarter earnings call. To start off, I would love to give a quick introduction of EnergyMonster. We are a consumer tech company providing mobile device charging service through our network of charging cabinets, which are placed at high traffic locations, such as entertainment venues, restaurants, shopping centers, hotels, transportation hubs and public spaces across China. Users may use our service by simply scanning the QR code of our cabinet through Alipay or WeChat to borrow our power banks and then return the power banks to any EnergyMonster cabinet across China. Our service provides clear value proposition to both our users allowing for seamless access to charging service on the go, and to our location partners providing for value-added service to their customers. As of the end of March 2021, we have over 5.6 million power banks in 716,000 POIs. As the number one player in China's fast-growing mobile charging device industry, with 34.4 market share in 2020, we will benefit from the fast growth of the industry. According to our research report, China's mobile device charging service industry is poised to grow at a CAGR over 36% from 2020 to 2028, reaching a market size of over RMB 100 billion in 2028. The growth of the industry is expected to be driven by growing demand for our service and the expanding supply through increased location coverage. On the demand side, the increase in smartphone penetration and the continued rapid increase in usage of smartphones, which reached 168 hours per Chinese smartphone users per month, are key drivers for growth. The increase in total battery consumption will definitely make the gap bigger between battery consumption and capacity, even to be beyond the current gap of 3,000 mAh per day. And in turn, this widening gap will continue to prepare demand for mobile device charging service. The increasing adoption of 5G smartphones is another major driver for demand. Chips within 5G phones are 2.5 times more power-consuming than 4G devices, resulting in faster battery drainage. As a result, we acquired more than 16 million newly registered unique users during the quarter, reflecting the growth demand for mobile device charging service and also our ability to capture this growth. Now, from a supply perspective, we continue to see massive opportunities penetrating into both existing and newer regions, expanding into different location types and signing key accounts. Based on industry research, only less than 10% of the potential locations suitable for mobile device charging service is covered in China. There continues to be a large amount of coverage potential to be captured in the future. Combining the opportunities on both the supply and demand side, we believe that the industry is still in its early stages of development and is still filled with massive growth potential. As the largest provider of mobile device charging service here in China, with strong growth and resilient profitability, Even during the year of COVID, we believe that we are the best positioned provider of mobile device charging service to capture the growth of the industry. Now let me walk you through our core strategies in expanding coverage, improving operational efficiency, and exploring new initiatives for the quarter. First is our coverage expansion strategy. During the first quarter, we continue to make strides towards making our service more accessible for users across China. We expanded our coverage in higher tier cities while also developing our coverage in lower tier cities. As of the end of the quarter, we covered more than 1,600 cities and counties here in China, up from 1,500 as of the end of 2020. We strengthened the network partner investment during the quarter to acquire new high potential network partners to drive the expansion in lower tier cities. It gives us the network partners more room to quickly reach scale and to see results earlier, which further aligns the interest between our network partners and us. by utilizing our operational know-how and big data capabilities that we have refined through our established offline network and years of experience. We can drive for the delivery of sustainable and profitable expansion of coverage while developing value both for our network partners and for EnergyMonster. Our investment and commitment to our network partner model will expand and calculate a larger and stronger distribution network. Our direct model coverage also expanded as we offer our service to more high-quality location partners, further propelling our POI coverage growth. The number of POIs increased from 664,000 as of the end of last year to 716,000 as of the end of the first quarter 2021, through a balanced expansion of coverage, both new and existing regions. Our POI composition continues to be diversified as we move our service into newer types of venues, such as office buildings and retail outlets. On the CA front, we are able to sign a number of important key accounts, with extensive offline presence or significant brand awareness during the first quarter of 2021. Notably, we are pleased to announce the signing off of KFC, the largest restaurant chain here in China. The signing of KFC gives us stronger coverage across China and also gives us a strong brand endorsement for Energy Monster. With KAs such as Huazhou Group, Shanghai Disneyland, and KFC, we work closely with them to integrate our service directly into the KA themselves, allowing their users to seamlessly access mobile device charging service during the visits. We believe the signing of these KAs is a testament of our ability to deliver a comprehensive package of service to top national KAs. reflecting the quality of our hardware, our service, and our brand. It is important to note that the majority of large KAs with