Technology

Full Truck Alliance Co. Ltd. Announces Fourth Quarter and Fiscal Year 2023 Unaudited Financial Results

Published

2 years ago

March 7, 2024

GUIYANG, China, March 7, 2024 /PRNewswire/ — Full Truck Alliance Co. Ltd. (“FTA” or the “Company”) (NYSE: YMM), a leading digital freight platform, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023.

Fourth Quarter and Fiscal Year 2023 Financial and Operational Highlights

Total net revenues in the fourth quarter of 2023 were RMB2,408.0 million (US$339.2 million), an increase of 25.3% from RMB1,922.5 million in the same period of 2022. Total net revenues in 2023 were RMB8,436.2 million (US$1,188.2 million), an increase of 25.3% from RMB6,733.6 million in 2022.

Net income in the fourth quarter of 2023 was RMB588.3 million (US$82.9 million), an increase of 200.6% from RMB195.7 million in the same period of 2022. Net income in 2023 was RMB2,227.1 million (US$313.7 million), an increase of 440.7% from RMB411.9 million in 2022.

Non-GAAP adjusted net income[1] in the fourth quarter of 2023 was RMB733.0 million (US$103.2 million), an increase of 64.4% from RMB445.8 million in the same period of 2022. Non-GAAP adjusted net income in 2023 was RMB2,797.0 million (US$394.0 million), an increase of 100.4% from RMB1,395.4 million in 2022.

Fulfilled orders[2] in the fourth quarter of 2023 reached 45.8 million, an increase of 40.4% from 32.6 million in the same period of 2022. Fulfilled orders in 2023 reached 158.8 million, an increase of 33.4% from 119.1 million in 2022.

Average shipper MAUs[3] in the fourth quarter of 2023 reached 2.24 million, an increase of 18.7% from 1.88 million in the same period of 2022. Average shipper MAUs in 2023 reached 2.03 million, an increase of 21.3% from 1.67 million in 2022.

Mr. Peter Hui Zhang, Founder, Chairman and Chief Executive Officer of FTA, commented, “In 2023, we continued to confront external challenges while ushering in opportunities. Amid a modest economic recovery, the continued growth of our network effect and our platform’s unmatched value proposition accelerated user penetration and drove a strong full-year performance. We achieved four consecutive quarters of growth in fulfilled orders and average shipper MAUs, underscoring the vitality of China’s freight market, the trend of freight digitalization, and the vast potential of the small and medium-sized direct shipper market. For 2024, we will leverage our keen market insight to capitalize on opportunities and remain committed to long-term development, which we believe will pave the way for our sustainable growth.”

Mr. Simon Cai, Chief Financial Officer of FTA, added, “We ended 2023 with strong fourth quarter revenue and profit growth in a disruptive external environment. Fueled by a rapidly growing user base and order volume, we continued to provide more efficient and intelligent freight solutions to our shipper and trucker users. Our total net revenue exceeded the high end of our guidance, surging by 25.3% year over year to RMB2.41 billion, while our non-GAAP adjusted net income of RMB733.0 million was once again well ahead of market expectations. Notably, we achieved 44.0% year-over-year growth in transaction commission, driven by increased order volume on our platform. Moving through 2024, we will take a more active stance toward user acquisition to broaden our high-quality user base. Concurrently, we will further enrich our products and services to address users’ evolving needs and improve our freight matching efficiency. We are confident that we will create long-term sustainable value for our stakeholders as we continue to foster a healthy platform ecosystem.”

[1] Non-GAAP adjusted net income is defined as net income excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions; (iv) settlement in principle of U.S. securities class action, which is non-recurring; and (v) tax effects of non-GAAP adjustments. See “Use of Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” at the end of this press release.

[2] Fulfilled orders on our platform in a given period are defined as all shipping orders matched through our platform during such period but exclude (i) shipping orders that are subsequently canceled and (ii) shipping orders for which our users failed to specify any freight prices as there are substantial uncertainties as to whether the shipping orders are fulfilled.

[3] Average shipper MAUs in a given period are calculated by dividing (i) the sum of shipper MAUs for each month of a given period by (ii) the number of months in a given period. Shipper MAUs are defined as the number of active shippers on our platform in a given month. Active shippers are defined as the aggregate number of registered shipper accounts that have posted at least one shipping order on our platform during a given period.

Fourth Quarter 2023 Financial Results

Net Revenues (including value added taxes, or “VAT,” of RMB998.5 million and RMB1,197.4 million for the three months ended December 31, 2022, and 2023, respectively). Total net revenues in the fourth quarter of 2023 were RMB2,408.0 million (US$339.2 million), representing an increase of 25.3% from RMB1,922.5 million in the same period of 2022, primarily attributable to an increase in revenues from freight matching services.

Freight matching services. Revenues from freight matching services in the fourth quarter of 2023 were RMB2,015.8 million (US$283.9 million), representing an increase of 24.9% from RMB1,614.4 million in the same period of 2022. The increase was mainly due to the steady growth in revenues from freight brokerage service, as well as continued expansion in transaction commissions.

Freight brokerage service. Revenues from freight brokerage service in the fourth quarter of 2023 were RMB1,124.7 million (US$158.4 million), an increase of 19.2% from RMB943.6 million in the same period of 2022, primarily attributable to an increase in transaction volume due to robust user demand.

Freight listing service. Revenues from freight listing service in the fourth quarter of 2023 were RMB246.2 million (US$34.7 million), an increase of 10.4% from RMB223.1 million in the same period of 2022, primarily due to a growing number of total paying members.

Transaction commission. Revenues from transaction commissions amounted to RMB644.8 million (US$90.8 million) in the fourth quarter of 2023, an increase of 44.0% from RMB447.8 million in the same period of 2022, primarily driven by strong order volume growth as well as higher per-order transaction commission.

Value-added services. Revenues from value-added services in the fourth quarter of 2023 were RMB392.2 million (US$55.2 million), an increase of 27.3% from RMB308.1 million in the same period of 2022, mainly attributable to an increase in revenues from credit solutions and other value-added services.

Cost of Revenues (including VAT net of refund of VAT of RMB675.4 million and RMB864.7 million for the three months ended December 31, 2022, and 2023, respectively). Cost of revenues in the fourth quarter of 2023 was RMB1,152.3 million (US$162.3 million), compared with RMB951.8 million in the same period of 2022. The increase was primarily due to increases in VAT, related tax surcharges and other tax costs, and net of tax refunds from government authorities. These tax-related costs net of refunds totaled RMB1,015.3 million, representing an increase of 18.4% from RMB857.4 million in the same period of 2022, primarily due to the continued growth in transaction activities involving our freight brokerage service.

