Ladies and gentlemen, thank you for standing by and welcome to the Uxin earnings call for the quarter ended December 31st, 2021. At this time, all participants are in a listen-only mode. After management's prepared remarks, there'll be a question and answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I will now turn the call over to hosts for today's conference call, Ms. Joyce Tang, IR Director of the company. Please go ahead, ma'am.
Thank you, operator. Hello, everyone. Welcome to Uxin's earnings conference call for the quarter ending December 31st, 2021. On the call today are DK, founder and CEO of Uxin, and John Lin, CFO of Uxin. DK will review business operations and company highlights, followed by John, who will discuss financials and guidance. They will both be available to answer your questions during the Q&A session that follows.
Before we start, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current knowledge and assumptions about future events that involve known or unknown risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements.
Uxin does not undertake any obligation to update any forward-looking statements except as required under applicable law. For more information about the potential risks and uncertainties, please refer to our filings with the SEC. With that, I will now turn the call over to our CEO, DK. Please go ahead.
Hello, everyone. Thank you for joining our earnings conference call today. To better communicate with both domestic and international investors, my prepared remarks today will still be in both English and Chinese. We are pleased that our business maintained its robust growth throughout the third quarter of fiscal year 2022, which stemmed from October to December 2021. Total transaction volume grew by 111% year-over-year to 4,879 units in the quarter, and grew by 33% compared with last quarter.
Specifically, retail transaction volume was 1,671 units, an increase of 61% compared with last quarter. Although the resurgence of COVID-19 cases in Xi'an, where our first IRC is located, resulted in a citywide lockdown in last December, the strong growth momentum of our second IRC in Hefei, generated since its launch, has effectively helped us mitigate some of the negative impacts from the disruptions in Xi'an. The Hefei IRC officially opened for business in mid-November 2021 after six months of preparation. With the successful model of our Xi'an IRC as a foundation, we redesigned the stock operation process through a series of upgrades and improvements. As such, we have equipped our Hefei IRC with an omnichannel sales model integrating online sales into its warehouse-style operation.
We offer our customers a diverse selection of high quality and cost-effective vehicles, premium transaction services, hassle-free after-sales guarantees, creating the superior used car shopping experience that has been widely welcomed by customers since opening. As evidence of our improved customer experience, our NPS continued to rise for the fifth consecutive quarter to reach a new record high of 59 in the third quarter from 56 in the prior quarter.
This is a testament to our persistent efforts in optimizing all aspects of our operations to better fulfill the customer needs from vehicle sourcing to transaction, delivery, and after-sales services. Going forward, we will continue to refine and upgrade our products and services, which will be the key for driving high quality sales growth through customer reputation. In terms of vehicle sourcing, we are actively increasing the number of cars we purchase from consumers.
For example, around 25% of used cars in the retail inventory was procured from customers in this quarter. Notably, we further strengthened our used car purchase services from local consumers, which enable us to further reduce procurement costs while boosting sales conversion rates in the region. As this metric has proven the effectiveness of our efforts, we will continue to expand into sourcing channels to purchase vehicles from consumers.
We also roll out our used NEV business in this quarter. We have already developed core NEV inspection capabilities such as for battery and motor inspections while expanding our used NEV after-sales services. We currently have five of the best-selling NEVs on sale, including Tesla, NIO, Li Auto, XPeng, and BYD. Moreover, the continuous optimization of our supply chain also yields very encouraging results.
By improving the synergies between each process throughout the supply chain cycle, we reduce the time needed to make a car we procure ready for sale by 30% in the quarter. In the meantime, we leverage our big data analysis of market dynamics and consumer preferences to ensure we keep an optimal selection of cars in our inventory. As such, our improved vehicle selection approach enable us to further refine and localize the structure of our vehicles in inventory. To bolster the opening of the Hefei IRC this quarter, we also ramp up our new media marketing strategy by leveraging live streaming and short form video content on popular platforms. Our marketing material had expanded its customer coverage and garnered excellent response and feedback.
We were able to successfully reach our target customers, significantly improving our marketing efficiency and reducing its costs through this new marketing strategy. Now, moving on to our expectations for the fourth quarter of fiscal year 2022. During the three months ending March 31, 2022, we have experienced a lockdown in Xi'an, as well as the expected Chinese New Year holiday off-season.