significant offline presence remain untapped here in China. Going forward, we believe our ability to deliver the most comprehensive package will allow us to attract more KAs, enabling us to create a stronger network effect. It is about efficiency. Energy Monster is by far the leader within the industry in terms of efficiency. Our power bank yields the highest revenue in any given period. Our profitability and growth profile remain consistent, and our revenue-to-employee headcount ratio leads the industry. These achievements and attributes are all due to our relentless pursuance of operational excellence. Our enduring management philosophy here at EnergyMonster is to drive both growth and profitability. This requires us to always make improvements to our incentives and management system to ensure the delivery. For our BDs and network partners, we continue to refine the incentive scheme during the first quarter to make sure that we are able to continue expanding to POIs that generate positive economics. For the first quarter, I have to mention that it is a low season for the business since many locations are closed and people intend to stay at home for gatherings during the month of Chinese New Year. On the other side, during the quarter, we see strong recovery of revenue per power bank per day on year-over-year basis as the impact of COVID dwindled. But on a quarter-on-quarter basis, the outbreak of COVID in a number of regions, such as Beijing, Shanghai, Hebei, and also northeastern regions of China, is still there. So it will result in a decline in revenue in these areas and also the revenue per power bank per day. during January and February. Despite the impact, our operations normalized starting in March when the partial outbreaks were fully contained. Another part of our efficiency comes from our long-term commitment to invest in both software and hardware technology. For software, we made improvements to our BD tools by implementing new features that further streamline the day-to-day operations of our employees to improve efficiency, allowing HBD to better manage more POIs and more power banks with greater efficiency and quality. In terms of hardware, we have identified additional areas to improve our cabinets and also the power banks in both quality and cost. We believe our continuous improvement of our operational efficiency and technology will further differentiate EnergyMonster from the other industry peers. Lastly, I would love to touch upon new initiatives. EnergyMonster has accumulated a massive online and offline network since our inception. We have over 236 million unique users and 715,000 locations across all provinces of China. Combined, these channels form a unique opportunity for us to leverage and to create new products and services. We are already exploring consumer goods that can utilize our online and offline networks for distribution. Also, we are exploring other IoT industries that can leverage and even extend our existing networks. Going forward, we believe our current set of networks will give us a unique advantage in incubating new initiatives from EnergyMonster and creating a company that can truly energize everyday life for all aspects of life. Overall, we delivered solid results for the first quarter of 2021, despite of Q1 being a low season, as well as the COVID still having regional outbreaks in January and February. Our core advantages in market leadership, industry-leading operational efficiency, where recognized brand and reliable hardware and software technologies have allowed us to consistently achieve strong performance and unparalleled unit economics within the industry. We believe that we can continue to expand our existing advantages and to provide comprehensive solutions to more locations and users. Our long-term commitment, both growth and profitability, will allow us to continue to expand our market share in China's mobile device charging service industry and to deliver long-term value for all of our shareholders. Now I will turn the call over to Maria Xin, our Chief Financial Officer, for the financial highlights.
spk07: Thank you, Mark. We are pleased to deliver solid results for the fourth quarter of 2021. Notably, we achieved strong revenue growth while continuing to be profitable despite the impact of COVID and seasonality in early 2021. With the recovery in March, we expect to continually deliver strong growth going into the second quarter of this year. Now, let me walk you through the financial results in greater detail. For the first quarter of 2021, revenues were $848.9 million, representing 162.5% year-over-year increase Revenues from mobile device charging business were up 164.5% year-on-year to $816.8 million and accounted for 96.4% of total revenues for the quarter. The increase was primarily on the back of the impact of COVID-19 on the first quarter of 2020 and was contributed by the increase in numbers of POIs and available-for-use power banks. Revenues from power bank sales were up 129.2% year-on-year to $25 million and accounted for 3% of our total revenues for the quarter. The increase was primarily on the back of the impact of COVID-19 on the first quarter of 2020 and was contributed by the increase in the number of POIs and available-for-use power banks. Other revenues were up 71.5% year-over-year to $5.1 million and accounted for 0.6% of our total revenues. The increase was primarily on the back of the impact of COVID-19 on the first quarter of 2020. Cost of revenues were up by 14.5% year-over-year to $124.6 million for the first quarter of 2021. The increase of cost of revenues was primarily due to the increase in maintenance cost, cost of power bank sold, and the depreciation. Gross profit was up 237.7% year-over-year to $722.3 million for the first