Sales and Marketing Expenses. Sales and marketing expenses in the fourth quarter of 2023 were RMB421.0 million (US$59.3 million), compared with RMB281.1 million in the same period of 2022. The increase was primarily due to an increase in advertising and marketing expenses for user acquisitions.

General and Administrative Expenses. General and administrative expenses in the fourth quarter of 2023 were RMB266.0 million (US$37.5 million), compared with RMB408.2 million in the same period of 2022. The decrease was primarily due to lower share-based compensation expenses and professional service fees.

Research and Development Expenses. Research and development expenses in the fourth quarter of 2023 were RMB255.3 million (US$36.0 million), compared with RMB250.2 million in the same period of 2022. The increase was primarily due to higher share-based compensation expenses and increased investment in technology infrastructure, partially offset by a decrease in salary and benefits expenses.

Income/(Loss) from Operations. Income from operations in the fourth quarter of 2023 was RMB250.8 million (US$35.3 million), compared with loss from operations of RMB5.3 million in the same period of 2022.

Non-GAAP Adjusted Operating Income.[4] Non-GAAP adjusted operating income in the fourth quarter of 2023 was RMB398.8 million (US$56.2 million), an increase of 60.6% from RMB248.4 million in the same period of 2022.

Net Income. Net income in the fourth quarter of 2023 was RMB588.3 million (US$82.9 million), an increase of 200.6% from RMB195.7 million in the same period of 2022.

Non-GAAP Adjusted Net Income. Non-GAAP adjusted net income in the fourth quarter of 2023 was RMB733.0 million (US$103.2 million), an increase of 64.4% from RMB445.8 million in the same period of 2022.

Basic and Diluted Net Income per ADS[5] and Non-GAAP Adjusted Basic and Diluted Net Income per ADS.[6] Basic and diluted net income per ADS were RMB0.56 (US$0.08) in the fourth quarter of 2023, compared with RMB0.18 in the same period of 2022. Non-GAAP adjusted basic net income per ADS was RMB0.70 (US$0.10) in the fourth quarter of 2023, compared with RMB0.42 in the same period of 2022. Non-GAAP adjusted diluted net income per ADS was RMB0.69 (US$0.10) in the fourth quarter of 2023, compared with RMB0.42 in the same period of 2022.

Balance Sheet and Cash Flow

As of December 31, 2023, the Company had cash and cash equivalents, restricted cash, short-term investments, long-term time deposits and wealth management products of RMB27.6 billion (US$3.9 billion) in total, compared with RMB26.3 billion as of December 31, 2022.

As of December 31, 2023, the total outstanding balance of on-balance sheet loans, consisting of the total principal amounts and all accrued and unpaid interests (net of provisions) of the loans funded through our small loan company, was RMB3,521.1 million (US$495.9 million), compared with RMB2,648.4 million as of December 31, 2022. The total non-performing loan ratio[7] for these loans was 2.0% as of December 31, 2023, which remained flat with that of December 31, 2022.

In the fourth quarter of 2023, net cash provided by operating activities was RMB758.1 million (US$106.8 million).

[4] Non-GAAP adjusted operating income is defined as income/(loss) from operations excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) settlement in principle of U.S. securities class action, which is non-recurring. See “Use of Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” at the end of this press release.

[5] ADS refers to American depositary shares, each of which represents 20 Class A ordinary shares.

[6] Non-GAAP adjusted basic and diluted net income per ADS is net income attributable to ordinary shareholders excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions; (iv) settlement in principle of U.S. securities class action, which is non-recurring; and (v) tax effects of non-GAAP adjustments, divided by weighted average number of basic and diluted ADSs, respectively. For more information, refer to “Use of Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” at the end of this press release.

[7] Non-performing loan ratio is calculated by dividing the outstanding principal and all accrued and unpaid interests of the on-balance sheet loans that were over 90 calendar days past due (excluding loans that are over 180 days past due and are therefore charged off) by the total outstanding principal and all accrued and unpaid interests of the on-balance sheet loans (excluding loans that are over 180 days past due and are therefore charged off) as of a specified date.

Fiscal Year 2023 Financial Results

Net Revenues (including value added taxes, or “VAT,” of RMB3,550.9 million and RMB4,172.7 million for the years ended December 31, 2022, and 2023, respectively). Total net revenues in 2023 were RMB8,436.2 million (US$1,188.2 million), representing an increase of 25.3% from RMB6,733.6 million in 2022, primarily attributable to an increase in revenues from freight matching services.

Freight matching services. Revenues from freight matching services in 2023 were RMB7,048.8 million (US$992.8 million), representing an increase of 24.6% from RMB5,656.7 million in 2022. The increase was primarily due to the rapid growth in transaction commissions as well as the growing revenues from our freight brokerage service.

Freight brokerage service. Revenues from freight brokerage service in 2023 were RMB3,916.4 million (US$551.6 million), an increase of 16.5% from RMB3,360.3 million in 2022, primarily driven by an increase in transaction volume as a result of improved user penetration.

Freight listing service. Revenues from freight listing service in 2023 were RMB929.4 million (US$130.9 million), an increase of 9.0% from RMB852.4 million in 2022, primarily attributable to a growing number of total paying members.

Transaction commission. Revenues from transaction commissions amounted to RMB2,203.1million (US$310.3 million) in 2023, an increase of 52.6% from RMB1,444.0 million in 2022, primarily driven by an increased order volume as well as higher per-order transaction commission.

Value-added services. Revenues from value-added services in 2023 were RMB1,387.3 million (US$195.4 million), an increase of 28.8% from RMB1,077.0 million in 2022, mainly attributable to an increase in revenues from credit solutions and other value-added services.

Cost of Revenues (including VAT net of refund of VAT of RMB2,539.3 million and RMB3,121.0 million for the years ended December 31, 2022, and 2023, respectively). Cost of revenues in 2023 was RMB4,119.0 million (US$580.2 million), compared with RMB3,514.6 million in 2022. The increase was primarily attributable to an increase in VAT, related tax surcharges and other tax costs, and net of tax refunds from government authorities. These tax-related costs net of refunds totaled RMB3,693.5 million, representing an increase of 16.6% from RMB3,167.8 million in 2022, primarily due to an increase in transaction activities involving our freight brokerage service.

