Full Truck Alliance Co Ltd

NYSE:YMM

Earnings Call Analysis

Strong Revenue Growth Driven by Increased User Base and Enhanced Fulfillment Efficiency

In the third quarter, Full Truck Alliance achieved remarkable financial results with net revenues of RMB 3.314 billion, a 33.9% year-over-year increase. This growth is fueled by a 34% rise in freight matching service revenues and a staggering 68.8% growth in transaction services. Monthly active shippers reached 2.84 million, up 33.6% year-over-year. The fulfillment rate improved to 34.5%, up 5.5 percentage points from the previous year. Looking ahead, the company anticipates fourth-quarter revenues between RMB 2.94 billion and RMB 3 billion, indicating a year-over-year growth rate of up to 24.8%. This momentum reflects strategic user acquisition and enhanced operational efficiency.

Robust Revenue Growth Amid Market Challenges

In the third quarter of 2024, Full Truck Alliance (FTA) reported a remarkable net revenue of RMB 3.314 billion, marking a 33.9% increase year-over-year. This growth was largely fueled by the thriving freight matching services, which generated RMB 2.5518 billion in revenue, a 34% increase compared to the same quarter last year. Notably, the transaction service revenue, a key area of focus, surged by 68.8% year-over-year, reaching RMB 1.475 billion. This significant uptick is attributed to an increased transaction volume driven by the rising user demand and effective operational strategies.

Operational Excellence and User Engagement Drive Fulfillment Rates

During the quarter, the number of fulfilled orders grew by 22.1% year-over-year to 51.8 million, significantly outpacing the overall freight market's growth in China. A major contributor to this success was an enhancement in matching efficiency and a growing user base, with average monthly active shippers reaching 2.84 million—an increase of 34% year-over-year. The fulfillment rate also improved significantly, climbing to 34.5%—up 5.5 percentage points from the previous year—reflecting FTA's focus on user acquisition and retention, particularly among small- and medium-sized enterprises.

Strong Profitability Indicators

FTA experienced a substantial increase in profitability with a net income of RMB 1.1219 billion, an impressive 81.4% year-over-year rise. Non-GAAP adjusted operating income also surged, reaching RMB 884.5 million—up 92.9% from the previous year. These results underscore FTA's effectiveness in managing operational costs while simultaneously expanding service offerings, contributing to stronger profit margins.

Strategic Investments and Future Growth Perspectives

Looking ahead to the fourth quarter, FTA forecasts revenues between RMB 2.94 billion and RMB 3 billion, indicating a year-over-year growth rate of approximately 22.3% to 24.8%. The company's outlook reflects a positive sentiment based on its ongoing investments in user acquisition and technology enhancement. FTA's strategy focuses on maintaining robust growth in its user base and further optimizing its service offerings to bolster user engagement and retention.

Continuous Innovation and Market Adaptation

During the call, management emphasized their commitment to innovation in logistics technology and service delivery. The launch of features such as premium cargo bidding and enhancements to their Less-than-Truckload (LTL) offerings illustrate FTA's proactive approach to adapting to market needs. This dedication not only attracts new users but also fosters stronger loyalty among existing truckers and shippers, thus enhancing overall operational efficiency.

Cost Management and Competitive Positioning

While FTA's revenues grew, costs did increase, particularly with respect to VAT-related tax surcharges and sales and marketing expenses, which rose to RMB 412.5 million from RMB 290.8 million year-over-year. However, strategic cost management measures allowed for continued expansion without overly compromising profit margins. The increase in overall user engagement and improved operational efficiency is expected to mitigate long-term cost pressure.

Conclusion: FTA's Growth Trajectory Looks Promising

In summary, FTA is navigating the current challenging macroeconomic environment effectively by leveraging technology, enhancing user engagement, and optimizing operations. The impressive growth in revenue and profitability metrics positions the company favorably within the logistics sector. Investors can look forward to further expansion and innovation as FTA continues to enhance its platform and capture the growing demand for logistics services in China.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to Full Truck Alliance's Third Quarter 2024 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mao Mao, Head of Investor Relations. Please go ahead.

[Mao Mao, executive]

Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and 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 the SEC. The company does not undertake any obligation to update this forward-looking information, except as required by law.

During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.

Joining us today on the call from FTA's senior management are Mr. Hui Zhang, our Founder, Chairman and CEO; and Mr. Simon Cai, our CFO. Management will begin with prepared remarks, and the call will conclude with a 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 ir.fultruckalliance.com.