quarter of 2021. The increase was primarily due to the increase in revenue from mobile device charging business, Operating expenses for the first quarter of 2021 were $698.4 million, up 103.6% year-over-year, excluding share-based compensation. Non-GAAP operating expenses were $690.3 million, representing a year-over-year increase of 104.8%. Research and development expenses for the first quarter of 2021 were 20.6 million, up 24.2% year-over-year. The increase was primarily due to the increase in personnel-related expenses. Sales and marketing expenses for the first quarter of 2021 were 661.7 million, up 107.4% year-over-year. The increase was primarily due to the increase in incentive fees paid to the location partners and network partners from the increase in mobile device charging business revenues. Journal and administrative expenses were 26.8 million in the fourth quarter of 2021, up 55.9% year-on-year. The increase was primarily due to the increase in personnel-related expenses and third-party service expenses. Income from operations was $23.8 million compared to a loss from operations of $129.2 million in the same period last year. Operating margin for the first quarter of 2021 was 2.8%. Net loss was $15.1 million in the first quarter of 2021 compared to a net loss of and $37.5 million in the same period last year. Net margin for the fourth quarter of 2021 was 1.8%. Non-GAAP net income, which includes share-based compensation expenses, was $23.2 million in the fourth quarter of 2021 compared to a non-GAAP net loss of $131.1 million in the same period last year. As of March, 31, 2021. The company had cash and cash equivalents, restricted cash, and a short-term investment of 2.2 billion. Cash flow generated from operations for the fourth quarter of 2021 was 131.2 million. Capital expenditures for the fourth quarter of this year were 138 million. Energy Monster currently expects to generate 940 million to 970 million of revenues for the second quarter of 2021. Please note that the forecast reflects Energy Monster's grant and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions.
spk04: Certainly. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request you to join the question queue again after your first question has been addressed. To ask a question, you will need to press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Hit star followed by one to ask your question. Thank you. We have the first question from the line of Weki Wee from Citigroup, please go ahead.
spk08: Good evening, management. Thanks for taking my questions and congrats on the successful IPO. My question is related to the competition landscape. So we saw some news that some small players consolidate and other industry players will aim to go public too. Does management see any change in current competition landscape? And under the current condition, will management provide some color about the change of revenue sharing with partners in fiscal 2021? Thank you.
spk05: Thanks for the question. We do not see a significant change in competitive landscape during the first quarter. Our core advantage in the network scale operational efficiency and the brand and technologies are still leading the market. And we will see that we are still gaining share with more locations and cities on board. So we are confident that if we stick to the strategy that we drive both growth and profitability and focus on the customer satisfaction so we can get more KAs Users and cities or even network partners on board.
spk07: So we are very confident So so far as a conclusion, there's no major change in the dynamics Okay, I for your question regarding the revenue sharing percentages So enter the direct model the incentive fee that we pay to the location partners seems flat compared with the last quarter and So the incentive fee that to our network partners increased slightly in the first quarter this year due to the launch of the network partner campaign to help us expand further into the untapped, larger cities. But unfortunately, we do not give guidance on this percentage. Thank you.
spk04: Thank you.
spk07: Thank you for your question.
spk04: Thank you. We have our next question from the line of Lucy Lee from Goldman Sachs. Please go ahead.
spk01: Hi, this is Lucy from Goldman. Thank you for taking my question. So my question is on the post-COVID impact. Can management share with us more details on the impact of COVID-19 during the first quarter and the possible impact going forward to the second quarter, please?
spk05: Thanks for the question. In early 2021, the resurgence of COVID occurred in Beijing, Shanghai, Hebei, and the northeastern regions of China. And if we look at the regions that were affected by the outbreak, the gross revenue of these regions in January and February of 2021 were actually down approximately 25% compared to December 2020 levels. And the other regions are not happening in this way. So in March, the COVID has been contained, and we see a full recovery in terms of gross revenue for these regions. Affected regions stayed flat during these minor outbreaks, meaning the impact of COVID, our first quarter revenues will have been 8% to 10% higher even if we just make it in a normalized situation. The whole national revenue will up 8% to 10%. But unfortunately, due to some of the minor outbreaks, some regions are down 25%. And we hope that the situation getting much, much better and stable. But we do see that in the past weeks, province like Anhui will still have some minor outbreaks. And for example, the city of Hefei at that period were down about 5% to 10%. But I think it's just for a moment. We will have experience to make the business recover even faster than the outbreak itself. So that will be the introduction of the impact of the COVID.