Sales and Marketing Expenses. Sales and marketing expenses in 2023 were RMB1,239.2 million (US$174.5 million), compared with RMB902.3 million in 2022. The increase was primarily due to increased expenses in advertising and marketing activities for user acquisitions.

General and Administrative Expenses. General and administrative expenses in 2023 were RMB937.7 million (US$132.1 million), compared with RMB1,417.9 million in 2022. The decrease was primarily due to lower share-based compensation expenses and a decrease in professional service fees, partially offset by settlement in principle of certain U.S. securities class action, which was disclosed in the Form 6-K filed on September 18, 2023.

Research and Development Expenses. Research and development expenses in 2023 were RMB946.6 million (US$133.3 million), compared with RMB914.2 million in 2022. The increase was primarily due to higher share-based compensation expenses and increased investment in technology infrastructure.

Income/(Loss) from Operations. Income from operations in 2023 was RMB997.4 million (US$140.5 million), compared with loss from operations of RMB162.0 million in 2022.

Non-GAAP Adjusted Operating Income. Non-GAAP adjusted operating income in 2023 was RMB1,580.4 million (US$222.6 million), an increase of 89.1% from RMB835.7 million in 2022.

Net Income. Net income in 2023 was RMB2,227.1 million (US$313.7 million), an increase of 440.7% from RMB411.9 million in 2022.

Non-GAAP Adjusted Net Income. Non-GAAP adjusted net income in 2023 was RMB2,797.0 million (US$394.0 million), an increase of 100.4% from RMB1,395.4 million in 2022.

Basic and Diluted Net Income per ADS and Non-GAAP Adjusted Basic and Diluted Net Income per ADS. Basic net income per ADS was RMB2.10 (US$0.30) in 2023, compared with RMB0.38 in 2022. Diluted net income per ADS was RMB2.09 (US$0.29) in 2023, compared with RMB0.38 in 2022. Non-GAAP adjusted basic net income per ADS was RMB2.64 (US$0.37) in 2023, compared with RMB1.29 in 2022. Non-GAAP adjusted diluted net income per ADS was RMB2.63 (US$0.37) in 2023, compared with RMB1.29 in 2022.

Business Outlook

The Company expects its total net revenues to be between RMB2.11 billion and RMB2.16 billion for the first quarter of 2024, representing a year-over-year growth rate of approximately 23.9% to 27.1%. These forecasts reflect the Company’s current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.

Share Repurchase Update

On March 3, 2023, the Company’s Board of Directors authorized a share repurchase program, under which the Company may repurchase up to US$500 million of the Company’s ADSs during a period of up to 12 months starting from March 13, 2023. As of March 6, 2024, the Company had repurchased an aggregate of approximately 30.7 million ADSs for approximately US$200.0 million from the open market under the share repurchase program.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at a rate of RMB7.0999 to US$1.00, the exchange rate in effect as of December 29, 2023, as set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve System. The Company makes no representation that any RMB or US$ amounts could have been, or could be, converted into US$ or RMB, as the case may be, at any particular rate, or at all.

Conference Call

The Company’s management will hold an earnings conference call at 7:00 A.M. U.S. Eastern Time on March 7, 2024, or 8:00 P.M. Beijing Time to discuss its financial results and operating performance for the fourth quarter and fiscal year 2023.

Dial-in details for the earnings conference call are as follows:

United States (toll free):

+1-888-317-6003

International:

+1-412-317-6061

Mainland China (toll free):

400-120-6115

Hong Kong, SAR (toll free):

800-963-976

Hong Kong, SAR:

+852-5808-1995

United Kingdom (toll free):

08082389063

Singapore (toll free):

800-120-5863

Access Code:

9049178

The replay will be accessible through March 14, 2024, by dialing the following numbers:

United States:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:

5149135

A live and archived webcast of the conference call will also be available on the Company’s investor relations website at ir.fulltruckalliance.com.

About Full Truck Alliance Co. Ltd.

Full Truck Alliance Co. Ltd. (NYSE: YMM) is a leading digital freight platform connecting shippers with truckers to facilitate shipments across distance ranges, cargo weights and types. The Company provides a range of freight matching services, including freight listing, freight brokerage and online transaction services. The Company also provides a range of value-added services that cater to the various needs of shippers and truckers, such as financial institutions, highway authorities, and gas station operators. With a mission to make logistics smarter, the Company is shaping the future of logistics with technology and aspires to revolutionize logistics, improve efficiency across the value chain and reduce its carbon footprint for our planet. For more information, please visit ir.fulltruckalliance.com.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to ordinary shareholders, non-GAAP adjusted basic and diluted net income per share and non-GAAP adjusted basic and diluted net income per ADS, each a non-GAAP financial measure, as supplemental measures to review and assess its operating performance.

The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company defines non-GAAP adjusted operating income as income from operations excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions and (iv) settlement in principle of U.S. securities class action. The Company defines non-GAAP adjusted net income as net income excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions; (iv) settlement in principle of U.S. securities class action, which is non-recurring; and (v) tax effects of non-GAAP adjustments. The Company defines non-GAAP adjusted net income attributable to ordinary shareholders as net income attributable to ordinary shareholders excluding (i) share-based compensation expense; (ii) amortization of intangible assets resulting from business acquisitions; (iii) compensation cost incurred in relation to continuing service terms in business acquisitions; (iv) settlement in principle of U.S. securities class action, which is non-recurring; and (v) tax effects of non-GAAP adjustments. The Company defines non-GAAP adjusted basic and diluted net income per share as non-GAAP adjusted net income attributable to ordinary shareholders divided by weighted average number of basic and diluted ordinary shares, respectively. The Company defines non-GAAP adjusted basic and diluted net income per ADS as non-GAAP adjusted net income attributable to ordinary shareholders divided by the weighted average number of basic and diluted ADSs, respectively.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as an analytical tool. The non-GAAP financial measures do not reflect all items of expense that affect its operations. Share-based compensation expense, amortization of intangible assets resulting from business acquisitions, compensation cost incurred in relation to continuing service terms in business acquisitions and tax effects of non-GAAP adjustments have been and may continue to be incurred in its business and are not reflected in the presentation of its non-GAAP financial measures.

