Ladies and gentlemen, good day, and welcome to Full Truck Alliance's first quarter 2022 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mao Mao, Head of Investor Relations. Please go ahead.
Thank you, operator. Please note that today's discussion will contain forward-looking statements relating to the company's future performance, which are intended to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's quarterly and discussion. A general discussion of the risk factors that could affect FTA's business and financial results is included in certain filings of the company with the SEC. The company does not undertake any obligation to update these forward-looking statements, except as required by law.
During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only.
For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from FTA's senior management side are Mr. Hui Zhang, our Founder, Chairman, and CEO, and Mr. Simon Chong Cai, our CFO. Management will begin with prepared remarks and the call will conclude with the Q&A session. As a reminder, the conference is being recorded. In addition, a webcast replay of this call will be available on FTA's Investor Relations website at ir.fulltruckalliance.com. I will now turn the call over to our Founder, Chairman, and CEO, Mr. Zhang. Please go ahead, sir.
Thank you for joining us today on our first quarter of 2022 earnings conference call.
Our growth momentum continued in the first quarter of 2022 with another quarter of solid financial and operational performance, despite typically slower seasonal demand, as well as challenges arising from the industry-wide transportation resources shortage and disrupted network operations in certain areas of China due to the pandemic and the dynamic zero-COVID policies. Our GTV reached RMB 53.6 billion, representing year-over-year growth of 4.2%, and the number of goods orders grew 13.6% year-over-year to 25.2 million. In the absence of new external user growth, we still witnessed a stable user activity trend in the first quarter, mainly attributable to higher user retention rates and rising engagement levels. Our continuous improvement in these metrics once again demonstrated the solid foundation of our business and the ability to mitigate the impact of external events.
As a result of this progress, we grew our total net revenue to RMB 1.33 billion in the first quarter, 53.7% higher than the prior year, and beating the high end of our previous guidance, which was projected at RMB 1.09 billion. While we grew our top line, we also improved our profitability. Under non-GAAP measures, our adjusted net income increased by 68.0% to RMB 189.7 million in the first quarter. Overall, we are pleased with our first quarter financial and operational achievements. Looking forward, we believe that we will remain focused on increasing user frequency by fine-tuning our freight matching and fulfillment process and reactivating dormant users through targeted marketing activities.
Propelled by these efforts as well as the outstanding value proposition of our products and services, we are confident that our user growth will gradually resume following the successful completion of the pending cybersecurity review. Despite the recent lockdown short-term impact on our business and the industry at large, the overall trend in China's logistics industry remained robust in the medium to long term. The industry's movement towards digitalization and the accelerated introduction of policies that support modernization are working strongly in our favor as we pioneer a digital, synthesized and smart logistics infrastructure across the value chain.
Capitalizing on this momentum, we will cultivate our technological edge, explore new business models, and strengthen our monetization system as we further unleash the great potential of our ever-growing, secure, yet efficient nationwide logistics network and create value for all of our stakeholders. With that, I will now turn the call over to our CFO, Simon, to go over our operational and financial results in more detail. Simon, please go ahead.
Thank you, Mr. Zhang, and hello, everyone. Let's take a look at our first quarter operations. The first quarter is traditionally the low season for the road transportation industry. This, in addition to the continued suspension of our new user registration and the recent COVID resurgences and lockdowns in some major cities, created incremental headwinds for the entire logistics industry and brought short-term uncertainties and challenges to our business. However, in light of the NDRC decision to relax restrictions and facilitate the full resumption of logistics operation, we saw a gradual resumption of business operations and signs of recovery in transaction volume in the past month. We believe that the current negative impact of the COVID will be short-lived. We remain confident in our path to long-term growth as we broaden our efforts to enhance our technological advantages and accelerate the industry's digital transformation.
Our first quarter results are a solid testament to the strength and stability of our platform. Our average fulfillment rate reached approximately 22% in the quarter, representing only a slight year-over-year decline due to the short-term truck shortage in some regions. Furthermore, during the first quarter, both our average shipper MAUs and average trucker MAUs who fulfilled shipping orders or responded to orders on our platform remained stable, with about 3.5 million active truckers fulfilling shipments in the past 12 months. We also witnessed an increase in the number of paying shippers, as a larger number of non-paying shippers actively enrolled in the shipper membership program as a result of improved perception of the value created by FTA platform.
