Smart Share Global Limited (Nasdaq: EM) (“Energy Monster” or the “Company”), a consumer tech company providing mobile device charging service, today announced its unaudited financial results for the quarter ended June 30, 2024.

HIGHLIGHTS FOR THE SECOND QUARTER OF 2024

  • As of June 30, 2024, 89.2% of POIs were operated under our network partner model, compared with 79.7% as of March 31, 2024.
  • As of June 30, 2024, the Company’s services were available in 1,267 thousand POIs, compared with 1,245 thousand as of March 31, 2024.
  • As of June 30, 2024, the Company’s available-for-use power banks3 were 9.5 million, compared with 9.4 million as of March 31, 2024.
  • As of June 30, 2024, cumulative registered users reached 417.1 million, with 12.8 million newly registered users acquired during the quarter.
  • Mobile device charging orders4 for the second quarter of 2024 was 150.6 million, compared with 171.8 million for the second quarter of 2023.

“Despite the weaker-than-expected consumption environment, we delivered a solid performance this quarter as we returned to profitability,” said Mars Guangyuan Cai, Chairman and Chief Executive Officer. “Our commitment to long-term value, even in the current consumption climate, is evident in our ongoing transition towards the network partner model, which we consider to be crucial for our long-term success. Additionally, this quarter, we have proactively begun exploring opportunities in the mobile device charging service market beyond China as a way to diversify our operation. By taking these steps, we are positioning the Company to capture the long-term value of the industry and deliver substantial returns to our investors.”

“The pace at which we have rebalanced our operations between the direct model and the network partner model has exceeded our initial expectations,” said Peifeng Xu, President. “Although the shift in our business model has imposed short-term impacts on our new POI expansion rate, we remain confident in our long-term prospects. Notably, the reduction in our direct model operations will not only lower our operational expenses but also enhance the contribution from the higher-margin network partner model.”

“Our return to profitability this quarter is a positive development, especially in light of the current transitions,” said Maria Yi Xin, Chief Financial Officer. “We will continue to pursue higher levels of operational efficiency within our core mobile device charging service. Simultaneously, we are committed to investing in new initiatives that will leverage Energy Monster’s existing capabilities and unlock new avenues for growth. These efforts are essential as we aim to realize our full growth potential and consistently deliver sustained value to our shareholders.”

FINANCIAL RESULTS FOR THE SECOND QUARTER OF 2024Revenues were RMB462.9 million (US$63.7 million5) for the second quarter of 2024, representing a 55.3% decrease from the same period in 2023. The decrease was primarily due to certain one-time adjustments made to the mobile device charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners.

  • Mobile device charging revenues, which consist of revenues generated under both the direct and network partner models, decreased by 60.0% to RMB410.6 million (US$56.5 million) for the second quarter of 2024, from RMB1,026.3 million in the same period of 2023.
    • Revenues generated under the direct model, comprising of mobile device charging service fees of RMB115.9 million and power bank sales of RMB2.2 million, decreased by 60.7% to RMB118.1 million for the second quarter of 2024, from RMB300.7 million in the same period of 2023. The decrease was primarily due to the decrease in number of POIs operated under the direct model.
    • Revenues generated under the network partner model, comprising of (i) mobile device charging solution fees, which increased by 14.3% year-over-year to RMB61.5 million, and (ii) power bank, cabinet and other related sales, which decreased by 65.6% year-over-year to RMB231.0 million, decreased by 59.7% to RMB292.5 million for the second quarter of 2024, from RMB725.6 million in the same period of 2023. The decrease was primarily due to certain one-time adjustments made to the mobile device charging revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners.
  • Other revenues, which primarily comprise of revenues from new business initiatives and advertising services, increased by 453.7% to RMB52.3 million (US$7.2 million) for the second quarter of 2024, from RMB9.4 million in the same period of 2023. The increase was primarily attributable to new business initiatives.

Cost of revenues decreased by 67.2% to RMB219.6 million (US$30.2 million) for the second quarter of 2024, from RMB668.5 million in the same period last year. The decrease was primarily due to certain one-time adjustments made to the mobile device charging cost of revenues for the second quarter of 2023 as a result of the change in the contractual arrangement with network partners and the decrease in depreciation as a result of the decrease in number of POIs operated under the direct model.