The Company reconciles the non-GAAP financial measures to the nearest U.S. GAAP performance measures. Non-GAAP adjusted operating income, non-GAAP adjusted net income, non-GAAP adjusted net income attributable to ordinary shareholders and non-GAAP adjusted basic and diluted net income per share should not be considered in isolation or construed as an alternative to operating income/(loss), net income, net income attributable to ordinary shareholders and basic and diluted net income per share or any other measure of performance or as an indicator of its operating performance. Investors are encouraged to review FTA’s non-GAAP financial measures to the most directly comparable GAAP measures. FTA’s non-GAAP financial measure may not be comparable to similarly titled measures presented by other companies.

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this release.

Safe Harbor Statement

This press release contains statements that may constitute “forward-looking” statements which are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” and similar statements. Statements that are not historical facts, including statements about the Company’s beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: FTA’s goal and strategies; FTA’s expansion plans; FTA’s future business development, financial condition and results of operations; expected changes in FTA’s revenues, costs or expenses; industry landscape of, and trends in, China’s road transportation market; competition in FTA’s industry; FTA’s expectations regarding demand for, and market acceptance of, its services; FTA’s expectations regarding its relationships with shippers, truckers and other ecosystem participants; FTA’s ability to protect its systems and infrastructures from cyber-attacks; PRC laws, regulations, and policies relating to the road transportation market, as well as general regulatory environment in which FTA operates in China; the results of regulatory review and the duration and impact of any regulatory action taken against FTA; the impact of COVID-19 outbreaks, extreme weather conditions and production constraints brought by electricity rationing measures; general economic and business condition; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact:

In China:

Full Truck Alliance Co. Ltd.
Mao Mao
E-mail: IR@amh-group.com

Piacente Financial Communications
Hui Fan
Tel: +86-10-6508-0677
E-mail: FTA@thepiacentegroup.com

In the United States:

Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: FTA@thepiacentegroup.com

FULL TRUCK ALLIANCE CO. LTD.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share, ADS, per share and per ADS data)

As of

December 31,

2022

2023

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

5,137,312

6,770,895

953,661

Restricted cash – current

83,759

115,513

16,270

Short-term investments

21,087,089

11,516,304

1,622,037

Accounts receivable, net

13,015

23,418

3,298

Loans receivable, net

2,648,449

3,521,072

495,933

Prepayments and other current assets

2,034,427

2,049,780

288,705

Total current assets

31,004,051

23,996,982

3,379,904

Restricted cash – non-current

—

10,000

1,408

Long-term investments1

1,774,270

11,075,739

1,559,985

Property and equipment, net

108,824

194,576

27,405

Intangible assets, net

502,421

449,904

63,368

Goodwill

3,124,828

440,123

Deferred tax assets

41,490

149,081

20,998

Operating lease right-of-use assets and land use rights

132,000

134,867

18,996

Other non-current assets

8,427

211,670

29,813

Total non-current assets

5,692,260

15,350,665

2,162,096

TOTAL ASSETS

36,696,311

39,347,647

5,542,000

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

27,953

25,220

3,552

Amount due to related parties

122,152

—

Prepaid for freight listing fees and other service fees

462,080

548,917

77,313

Income tax payable

52,233

154,916

21,819

Other tax payable

721,597

784,617

110,511

Operating lease liabilities – current

44,590

37,758

5,318

Accrued expenses and other current liabilities

1,301,160

1,723,245

242,714

Total current liabilities

2,731,765

3,274,673

461,227

Deferred tax liabilities

121,611

108,591

15,295

Operating lease liabilities – non-current

35,931

46,709

6,579

Other non-current liabilities

—

22,950

3,232

Total non-current liabilities

157,542

178,250

25,106

TOTAL LIABILITIES

2,889,307

3,452,923

486,333

MEZZANINE EQUITY

Redeemable non-controlling interests

149,771

277,420

39,074

SHAREHOLDERS’ EQUITY

Ordinary shares

1,377

1,371

193

Treasury stock

—

(608,117)

(85,651)

Additional paid-in capital

47,758,178

47,713,985

6,720,374

Accumulated other comprehensive income

2,511,170

2,897,871

408,157

Accumulated deficit

(16,613,492)

(14,400,604)

(2,028,283)

TOTAL FULL TRUCK ALLIANCE CO. LTD. EQUITY

33,657,233

35,604,506

5,014,790

Non-controlling interests

—

12,798

1,803

TOTAL SHAREHOLDERS’ EQUITY

33,657,233

35,617,304

5,016,593

TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY

36,696,311

39,347,647

5,542,000

1. The Group’s long-term investments consist of RMB8,540 million long-term time deposits, RMB678 million wealth management products with maturities
over one year, RMB831 million investments in debt securities, RMB318 million equity method investments, and RMB708 million equity investments without
readily determinable fair value as of December 31, 2023.

FULL TRUCK ALLIANCE CO. LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(All amounts in thousands, except share, ADS, per share and per ADS data)

Three months ended

Year ended

December 31,

September 30,

December 31,

2022

2023

2022

2023

RMB

US$

RMB

US$

Net revenues (including value added taxes,

“VAT”, of RMB998.5 million and

RMB1,197.4 million for the three months

ended December 31, 2022 and 2023,

RMB3,550.9 million and

RMB4,172.7 million for the year ended

December 31, 2022 and 2023,

respectively)

1,922,473

2,263,917

2,407,957

339,154

6,733,644

8,436,159

1,188,210

Operating expenses:

Cost of revenues (including VAT net of

refund of VAT of RMB675.4 million

and RMB864.7 million for the three

months ended December 31, 2022

and 2023, RMB2,539.3 million and

RMB3,121.0 million for the year

ended December 31, 2022 and

2023, respectively)(1)

(951,779)

(1,142,057)

(1,152,317)

(162,300)

(3,514,551)

(4,119,016)

(580,151)

Sales and marketing expenses(1)

(281,129)

(290,782)

(420,960)

(59,291)

(902,269)

(1,239,191)

(174,536)

General and administrative expenses(1)

(408,181)

(290,443)

(266,016)

(37,468)

(1,417,933)

(937,677)

(132,069)

Research and development expenses(1)

(250,207)

(237,716)

(255,344)

(35,964)

(914,151)

(946,635)

(133,331)

Provision for loans receivable

(53,900)

(62,948)

(67,627)

(9,525)

(194,272)

