Full Truck Alliance Co. Ltd.

Good day and welcome to Full Truck Alliance's first quarter 2025 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Maomao, Head of Investor Relations. Please go ahead.

Thank you, Drew. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Legislation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect FTA's business and financial results is included in certain filings of the company with SEC. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and a reconciliation of -non-GAAP financial results without any doubt, please see the earnings release issued earlier today. Joining us today on the call from FTA's image management are Mr. Hui Zhang, our founder, chairman, and CEO, and Mr. Simon Tai, our chief financing and investment officer. Management will begin with prepared remarks and the call will conclude with the Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this call will be available on FTA's Investor Relations website at .FortrexAlliance.com. I will now turn the call over to our founder, chairman, and CEO, Mr. Zhang. Please go ahead, sir.

Hello, everyone. Welcome to the first quarter of 2025 FTA's call conference. In the first quarter of 2025, FTA has been working to improve the quality of business and financial services by providing a sustainable and intelligent environment. We have been using technology innovation and product growth to continue to replace the traditional offline logistics trading model, promoting platform ecological value, and taking new steps. The demand for the first-class group orders has increased by 23% compared to the previous year, far exceeding the supply of public goods and the supply of large-scale goods. We have laid solid foundation for the high-quality development of the whole chain.

Hello, everyone, and thank you for joining us today on our first quarter of 2025 earnings conference call. In the first quarter of 2025, we continue to focus on enhancing operational efficiency and reducing logistics costs within China's road-free industry. Leveraging cutting-edge digitalization and smart technologies, we successfully navigated a challenging yet opportunity-rich economic environment. Through ongoing technological innovation and product upgrades, we further displaced traditional offline logistics transaction models, elevating the value of our platform ecosystem to new heights. As a result, our total for field orders for the quarter grew by 23% -over-year, significantly outpacing the industry's growth and laying a solid foundation for sustainable high-quality development throughout the year.

Building on this momentum, we are very excited to announce that the first quarter of 2025 earnings conference call is now over. We are very excited to announce that the first quarter of 2025 earnings conference call is over. We are very excited to announce that the first quarter of 2025 earnings conference call is over. We are very excited to announce that the first quarter of 2025 earnings conference call is Building

on this momentum, we achieved breakthroughs across our key operational matrix during this quarter, reaching pivotal milestones in user acquisition, transportation capacity, and the quality of matching as well as monetization. Targeting the substantial potential of approximately 30 million small and medium-sized direct shippers, we continued our long-term investments in branding initiatives and online user acquisition. The strategic efforts reinforced our brand perception and clearly communicated our unique value proposition of nationwide trade coverage, market leading volume, and lower cost for intercity shippers. Consequently, our average shipper MAUs reached 2.76 million in the first quarter, up .8% year over year. Our total shipper members exceeded 1.1 million, and the auto contribution from direct shippers increased to 51%, reflecting ongoing improvements in our platform's user structure. Turning to our transportation capacity, ecosystem, and matching efficiency, we are very happy to continue to enhance truckers Pokemon the capabilities and the quality. The future is in hand with our re但是 who are linked and scaling their network, which contributes to reaching an all-time high. trucker membership. Mostly the next month retention for truckers responding to orders consistently remaining above 85%, highlighting the strong engagement and the stickiness of our trucker community. Our focus on more others, excellent service and higher income has bolstered trucker satisfaction and encouraged continued participation. As a result, our platform's overall performance rate for the first quarter reached .2% of nearly 6 percentage points year over year setting a new record.

The same increase of the same amount of revenue is 19%. Among them, the continued -in-touch function of the transaction service revenue increased by .5% to 10.5 billion yuan. The total revenue of the trucker group reached 39%. After the non-US accounting regulation, the profit of the business after adjustment reached 13.2 billion yuan, the same increase of 171.5%. After the