Research and development expenses increased by 11.6% to RMB20.8 million (US$2.9 million) for the second quarter of 2024, from RMB18.7 million in the same period last year. The increase was primarily due to the increase in personnel related expenses.

Sales and marketing expenses decreased by 38.7% to RMB180.9 million (US$24.9 million) for the second quarter of 2024 from RMB295.2 million in the same period last year. The decrease was primarily due to the decrease in incentive fees paid to location partners under the direct model and personnel related expenses.

General and administrative expenses increased by 26.8% to RMB39.5 million (US$5.4 million) for the second quarter of 2024, compared to RMB31.1 million in the same period last year. The increase was primarily due to the increase in reserve for doubtful accounts in relation to the increasing contribution of the network partner model.

Loss from operations for the second quarter of 2024 was RMB6.0 million (US$0.8 million), compared to an income from operations of RMB13.6 million in the same period last year.

Net income for the second quarter of 2024 was RMB9.2 million (US$1.3 million), compared to a net income of RMB24.5 million in the same period last year.

Non-GAAP adjusted net income for the second quarter of 2024 was RMB15.2 million (US$2.1 million), compared to a non-GAAP adjusted net income of RMB30.1 million in the same period last year.

Net income attributable to ordinary shareholders for the second quarter of 2024 was RMB9.2 million (US$1.3 million), compared to a net income attributable to ordinary shareholders of RMB24.5 million in the same period last year.

As of June 30, 2024, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB3.2 billion (US$440.9 million). 

SUPPLEMENTAL INFORMATIONThe table below sets forth the breakdown of mobile device charging revenue components based on the latest classification for the periods indicated:

  2023Q2   2024Q1   2024Q2
  thousands RMB   thousands RMB   thousands RMB
           
Mobile device charging:          
Direct Model 300,701   155,224   118,105
Mobile device charging service 293,922   152,108   115,863
Power bank sales 6,779   3,116   2,242
Network Partner Model 725,577   222,852   292,505
Mobile device charging service -   -   -
Mobile device charging solution 53,793   59,016   61,508
Power bank, cabinet and other related sales 671,784   163,836   230,997
Total mobile device charging 1,026,278   378,076   410,610
           

CONFERENCE CALL INFORMATIONThe company will hold a conference call at 8:00 A.M. Eastern Time on Thursday, August 22, 2024 (8:00 P.M. Beijing Time on Thursday, August 22, 2024) to discuss the financial results. Upon registration, each participant will receive dial-in details to join the conference call.

Event Title: Energy Monster’s Second Quarter 2024 Earnings Conference CallPre-registration link: https://s1.c-conf.com/diamondpass/10041388-erkogt.html

Participants may also access the call via webcast: https://edge.media-server.com/mmc/p/fga362u4

A telephone replay will be available through August 29, 2024. The dial-in details are as follows:

International: +61-7-3107-6325
United States: +1-855-883-1031
Mainland China: +86-400-120-9216
China Hong Kong: +852-800-930-639
Access Code: 10041388
   

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at https://ir.enmonster.com/.

ABOUT SMART SHARE GLOBAL LIMITEDSmart Share Global Limited (Nasdaq: EM), or Energy Monster, is a consumer tech company with the mission to energize everyday life. The Company is the largest provider of mobile device charging service in China with the number one market share. The Company provides mobile device charging service through its power banks, which are placed in POIs such as entertainment venues, restaurants, shopping centers, hotels, transportation hubs and public spaces. Users may access the service by scanning the QR codes on Energy Monster’s cabinets to release the power banks. As of June 30, 2024, the Company had 9.5 million power banks in 1,267,000 POIs across more than 2,100 counties and county-level districts in China.

CONTACT USInvestor RelationsHansen Shiir@enmonster.com

SAFE HARBOR STATEMENTThis press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. Among other things, the business outlook and quotations from management in this announcement, as well as the Company’s strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission (“SEC”), in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and 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: Energy Monster’s strategies; its future business development, financial condition and results of operations; the impact of technological advancements on the pricing of and demand for its services; competition in the mobile device charging service industry; Chinese governmental policies and regulations affecting the mobile device charging service industry; changes in its revenues, costs or expenditures; general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks, uncertainties or factors 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 duty to update such information, except as required under applicable law.