More importantly, we maintain our shipper and trucker retention rates, including both 12 months retention of paying shippers and next month's retention of truckers who responded to shipping orders on the platform at a high level of approximately 85%. Improving our logistics ecosystem and customer satisfaction remain our top priorities. As we move forward, we aim to offer a broader range of efficient and user-friendly products and services to streamline logistics transactions while increasing user activity and stickiness. Turning now to our entrusted shipment program. We first introduced the program in Wuxi in June last year and have now applied this model to the entire country.
Current data shows the project is running smoothly, since this program largely serves direct shippers, mainly consisting of SMEs, and shippers of this type tend to have higher standard of service demand and user stickiness.
Its fulfillment rate is significantly higher than that of negotiated and other type of transactions. We believe that penetration will continue to increase as we upgrade the program service experience. Furthermore, the program creates additional monetization opportunities and provides growth rooms for our transaction commission, while also playing a critical role in our user composition optimization strategy. That brings us to our online transaction service, which also utilizes a commission model in certain cities. Revenue from its commission model increased by 202% year-over-year, reaching RMB 258.2 million in the first quarter. This growth was primarily driven by our extended commission coverage of 195 cities as of March 2022, which raised the commission penetration rate by roughly 20 percentage points year-over-year to nearly 49%.
Operating data and user feedback from these commission cities reflect a high level of user adoption with truckers next month's retention rate of 85%. The commission model is now shaping up to be a major growth engine for our platform as its proportion of total revenue continues to rise. Building on our previous success, we remain devoted to enhancing truckers' user experience while fostering their paying habits, as we plan to prudently increase the commission rate as well as expand commission model coverage. A stable and fast-growing user base is critical to our success. To nurture the solid foundation of trust and loyalty we have built, we continuously optimize product functions, improve platform governance, and invest significant resources in customer experience enhancement. Doing our utmost to protect users' interests.
With respect to upgrades to our platform ecosystem governance, in February, we commenced implementing our shipper rating system in Jiangsu, Shandong, and Hubei provinces. We expect to expand it on a national scale in future quarters. The goal is to guide shippers to form good trading habits and encourage them to operate in a standardized and trustworthy manner. Shippers can increase their rating by adhering to best practice guidance and settling payments online. Our shipper rating system has already positively impacted the fulfillment rate in those provinces. Survey data suggests that 66.6%-66% of shippers have taken the initiative to raise their rating scores since the system's launch. Going forward, we will further refine the system based on our user feedback.
Additionally, in response to the widespread COVID recurrences, we added a pandemic prevention reference function on the trucker side of the platform, enabling instant checking of pandemic prevention policies in regions where cargoes will be loaded and unloaded. This feature allows truckers to review relevant local requirement before responding to shipping orders and ensuring smooth shipments to the extent possible. We also unveiled a function to remind shippers to factor in fuel price fluctuation when setting freight fee, allowing shippers and truckers to communicate efficiently. These features ensure efficient order matching while protecting truckers rights and interests. To further combat the pandemic, we rolled out an anti-pandemic assistant function on the platform in early May. This new function prioritize displays and recommendations of relevant anti-pandemic products to truckers.
It helps better direct more pandemic relief-related traffic to shippers and facilitates trouble-free transportation channels for daily necessities in the affected areas. At the same time, we are utilizing our platform's operating measures and subsidies to alleviate pressures on shippers facing serious shortage of transportation capacity in certain areas. By reallocating and deploying surrounding trucker capacity, we help complete shipments as efficiently as possible. Now, I'd like to provide a brief overview of our 2022 first quarter financial results. Our total revenue in the first quarter were RMB 1.3 billion, representing an increase of 53.7% year-over-year, primarily attributable to an increase in revenue from freight matching services.