(234,599)

(33,043)

Total operating expenses

(1,945,196)

(2,023,946)

(2,162,264)

(304,548)

(6,943,176)

(7,477,118)

(1,053,130)

Other operating income

17,453

7,089

5,123

722

47,530

38,388

5,407

(Loss) income from operations

(5,270)

247,060

250,816

35,328

(162,002)

997,429

140,487

Other income (expense)

Interest income

202,324

297,249

313,037

44,090

483,658

1,141,861

160,828

Interest expenses

—

(175)

—

Foreign exchange gain (loss)

1,531

585

(2,909)

(410)

15,048

(2,149)

(303)

Investment income

1,212

22,605

25,832

3,638

5,411

55,621

7,834

Unrealized gain (loss) from fair value

changes of trading securities and

derivative assets

4,986

(12,124)

6,833

962

(63,390)

12,938

1,822

Other income, net

5,085

116,885

2,457

346

230,631

130,264

18,347

Share of loss in equity method investees

(73)

(236)

(825)

(116)

(1,246)

(2,067)

(291)

Total other income

215,065

424,964

344,425

48,510

669,937

1,336,468

188,237

Net income before income tax

209,795

672,024

595,241

83,838

507,935

2,333,897

328,724

Income tax expense

(14,110)

(53,601)

(6,991)

(985)

(96,035)

(106,804)

(15,043)

Net income

195,685

618,423

588,250

82,853

411,900

2,227,093

313,681

Less: net (loss) income attributable to

non-controlling interests

—

(675)

(591)

(83)

539

(1,252)

(176)

Less: measurement adjustment

attributable to redeemable non-

controlling interest

1,845

4,745

4,752

669

4,599

15,457

2,177

Net income attributable to

ordinary shareholders

193,840

614,353

584,089

82,267

406,762

2,212,888

311,680

FULL TRUCK ALLIANCE CO. LTD.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)

(All amounts in thousands, except share, ADS, per share and per ADS data)

Three months ended

Year ended

December 31,

September 30,

December 31,

2022

2023

2022

2023

RMB

US$

RMB

US$

Net income per ordinary

—Basic

0.01

0.03

0.00

0.02

0.10

0.01

—Diluted

0.01

0.03

0.00

0.02

0.10

0.01

Net income per ADS*

—Basic

0.18

0.58

0.56

0.08

0.38

2.10

0.30

—Diluted

0.18

0.58

0.56

0.08

0.38

2.09

0.29

Weighted average number

of ordinary shares used

in computing net

income per share

—Basic

21,246,855,688

21,025,267,682

20,949,011,129

21,517,856,981

21,111,924,886

—Diluted(2)

21,305,376,233

21,059,252,652

21,016,273,541

21,579,616,389

21,162,351,461

Weighted average number

of ADS used in

computing net

income per ADS

—Basic

1,062,342,784

1,051,263,384

1,047,450,556

1,075,892,849

1,055,596,244

—Diluted(2)

1,065,268,812

1,052,962,633

1,050,813,677

1,078,980,819

1,058,117,573

* Each ADS represents 20 ordinary shares.

(1) Share-based compensation expense in operating expenses are as follows:

Three months ended

Year ended

December 31,

September 30,

December 31,

2022

2023

2022

2023

RMB

US$

RMB

US$

Cost of revenues

1,812

2,796

2,593

365

6,406

8,576

1,208

Sales and marketing

expenses

12,163

15,217

16,014

2,256

39,771

55,503

7,817

General and administrative

expenses

201,514

81,249

89,255

12,571

809,194

297,469

41,898

Research and development

expenses

19,749

22,938

22,813

3,213

63,884

80,279

11,307

Total

235,238

122,200

130,675

18,405

919,255

441,827

62,230

(2) Weighted average number of ordinary shares/ADS used in computing diluted net income per share/ADS are adjusted by
the potentially dilutive effects of ordinary shares/ADS issuable upon the exercise of outstanding share options.

FULL TRUCK ALLIANCE CO. LTD.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands, except share, ADS, per share and per ADS data)

Three months ended

Year ended

December 31,

September 30,

December 31,

2022

2023

2022

2023

RMB

US$

RMB

US$

(Loss) income from

operations

(5,270)

247,060

250,816

35,328

(162,002)

997,429

140,487

Add:

Share-based

compensation

expense

235,238

122,200

130,675

18,405

919,255

441,827

62,230

Amortization of

intangible assets

resulting from

business acquisitions

14,121

13,021

1,834

56,484

52,084

7,336

Compensation cost

incurred in relation

to acquisitions

4,281

603

21,914

17,124

2,412

Settlement in principle

of U.S. securities

class action

—

71,900

—

71,900

10,127

Non-GAAP adjusted

operating income

248,370

458,462

398,793

56,170

835,651

1,580,364

222,592

Net income

195,685

618,423

588,250

82,853

411,900

2,227,093

313,681

Add:

Share-based

compensation

expense

235,238

122,200

130,675

18,405

919,255

441,827

62,230

Amortization of

intangible assets

resulting from

business acquisitions

14,121

13,021

1,834

56,484

52,084

7,336

Compensation cost

incurred in relation

to acquisitions

4,281

603

21,914

17,124

2,412

Settlement in principle

of U.S. securities

class action

—

71,900

—

71,900

10,127

Tax effects of

non-GAAP

adjustments

(3,530)

(3,255)

(459)

(14,120)

(13,021)

(1,834)

Non-GAAP adjusted net

income

445,795

826,570

732,972

103,236

1,395,433

2,797,007

393,952

FULL TRUCK ALLIANCE CO. LTD.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (CONTINUED)

(All amounts in thousands, except share, ADS, per share and per ADS data)

Three months ended

Year ended

December 31,

September 30,

December 31,

2022

2023

2022

2023

RMB

US$

RMB

US$

Net income attributable

to ordinary

shareholders

193,840

614,353

584,089

82,267

406,762

2,212,888

311,680

Add:

Share-based

compensation

expense

235,238

122,200

130,675

18,405

919,255

441,827

62,230

Amortization of

intangible assets

resulting from

business acquisitions

14,121

13,021

1,834

56,484

52,084

7,336

Compensation cost

incurred in relation

to acquisitions

4,281

603

21,914

17,124

2,412

Settlement in principle

of U.S. securities

class action

—

71,900

—

71,900

10,127

Tax effects of

non-GAAP

adjustments

(3,530)

(3,255)

(459)

(14,120)

(13,021)

(1,834)

Non-GAAP adjusted net

income attributable to

ordinary shareholders

443,950

822,500

728,811

102,650

1,390,295

2,782,802

391,951

Non-GAAP adjusted net

income per ordinary

—Basic

0.02

0.04

0.03

0.00

0.06

0.13

0.02

—Diluted

0.02

0.04

0.03

0.00

0.06

0.13

0.02

Non-GAAP adjusted net

income per ADS

—Basic

0.42

0.78

0.70

0.10

1.29

2.64

0.37

—Diluted

0.42

0.78

0.69

0.10

1.29

2.63

0.37

View original content:https://www.prnewswire.com/news-releases/full-truck-alliance-co-ltd-announces-fourth-quarter-and-fiscal-year-2023-unaudited-financial-results-302082633.html

SOURCE Full Truck Alliance Co. Ltd.