NON-GAAP FINANCIAL MEASUREIn evaluating its business, the Company considers and uses non-GAAP adjusted net income in reviewing and assessing its operating performance. The presentation of this non-GAAP financial measure 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 presents this non-GAAP financial measure because it is used by management to evaluate operating performance and formulate business plans. The Company believes that this non-GAAP financial measure helps identify underlying trends in its business, provide further information about its results of operations, and enhance the overall understanding of its past performance and future prospects.

Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP, and have limitations as analytical tools. The Company’s non-GAAP financial measure does not reflect all items of expenses that affect its operations and does not represent the residual cash flow available for discretionary expenditures. Further, the Company’s non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. The Company compensates for these limitations by reconciling its non-GAAP financial measure to the nearest U.S. GAAP performance measure, which should be considered when evaluating performance. Investors and others are encouraged to review the Company’s financial information in its entirety and not rely on a single financial measure.

The Company defines non-GAAP adjusted net income as net income excluding share-based compensation expenses. For more information on the non-GAAP financial measure, please see the table captioned “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this press release.

Smart Share Global Limited
Unaudited Consolidated Balance Sheets
(In thousands, except for share and per share data, unless otherwise noted)
                   
      December 31, 2023     June 30, 2024     June 30, 2024
  RMB RMB US$
       
  ASSETS                
  Current assets:                
  Cash and cash equivalents   588,644       735,208       101,168  
  Restricted cash   173,246       146,037       20,095  
  Short-term investments   2,541,889       2,302,795       316,875  
  Accounts receivable, net   269,736       300,853       41,399  
  Inventory   106,530       155,743       21,431  
  Prepayments and other current assets   345,744       327,539       45,071  
                   
  Total current assets   4,025,789       3,968,175       546,039  
                   
  Non-current assets:                
  Long-term restricted cash   20,000       20,000       2,752  
  Property, equipment and software, net   322,806       237,794       32,722  
  Right-of-use assets, net   16,353       11,134       1,532  
  Other non-current assets   21,621       16,592       2,283  
  Deferred tax assets, net   18,804       18,804       2,587  
                   
  Total non-current assets   399,584       304,324       41,876  
                   
  Total assets   4,425,373       4,272,499       587,915  
                   
  LIABILITIES AND SHAREHOLDERS' EQUITY                
  Current liabilities:                
  Accounts and notes payable   764,741       699,504       96,254  
  Salary and welfare payable   143,653       122,335       16,834  
  Taxes payable   214,738       213,000       29,310  
  Current portion of lease liabilities   7,399       5,241       721  
  Accruals and other current liabilities   336,959       334,455       46,023  
                   
  Total current liabilities   1,467,490       1,374,535       189,142  
                   
  Non-current liabilities:                
  Non-current lease liabilities   7,641       5,390       742  
  Amounts due to related parties-non-current   1,000       1,000       138  
  Other non-current liabilities   195,585       207,501       28,553  
                   
  Total non-current liabilities   204,226       213,891       29,433  
                   
  Total liabilities   1,671,716       1,588,426       218,575  
                   
  SHAREHOLDERS' EQUITY                
  Ordinary shares   347       347       48  
  Treasury stock   (5,549 )     (44,243 )     (6,088 )
  Additional paid-in capital   11,791,570       11,743,588       1,615,971  
  Statutory reserves   16,593       16,593       2,283  
  Accumulated other comprehensive income   182,824       191,087       26,294  
  Accumulated deficit   (9,232,128 )     (9,223,299 )     (1,269,168 )
                   
  Total shareholders' equity   2,753,657       2,684,073       369,340  
                   
  Total liabilities and shareholders' equity   4,425,373       4,272,499       587,915  
                         
Smart Share Global Limited
Unaudited Consolidated Statements of Comprehensive Income
(In thousands, except for share and per share data, unless otherwise noted)
                           
      Three months ended June 30,   Six months ended June 30,
      2023   2024   2023   2024
      RMB   RMB   US$   RMB   RMB   US$
                           
  Revenues:                        
  Mobile device charging   1,026,278     410,610     56,502     1,839,323     788,686     108,527  
  Others   9,448     52,313     7,199     19,238     71,443     9,831  
                           
  Total revenues   1,035,726     462,923     63,701     1,858,561     860,129     118,358  
                           
