[Management View]
Key metrics, strategic priorities

[Outlook]
Performance guidance, future plans

[Financial Performance]
YoY/QoQ trends compared to expectations/estimates

[Q&A Highlights]
Question 1: Thank you, management, for taking my question. My question is regarding the fulfilled orders. We have seen that the fulfilled orders increased by 24% year-over-year in the second quarter, and the fulfillment rate increased to around 41%. Both maintained very strong growth momentum. What are the key factors driving this growth? How do you view the fulfilled order volume growth in the second half of this year, as well as for the full year? Thank you.

Answer: Thank you, Eddie. In the past second quarter, our fulfilled orders continued to increase steadily, significantly outperforming the broader freight market. We attribute this strong growth to three key elements: our ongoing user base expansion, the optimization of shipper user structure, and our product and service upgrades. First, the consistently rapid expansion of both shippers and trucker user base has laid a solid foundation for order growth. On the shipper side, rising demand among the SME owners to reduce costs and improve efficiency, along with increased appetite for digital and intelligent transformation, has accelerated the shift of shippers from offline to online. Our average monthly active shippers exceeded 3,160,000 in the second quarter, hitting an all-time high.
On the trucker side, more truckers who traditionally operated offline took orders to online platforms, effectively boosting transportation capacity. The continued expansion on both the supply and demand side has further supported order growth. Second, the continued optimization of our shipper user base has driven stronger order stickiness. Our high-quality shipper segment, mostly low and medium frequency direct shippers, have delivered consistent growth in average fulfilled orders per user, thanks to ongoing platform service refinement, reflecting stronger retention and stickiness. The order contribution of direct shippers further increased to 53% in the second quarter, up four percentage points year-over-year. In the meantime, our average fulfillment rate for these direct shippers surpassed 60% of thresholds for the first time.
This user mix progress was a key structural driver of the overall increasing order volume and fulfillment rates. Thirdly, our further upgraded products and operational strategies have strengthened the certainty level of order fulfillment. For example, in the second quarter, we rolled out an intelligent matching system that prioritized dispatching orders to truckers closest to the shipping location before gradually expanding outwards. This close-to-far strategy effectively cut down matching time and improved the truckers' order response efficiency and fulfillment reliability. Meanwhile, on the shipper side, we have fine-tuned our shipper information intake process, helping truckers get a clearer and more complete picture of the cargo before accepting orders, which has reduced cancellations caused by information gaps.
For the full year, we remain optimistic about the continued growth in our fulfilled orders. While the macro uncertainties are likely to persist in the second half, we feel our relatively positive outlook is justified given our leading edge and strong market position in the freight matching service, and the online penetration is still low. We will continue optimizing the user structure and enhancing service standards to keep driving higher quality order conversions while also refining our product and service operations to boost user engagement and retention among small and medium-sized shippers and core trucker groups. We are confident these efforts will further solidify our platform's industry leadership and bring us closer to our full-year order growth target. Thank you.

Question 2: Thank you, management, for taking my questions. In the second quarter, the number of monthly active shippers reached 3,160,000, representing a year-over-year growth of 19.3%. What are the main drivers behind this growth? And could you brief us on the progress of the shipper member business in the second quarter? Thank you.

Answer: Thank you, Charlie. In the second quarter, the number of monthly active shippers maintained a solid growth trajectory we have observed in the past few quarters. This momentum was primarily driven by improved user acquisition efficiency and consistent enhancement to product experience. First, we continue to optimize our user acquisition strategy. We cut back our low conversion marketing placement channels and shifted resources to high conversion channels, such as online app store advertising, achieving better ROI within a controlled budget. Shippers' willingness to engage and the conversion rate of their first postings to fulfillment both improved significantly, driving ongoing improvements in the quality of new users.

Second, our efforts to increase engagement and retention among existing users contributed to the sustained MAU growth. We refined key features such as trucker trajectory completeness and real-time trucker locations, enhancing shippers' confidence in our fulfillment capabilities. This boosted both overall shipment frequency and fulfillment rates, elevating user stickiness. Sequentially, our shipper MAU growth eased slightly quarter over quarter, mainly due to reduced activity among intermediary 1688 member shippers as we stayed more focused on serving direct shippers and strengthening our platform service capabilities. Fulfillment experience and matching efficiency, more direct shippers opted to post orders directly onto our platform, reducing the role of intermediary brokers.
This shift was essentially an improvement in our platform's ecosystem quality, marking progress toward a more sustained shipper user cluster. Regarding membership programs, the number of shipper members continued to steadily increase in the second quarter, with existing shipper members totaling 1,210,000 by quarter-end. This growth was primarily driven by our ongoing enhancements to our membership programs, effective execution of our tiered pricing strategies, and stable retention among existing members. The rapid growth of mini member shippers remained the primary driver of shipper member growth. Promotion for our 288 membership program effectively lowered the initial payment threshold, driving first-time conversions among low and medium frequency direct shippers.
Data shows that our tiered approach to member operations has started to pay off. Notably, in the second quarter, among 288 members who used up shipment allowance and chose to renew, nearly 30% upgraded to the 688 membership, demonstrating users' increasing trust and reliance on our platform services. In the meantime, retention among existing shipper members remained stable. As of the end of the second quarter, our twelve-month rolling retention rate for shipper members remained above 80%. This sustained high level over multiple quarters reflects our continuous efforts to improve member experience. Looking ahead, we will continue to focus on high-quality direct shipper operations, expanding the share of core users while naturally phasing out intermediary shippers.
In terms of the membership program, we will further enhance renewal rates for mini member shippers and encourage upgrades to higher-tier members. Leveraging our tiered approach to members' operations and targeted benefits, this will enable us to boost overall payment rates and user lifecycle value, fueling our platform's order growth and enhancing transaction quality.