regarding monetization, our prudently tapped into the significant monetization potential of our platform, fueling robust revenue growth for the quarter. These achievements further underscored the unique value we delivered to both truckers and shippers. Our high-quality operations translated into exceptional financial performance this quarter. Our total net revenues, which amounted to RMB 2.7 billion, up .0% year over year. Mostly revenue from our transaction service continued to grow rapidly, rising .5% year over year to RMB 1.05 billion and accounting for nearly 39% of our total revenues. NGAP adjusted operating income by .5% year over year to RMB 1.32 billion and NGAP adjusted net income increased by 84% year over year to RMB 1.39 billion. The solid first quarter performance provides a strong foundation for us to invest further in strategic areas of growth. During the quarter, the emergence of DeepSeek and intelligent robotics initiated a new phase of technological advancements. As a leader propelling the new quality, productive forces of the logistics industry, we remain dedicated to seizing the opportunities presented by the industry's digitalization and AI-driven transformation. This year, we plan to deepen our investment in PLUS-DRC to maintain our long-term technological leadership in heavy-duty truck autonomous driving. Additionally, the full spectrum of road transportation scenarios presents vast opportunities for AI applications, which we will actively explore to drive cost reductions and efficiency improvements across the industry.

Thank

you once again. Now I'll pass the call over to Simon, who will provide an update on our first quarter's financial results.