  Cost of revenues   (668,547 )   (219,600 )   (30,218 )   (795,936 )   (387,337 )   (53,299 )
  Research and development expenses   (18,651 )   (20,812 )   (2,864 )   (40,095 )   (40,486 )   (5,571 )
  Sales and marketing expenses   (295,150 )   (180,949 )   (24,899 )   (960,424 )   (385,443 )   (53,039 )
  General and administrative expenses   (31,117 )   (39,450 )   (5,429 )   (57,888 )   (66,034 )   (9,087 )
  Other operating loss   (8,703 )   (8,133 )   (1,119 )   (6,435 )   (9,607 )   (1,322 )
                           
  Income/(loss) from operations   13,558     (6,021 )   (828 )   (2,217 )   (28,778 )   (3,960 )
                           
  Interest and investment income   28,054     28,754     3,957     54,290     59,343     8,166  
  Interest expense to third parties   -     -     -     (4,228 )   -     -  
  Foreign exchange loss, net   (17,269 )   (2,537 )   (349 )   (12,509 )   (3,103 )   (427 )
  Other income/(loss), net   172     (5 )   (1 )   (11 )   68     9  
                           
  Income before income tax expense   24,515     20,191     2,779     35,325     27,530     3,788  
                           
  Income tax expense   -     (11,013 )   (1,516 )   -     (18,701 )   (2,573 )
                           
  Net income   24,515     9,178     1,263     35,325     8,829     1,215  
                           
  Net income attributable to ordinary shareholders of Smart Share Global Limited   24,515     9,178     1,263     35,325     8,829     1,215  
                           
  Other comprehensive income                        
  Foreign currency translation adjustments, net of nil tax   68,489     5,901     812     50,422     8,263     1,137  
                           
  Total comprehensive income   93,004     15,079     2,075     85,747     17,092     2,352  
                           
  Comprehensive income attributable to ordinary shareholders of Smart Share Global Limited   93,004     15,079     2,075     85,747     17,092     2,352  
                           
  Weighted average number of ordinary shares used in computing net income per share                        
  - basic   520,059,564     513,255,262     513,255,262     519,652,925     515,725,209     515,725,209  
  - diluted   520,059,564     523,442,724     523,442,724     519,652,925     520,818,940     520,818,940  
                           
  Net income per share attributable to ordinary shareholders                        
  - basic   0.05     0.02     0.00     0.07     0.02     0.00  
  - diluted   0.05     0.02     0.00     0.07     0.02     0.00  
                           
  Net income per ADS attributable to ordinary shareholders                        
  - basic   0.10     0.04     0.01     0.14     0.03     0.00  
  - diluted   0.10     0.04     0.01     0.14     0.03     0.00  
                           
Smart Share Global Limited
Unaudited Reconciliation of GAAP and Non-GAAP Results
(In thousands, except for share and per share data, unless otherwise noted)
                         
    Three months ended June 30,   Six months ended June 30,
    2023   2024   2023   2024
    RMB   RMB   US$   RMB   RMB   US$
                         
  Net income 24,515   9,178   1,263   35,325   8,829   1,215
  Add:                      
  Share-based compensation 5,540   6,034   830   11,825   10,217   1,406
  Less:                      
  Adjusted for tax effects -   -   -   -   -   -
                         
  Adjusted net income (non-GAAP) 30,055   15,212   2,093   47,150   19,046   2,621
                         

___________________________

1 The Company defines number of points of interests, or POIs, as of a certain day as the total number of unique locations whose proprietors (location partners) have entered into contracts with the Company or its network partners on that day and have at least one cabinet assigned to the location.

2 The Company defines cumulative registered users as the total number of users who have agreed to register their mobile phone numbers with the Company via its mini programs since inception, and the number of cumulative registered users of the Company on a certain date is the number of unique mobile phone numbers that have been registered with the Company since inception on that date.

3 The Company defines available-for-use power banks as of a certain date as the number of power banks in circulation on that day.

4 The Company defines mobile device charging orders for a given period as the total number of completed orders placed by registered users of the mobile device charging business under both the direct and network partner models in that given period, without any adjustment for orders that may qualify for discounts or incentives.

5 The U.S. dollar (US$) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the readers. The conversion of Renminbi (RMB) into US$ in this press release is based on the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of June 28, 2024, which was RMB7.2672 to US$1.0000. The percentages stated in this press release are calculated based on the RMB amounts.

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