Technology

Global Times: Head-of-state diplomacy shines at WAIC, fostering ties and advancing global governance consensus

Published

3 hours ago

July 18, 2026

BEIJING, July 17, 2026 /PRNewswire/ — Chinese President Xi Jinping on Friday held a series of high-level meetings on the sidelines of the 2026 World Artificial Intelligence Conference (WAIC) and High-Level Meeting on Global AI Governance in Shanghai, sitting down successively with Thai Prime Minister Anutin Charnvirakul, Cambodian Prime Minister Hun Manet, and UN Secretary-General António Guterres. The bustling diplomatic activity transformed the WAIC from a premier showcase of AI technologies and industrial breakthroughs into a vibrant platform for head-of-state diplomacy and global governance coordination.

Analysts said hosting intensive head-of-state diplomatic events in Shanghai, a core hub of reform, opening-up and technological innovation, carries profound meaning. In addition, Friday’s high-level meetings embody the innovative model of “technology builds the stage while diplomacy takes the leading role.” It not only deepens China’s bilateral relations with ASEAN members, but also helps advance inclusive global AI governance centered on the UN mechanism.

Strategic guidance

According to the two separate official releases by Xinhua, during his meetings with the prime ministers of Thailand and Cambodia, President Xi spoke of the long-standing friendship China shares with both nations. He called on China and Thailand, as well as China and Cambodia, to join hands to advance the development of their respective communities with a shared future.

Furthermore, the Chinese leader stressed the need for China to expand pragmatic cooperation with Thailand and Cambodia respectively across traditional and emerging sectors, and work with each country to jointly crack down on cross-border crimes such as online gambling and telecom fraud, according to Xinhua.

He called for the proper handling of border frictions between Thailand and Cambodia and called on the two sides to resolve disputes through dialogue and consultation, with China standing ready to continue playing a constructive role in this regard, per Xinhua.

During their respective meetings with the Chinese leader, the prime ministers of Thailand and Cambodia both expressed willingness to deepen multi-field cooperation with China and spoke highly of China’s positive efforts to facilitate the peaceful settlement of the Thailand-Cambodia border conflicts.

Xu Liping, Director of the Center for Southeast Asian Studies at the Chinese Academy of Social Sciences, told the Global Times that head-of-state diplomacy has charted the fundamental course for the advancement of China’s ties with both Cambodia and Thailand.

WAIC exemplifies the innovative model of “technology builds the platform, while diplomacy takes the leading role,” said Xu, “In addition, AI cooperation is also expected to serve as a vital entry point to further deepen and substantiate China’s ties with Thailand and Cambodia going forward.”

Furthermore, addressing the sensitive and thorny Thailand-Cambodia border dispute amid the relatively relaxed atmosphere of a tech summit enables all relevant parties to handle differences in a rational and pragmatic manner, which embodies Eastern wisdom and an Asian approach to resolving issues, said Xu.

The year 2026 marks the fifth anniversary of the establishment of the China-ASEAN comprehensive strategic partnership, witnessing the official rollout of the new Plan of Action on the China-ASEAN Comprehensive Strategic Partnership (2026-2030). It also kicks off the implementation of China’s 15th Five-Year Plan.

The critical juncture offers a perfect window to align China’s development plans closely with the national development strategies of Global South countries and ASEAN members, said Xu. “Thailand and Cambodia’s willingness to ramp up cooperation with China mirrors the aspiration of the majority of ASEAN members to leverage China’s development dividends and pursue win-win outcomes and common prosperity in the region.”

Firm support for UN

In his meeting with UN Secretary-General Antonio Guterres on Friday, Xi reiterated China’s firm support for the UN.

Noting that this year marks the 55th anniversary of the restoration of the lawful seat of the People’s Republic of China at the UN, the Chinese leader said China has since been committed to building world peace, contributing to global development, defending international order, and firmly supporting the UN, Xinhua reported.

Xi added that he proposed the vision of building a community with a shared future for humanity and the four global initiatives with one important consideration in mind – to uphold the status and authority of the UN.

Currently, the international landscape is marked by more pronounced changes and turbulence, making it all the more necessary to practice true multilateralism and reinvigorate the status and role of the UN, he said.

Guterres commended China for its steadfast support for multilateralism, the cause of the UN, and international cooperation, saying that China has set an example for the world.

Guterres said the UN will continue to strengthen cooperation with China, oppose unilateralism, protectionism, and hegemonic bullying, safeguard the UN Charter and international law, as well as advance the process toward a multipolar world.

At this pivotal juncture where talks on AI development and UN multilateral governance converge, China, leveraging head-of-state diplomacy as a top-tier platform, has elaborated in a systematic manner its vision for global governance in the AI era, Wang Yiwei, a professor at the School of International Studies, Renmin University of China, told the Global Times.

He added that China’s emphasis on the UN-centered global governance architecture will further strengthen the UN’s authority and operational capacity.

Before the official opening of the WAIC, on Thursday, representatives from 29 countries, including Kazakhstan, Laos, Pakistan, Russia and Indonesia, signed an agreement on establishing the World Artificial Intelligence Cooperation Organization (WAICO) in Shanghai. UN chief Guterres was among representatives from countries and international organizations present at the signing ceremony.

According to the agreement, WAICO will be an independent intergovernmental international organization, which aims to promote international cooperation and global governance on AI, ensuring that AI is beneficial, safe and fair, thereby promoting its healthy and orderly development to benefit all humanity.