Thank you, Mr. John. Thank you all for joining today's earnings conference call. I will now provide an overview of our operational highlights and financial results for the first quarter of 2025. Let's start with our operations. We continue to refine and enhance our fulfillment services, achieving record milestones this quarter. Our fulfilled orders rose to $48.2 million, a .6% -over-year increase, outpacing the broader freight industry trends. This growth was driven by an expanding shipper base and improved fulfillment efficiency, supported by positive shifts in our user structure. Our fulfillment rate reached a 10% percentage point -over-year. This marks yet another new record for our platform. Notably, the average fulfillment rate of low and medium frequency direct shippers approached 60%, an increase of nearly 10% points -over-year. Others from these user groups now account for more than half of total orders, reflecting the successful optimization of our shipper user structure and improved ecosystem. These achievements underscored the effectiveness of our differentiated operational strategy and set a strong foundation for future service quality and enhancement. Moving on to our user base, both our average shipper MAU and the number of shipper members continued their steady growth in the first quarter. Our average shipper MAUs reached 2.76 million, up .8% -over-year. In March, we surpassed 3 million average shipper MAUs, setting a new monthly record. Total shipper members exceeded 1.1 million by the end of the first quarter, another all-time high. This growth was primarily driven by increase among low and medium frequency direct shippers, resulting from our effective user engagement and retention initiatives. We improved conversion rates at key onboarding stages, such as new shippers' initial engagement, their first fulfillment, and early repeat orders. This was accomplished through targeted strategies, including streamlined shipment onboarding, enhanced fulfillment assurance, and improved retention rate, and dedicated customer support and service engagement via Wecom. Our 12-month rolling retention rate for shipper members remained above 80%, demonstrating strong user loyalty to our platform as our user base continues to expand. Turning to our trucker operations, we upgraded our trucker credit rating system in the quarter, optimized the benefits associated with trucker membership, and refined our premium cargo bidding algorithm. These efforts grow sustained improvements in trucker performance with the number of active truckers fulfilling orders through our platform over the year. The demand and loyalty amount truckers further improved, with the truckers' average monthly fulfilled orders increasing year over year, and the next month's retention rate of truckers who responded to orders consistently exceeding 85%, underscoring the effectiveness of our initiatives in building a reliable and committed trucker network. Shifting now to our transaction service, revenue for the quarter saw significant acceleration, increasing .5% year over year to RMB 1.05 billion, thanks to the dual engine of order growth and enhanced monetization. We made substantial progress across several key monetization metrics. Our monetized order penetration rate surged to .2% for the quarter, an impressive increase of nearly 8 percentage points from .4% last year, while the average monetization amount per order improved to RMB 25.5 from RMB 22.7 a year ago. These results were propelled by the refined management of our freight matching system. By continuously iterating and optimizing our multi-dimensional commission model and differentiating freight pricing for low, medium, and high frequency shippers, we strengthened retention among core shipper users, unlocking monetization potential within long tail user demographics. With our fulfillment efficiency consistently increasing, the growing willingness of our low and medium frequency direct shippers to pay supported further refinement of our monetization structure. Looking ahead, we will leverage our intelligent risk control system and dynamic pricing capabilities to deepen monetization in high value scenarios. Combined with our tiered approach to shipper member operations, these initiatives will expand our base of quality shippers, fostering a virtuous cycle of quality user growth and monetization efficiency. In addition, we plan to harness AI to further enhance matching efficiency, enabling smarter, faster connections between shippers and truckers. We believe this will drive a stronger momentum throughout 2025 and driving long-term value for our platform. Now I'd like to provide a brief overview for our 2025 first quarter financial results. Our total net revenues in the first quarter were RMB ,000,000 representing a 19% increase year over year, primarily attributable to an increase in revenues from freight matching services. Net revenues from freight matching services including service fees from freight brokerage models, membership fees from listing models, and commissions from transaction services were RMB Revenues from freight brokerage services in the first quarter were RMB 965.7 million, remaining nearly flat, primarily attributable to an increase in service fee rate offset by a decrease in transaction volume as we exercised caution in this business by proactively downsizing operations in anticipation of possible VAT rebate adjustments. Revenues from the freight listing service in the first quarter were RMB 234.9 million, up 10% year over year, primarily due to the growing number of total paying members. Revenues from the transaction service in the first quarter were RMB 1 billion and RMB 46.5 million, up .5% year over year, primarily driven by an increase in order volume penetration rates and per order transaction service fee. Revenues from value added services in the first quarter were RMB 452.8 million, up .5% year over year. And this increase was primarily due to growing demand for credit solutions. First quarter cost of revenues was RMB 698.6 million, a decrease of .3% from RMB 1 billion and 31.9 million in the same period of 2024. The decrease was primarily due to decreases in VAT related tax surcharges and other tax costs, net of grants from government authorities. And these tax related costs of net of government grants totaled RMB 565.6 million, representing a decrease of 37.7 from RMB 908 million in the same period of 2024, primarily due to a decrease in tax costs of net of government grants related to the company's freight brokerage service. Out sales and marketing expenses in the first quarter were RMB 377.9 million compared with RMB 340.1 million in the same period of 2024. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions, partially offset by lower salaries and benefit expenses. General and administrative expenses in the first quarter were RMB 186 million compared with RMB 264.5 million in the same period of 2024. The decrease was primarily due to lower share based compensation and salary and benefit expenses. RMB expenses in the first quarter were RMB 193.4 million compared with RMB 247.7 million in the same period of 2024. The decrease was primarily due to lower salary and benefit expenses. Our income from operations in the first quarter was RMB ,202.4 million, an increase of .2% from RMB 312.2 million in the same period of 2024. Net income in the first quarter was RMB ,278.9 million, an increase of .1% from RMB 586.4 million in the same period of 2024. Under non-GAAP measures, our adjusted operating income in the first quarter was RMB ,318.1 million, an increase of .5% from RMB 485.4 million in the same period of 2024. Our adjusted net income in the first quarter was RMB ,391.4 million, an increase of 84% from RMB 756.4 million in the same period of 2024. Basic net income per ADS was RMB 1.22 in the first quarter compared with RMB 0.56 in the same period of 2024. Our adjusted basic net income per ADS was RMB 1.21 in the first quarter compared with RMB 0.56 in the same period of 2024. Non-GAAP adjusted basic and diluted net income per ADS was RMB 1.32 in the first quarter of 2025 compared with RMB 0.72 in the same period of 2024. As of March 31, 2025, the company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits, and wealth management products with maturity over one year of RMB 29.3 billion in total compared with RMB 29.2 billion as of December 31, 2024. For our second quarter 2025 business outlook, we expect our total net revenues to be between RMB 3.06 billion and RMB 3.12 billion representing a -over-year growth rate of approximately .6% to 12.9%. This forecast reflects the company's current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with the reasonable accuracy as of the date hereof. Before concluding our prepared remarks, I'd like to highlight that on May 16, 2025, our Board of Directors approved an additional investment of US$125 million into PlusPRC, a leading autonomous driving technology company in China. This investment will count in the principal and accrued interest of certain convertible nodes issued by PlusPRC, which were acquired in May 2024 and January 2025. Post the completion of the transaction, we expect to maintain no less than .8% of equity interest and .2% of voting rights in PlusPRC, excluding ESOP. With the expected amendment to the memorandum and articles of association of PlusPRC that will allow Food Truck Alliance to control the board of PlusPRC, we expect to consolidate financial results of PlusPRC into our consolidated financial statements upon completion of these investment transactions. We believe that we are at a pivotal moment in the era of AI and autonomous driving, transitioning from technological validation to large-scale deployment. Through deeper collaboration with PlusPRC, we aim to capitalize on the opportunities within intelligent technologies, and we are confident that this forward-looking strategy will establish a significant first-mover advantage in addressing the critical needs of road transportation and further reinforcing our leadership position in the industry. That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead.