I will now turn the call over to our Founder, Chairman and CEO, Mr. Zhang. Please go ahead, sir.

[Hui Zhang, executive]

[Foreign Language]

[Mao Mao, executive]

Hello, everyone. Thank you for joining us today on our third quarter of 2024 earnings conference call. Over the past quarter, we have continued our efforts to drive the digital and intelligent transformation of the logistics industry. By helping enterprises reduce cost and improve operating efficiency, we have enhanced their logistics competitiveness, a key differentiator in the current macro environment. As a result, we achieved 22% year-over-year growth in fulfilled orders in the third quarter, steadily advancing the shift away from traditional off-line logistics matching models. In addition, the rapid expansion of our user base together with the significant strengthening of the synergetic network effect between our shippers and trucker users has improved cost and transaction efficiencies, organically fueling our growth.

[Hui Zhang, executive]

[Foreign Language]

[Mao Mao, executive]

Looking back at the third quarter, we are pleased with the progress we have made across the board, particularly in terms of new user acquisition, shipper operations, enhancing the trucker capacity supply and boosting monetization quality. For new shippers, our vast addressable market covers tens of millions of small- and medium-sized enterprises that have logistic needs nationwide. During the quarter, our efforts to capture this market, including user acquisition campaigns across diverse channels and ongoing product enhancements to improve new shippers user experience drove a strong influx of new shippers. In terms of shipper operations, we executed a full rebranding for Yunmanman this quarter and boosted user stickiness by optimizing our product metrics for shipper members. These initiatives drove average ship MAUs to another record high, reaching 2.84 million in the third quarter, up 33.6% year-over-year. To enhance our trucker supply, we fostered a sustainable growth in transportation capacity by strategically leveraging our premium cargo bidding initiatives, trucker membership program and the trucker credit rating system. This not only led to an increase in fulfillment rate to 34.5% this quarter, up 5.5 percentage points year-over-year, but also shortened the average matching time for our long-haul transactions.

Lastly, on monetization, we continue to gradually unlock our platform's substantial monetization potential during the quarter, propelling rapid revenue growth. These achievements further underscores our immense value in driving cost savings for shippers, while empowering truckers with more orders, higher turnover and extra income.

[Hui Zhang, executive]

[Foreign Language]

[Mao Mao, executive]

Thanks to our comprehensive operational excellence. Our financial results this quarter again exceeded market expectations. Our net revenue in the quarter reached RMB 3.03 billion, up 34% year-over-year, among which transaction service revenues grew by 69% year-over-year and accounted for nearly 35% of our total revenues. Non-GAAP adjusted operating income surged by 93% year-over-year to RMB 884.5 million and non-GAAP adjusted net income increased by 50% year-over-year to RMB 1.24 billion.

[Hui Zhang, executive]

[Foreign Language]

[Mao Mao, executive]

Harnessing the momentum of China's industrial transformation and upgrading, we have actively embraced the new quality productive force trends, empowering emerging manufacturing industries with more competitive logistics solutions that drive their high-quality growth. As a pioneer in advanced logistics productivity, we are committed to addressing the government's need to reduce logistics costs across society.

Looking ahead to the fourth quarter, we will continue to invest deeply in digital and intelligent product innovation, creating greater value for all of our users and the society as a whole.

Thank you, everyone. Let me pass the call over to our CFO, Simon, who will provide an update on our third quarter business progress and financial results.

[Chong Cai, executive]

Okay. Thank you, Mr. Zhang, and thanks, everyone, for making the time to join our earnings conference call today.

Let's review our operational and financial results for the third quarter of 2024. I'll start with our operational performance. Although overall freight market activity remained subdued this quarter, our fulfilled orders increased by 22.1% year-over-year to 51.8 million in the third quarter. This robust growth was driven by our expanding shipper user base as well as higher fulfillment efficiency, thanks to enhanced product features and user experience on the platform. Our fulfillment rate also continued to improve in the quarter -- in the first quarter, reaching 34.5%, up 5.5 percentage points year-over-year and surpassing last quarter's record-setting fulfillment rate. This improvement was largely driven by the continuous shift in our shipper user structure and the resulting optimized order structure. The other contribution from our direct shippers reached 49% in the third quarter, which is expected to exceed 50% soon. Meanwhile, both our 688 member shippers and nonmember shippers achieved average fulfillment rates above 50%.