President Xi on Friday also announced that in the next five years, China will provide developing countries with 5,000 opportunities in AI training and seminar programs. China will also develop international AI application cooperation centers with the ASEAN, the League of Arab States, the African Union, the Community of Latin American and Caribbean States, the Shanghai Cooperation Organization, and BRICS.

However, some international media, including Reuters and Nikkei, used the term “AI diplomacy” describing the grand gathering in Shanghai, claiming that Beijing seeks a new global AI order, challenging US dominance.

In rebuttal, Wang pointed out that China advocates open, inclusive technology that lets AI benefit all humanity under the vision of “AI for All”. In contrast, the US adheres to a mindset of “All for AI”, weaponizing AI for geopolitical rivalry and aiming to outpace China in technological competition. Driven by the “America First” doctrine and capital-centric priorities, Washington’s approach forms a sharp contrast with China’s.

Meanwhile, China’s resolute commitment to upholding the UN system underscores that for China and a wide array of Global South countries, the sensible path lies in reforming and improving the existing global governance architecture rather than discarding it to build parallel institutions from scratch, the expert added.

This article first appeared on Global Times

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SOURCE Global Times

Technology

Global Times: China sends fresh signal on global AI cooperation at WAIC

Published

3 hours ago

July 18, 2026

BEIJING, July 17, 2026 /PRNewswire/ — “AI development should not be a solo performance by a single country, but a symphony of international cooperation,” Chinese President Xi Jinping said on Friday while addressing the opening ceremony of the 2026 World AI Conference (WAIC) and High-Level Meeting on Global AI Governance, stressing that China is ready to be more open, take more practical actions, and assume a more visionary perspective.

We are ready to work with all parties to seize the opportunities of AI development and meet the challenges, and join hands to create a brighter future for humanity, he added.

Xi’s remarks received positive responses from domestic and foreign enterprises and experts, as they spoke highly of China’s scientific and technological achievements in recent years while noting that China’s commitment to openness and cooperation can help ensure that the benefits of AI are shared by all humanity and Chinese solutions in AI governance enable other countries to better tackle the common challenges brought about by AI development.

Openness and win-win cooperation

Xi presented four observations on AI development and governance in the speech. The Chinese leader called for adhering to the principle of openness and win-win cooperation while boosting innovation-driven development. He highlighted the importance of encouraging open-source, openness, collaboration and sharing to facilitate technological innovation, industrial development and scenario-based application of AI.

He also called for strengthening risk-awareness and ensuring that AI is secure and controllable. Stressing the need to ensure that AI is always under human control, Xi urged all sides to jointly oppose overstretching the national security concept in the field of AI or placing one country’s security over that of others.

Third, he called for encouraging inclusiveness and promoting mutual learning among civilizations.

Fourth, he called for advocating solidarity and improving global governance. The important role of the United Nations should be recognized, Xi said, calling for further alignment and coordination on AI development strategies, governance rules and technical standards.

“We must carry out extensive international cooperation and help Global South countries with capacity building to bridge the AI and digital divides, promote sustainable development and prevent creating new historical injustice in AI,” he said.

In the next five years, China will provide developing countries with 5,000 opportunities in AI training and seminar programs, Xi said. He said China will develop international AI application cooperation centers with the Association of Southeast Asian Nations, the League of Arab States, the African Union, the Community of Latin American and Caribbean States, the Shanghai Cooperation Organization, and BRICS. China will enable 30 countries to use the AI-powered meteorological warning system, or MAZU, to safeguard homes around the world.

“President Xi’s remarks underscore China’s commitment to advancing global AI governance and technological innovation through opening-up and win-win cooperation, bringing new opportunities for sharing AI dividends and achieving shared prosperity to countries worldwide, especially developing countries,” Song Yang, professor of School of Economics and research fellow at the National Academy of Development and Strategy at Renmin University of China, told the Global Times on Friday.

China is sending a clear and important message: AI should become a bridge between countries, not a new dividing line, Luigi Gambardella, president of the Brussels-based international digital association ChinaEU, told the Global Times on Friday on the sidelines of the forum.

“No country, however technologically advanced, can develop and govern AI alone. China’s commitment to openness and cooperation can help ensure that the benefits of AI are shared by all humanity. It can help prevent the fragmentation of technologies, standards and markets, while ensuring that the opportunities created by AI are shared more widely,” Gambardella said.

“President Xi proposed ‘adhering to the principle of openness and win-win cooperation’ and ‘advocating solidarity’, and announced a series of pragmatic measures to support global AI development. These remarks have deeply inspired me and further strengthened my confidence in promoting the inclusive development of AI through opening-up and cooperation,” Xu Li, chairman and CEO of Shanghai-based AI software company SenseTime, told the Global Times on Friday.

Looking ahead, SenseTime aims to bring more field-tested technologies, products, and talent cultivation expertise to more countries and regions, and boost “China innovation” to deliver sustained value across a wider spectrum of industrial scenarios, thereby enabling AI to better benefit all of humanity, Xu said.

China actively supports strengthening global cooperation on AI governance, advocates multilateralism, and promotes the establishment of a global governance framework, which has received positive responses from many Global South countries.

Twenty-nine countries on Thursday signed an agreement in Shanghai on establishing the World Artificial Intelligence Cooperation Organization (WAICO). As an independent intergovernmental international organization headquartered in Shanghai, WAICO will uphold the purposes of the UN Charter, be committed to extensive consultation and joint contribution for shared benefit and adhere to a people-centered approach, according to the agreement, per Xinhua.

Global spotlight on WAIC

Since its inception in 2018, the WAIC has successfully convened for eight consecutive editions, becoming an important window for showcasing cutting-edge AI technologies from China and around the world while deepening international opening-up and cooperation.

Themed “AI Partnership for a Brighter Future”, the exhibition area exceeds 100,000 square meters for the first time this year, attracting the participation of over 1,100 enterprises. The exhibitors are showcasing more than 3,000 products and technologies, with over 300 products making their global debuts.

Among the exhibition highlights are Huawei’s latest AI computing super node system Atlas 950, MiniMax M3 multimodal foundation model, and the world’s first agentic AI phone, alongside a range of humanoid robots and AI-powered dexterous hands.

A German BMW representative, who attended WAIC for the first time, expressed enthusiasm about the event, highlighting the humanoid robotics showcased in the exhibition area – technologies he said he has never encountered before.