We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. At this time, we will pause momentarily to assemble our roster. The first question comes from Ronald Kung with Goldman Sachs. Please go ahead.

Thank you, management, for taking my question. I just want to ask about the fulfilled orders that was very healthy at 23% in the first quarter, outperforming the industry significantly. So what are the key factors? And then since the tariff impact came in April, have you seen any impact on your auto volumes? And how should we think of the full year volume expectations for 2025? Thank you.

Thank you, Ronald. So despite the traditional seasonal slowdown during the Chinese New Year period, our platform delivered a remarkable .6% year over year increase in fulfilled orders in the past quarter, and that's significantly outperforming the broader market. And we believe this strong performance was attributed to three key factors. First, we experienced a continued expansion of high quality user base, although we exercised caution in terms of marketing and promotional activities over the holiday period. And following the Chinese New Year, the number of active shippers rebounded rapidly, with average monthly active shippers exceeded three million in March, setting a new record. And notably, the majority of new users we acquired were SME owners with high quality order demand. And also their industry distribution aligned closely with the platform's overall structure, which is pretty much domestic demand driven. And given these characteristics, they will provide a solid foundation for future order volume growth. The second element is the strong order volume growth was attributable to effective execution of our refined operational strategies. Through multiple initiatives focusing on shipment, onboarding, fulfillment, assurance, and retention enhancement, we have significantly improved conversion rates from new user registration to first order fulfillment and early repeat orders. This year, we are also planning to deepen our targeted operation for key freight categories, ensuring that we match shippers with truckers who have relevant transportation experience and capabilities. We hope this approach will continue to enhance fulfillment experiences, reinforce user trust, and support sustainable long-term growth. And lastly, continuously breakthroughs in our new business contributed to the robust order volume growth as well. Both our lessened truckload and intercity business maintained rapid growth momentum during the quarter. In particular, we expect a strong demand in the LPL subsegment to become a key growth driver for the platform going forward. Regarding the impact of the recent tariff adjustments, we have not observed, even until now, any significant impact on our business. And that is primarily due to our focus on domestic freight transportation. Export cargoes typically rely on containerized logistics and are largely managed through third-party logistics specialists, which fall outside of our scope. While the upstream suppliers in the manufacturing chain may face indirect pressure from tariffs, such effects are highly fragmented and not quantifiable at this moment. We will closely monitor any potential indirect effects on the supply chain and will assess and address a long-term impact as it arrives. Looking ahead to 2025, we still remain optimistic about our order volume outlook. Our core strategy will continue to focus on strengthening our long-haul freight operations by improving supply demand matching efficiency and enhancing the -to-end service experience to solidify our leadership position in the long-haul freight market and drive high-quality volume growth. Ultimately, we are committed to creating sustainable value for both shippers and truckers and building a long-term mutually beneficial ecosystem. Thank you.

The next question comes from Eddie Wong with Morgan Stanley. Please go ahead.

Thank you, Mr. Changhui, Mr. Simon, and Mr. Wang. Thank you for the question. Congratulations on your performance in the first quarter. My question is about the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on the return on a first quarter. Now let's see if I Thank you, management for taking my question. My question is regarding the fulfillment rates. We see that to the fulfillment WAIT to continue to increase in the first quarter are rich in .2% a year over Alex Sal, .7% points and -to-quarter improvement of .7% points. What are the main drivers behind the significant increase in the fulfillment rates over the three consecutive quarters? Thank you.