spk03: Thank you. Can we move to the next question, sir?
spk04: We have our next question. We have our next question from the line of Ryan Bing from China Renaissance. Please go ahead.
spk02: Good morning, and I got a few questions. The first one is that can you give us more color on the new POS cover this quarter? and generally for higher-tier cities, and how much percent will run through the direct model or the network parallel model? Thank you.
spk05: Yeah, thanks for the question. We actually expanded our POR coverage by more than 50,000 during the quarter, so the total number is increasing, both in higher-tier cities and lower-tier cities. we are having the strategy to drive faster of the network partner model. So we witness an increase of revenue from the network partner model from about 30 all the way grow towards 40. So we see some of the great news happening there. While we're still focusing on the operational excellence, no matter where we go, no matter how many locations more to add on, we are still very confident to make it profitable at the time we are entering this market or location.
spk12: Thank you.
spk04: Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Once again, if you wish to ask a question, please press star 1 on your telephone. We are now approaching the end of the conference call. I will now turn the call over to EnergyMonster's CFO, Maria Zhen, for closing remarks. Thank you.
spk07: Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months. Thank you. Thank you very much.
spk04: Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Thank you. Thank you. So, Thank you. Thank you. Hello and thank you for standing by for Energy Monster's 2021 First Quarter Earnings Conference Call. At this time, all participants are on listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference call, Director of Investor Relations, Hanson Shi. Thank you. Please go ahead.
spk11: Thank you. Welcome to our 2021 first quarter earnings conference call. Joining me on the call today are Mars Tsai, Energy Monster's chairman and CEO, and Maria Hsin, our CFO. For today's agenda, management will discuss business updates, operation highlights, and financial performance for the first quarter of 2021. Before we continue, I refer you to our safe harbor statement in the earnings press release, which applies to this call. as we will make forward-looking statements. Also, this call includes discussion of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures. Finally, please note that, unless otherwise stated, all figures mentioned during this call are in R&D. I would now like to turn the call over to our Chairman, CEO, Mark Tsai, for the business and operation highlights.
spk05: Thank you, Hanson. Good day, everyone. Welcome to EnergyMonster 2021 first quarter earnings call. To start off, I would love to give a quick introduction of EnergyMonster. We are a consumer tech company providing mobile device charging service through our network of charging cabinets, which are placed at high traffic locations, such as entertainment venues, restaurants, shopping centers, hotels, transportation hubs and public spaces across China. Users may use our service by simply scanning the QR code of our cabinet through Alipay or WeChat to borrow our power banks and then return the power banks to any EnergyMonster cabinet across China. Our service provides clear value proposition to both our users allowing for seamless access to charging service on the go, and to our location partners providing for value-added service to their customers. As of the end of March 2021, we have over 5.6 million power banks in 716,000 POIs. As the number one player in China's fast-growing mobile charging device industry, with 34.4 market share in 2020, we will benefit from the fast growth of the industry. According to our research report, China's mobile device charging service industry is poised to grow at a CAGR over 36% from 2020 to 2028, reaching a market size of over RMB 100 billion in 2028. The growth of the industry is expected to be driven by growing demand for our service and the expanding supply through increased location coverage. On the demand side, the increase in smartphone penetration and the continued rapid increase in usage of smartphones, which reached 168 hours per Chinese smartphone users per month. are key drivers for growth. The increase in total battery consumption will definitely make the gap bigger between battery consumption and capacity, even to be beyond the current gap of 3,000 mAh per day. And in turn, this widening gap will continue to prepare demand for mobile device charging service. The increasing adoption of 5G smartphones is another major driver for demand. Chips within 5G phones are 2.5 times more power-consuming than 4G devices, resulting in faster battery drainage. As a result, we acquired more than 16 million newly registered unique users during the quarter, reflecting the growth demand for mobile device charging service and also our ability to capture this growth. Now, from a supply perspective, we continue to see massive opportunities penetrating into both existing and newer regions, expanding into different location types and signing key accounts. Based on industry research, only less than 10% of the potential locations suitable for mobile device charging service is covered in China. There continues to be a large amount of coverage potential to be captured in the future. Combining the opportunities on both the supply and demand side, we believe that the industry is still in its early stages of development and is still filled with massive growth potential. As the largest provider of mobile device charging service here in China, with strong growth and a resilient profitability, Even during the year of COVID, we believe that we are the best positioned provider of mobile device charging service to capture the growth of the industry. Now let me walk you through our core strategies in expanding coverage, improving operational efficiency, and exploring new initiatives for the quarter. First is our coverage expansion strategy. During the first quarter, we continue to make strides towards making our service more accessible for users across China. We expanded our coverage in higher tier cities while also developing our coverage in lower tier cities. As of the end of the