As you know, Xi'an was the second provincial capital city in China to shut down since the outbreak in 2020. Our Xi'an IRC began to recover after the Chinese New Year holiday, and business is now back to its standard level before COVID-19. However, driven by a robust performance of our Hefei IRC, we expect our retail sales to continue to grow in the fourth quarter.
Although the impact of the epidemic in Xi'an has brought forth new challenges, I have no doubt that our team has the capabilities to overcome these obstacles. We have a team that has strength in experience, skills, and team unity, and we are grateful to everyone's hard work and dedicated contributions. We have the right strategies in place, and we will continue to provide customers with high-quality products and services. Our commitment to driving high-quality growth through customer reputation and creating long-term value for our customers and shareholders will always serve as the foundation of our business vision. With that, I'd like to turn the call over to our CFO, John, to walk you through the financial results. John, please.
Okay. Thanks, DK. Hello, everyone. Thank you all for joining us today. I will walk you through our financial performance in the quarter ended December 31st, 2021. In this quarter, our retail sales volume increased by 61.3% quarter-over-quarter, and our overall sales volume increased to 33.4% quarter-over-quarter. As a result, despite the COVID-19 impact starting from mid-December, our revenue grew 46.5% quarter-over-quarter, and slightly beat the revenue guidance we showed last time. Contribution from our Hefei IRC was the key driver of our sales and the revenue growth in the third quarter. The new IRC significantly boosted the scale of our retail inventory. In the second quarter, we only had one IRC in Xi'an with a total inventory of about 600 cars.
The newly added Hefei IRC can reach up to 2,500 cars inventory. The increased inventory enabled us to ramp up our sales, enhance our operational efficiency, and improve our one-stop car shopping experience to our customers. Thanks to the opening of Hefei IRC, we can keep our retail growth momentum both in Q3 and will be in Q4. With the opening of Hefei IRC in Q3, we incurred additional costs and expenses on construction, renovations, site rental, and new employees. We also invested in additional marketing for customer acquisition in Hefei City, as well as the entire Anhui Province to maximize our branding in the regional markets. Other than that, we continue to operate our business in the leanest way possible. We plan carefully, and we only invest in key areas that will expand our vehicle acquisition, improve our technology leadership, and refine our supply chain systems.
Our business progress and operation optimization have been executed steadily following our long-term development plan, and we received a further capital injection from our strategic investors. With respect to the financing transaction with Neo Capital and Joy Capital, last Friday, or March the 25th, we received $10 million from the second close. We also expect to receive the remaining $12.5 million from the second closing in the coming months. In addition, we are on track with the investors about the execution of the $165 million warrant. Now I will run through some key financials. All numbers are in RMB terms, unless otherwise noted.
Total revenue was CNY 506.6 million, representing a quarter-over-quarter growth of 46.5% and a year-over-year growth of 56.9%. Gross margin was 4.1%, stable compared with 4.2% last quarter. Total operating expenses were CNY 120 million, compared to CNY 85.9 million in the prior quarter, and CNY 188.3 million in the same period the last time. As I shared earlier, during this quarter, we incurred expenses on preparation of the launch of the new Hefei IRC, and we also invested in additional marketing. Non-GAAP adjusted loss from continuing operations was CNY 68.6 million, compared with CNY 43.2 million last quarter and CNY 162.5 million in the same period last year.
Similar to last quarter, there was a fair value impact related to our financing transaction. The share price was $1.58 per ADS on December 31st, 2021, compared with $2.76 per ADS on September 30th, 2021. This resulted in a non-cash gain of CNY 1.36 billion from fair value change of the warrant liabilities and forward liabilities on our balance sheet. I would like to reiterate that this fair value impact was a non-cash gain and was not a result of our operations.
Consequently, net income from continuing operations was a net gain of CNY 1.28 billion in the third quarter, compared with a net loss of CNY 1.71 billion in the last quarter and a net loss of CNY 172.9 million in the same period last year. If removing the fair value adjustment impact, the Non-GAAP adjusted net loss from continuing operations was CNY 80.2 million, compared with a net loss of CNY 56.9 million and a net loss of CNY 171 million in the same period last year. About our cash position. As of December 31st, 2021, we had cash and cash equivalents of CNY 161.3 million. Moving on to our Q4 guidance. In the fourth quarter, we are facing two major challenges.