Looking ahead, we are committed to further enhancing our platform's overall order structure by advancing our direct shipper acquisition strategies and improving matching efficiency through streamlined fulfillment processes across transaction types. We're confident that these efforts will lead to sustained improvements in fulfillment efficiency across the platform.

Turning to our user base. Our average shipper MAUs reached 2.84 million in the third quarter, up 33.6% year-over-year and 7.4% quarter-over-quarter. Notably, our average shipper miles surpassed 3 million in September. The strong growth in shipper users was largely attributable to growth among our low and medium frequency direct shippers, particularly our expanding nonmember shippers, underscoring the effectiveness of our user acquisition strategies and our outstanding execution capabilities.

Since the third quarter, we have been ramping up our investment in user acquisition and branding campaigns across diverse channels, effectively expanding our reach to a wider pool of potential users. Additionally, we have sharpened our focus on customer experience, taking multiple steps to address their feedback, including simplifying the shipment process and proactively engaging dormant users through targeted customer service efforts. We're confident that we can maintain rapid growth in our shipper user base. Moreover, by refining the fulfillment experience for shippers first 3 orders, we have meaningfully improved new users' perception of our services and increased our share of mind, resulting in consistently robust shipper activity with our shipper member 12-month rolling retention rate remaining above 80% in the third quarter.

In addition to continuous shipper user growth, our platforms, influence and wallet share are also steadily increasing within the trucker community. This has been demonstrated by the number of active truckers fulfilling orders through our platform over the past 12 months, which by September reached a new milestone, exceeding 4 million for the first time. Even with the growing user base, our next month's retention of truckers who responded to orders remained above 85% by average in the third quarter. In the meantime, the average number of quarterly fulfilled orders per active truckers fulfilling others on our platform surpassed last quarter's peak, hitting another new record high. Taken together, these user metrics underscore truckers growing reliance on FTA's platform.

To enhance trucker operations, we implemented an area of operational upgrades and optimizations based on the existing operations framework. First, we identified and segmented new truckers as well as providing user training, helping them quickly familiarize themselves with FTA's features for order acceptance and fulfillment to ensure an optimal fulfillment experience for shippers. We also introduced our care-free package, our trucker membership program for the long-haul segment to increase trucker retention and stickiness. In addition, we continue to drive the premium cargo bidding initiatives launched last quarter, leveraging the distribution of high-quality orders to incentivize truckers to boost their fulfillment efficiency and credit rating, which resulted in higher overall trucker activity.

Next, I'd like to highlight the progress we made on our transaction service. In the third quarter, revenues from transaction service maintained their strong growth momentum soaring by 68.6% year-over-year to RMB 1.05 billion. This was fueled by the steady growth in order volume, increased monetized order penetration and improved monetization rate resulting from enhanced platform functionality and service quality. Our monetized order penetration ratio reached 82.8% for the quarter, an increase of more than 12 percentage points year-over-year from 70.1% in the prior year period. Our average monetization amount per order, including transaction commission and trucker membership fee increased to RMB 24.4 in the third quarter from RMB 20.9 a year ago. Without compromising user experience and matching the efficiency, we have consistently refined our commission strategy fine tuning the granularity of commission metrics to cater to the sensitivities of different transaction types, supply-demand dynamics and user demographics.

Looking ahead to the fourth quarter, we expect both the monetization rate and monetized order penetration ratio to remain disciplined and steadily improve. Before going over our financial results, I'd like to provide a brief update on our share repurchase program. Since we announced our 1-year share repurchase program totaling USD 300 million on March 30, 2024, we have repurchased approximately 4.9 million ADS shares totaling approximately USD 40.3 million.

Moving on to our third quarter financial results. Our total net revenues in the third quarter were RMB 3.314 billion, representing a 33.9% increase year-over-year, primarily attributable to an increase in revenues from freight matching services. Net revenues from the freight matching services, including service fees from freight brokerage models, membership fees from listing models and commission from transaction services were RMB 2.5518 billion in the third quarter, representing an increase of 34% year-over-year, primarily due to a rapid increase in transaction service and the continued growth in trade brokerage service.