quarter, we covered more than 1,600 cities and counties here in China, up from 1,500 as of the end of 2020. We strengthened the network partner investment during the quarter to acquire new high potential network partners to drive the expansion in lower tier cities. It gives us the network partners more room to quickly reach scale and to see results earlier, which further aligns the interest between our network partners and us. by utilizing our operational know-how and big data capabilities that we have refined through our established offline network and years of experience. We can drive for the delivery of sustainable and profitable expansion of coverage while developing value both for our network partners and for EnergyMonster. Our investment and commitment to our network partner model will expand and calculate a larger and stronger distribution network. Our direct model coverage also expanded as we offer our service to more high-quality location partners, further propelling our POI coverage growth. The number of POIs increased from 664,000 as of the end of last year to 716,000. as of the end of the first quarter 2021, through a balanced expansion of coverage, both new and existing regions. Our POI composition continues to be diversified as we move our service into newer types of venues, such as office buildings and retail outlets. On the KA front, we are able to sign a number of important key accounts with extensive offline presence or significant brand awareness during the first quarter of 2021. Notably, we are pleased to announce the signing off of KFC, the largest restaurant chain here in China. The signing of KFC gives us stronger coverage across China and also gives us a strong brand endorsement for Energy Monster. With KAs such as Huazhou Group, Shanghai Disneyland, and KFC, we work closely with them to integrate our service directly into the KA themselves, allowing their users to seamlessly access mobile device charging service during the visits. We believe the signing of these KAs is a testament of our ability to deliver a comprehensive package of service to top national KAs. reflecting the quality of our hardware, our service, and our brand. It is important to note that the majority of large KAs with significant offline presence remain untapped here in China. Going forward, we believe our ability to deliver the most comprehensive package will allow us to attract more KAs, enabling us to create a stronger network effect. It is about efficiency. Energy Monster is by far the leader within the industry in terms of efficiency. Our power bank yield the highest revenue in any given period. Our profitability and growth profile remain consistent, and our revenue-to-employee headcount ratio leads the industry. These achievements and attributes are all due to our relentless pursuance of operational excellence. Our enduring management philosophy here at EnergyMonster is to drive both growth and profitability. This requires us to always make improvements to our incentives and management system to ensure the delivery. For our BDs and network partners, we continue to refine the incentive scheme during the first quarter to make sure that we are able to continue expanding to POIs that generate positive economics. For the first quarter, I have to mention that it is a low season for the business since many locations are closed and people intend to stay at home for gatherings during the month of Chinese New Year. On the other side, during the quarter, we see strong recovery of revenue per power bank per day on year-over-year basis as the impact of COVID dwindled. But on a quarter-on-quarter basis, the outbreak of COVID in a number of regions, such as Beijing, Shanghai, Hebei, and also northeastern regions of China, is still there. So it will result in a decline in revenue in these areas and also the revenue per power bank per day. during January and February. Despite the impact, our operations normalized starting in March when the partial outbreaks were fully contained. Another part of our efficiency comes from our long-term commitment to invest in both software and hardware technology. For software, we made improvements to our BD tools by implementing new features that further streamline the day-to-day operations of our employees to improve efficiency, allowing HBD to better manage more POIs and more power banks with greater efficiency and quality. In terms of hardware, we have identified additional areas to improve our cabinets and also the power banks in both quality and cost. We believe our continuous improvement of our operational efficiency and technology will further differentiate EnergyMonster from the other industry peers. Lastly, I would love to touch upon new initiatives. EnergyMonster has accumulated a massive online and offline network since our inception. We have over 236 million unique users and 715,000 locations across all provinces of China. Combined, these channels form a unique opportunity for us to leverage and to create new products and services. We are already exploring consumer goods that can utilize our online and offline networks for distribution. Also, we are exploring other IoT industries that can leverage and even extend our existing networks. Going forward, we believe our current set of networks will give us a unique advantage in incubating new initiatives from EnergyMonster and creating a company that can truly energize everyday life for all aspects of life. Overall, we delivered solid results for the first quarter of 2021, despite Q1 being a low season, as well as the COVID still having regional outbreaks in January and February. Our core advantages in market leadership, industry-leading operational efficiency, well-recognized brand, and reliable hardware and software technologies have allowed us to consistently achieve strong performance and unparalleled unit economics within the industry. We believe that we can continue to expand our existing advantages and to provide comprehensive solutions to more locations and users. Our long-term commitment, both growth and profitability, will allow us to continue to expand our market share in China's mobile device charging service industry and to deliver long-term value for all of our shareholders. Now I will turn the call over to Maria Xin, our Chief Financial Officer, for the financial highlights.