Question 3: Thank you, management, for taking my question. We know that in early July, several major domestic online freight platforms have jointly signed the industry self-regulation convention. Under this context, what measures have you put in place?

Answer: Thank you, Wenjie. That's a good question. The industry self-regulation convention aimed to protect truckers' legitimate rights and foster a healthier, more sustainable industry ecosystem. Our platform responded swiftly with supplementary guidance and various measures aimed at helping truckers take orders confidently, receive payment promptly, and operate with peace of mind. In terms of freight rate protection, we strengthened our oversight of shippers and provided truckers with robust support in resolving payment issues through both customer service and legal channels. We have also expanded our freight rate protection program for eligible trucker members.

For orders that are not settled on time, the platform will advance or partially cover payments per established rules, ensuring that truckers' cash flow is more stable and predictable. To improve transaction fairness, we have taken steps to curb market-disrupting behaviors such as malicious order flipping, fake order taking, and frequent cancellations. Leveraging algorithm monitoring and optimization, we are able to block ultra-low-priced or otherwise unreasonable freight resources, helping safeguard truckers' earnings. Shippers or truckers who violate platform rules may face account suspension or blacklisting. At the same time, we have made reporting channels more accessible, encouraging truckers to share tips and help maintain a transparent, fair trading environment.
Finally, we are enhancing communication and feedback mechanisms by regularly hosting trucker discussion panels in person, where truckers can share their thoughts on what matters most to them, including rights protection and rule optimization. By also gradually opening channels for truckers to submit reports publicly, share feedback, and track resolution, we can ensure closure of reported issues. These initiatives are designed to reinforce truckers' sense of security, satisfaction, and trust when operating on our platform, while fostering a stable, long-lasting partnership between the platform and the trucker community.

Question 4: Thanks, management, for taking my questions. Congrats on the strong results in the second quarter. We see that the company adjusted its freight brokerage service on August 1. So what operational changes have been made in them? And do you observe any user behavior shift? And how should we view the future prospects in the financial contribution of the Nalimba business? Thank you.

Answer: Thank you. In early August, in response to the upcoming cancellation of government grants, we promptly increased the fee rate for freight brokerage service to between 10% to 11% to cover increased tax costs and other operating costs related to the business. At the operational level, we have been focused on strengthening existing customer communication and retention, with emphasis on ensuring a seamless experience for shippers placing, invoicing, and also freight matching orders. At the same time, we have continued to enhance our freight matching services to maintain stable fulfillment performance.
Early observations suggest that the retention of these users remains broadly in line with our expectations following the fee rate adjustment, confirming the core value of our platform's freight matching service in driving user engagement and loyalty. At the group level, we believe the adjustments to our freight brokerage business will have limited impact on public freight management service. We expect that as other platforms providing similar freight broker services complete fee rate adjustments sooner or later, both smaller players with limited value-add other than low-priced invoicing service will exit the market eventually. This is likely to bring some users back to Full Truck Alliance Co.
Ltd. and support a new wave of consolidation in the freight sector, further highlighting the core value our platform delivers to both shippers and truckers. From a financial standpoint, we believe the reduced profit contribution of freight brokerage will, over the long run, help us optimize our revenue structure and key operating metrics, including profitability. It will also reduce cash flow uncertainty arising from receivables and local government grants, allowing our earnings to more accurately reflect the true value of our core operations and providing a stronger foundation for sustainable revenue and profit growth in the future. Thank you.

Question 5: Thank you, management, for taking my question. I want to ask about the interest of shipment business. So how did this segment perform in the second quarter? And on the operations side, what were the key initiatives involved? Thank you.

Answer: Thank you, Ritchie. Since the beginning of the second quarter, we have reshuffled our entrusted shipment service as part of our broader business strategy optimization. Starting in April, we streamlined product offerings by discontinuing the entrusted shipment carpooling service and focusing exclusively on the full truckload transactions under the entrusted shipment segment. This shift was driven by two considerations. First, from a product positioning perspective, the entrusted shipment business is built around providing a high-quality, highly reliable transportation experience for shippers with stringent requirements for timeliness and stability. In contrast, less-than-truckload carpooling services are primarily cost-driven, characterized by lower freight rates and less certainty in fulfillment.
This inherent mismatch with our brand positioning prompted us to reshuffle the customer service and concentrate our resources on full truckload offerings, further enhancing the premium image of the entrusted shipment segment. Second, from an operational efficiency standpoint, full truckload orders in the entrusted shipment business generally achieve higher freight rates and stronger fulfillment performance, making them more attractive to truckers. This advantage was amplified in May when we fully implemented the price consistency mechanism under which freight rates for entrusted shipment orders are notably higher than standard freight orders. The resulting income potential has increased trucker engagement and expanded the availability of high-quality transportation capacity on our platform.
While the restructuring of service offerings under the entrusted shipment program led to a short-term slowdown in order volume growth, we believe this strategic adjustment will, over the medium to long term, strengthen user mindset with premium brand positioning, creating differentiated competitive advantages, and help cultivate a higher-quality ecosystem of both shippers and truckers. On the monetization front, the premium pricing strategy has created a more favorable revenue environment and improved the stability in revenues from transaction service. Looking ahead, we will continue refining the shipment business model, focusing on the dual engines of efficient matching and premium service to further enhance user experience, deepen platform engagement, and solidify its role as a core pillar of our product portfolio.

[Sentiment Analysis]
Tone of analysts/management

[Quarterly Comparison]
key metrics comparison table, don't omit

[Risks and Concerns]
Risks and concerns content

[Final Takeaway]
1-2 paragraph synthesis