Revenues from freight brokerage service in the third quarter were RMB 1.2809 billion, up 19.7% year-over-year, primarily attributable to an increase in transaction volume due to the continued growth in user demand. Revenues from the freight listing service in the third quarter were RMB 223.4 million, up 4.9% year-over-year, primarily due to a growing number of total paying members. Revenue from the transaction service in the third quarter were RMB 1.475 billion, up 68.8% year-over-year primarily driven by an increase in other volume penetration rate and the per order transaction service fees.

Revenues from value-added services in the third quarter were RMB 479.6 million, up 33.4% year-over-year. The increase was due to the growing demand from truckers and shippers for credit solutions and other value-added services.

Third quarter cost of revenues was RMB 1.3649 billion compared with RMB 1.1421 billion in the prior year period. The increase was primarily due to an increase in VAT-related tax surcharges and other tax costs, net of grants from government authorities. These tax-related costs net of government grants totaled RMB 1.2226 billion, representing an increase of 18.3% from RMB 1.325 billion in the same period of 2023, primarily due to the expansion of transaction activities involving our free brokerage service. Our sales and marketing expenses in the third quarter were RMB 412.5 million compared with RMB 290.8 million in the same period of 2023. The increase was primarily due to an increase in advertising and marketing expenses for user acquisition.

General and administrative expenses in the third quarter were RMB 227.9 million compared with RMB 290.4 million in the same period of 2023. The decrease was primarily because we recorded a settlement in principle of certain U.S. securities class action in the same period last year, which was disclosed in the Form 6-K furnished to the SEC on September 18, 2023.

R&D expenses in the third quarter were RMB 195.1 million compared with RMB 237.7 million in the same period of 2023. The decrease was primarily due to lower salary and benefit expenses. Income from operations in the third quarter was RMB 762 million compared with RMB 247.1 million in the same period of 2023. Net income in the third quarter was RMB 1.1219 billion, an increase of 81.4% from RMB 618.4 million in the same period of 2023. On the non-GAAP measures, our adjusted operating income in the third quarter was RMB 884.5 million, an increase of 92.9% from RMB 458.5 million in the same period of 2023. Our adjusted net income in the third quarter was RMB 1.2412 billion, an increase of 50.2% from RMB 826.6 million in the same period of 2023.

Basic and diluted net income per ADS were RMB 1.06 in the third quarter compared with RMB 0.58 in the same period of 2023. Non-GAAP adjusted basic net income per ADS was RMB 1.18 in the third quarter compared with RMB 0.78 in the same period of 2023. Non-GAAP adjusted diluted net income per ADS was RMB 1.17 in the third quarter compared with RMB 0.78 in the same period of 2023.

As of December 30, 2024, the company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits and wealth management products with maturities over 1 year of RMB 27.3 billion in total compared with RMB 27.6 billion as of December 31, 2023.

For our fourth quarter 2024 business outlook, we expect our total revenues to be between RMB 2.94 billion and RMB 3 billion, representing a year-over-year growth rate of approximately 22.3% to 24.8%. 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 reasonable accuracy as of the date hereof.

That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead.

[Operator]

[Operator Instructions] And our first question today will come from Charlie Chen of China Renaissance.

[Charlie Chen, analyst]

[Foreign Language]

Congratulations for a very strong quarterly results. My question is regarding the order numbers. So the number of fulfilled orders in the third quarter grew by 22.1% year-on-year, significantly outpacing the growth rate of the overall freight market in China. What were the key drivers behind it? And also based on the order trends so far this year, how do you view order volume growth in the fourth quarter?

[Chong Cai, executive]

Thank you, Charlie. Our platform's order volume continued to grow steadily in the past quarter despite very challenging macro freight market demand. This growth was largely fueled by an influx of new users and improvements in our matching efficiency, driven by product feature optimization and enhancement. Additionally, our incremental order volume come from new business -- additionally, our incremental order volume from new business also maintained a strong growth momentum. For new users, we continue to execute our direct shipper acquisition strategies to propel user growth. We integrated online channels with offline truck sticker and advertising to substantially boost brand awareness and engagement.

During the past quarter, our average number of monthly active shippers increased by 34% year-over-year reaching a very impressive 2.84 million. Furthermore, our operations team focused on converting new users through their initial, and the first 3 order fulfillment and fostering consistent online order placement and fulfillment habits among all the users. This quarter, we also launched a holistic branding campaign, introducing a more vibrant, modern red and white checkered logo to enhance brand recognition and recall among shipper and trucker users. Moving forward, this updated design will be featured on truck XSeries, Tarps and other FDA branded items further strengthening our renewed brand identity and our strategic positioning within the logistics industry.