spk07: Thank you, Mark. We are pleased to deliver solid results for the fourth quarter of 2021. Notably, we achieved strong revenue growth while continuing to be profitable despite the impact of COVID and seasonality in early 2021. With the recovery in March, we expect to continually deliver strong growth going into the second quarter of this year. Now, let me walk you through the financial results in greater detail. For the first quarter of 2021, revenues were $848.9 million, representing 162.5% year-over-year increase Revenues from mobile device charging business were up 164.5% year-on-year to $816.8 million and accounted for 96.4% of total revenues for the quarter. The increase was primarily on the back of the impact of COVID-19 on the first quarter of 2020 and was contributed by the increase in numbers of POIs and available-for-use power banks. Revenues from power bank sales were up 129.2% year-on-year to $25 million and accounted for 3% of our total revenues for the quarter. The increase was primarily on the back of the impact of COVID-19 on the first quarter of 2020 and was contributed by the increase in the number of POIs and available-for-use power banks. Other revenues were up 71.5% year-over-year to $5.1 million and accounted for 0.6% of our total revenues. The increase was primarily on the back of the impact of COVID-19 on the first quarter of 2020. Cost of revenues were up by 14.5% year-over-year to $124.6 million for the first quarter of 2021. The increase of cost of revenues was primarily due to the increase in maintenance costs, cost of power bank sold, and depreciation. Gross profit was up 237.7% year-over-year to $722.3 million for the first quarter of 2021. The increase was primarily due to the increase in revenue from mobile device charging business, Operating expenses for the first quarter of 2021 were $698.4 million, up 103.6% year-over-year, excluding share-based compensation. Non-GAAP operating expenses were $690.3 million, representing a year-over-year increase of 104.8%. Research and development expenses for the first quarter of 2021 were 20.6 million, up 24.2% year-over-year. The increase was primarily due to the increase in personnel-related expenses. Sales and marketing expenses for the first quarter of 2021 were 661.7 million, up 107.4% year-over-year. The increase was primarily due to the increase in incentive fees paid to the location partners and network partners from the increase in mobile device charging business revenues. Journal and administrative expenses were 26.8 million in the fourth quarter of 2021, up 55.9% year-on-year. The increase was primarily due to the increase in personnel-related expenses and third-party service expenses. Income from operations was $23.8 million compared to a loss from operations of $129.2 million in the same period last year. Operating margin for the first quarter of 2021 was 2.8%. Net loss was $15.1 million in the first quarter of 2021 compared to a net loss of and $37.5 million in the same period last year. Net margin for the fourth quarter of 2021 was 1.8%. Non-GAAP net income, which includes share-based compensation expenses, was $23.2 million in the fourth quarter of 2021, compared to a non-GAAP net loss of $131.1 million in the same period last year. As of March, The company had cash and cash equivalents, restricted cash, and a short-term investment of $2.2 billion. Cash flow generated from operations for the first quarter of 2021 was $131.2 million. Capital expenditures for the first quarter of this year were $138 million. Energy Monster currently expects to generate 940 million to 970 million of revenues for the second quarter of 2021. Please note that the forecast reflects Energy Monster's grant and preliminary view on the industry and its operations, which is subject to change. Thank you for listening. We are now ready for your questions.
