Smart Share Global (EM) Q2 2024 earnings summary

Executive summary

• Achieved GAAP profitability with net income of RMB 9.2 million in Q2 2024, demonstrating resilience amid a softer consumption environment and ongoing business model transition.

• Sixth consecutive quarter of non-GAAP profitability since early 2023, reflecting effective strategic initiatives.

• Accelerated shift to the network partner model, now representing 89.2% of POIs, up from 62% a year ago and 79.7% in Q1 2024.

• Services available in over 1.27 million POIs with 9.5 million power banks and 417.1 million cumulative registered users.

• Exploring international expansion to diversify operations and drive long-term growth.

Financial highlights

• Q2 2024 revenue was RMB 462.9 million, down 55.3% year-over-year due to one-time adjustments in 2023.

• Mobile device charging revenue was RMB 410.6 million, accounting for 88.7% of total revenue, down 60% year-over-year.

• Other revenue grew 453.7% year-over-year to RMB 52.3 million, driven by new business initiatives.

• Gross profit was RMB 243.3 million, down 33.7% year-over-year, with gross margin improving as cost of revenues fell faster than revenue.

• Net income was RMB 9.2 million, with a net margin of 2%; non-GAAP net income was RMB 15.2 million.

Outlook and guidance

• No clear rebound in core business expected for the second half of 2024 due to weak consumer confidence and challenging market conditions.

• Management remains confident in long-term prospects, emphasizing operational efficiency and investment in new growth initiatives.

• Other initiatives, especially in renewable energy, are trending up and expected to be long-term growth drivers, with renewable energy reaching break-even in July.

• Continued focus on expanding the network partner model and international opportunities.