For product features, optimizing premium cargo bidding remained a priority in the third quarter. The following last quarter's introduction of instant bidding for price orders, we have now extended the coverage to negotiate orders, which incentivize truckers to complete order matches and boost their credit ratings to obtain access to better orders. From the perspective of product effectiveness, matching efficiency for high-value orders remained stable, supported by significant improvements in matching efficiency across medium-tier cargo categories. This program led to an overall increase in order volume and fulfillment rates with average orders fulfilled by monthly active truckers achieving over 10% year-over-year growth quarter.

In terms of our new business, our Less-than-Truckload business continues to serve as a major growth driver for users and other volume. In this quarter, we further optimized the product functionality of our LTL carpool offering, unveiling sequential route aligned carpooling. This new feature leverages load optimization models and route alignment algorithms to provide truckers with precise freight matching capabilities. It has significantly improved truckers carpooling efficiency and success rates contributing additional value to our platform's business growth. And as we enter to the fourth quarter, we're confident in sustaining growth in our online penetration rate through user growth and ongoing product feature optimization.

[Operator]

Our next question will come from Eddy Wang of Morgan Stanley.

[Eddy Wang, analyst]

[Foreign Language]

In the third quarter, the fulfillment rate further tracked upward to 34.5%, up 5.5 percentage points year-over-year and 0.8 percentage points sequentially. What were the key drivers behind this improvement? And what operational strategy enhancements were implemented to boost the fulfillment rate?

[Chong Cai, executive]

Thank you, Eddy. Our fulfillment rate once again reached a record high. We finished the quarter at 34.5%. This surge was largely driven by a shift in our user -- shipper user structure and the continued optimization of our operational strategies. In terms of user structure, the majority of new -- majority of new shippers come from small- to medium-sized business owners and were mainly direct shippers. This further optimized our platform's user structure. Currently, direct shippers contribute around 49% of the total fulfilled orders, and these shippers mainly place orders in categories known for higher fulfillment rates such as LTL, entrusted shipments, and short-haul deliveries, consistently contributing to the improvement in overall fulfillment rate. Our monthly active 1688 member shippers practically hit saturation with the member count remaining flat quarter-over-quarter and year-over-year this quarter. We expect membership in this segment to stabilize or even shift toward other low and median frequency shipper tiers in the future. This trend further reinforced our vision of redefining industry standards for road freight, transport by gradually phasing out ineffective intermediaries and facilitating simulated connections between direct shippers and truckers.

From an operational strategy perspective, this quarter, we shifted our focus back to optimizing the application of foundational data and freight matching starting with trucker registration, we guided users to select tasks such as cargo types and preferred locations for more accurate trucker profiling and clearer insights into their needs ultimately improving the matching efficiency of our recommended orders. In addition, with negotiated orders now fully accessible in premium cargo bidding, our platform has aligned all freight postings with this bidding logic. This adaptation enabled us to leverage credit ratings more effectively to incentivize truckers significantly improving fulfillment rates for medium team orders. Looking ahead, we will consistently acquire more direct shippers and truckers generating and aligning increased demand and supply to enhance the balance between shipping capacity and cargo, ultimately boosting our fulfillment rate.

[Operator]

Our next question today will come from Jiulu Li of CICC.

[Jiulu Li, analyst]

[Foreign Language]

In third quarter, the monthly active shippers reached 2.84 million, marking a year-over-year increase of 33.6% and a quarter-over-quarter increase of 7.4%, which was one of the key factors driving this growth, and what's the user profile of new shippers?

[Chong Cai, executive]

Thank you, Jiulu. Our monthly active shippers continue to grow rapidly in the past quarter, mainly driven by the ongoing increase in new users gained through our effective user acquisitions alongside improved user engagement resulting from our fine-tuned operational strategies. As our user base expanded, our user structure also improved with monthly active direct shippers increasing by over 39% year-over-year in the past quarter. Our platform promotions, mainly leveraged online app stores and strategic marketing placement to boost user growth, complemented by offline initiatives such as truck, sticker advertising and brand awareness -- brand awareness campaigns. Following our holistic brand upgrade this quarter, we tend to focus on cities with high foot traffic and elevated order volumes to increase brand exposure and further enhancing new user conversion effectiveness. We noted that our newly acquired shippers were widely distributed across diverse sectors, reflecting the broader market dynamics with higher concentrations in sectors such as building materials, food and beverages, parts and components, metal and steel and chemicals, among others.