Revenues from freight matching services, including service fee from freight brokerage model, membership fees from listing model, and commissions from online transaction services were RMB 1.1 billion in the first quarter, representing an increase of 60.9% year-over-year, primarily attributable to an increase in revenue from freight brokerage service, as well as rapid growth in transaction commissions. Revenue from freight brokerage service in the quarter were RMB 662.4 million, representing an increase of 48.4% year-over-year, primarily driven by significant growth in transaction volume. The revenue from freight listing service in the first quarter were RMB 198 million, up 21.2% year-over-year, primarily attributable to an increase in total paying members amid increased shipper demands for our services as our business continued to expand.
Revenue from transaction commissions amounted to RMB 258.2 million in the first quarter, an increase of 202% year-over-year, primarily driven by a rapid ramp up of commissioned GTV penetration. Revenue from value-added services in the quarter were RMB 214 million, an increase of 24.4% year-over-year, mainly attributable to increased revenue from credit solutions. Cost of revenues in the first quarter was RMB 683.9 million compared with RMB 412.8 million in the same period last year. The increase was primarily attributable to an increase in VAT related tax surcharges and other tax costs net of tax refunds from government authorities.
These tax-related costs net of refunds totaled RMB 598.3 million, representing an increase of 65.8% from RMB 361 million in the same period last year, primarily due to an increase in transaction activities involving our freight brokerage service. Sales and marketing expenses in the first quarter were RMB 192 million, compared with RMB 170.4 million in the same period last year. The increase was primarily due to an increase in salary and benefit expenses, driven by the increase in sales and marketing headcount, partially offset by a decrease in advertising and marketing expenses, as well as a decrease in share-based compensation expenses. G&A expenses in first quarter were RMB 458.4 million compared with RMB 322 million in the same period last year.
The increase was primarily due to an increase in salary and benefit expenses driven by a higher headcount in general and administrative personnel and an increase in share-based compensation expenses. R&D expenses in first quarter were RMB 221 million, compared with RMB 138 million in the same period last year. The increase was primarily due to an increase in salary and benefit expenses driven by higher headcount in the R&D personnel. Loss from operation in the first quarter was RMB 252 million, compared with RMB 201.9 million in the same period last year. Net loss in the first quarter was RMB 192 million, compared with RMB 197 million in the same period last year.
Under non-GAAP measures, our adjusted operating income in the first quarter was RMB 133.2 million, an increase of 20.3% from RMB 110.7 million in the same period last year. Our adjusted non-GAAP net income in the first quarter was RMB 189.7 million, an increase of 68% from RMB 112.9 million in the same period last year. Basic and diluted net loss per ADS were RMB 0.18 in the first quarter, compared with RMB 2.09 in the same period last year.
Non-GAAP adjusted basic and diluted net income per ADS were RMB 0.17 in the first quarter, compared with non-GAAP adjusted basic and diluted net loss per ADS of RMB 0.7 in the same period last year. As of March 31, 2022, the company had cash and cash equivalents, restricted cash, and short-term investments of RMB 25.3 billion in total, compared with RMB 26 billion as of December last year. For the first quarter of 2022, net cash used in operating activities was RMB 96.3 million.
Looking at our business outlook for second quarter, we expect our total revenue to be between RMB 1.56 billion and RMB 1.64 billion, representing a year-over-year growth rate of approximately 39.4% to 46.3%, despite the impact of the COVID outbreaks on transaction value for the period. These forecasts reflect company's current and preliminary view on the market, operational conditions, and the uncertainties caused by the current COVID outbreaks, including the geographic scope and duration of the outbreaks, the additional restrictive measures that the governmental authorities may take, and the further impact on the business of shippers, truckers, and other ecosystem participants, which are all subject to change and cannot be predicted with reasonable accuracy as of the current year.
To summarize, we had a solid first quarter marked by steady growth across our primary operation and financial metrics. Our success can be attributed to years of devotion to building a cutting-edge digital freight platform, a highly engaged user base, and improved monetization capabilities. We have entered an exciting new era where digitalization transformation is taking shape as we speak. Consequently, we will continue to forge ahead with our user-centric growth strategy, invest in technologies, improve our top line, and focus on driving value for all of our users, investors, and shareholders.
That concludes our prepared remarks. We would now like to open the call to Q&A. Operator, please go ahead.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. The first question today is from Ronald Keung with Goldman Sachs. Please go ahead.