One is the citywide lockdown in Xi'an from late December to late January, and the other one is the traditional Spring Festival off-season in February. We expect our total revenues to be in the range of RMB 440 million-RMB 460 million for the three months ended March 31st, 2022. Although our revenue growth slows down a little bit, we expect our retail sales volume to continue to increase. Please note that this forecast reflects our current and preliminary views on the market and operational conditions, which are subject to changes. That concludes our prepared remarks. Thanks.
Ladies and gentlemen, if you have a question or a comment at this
We are ready to take up questions.
Ladies and gentlemen, if you have a question or a comment at this time, please press the star then the one key on your touchtone telephone. If your question has been answered or you wish to move yourself from the queue, please press the pound key. When asking a question, state your question in Chinese first, then repeat in English for the convenience of everyone on the call. We'll pause for a moment to compile our Q&A roster.
Again, ladies and gentlemen, if you have a question or a comment at this time, please press the star then the one key on your touchtone telephone. Again, when asking your question, please ask the question first in Chinese, then repeat it in English for the convenience of everyone on the call. Our first question comes from Karl Birkenfeld with American Trust.
Okay. Yes. Given the recent increased COVID-related lockdown in China, what is the impact to your vehicle inventory center and retail sales growth for 2022 going forward calendar year? I'm sorry, I don't speak Chinese, so.
All right. No problem. I got your question. Yeah, this is DK. I still try to use Chinese to answer the question, and my colleagues will translate to English.
Okay. Our business was definitely affected by the resurging of COVID-19 and the Chinese New Year off-season. In particular, operations of our Xi'an IRC was severely disrupted by COVID-19. However, as we successfully launched our Hefei IRC in November last year, its robust performance helped us mitigate some of the impact. After the Chinese New Year holiday, our Xi'an IRC has also resumed its growth trajectory as its sales volume has surpassed its pre-COVID levels.
During the fourth quarter, our Xi'an IRC continued to experience disruptions caused by lingering COVID effects. However, we expect the strong momentum of our Hefei IRC to enable us to offset the impact and sustain our growth in terms of retail sales volume. In fact, for the full fiscal year of 2022, we expect both retail and total sales volume to achieve solid sequential growth.
Also, we are always able to conduct our business across the country when certain regions are impacted by COVID. Our online and offline sales model has integrated our offline super stores with our Uxin Online Super Mall. This integration allows us to better diversify risks and minimize the impact of COVID-19. Thanks for the question.
Again, ladies and gentlemen, if you have a question or a comment at this time, please press the star then the one key on your touchtone telephone. Our next question comes from Yin Ying with China Securities. Your line is open. You can ask your question, Yin Ying. If your line is muted, could you please unmute the line? The China Securities, you can go ahead and ask your question. Your line is open.
好，这样问题是如果未来OK。
Sorry, Ying, please go ahead.
我第二个问题是想请问一下，因为我们已经有西安和合肥两块店了，那未来扩张的话，现金这一块会怎么来？好，谢谢您。
Okay, please allow me to translate the questions to English. The first question is, can you share more details on the trend of inventory turnover and average selling price during 2021? Also, what's your view on the current competition with [Foreign language] as well as traditional car dealers?
好的，我来回答第一个问题吧，然后John来回答第二个，好吗？
OK。
那个从周转率的情况来看，现在西安仓呢，是去年的三月份开业，到现在跑了刚刚一年，然后合肥呢，是去年十一月开业，到现在三个多月。那么两个仓的运营时间和成熟度不太一样。那目前从整体就landing来看的话呢，周转率大概在六十天左右。那交易均价上面，当前就是这个月我们的零售交易均价大概在¥14万左右，但从整体的策略上面来说的话，我们下一步呢，还会把交易均价再降低一些，会大概在¥10到¥12万之间，然后呢，来更契合广大消费者多样化的需求。
Okay, for your first question on turnover. Our two IRCs are at different stage of development of maturity. As we launch our Xi'an IRC in March 2021, and our Hefei IRC in November 2021. Overall, our turnover is around six days as a whole. As for the average transaction price, our current price of retail vehicles is around RMB 140,000 for this month. Going forward, we will continue to diversify by our selection of vehicles. As such, I think our average price will reduce to around RMB 100,000-RMB 120,000, which is more suitable for the diverse needs for customers.