Thank you, Eddie. The fulfillment rate improved rapidly in the first quarter, primarily due to the combined effects of user structure optimization, upgraded operational strategies, and enhanced matching efficiency. First, our improved user mix has significantly enhanced overview of fulfillment quality over the past few quarters. The other contribution from direct shippers increased to 51% this quarter from 47% in the prior year period. This user group, primarily composed of small and medium-sized business owners, typically demands higher service quality and greater fulfillment reliability. And during the quarter, the average fulfillment rate of direct shippers approached nearly 60%, significantly outperforming that of intermediaries and other professional shippers. We believe the continued growth in the share of direct shippers will be a key structural factor driving overall platform fulfillment rate improvements. And second, our refined operational strategies are unlocking greater efficiencies through the user lifecycle. During the first quarter, we further clarified the pricing structure holistically so that for any given shipment, the freight fees, the freight rates decreased in the order of entrusted shipment, followed by full truckload, and then lessened truckload. The clearer pricing differences between different transaction types help shippers set reasonable expectations, reducing cancellations caused by pricing misunderstandings. Additionally, we optimized the trucker order acceptance process so that the post-cargo information is obfuscated, and thus encouraging truckers to return to the app for full details before accepting, which extends their online time and improves matching precision, significantly enhancing fulfillment outcomes. We also strengthened shipper loyalty through initiatives such as dedicated Wecom customer support and customized service for key accounts, which have improved the retention and repurchase behavior, reinforcing fulfillment capabilities of shipper users. As a result, matching efficiency has improved substantially. In the first quarter, the number of monthly active truckers also increased significantly year over year, ensuring sufficient transportation capacity supply. For example, the average time from order post into successful matching decreased under 10 minutes, an improvement of more than 35% year over year, which provides strong underlying support for fulfillment growth. Looking ahead, we remain confident that the upward trend in fulfillment rates will continue as we further expand our direct shipper base, deepen our user segmentation strategies, and enhance product experiences. By leveraging technology and building a stronger ecosystem, we aim to elevate fulfillment performance to new heights and creating more predictable and tangible values for both shippers and truckers. Thank you.

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

Hi, Mr. Zhang, Mr. Simon, and Mr. Mao. Thank you for answering my question. My question is about the stock. We actually saw that the stock of the first quarter was 276,000 yuan, and the increase was about 29%. I would like to ask what the driving factor is. And in the past three years, the overall trend has been very positive. In the first quarter, the number of monthly active shippers increased about 29% to 2.76 million. I wonder what are the main reasons behind this high growth. And if we look at overall trends over the past three years, we have seen an accelerated growth of the shipper users. What are the primary reasons for that growth?

Thank you. In the first quarter, the number of monthly active shippers maintained a growth trajectory we observed in the past few quarters. And we believe this momentum was driven not only by short-term strategic optimizations but also by platforms' long-term accumulated value, which continues to strengthen our user ecosystem. First, our comprehensive marketing system enabled more targeted outreach. We also managed to reach to prospective users during the quarter. On the digital front, we consistently optimized keywords, placements, and searched to download conversion rates across major app stores, while also investing in precision marketing on content platforms, including short-home video apps to attract potential users. Offline, we continue to enhance brand recognition through truck stickers, view boards in commercial areas and other physical channels, effectively driving traditional offline users to move online and creating a healthy conversion funnel from brand exposure to app downloads. Second, our refined operational strategies on shipper sites significantly improved user engagement and the retention. As mentioned earlier, we adopted a three-step strategy on user conversion, focusing on shipment, onboarding, fulfillment, assurance, and retention enhancement. Thanks to the operational team's efforts, conversion rates for both first order and repeat orders for new shippers have improved remarkably. Additionally, our membership program, which offers benefits such as freight discounts and shipment tracking for frequent shippers, further stimulated user activity and loyalty. From a long-term perspective, we believe the ongoing enhancement of the platform's value proposition has accelerated user growth. Our increasingly efficient and transparent matching mechanism enables more direct shippers to connect with truckers at reasonable freight rates, avoiding the traditional price markup typically associated with offline intermediaries. Furthermore, as an independent third-party platform, we have built a robust credit rating and disputes resolution system that enables us to provide detailed order and communication records to support user claims in the event of a dispute, helping to minimize transaction risks. These user experience advantages and safeguards underpin our accelerated shipper MAU growth over the last three years. Looking ahead, we'll continue to center our strategy around user value, deepening technology empowerment and operational innovation. Our goal is to further expand the share of direct shippers to reinforce our leadership in the digitalization of freight logistics and drive sustained high-quality user growth.