spk04: Certainly. The question and answer session of this conference call will start in a moment. In order to be fair to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request you to join the question queue again after your first question has been addressed. To ask a question, you will need to press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Hit star followed by one to ask your question. Thank you. We have the first question from the line of Weki Wee from Citigroup, please go ahead.
spk08: Good evening, management. Thanks for taking my questions and congrats on the successful IPO. My question is related to the competition landscape. So we saw some news that some small players consolidate and other industry players will aim to go public too. Does management see any change in current competition landscape? And under the current condition, will management provide some color about the change of revenue sharing with partners in fiscal 2021? Thank you.
spk05: Thanks for the question. We do not see a significant change in competitive landscape during the first quarter. Our core advantage in the network scale Operational efficiency and the brand and technologies are still leading the market And we will see that we are still gaining share with more locations and cities on board So we are confident that if we stick to the strategy that we drive both growth and probability and focus on the customer satisfaction so we can get more and KAs, users, and cities, or even network partners on board. So we are very confident. So far, as a conclusion, there's no major change in the dynamics.
spk07: Okay. As for your question regarding the revenue sharing percentages, so under the direct model, the incentive fee that we pay to the location partners seems flat compared with the last quarter. So the incentive fee that our network partners increased slightly in the first quarter this year due to the launch of the network partner campaign to help us expand further into the untapped lower tier cities. But unfortunately, we do not give guidance on this percentage. Thank you.
spk04: Thank you for your question. Thank you. We have our next question from the line of Lucy Lee from Goldman Sachs. Please go ahead.
spk01: Hi, this is Lucy from Goldman. Thank you for taking my question. So my question is on the post-COVID impact. You can mention and share with us more details on the impact of COVID-19 during the first quarter and the possible impact going forward to the second quarter, please.
spk05: Thanks for the question. In early 2021, the resurgence of COVID occurred in Beijing, Shanghai, Hebei, and the northeastern regions of China. And if we look at the regions that were affected by the outbreak, the gross revenue of these regions in January and February of 2021 were actually down approximately 25% compared to December 2020 levels. And the other regions are not happening in this way. So in March, the COVID has been contained and we see a full recovery in terms of gross revenue for these regions. Unaffected regions stayed flat during these minor outbreaks, meaning the impact of COVID, our first quarter revenues will have been 8% to 10% higher even if we just make it in a normalized situation. The whole national revenue will up 8% to 10%. But unfortunately, due to some of the minor outbreaks, some regions are down 25%. And we hope that the situation getting much, much better and stable. But we do see that in the past weeks, province like Anhui will still have some minor outbreaks. And for example, the city of Hefei at that period were down about 5% to 10%. But I think it's just for a moment. We will have experience. to make the business recover even faster than the outbreak itself. So that will be the introduction of the impact of the COVID.
spk03: Thank you. Can we move to the next question, sir?
spk04: We have our next question. We have our next question from the line of Ryan Bing from China Renaissance. Please go ahead.
spk02: Good morning, and I have a few questions. The first one is that can you give us more color on the new POS covered this quarter, and is that generally for high-target cities, and how much percent will run through the direct model or the network parallel model? Thank you.
spk05: Yeah, thanks for the question. We actually expanded our POR coverage by more than 50,000 during the quarter. So the total number is increasing, both in higher tier cities and lower tier cities. Due to we are having the strategy to drive faster of the network partner model, so we witness an increase of revenue from the network partner model from about 30 all the way grow towards 40. So we see some of the great news happening there. While we are still focusing on the operational excellence, no matter where we go, no matter how many locations more to add on, we are still very confident to make it profitable at the time we are entering this market or location.
spk12: Thank you.
spk04: Thank you. Once again, if you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. Once again, if you wish to ask a question, please press star 1 on your telephone. We are now approaching the end of the conference call. I will now turn the call over to Energy Monster's CFO, Maria Jean, for closing remarks. Thank you.
spk07: Once again, thank you for joining us today. Please don't hesitate to contact us if you have any further questions. Thank you for your continued support, and we look forward to speaking with you in the coming months. Thank you.
spk05: Thank you very much.
spk04: Thank you for your participation in today's conference. This concludes the presentation. You may not disconnect. Good day. Thank you all.
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