关于竞争方面呢，我觉得我们和友商啊都在这个适合自己的发展模式之上。那这个中国二手车市场非常大，也很分散。其实我们是希望能够有更多的新鲜血液来到这个传统的行业啊，只要是能给消费者带来好的购物体验的，我觉得大家都是有机会。那从优信自身的竞争优势来看啊，首先呢，我们从消费者的购买体验来讲，优信有单一规模最大的竞卖场，那这种方式呢，给顾客带来了最丰富的车辆产品的选择。然后呢，我们非常重视客户口碑传播带来的高质量增长，所以我们呢，这个自己build了我们自己的工厂，然后工艺和技术呢都是行业领先的，所有的车辆都经过了多项细致的检测和高水平的整理翻新，保证了出品的二手车的品质。那我们现在的模式呢，是最先进的线上和线下结合的零售模式。那么优信最早在全国做二手车在线的承诺购业务，那么我们也很好地把这块业务继承了下来，那么消费者可以不受地域限制地购买二手车。我们车辆现在可以发往全国两百多个城市，一到四天之内呢就能送货上门。那最后一点，我觉得从优势上来讲呢，集中化的这个仓储式的卖场和一体式的这个工厂店，那在各个环节上目前都会体现出更好的成本效益。
Regarding competition, we and our peers are all focused on developing a business model that can facilitate our development. The used vehicle market is immense and highly fragmented. We all share the common goal of bringing innovation to this traditional industry and creating a better shopping experience for our customers. In terms of our advantage, customers are our focus, as we have always prioritized customer obsession to improve the quality of our growth.
We have the largest self-operated store to provide customers with a wide selection of vehicles to choose from. We also have our own inspection and reconditioning center with industry-leading technology and capabilities. All vehicles we sell undergo a number of itemized inspections and reconditioning procedures to ensure our cars have a high standard of quality.
We also have the most advanced online and offline integrated retail model. We were the first one in China to sell used cars online nationwide, removing the geographic barriers for customers. Now our vehicles are delivered to the doorsteps of our customers in more than 200 cities across China within four days. In addition, our large scale and centralized warehouse-style retail model has better cost efficiency. The next question from Yin Ying is that what are your plans to fund your future expansion?
还是John来回答这个问题。在去年2021年6月份的时候，公司同蔚来资本和愉悦资本签署了总额3.65亿美金的融资协议，这个协议一共分三批，其中第一批的融资款1亿美金是在去年的七月份已经到账，第二批的融资款总额是5,000万美金，包含了刚刚在上周五，也就是三月二十五日收到的1,000万美金。第二批融资款已经累计入账了3,750万美金，那剩余的1,250万美金预计也会很快到账。除此之外，第三批还有总计1.65亿美金的warrant在投资人手里。目前公司依据业务的推进带来的资金的需求节奏，在按照原定的融资计划，同投资人共同推进后续warrants的融资的落地。这些资金到位后，会支持公司继续打造二手车产品和服务的标杆，来完善现有的IRC并进行扩展新的IRC，推动业务长期持续的发展。
Okay, as we mentioned before, we sign a financing agreement with Neo Capital and Joy Capital in June 2021 for the total consideration of $350 million. As part of this agreement, we received the first tranche of $100 million in July 2021. The second tranche has a total consideration of $50 million. On March 25 this year, we received $10 million of the second tranche. As such, we have received totally $137.5 million for the financing and about $37.5 million from the second tranche. We expect to receive the remaining $12.5 million soon. On top of this, there are still a total of $165 million warrants to be exercised by investors.
We are currently working on the warrant program with our investors based on the pace of our expansion and its needs for cash injection. With this money, we aim to continue accumulating and extending our IRC networks to sustain our business growth in the long term as we set the bar for used car products and services. Thanks for your question.
Our next question comes from Fei Dai with TF Securities.
Hello DK。嗯，根据本季的财报，合肥新IRC的开设对公司业绩产生了积极影响。想问一下未来公司规模的扩大是否将更多依赖线下重资产的投入？第二个问题是公司对目前国内二手车市场未来的发展怎么看？公司准备如何应对现在已经可以看到的变化？Repeat my question in English. According to the financial report, Hefei IRC has had a positive impact on the company's performance. Will the expansion of the company in the future rely more on offline heavy assets? What do you think of the future development of the China used car market? How will the company cope with the changes that have been seen now? Thank you.