Did that conclude your answer? Yes. Thank you. The next question comes from Brian Gong with Citi. Please go ahead.

I will question myself. My question is, how was the truckers' activity level in the first quarter? And it has an order acceptance frequency of active truckers on the platform further increased? Have you noticed the rapid growth in the number of trucker users given a relatively big job market? And therefore, the supply demand relationship between truckers and the shippers becoming increasingly imbalanced. Thank you.

Thank you, Brian. In the first quarter, the average number of monthly active truckers remained above 3 million, achieving high single-digit growth year over year. Both our truckers' engagement and transaction frequency per trucker improved in parallel. We believe there are three drivers of truckers for truckers' activity growth. First, a continuous increase in shipper order volume effectively activated the existing trucker capacity on the platform, while also encouraging previously dormant truckers to become active. This naturally created a positive cycle of other growth driving trucker activation. Meanwhile, our evolving matching outcome significantly reduced the idle time between orders for truckers. Based on our transaction data, the empty hauling, empty waiting, and empty loads data all declined year over year, also lower than industry average, boosting truckers' order taking efficiency per unit of time and further motivating them to remain active. In addition, our trucker membership system has become a critical lever for improving fulfillment. By the end of the first quarter, the number of trucker members who subscribe to our Shengxing program had grown steadily to over 700,000, contributing approximately 40% of the platform's long haul fulfilled orders. Truckers enjoying membership benefits, such as priority access to orders and other exclusive privileges, show significant higher transaction frequency and fulfillment rates compared to nonmembers. As the membership penetration rate continues to rise, we expect the platform's overall trucking supply and matching efficiency to improve. In terms of the overall trucker user trend, we have observed a structurally stable supply of median and heavy duty truckers over the past two years. This is largely due to the naturally high entry barriers for truckers, including the requirement for a professional driver's license, substantial vehicle investment, and a certain level of cargo resources, all of which help future out newcomers with non-trucking backgrounds. By increasing order frequency and offering all around support, our platform has helped these truckers improve their vehicle turnover, enabling them to maintain resilient incomes amid economic fluctuations and thereby strengthening the stability of the core trucking base. Looking ahead, we are confident that as order volume continues to grow, the trucker vehicle's utilization will further improve as well as the income. Meanwhile, with ongoing optimization of matching efficiency and membership programs, we expect supply-demand dynamics to become even more balanced, which ultimately creating greater value for both truckers and shippers. Thank you.

The next question comes from Thomas Chung with Jeffreys. Please go ahead.

Thanks, management, for taking my question. In the first quarter, transaction service revenue increased by .5% year on year, continuing its rapid growth. What are the main drivers behind this? What are the focuses for your commission strategies this quarter? Thank you.

Thank you, Brian. That's a good question. In the first quarter, transaction service revenue continued to grow strongly, primarily driven by dual engines of expanding business scale and improving order quality. First, the number of commission orders continued to grow rapidly, given robust growth in fulfilled orders and increased commission order coverage. In March, we newly rolled out commission services in 39 additional cities across Northeast and Southwest regions, increasing overall commission coverage from 77% in the same period last year to 85% this year. Looking at our full year strategy, we plan to further expand the number of commissioned cities. Given our strong capabilities to identify high quality transactions than prior years, we believe that transitioning from a city-based exemption model to a more refined order-based exemption model will achieve higher monetization efficiency. This fine-tooth commission strategy will allow us to enhance user experience while driving sustainable growth in transaction service revenue. Second, the monetization per order also improved steadily from RMB 22.7 per order in the same period last year to RMB 25.5 this quarter, representing a 12% -over-year increase. This was largely driven by the larger order contribution from high quality transactions. With our improvements in freight pricing and price protection for truckers, they have become more open to accept higher commission rates, creating a healthy cycle of better service for shippers, reasonable freight premium to truckers, and ultimately more room for commission, mutually beneficial to both users and the platforms. Looking ahead, we believe there is a considerable room for further growth in transaction service revenue through ongoing optimization of order structure and the platform's efforts to provide protections and added value to both shippers and truckers. We'll continue to refine our commission strategies, enhance monetization efficiency, and ensure that platform service deliver greater value to users to drive sustainable growth in our transaction service business. Thank you.