During the third quarter, we boosted user activity mainly by optimizing product features and refining our membership strategies. For direct shippers, our R&D team further simplified our order placement interface to streamline the shipping process. Additionally, our customer service representative proactively engaged dormant users, elevating overall user engagement.

Regarding membership strategies, we prioritized the promotion and penetration of our mini membership program by offering benefits such as shipment tracking and freight discount, we effectively converted a large -- a larger proportion of low and medium frequency shippers into paying members, resulting in increased user activity and order frequency. We believe that the online penetration rate among small- to medium-sized enterprises is well below saturation. Our long-term objective is to convert tens of millions of direct shippers. And looking ahead, as our brand recognition grows and we continue to refine our product features, we expect a fresh influx of SME owners to join our platform and preparing sustained growth in our user base and overall platform scale.

[Operator]

Our next question today will come from Bruce Mi of UBS.

[Yuxuan Mi, analyst]

[Foreign Language]

My question is on the company's transaction service. So in the third quarter, our transaction service revenue increased by nearly 69% year-on-year. So what were the main drivers behind this growth? So did we make some adjustments to our commission strategy?

[Chong Cai, executive]

Thank you, Bruce. Our overall transaction commission dynamics remained strong in the third quarter, both the number of monetized orders and the average monetization amount per order demonstrated a steady upward trajectory compared to last quarter. Regarding growth in monetized orders, the solid increase in our fulfilled orders, along with the steadily rising monetization coverage ratio both contributed. In the third quarter, the proportion of high-quality orders rose due to the surging order demand from new direct shippers. On the trucker side, we promoted membership packages with benefits such as compensation guarantee, deposit reductions and waivers, effectively securing long-term capacity support. As a result, the order monetization coverage rate increased to nearly 83% in the third quarter, an increase of almost 13 percentage points year-over-year. Average commission per order also increased to RMB 24.4 this quarter from RMB 20.9 in the prior year period, up by almost 17% year-over-year. This increase was primarily driven by the increase in proportion of our high-quality orders. With reasonable freight rates and comprehensive benefits assured, truckers were willing to pay higher prices to accept and fulfill orders through our platform, creating a positive monetization cycle. Additionally, our pricing products such as entrusted shipments, targeting low and medium frequency direct shippers have gained traction among users and further boosting our average monetization amount per order.

Moving forward, as we consistently enhance our platform's safeguards for the rights and interests of both shippers and truckers and upgrade value-added benefits and refine our commission strategy, we're confident that revenues from our transaction service will maintain the rapid growth.

[Operator]

[Operator Instructions] Our next question will come from [ Yon Law ] of CITIC Securities.

[Unknown Analyst]

[Foreign Language]

Congratulations for the strong results this quarter. Can management share some color on how did the entrusted shipment business progress in the third quarter? And in what areas were the optional strategies refund?

[Chong Cai, executive]

Our entrusted shipment segment fulfilled nearly 40,000 orders per day during the third quarter. This is almost double from the last year. This growth was primarily -- was primarily attributable to our strategic allocation of user resources and product feature enhancement that bolstered user retention. Building on this momentum, we guided new shippers primarily towards the entrusted shipment channel in our recommendation given its superior initial fulfillment rate compared to other orders -- order types, the strategy facilitated smoother onboarding and conversion for new users. For our existing shippers, we maintained a hands-off approach allowing them to make their own choices.

Additionally, we further refined our pricing strategy this quarter, leveraging prior algorithm and business logic integration, we offered bids with lower freight rates than brokers and other intermediaries. This approach effectively boosted shippers repurchase rates and retention within our entrusted shipment segment. For those orders involving human intervention, we mainly focus on optimizing freight guarantees for truckers, ensuring cargo protection for shippers and minimizing customer complaints, all of which obviously enhanced the overall user experience and substantially elevated user satisfaction with our offerings. As we look to the future, we expect a continuous advancement in product optimization, pricing strategies and user experience, which will support the continued order volume growth for our entrusted shipment business.

[Operator]

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

[Mao Mao, executive]

Thank you, operator, and thank you, everyone, for joining us today. If you have further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investor Relations. Our contact information for IR in both China and U.S. can be found in today's press release. Have a great day.

[Operator]

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