好的，我来回答哈。首先回答第一个问题，那个线下投入主要是针对IRC的，其实也就是再制造工厂。IRC的投入呢，有助于我们规模化地去执行整备翻新，然后对整备环节的把控，对整备类耗材的集中采购，也会提高我们对上游供应商的议价优势。同时呢，随着整备技术和工艺的进一步打磨，生产效率会不断地提高，这些都有助于我们更好地降低整备成本。线下IRC的投入会成为我们很好的护城河。
Our offline investments are mainly channeled into our IRC or inspection and reconditioning centers. These investments enable us to scale our reconditioning capabilities. As we scale up, we are able to better manage the reconditioning process and centralize the procurement of reconditioning consumables, which gives us more negotiation power with our upstream suppliers. At the same time, we are constantly refining our reconditioning technologies and process, leading to higher efficiency. These improvements will help us reduce our costs. As such, our investment in IRC further fortify our competitive moats.
车辆的自营零售啊，是逃不掉对车辆的仓储的。所以我们呢，这个始终坚持是仓储结合线上一体化的营销模式，所以对消费者来选，选择来说是很灵活，他不论是从线上浏览购买，还是直接到访我们的线下卖场，这个消费者所看到的车辆品质和车辆价格都是一样的。啊，线上运营和在线销售我们已经积累了多年的经验，线上全国购的服务能力保持行业的领先地位。消费者认识优信是从线上开始的，而线下区域口碑的扩大和线下区域的渗透率加强，也会进一步的加强优信在消费者中的口碑。线上和线下的销售是互相促进的。
We are committed to the omni-channel sales model that integrates online sales with warehouse-style operations. Regardless of whether consumers buy online or visit our offline stores directly, the quality and price of vehicles they see are the same. We have accumulated extensive experience in online sales from building and operating China's leading online used car shopping destination, Uxin Online Super Mall. A lot of consumers know our name through our online reputation. Meanwhile, we are accelerating our penetration into regional markets while expanding our offline influence. Our online and offline operations can synergize and complement each other.
关于第二个问题，对于市场未来的发展，2021年国内的二手车销量已经超过了1,700万台，销售额超过了一万亿，且二手车的销量和销售额还在持续保持稳定的增长。近几年来，活跃的新能源车的销售也是未来二手车市场的重要组成部分。从零售来看，国内现在单家零售量大于市场1%的二手车车商还没有出现，所以二手车市场整体呈现是一个非常巨大而且非常分散的现状。
In 2021, the used car market in China continued to grow as its sales volume exceeding 70 million units or RMB 1 trillion in transaction value. NEVs have been on the rise in recent years, and they will definitely be an important component of the market in the future. For retail, no used car dealership had a market share of more than 1% in terms of sales volume in China, as that market remains to be massive and highly fragmented.
从未来的发展来看，这个现在二手车消费者对二手车的认可度和接受度在逐渐提高，但是呢，这个行业痛点还没有根本的解决。所以我们呢，选择积极布局二手车自营模式，那么关键是加强对检测能力、再制造能力和销售服务能力的建设，以及把新能源车这一系列的能力布局和投入进来，这一切都是为了给消费者创造提供一种可靠安全的二手车产品，为了更好地满足消费者对高品质二手车消费的需求。
In recent years, consumers are increasingly comfortable with buying used cars. However, the major pain points of the traditional used car industry are yet to be addressed. This is why we are actively developing our self-operating used car sales model to strengthen our reconditioning and service capabilities. In addition, we are also developing services for NEVs. We make all of these investments in order to provide customers with reliable and safe used car products to fulfill their needs for high-quality used cars.
我们在加大对核心竞争力的投入同时，我们会同时保持对整个运营体系效率的关注，然后来不断确保我们提高我们的运营效率。
While we maintain an efficient operating system, we will keep investing to strengthen our core competitiveness and further improve our operational efficiency. Thank you for your question.
Thank you. We've reached the end of the question and answer session. Management for any closing remarks.
Thank you for joining our conference call today. We are looking forward to seeing you next time.