The next question comes from Wan Lao with CITC. Please go ahead.

Thank you, Mr. Zhang, Mr. Zhang, and Mr. Mao for answering my question. In today's opening, the management team mentioned that they are going to increase their investment in home ownership. I'd like to ask the management team what is the main consideration for increasing investment this year? And what is the current situation of home ownership? I'll translate it myself. Thanks, management, for taking my questions. So my question is about what are the key considerations behind the anticipated increase in the investment in PLASPRC during this year? And what is the current progress of PLASPRC's business? Thank you.

Thank you. We believe the autonomous driving technology is a critical inflection point, as I mentioned, shifting from technical validation to large-scale commercialization. With rapid advancement in perception algorithms, decision-making systems, and increasingly supportive regulatory environments, the sector now offers a significant commercial potential. By scaling up our investments at this pivotal moment, we aim to seize the opportunity presented by the technology's maturation and acceleration and accelerate the development of closed-loop ecosystems from R&D to monetization, particularly by building early-mover advantages in high-demand applications, such as long-haul logistics. On the collaboration front, we have established joint R&D initiatives with leading OEMs to co-develop and deploy next-generation autonomous driving systems. In terms of commercialization milestones, our intelligent trucking fleet has already begun delivering freight services to enterprise clients. This real-world deployment allows us to continuously accumulate operational data while providing tangible efficiency gains, including lower transportation costs and improved coordination between human operators and autonomous systems. As a dedicated innovator in autonomous driving, PLOS TRC is committed to reshaping transportation economics through practical and scalable technological solutions. Unlike pure-play R&D companies, we focus on solving real-world challenges, such as fuel efficiency, driver fatigue, and fleet management complexity with targeted applications. Looking ahead, we remain focused on two core goals, reducing costs through breakthrough technologies and driving operational efficiency, ultimately helping the industry transition toward a safer, smarter, and more sustainable freight transportation. Thank you.

The next question comes from Richie Sun with HSBC. Please go ahead.

Zhang Zhong, Simon Maomao. Good evening. Thank you for giving me the opportunity to ask. My question is about AI. What are the main applications of AI on the platform's product functionality and future plans? Thank you, management, for taking my questions. So my question is about AI. So what are the main applications of AI on the platform's product functionality currently? And what are the plans for the AI development in the future? Thank you.

Yeah, thank you, Richie. Currently, the application of AI technology is primarily focused on intelligent dispatching. And based on extensive user research, we identified that many shippers experience common pain points during the truck finding process, such as missed calls and inefficient communication due to repeated interactions. To address these challenges, we invested over a year integrating the freight industry's specific features into our AI large model to create our smart truck finder designed to help shippers locate the right truckers more effectively and efficiently. With the AI-powered truck finders, shippers can simultaneously communicate with multiple truckers 24-7 and provide real-time response to truckers' inquiries, significantly improving communication efficiency. In addition, the AI system can automatically verify the vehicle's status and conditions to ensure that they meet the shipper's requirements. It also leverages the platform's broader market data to intelligently filter and recommend the most suitable and cost-effective truckers, providing shippers with a more reliable and hassle-free experience. Furthermore, we will substantially increase AI-related investments and actively explore the use of AI technology in other areas, such as order posting, customer services, and route planning. Looking ahead, we aim to continually deepen our AI capabilities to further enhance overall operational efficiency and consistently deliver high-quality, more efficient services to shippers and truckers. Thank you.

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

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Full Truck Alliance or TPG Invest Relations. Our contact information for IR in both China and the US can be found in the description below. Thank you for joining today's presentation. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.