The representative told the Global Times that his company has adopted Chinese AI-powered large language models such as Qwen and DeepSeek. “The new updated versions of these models emerge weekly, which is very impressive,” the representative said, speaking highly of the cost efficiency of Chinese models.

However, some Western media outlets keep smearing China’s AI advancements and international cooperation. The Economist even claims that China’s open-source AI is a “trap” and that embracing China is “risky.”

Debunking this groundless smearing, Song said that China’s AI development has consistently adhered to the philosophy of a people-centered approach and AI for good, accumulating a wealth of vivid, replicable, and scalable experiences.

At the opening ceremony of the WAIC, the China Meteorological Administration unveiled the MAZU-FengYun Satellite AI Box. The launch marks a new stage in MAZU’s intelligent early-warning initiative, which was unveiled last year, shifting from providing shared meteorological products to delivering AI-enabled forecasting capabilities, according to the administration.

“Over the past year, meteorological and disaster reduction agencies from more than 40 countries have accessed the MAZU early warning technologies and products via cloud platforms. Customized versions of the tool have been deployed in Nigeria, Djibouti, Pakistan, and other nations, earning widespread recognition from users,” You Yang, a staff member with the Shanghai Meteorological Bureau, told the Global Times on Friday.

“From base models to industry-specific applications, China is opening up its low-cost, replicable technological pathways to the world, thereby lowering the threshold for underdeveloped nations to enter the AI era. Meanwhile, China actively helps developing countries address gaps in technology, talent, and governance capabilities to bridge the digital divide in the age of intelligence,” Song said.

According to a March report from Hugging Face, one of the world’s largest AI open-source communities, China has surpassed the US in monthly downloads and overall downloads. In the past year, Chinese models quickly accounted for the plurality or 41 percent of downloads.

“China possesses three unique institutional advantages in promoting AI for good and inclusive development: First, the new system for nationwide mobilization of resources coordinates development and security, achieving synergistic progress in key technological breakthroughs and rule-making. Second, a people-centered approach ensures that technological advancement benefits the people. Third, a multi-stakeholder agile and collaborative governance model links governments, universities, research institutions, enterprises, and social organizations to explore the synergy between rules and technology, providing China’s experience to the world,” Zeng Yi, a member of the UN Advisory Body on AI, told the Global Times on Friday.

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SOURCE Global Times

Technology

Ecopetrol Reports Cybersecurity Incident

Published

3 hours ago

July 18, 2026

BOGOTA, Colombia, July 17, 2026 /PRNewswire/ — Ecopetrol S.A. (BVC: ECOPETROL; NYSE: EC) (the “Company”) announced that it has identified an unauthorized access to certain digital resources owned by the Company and its subsidiaries by an external actor who has not been identified, as well as an attempted ransomware attack that was blocked by the cybersecurity controls implemented across the Company and its subsidiaries. The unauthorized access affected cloud-based file storage environments of approximately 15 subsidiaries (including the Company), resulting in the unauthorized download of data associated with approximately 3,300 user accounts. The external actor communicated extortion demands, threatening to publicly disclose the information that had been unlawfully extracted.

In response to this incident, the Company initiated an investigation and activated its incident response and management protocols. In addition, the Company deployed the following measures aimed at preventing the public disclosure of the unlawfully extracted information, addressing supervisory actions and/or potential financial costs associated with investigation, remediation, and regulatory compliance, as follows:

a. Immediate revocation of unauthorized access to the compromised digital assets.
b. Blocking of mechanisms associated with the mass download of information.
c. Identification, analysis, and containment of the tactics, techniques, and procedures (TTPs) used by the malicious actor.
d. Filing of a criminal complaint before the Office of the Attorney General of Colombia and deployment of cooperation activities with specialized national authorities.
e. Identification of external infrastructures used for the storage or download of information to pursue restriction or blocking actions.
f. Activation of support mechanisms with insurers and specialized capital markets teams to ensure the proper management of the event.
g. Detailed assessment of the downloaded information and determination of its criticality.
h. Enhanced monitoring of the technology infrastructure under critical alert protocols and continuous validation of preventive and detective controls.

As of the date of this report, the Company has not identified any material disruption to its critical operations, production capacity, or essential services; any direct financial impact that would prevent it from continuing to conduct its business activities; or any disclosure of the information subject to the unauthorized access. However, the Company continues to assess the potential exposure of corporate information, which could include confidential, restricted, proprietary, or personal data, as it cannot guarantee that this incident will not have a material adverse effect on the Company’s business, reputation, operating results, or financial condition.

Ecopetrol S.A. will continue to monitor developments related to this matter and, should any material facts or information requiring disclosure to the market be identified, will promptly disclose such information in accordance with applicable laws and regulations.

Ecopetrol is the largest company in Colombia and one of the main integrated energy companies in the American continent, with more than 19,000 employees. In Colombia, it is responsible for more than 60% of the hydrocarbon production of most transportation, logistics, and hydrocarbon refining systems, and it holds leading positions in the petrochemicals and gas distribution segments. With the acquisition of 51.4% of ISA’s shares, the company participates in energy transmission, the management of real-time systems (XM), and the Barranquilla – Cartagena coastal highway concession. At the international level, Ecopetrol has a stake in strategic basins in the American continent, with Drilling and Exploration operations in the United States (Permian basin and the Gulf of Mexico), Brazil, and Mexico, and, through ISA and its subsidiaries, Ecopetrol holds leading positions in the power transmission business in Brazil, Chile, Peru, and Bolivia, road concessions in Chile, and the telecommunications sector.

This release contains statements that may be considered forward-looking statements within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. All forward-looking statements, whether made in this release or in future filings or press releases, or orally, address matters that involve risks and uncertainties, including in respect of the Company’s prospects for growth and its ongoing access to capital to fund the Company’s business plan, among others. Consequently, changes in the following factors, among others, could cause actual results to differ materially from those included in the forward-looking statements: market prices of oil & gas, our exploration, and production activities, market conditions, applicable regulations, the exchange rate, the Company’s competitiveness and the performance of Colombia’s economy and industry, to mention a few. We do not intend and do not assume any obligation to update these forward-looking statements.

For more information, please contact:

Investor Relations Office
Email: investors@ecopetrol.com.co

Head of Corporate Communications (Colombia)
Marcela Ulloa
Email: marcela.ulloa@ecopetrol.com.co

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SOURCE Ecopetrol S.A.