[Non-English content] Congratulations on the results, management.
I want to ask about the platform's fulfilled GTV and number of orders, maintained year-on-year growth in the first quarter. It's around a quarter-over-quarter decline compared with the fourth quarter. I want to hear the reasons, major factors and also how should we think of the second quarter fulfilled GTV and order volumes, into the second quarter. Thank you.
[Non-English content]
In the first quarter, the platform fulfilled GTV and number of orders both maintained year-over-year growth, mainly benefiting from the sustained increase in our shipments and stronger network effects. With the enhancement and improvement of product features and user experience, we are seeing more and more shippers relying on the FTA platform for shipments, and these users have extremely high retention rates. In the first quarter, the rolling 12-month retention of our paying shippers and next month retention rate of truckers responding to orders both stayed at around 85%. Such high levels of user stickiness while new user registration is suspended, clearly demonstrated FTA's stable market position in the FTL industry.
[Non-English content]
In terms of the quarter-over-quarter trends, the shipment volume in the first quarter was mainly affected by the following factors. First, the first quarter is traditionally the slow season, especially during the Spring Festival, when shipment volume is usually at the lowest point in a given year. Secondly, the suspension of new user registration still affected business in the quarter. Third, since mid to late March, we are seeing the pandemic resurgence resulting in highway closures and traffic controls in some cities, which severely impeded truckers' fulfillment capability, leading to an imbalance of supply and demand, with fewer truckers available for shipments.
[Non-English content]
Despite the impact of multiple external factors, we remain committed to enhancing user experience and operating efficiency. Regarding algo capability building, in the first quarter, we improved our product based on various matching such as sorting and accurate recommendations, addressing certain mismatches between the order placement and shipment capacity, and elevating overall matching efficiency. In terms of operations, our operational team provided guidance to users on resuming work after the Spring Festival, which increased shippers and truckers activity levels.
[Non-English content]
As for the second quarter lingering COVID operate in various region nationwide without it different levels of traffic control the dividend may impact the budget in industry. A gradual recovery of industry logistic and platform party, it may take awhile before returning in pre-pandemic level.
Thank you, next question please.
Next question today comes from Charlie Chan with China Renaissance, please go ahead.
[Non-English content] Thanks management, to take my question. I have some question regarding the commission business. First of all, how did commission business progress in the first quarter and also year-to-date, including commission penetration and the commission rate? And also, were commission business impacted by the pandemic situation, and what is the company's commission plan going forward? Thank you.
Thank you. Simon here. I'll take the question in English directly. Our commission revenue in Q1 reached about RMB 258 million. This is largely owing to an increase in commission rates. As of the end of March, we have extended our commission model to 195 cities. As I said, due to the pandemic, the average freight matching time increased quarter-over-quarter. That's slightly lowering our commission penetration sequentially. Since the end of last year, we have launched tiered commissioning by matching time, which has now been fully adopted in all regions where we operate. To some extent, matching time reflects the so-called popularity of the order placement. Truckers are more receptive to commissions charged for those more popular orders.
Our user survey data indicate that overall commissioning feedback has been improving since Q1, which is also the main driver behind the continuous increase in commission rate. In addition, we adjust our commission strategy flexibly based on the changes in supply and demand dynamics. For example, at the end of Q1, we adopted a commission-free strategy for freight that were labeled pandemic supplies to ensure the supply of those materials to areas hit by the pandemic is sufficient. Going forward, we plan to steadily increase the commission rate as well as the commission penetration by improving the overall freight matching efficiency.
Because the commission charge essentially represents our platform's value and services, we will remain devoted to providing additional value-added services and improving product functions for our truckers and continually enhancing the user experience as we develop our commission business.
The next question comes from Brian Gong with Citi. Please go ahead.
I'll translate for myself. Thanks management for taking our questions. My question is related to intercity shipments program. How does this program progress since first quarter this year? Did the program's commission plan proceed as expected? What are your targets for the program this year? Thank you.
Yeah, the line was breaking a little bit, but I'll try my best to address your question. After nearly a year of refinement and functional improvement. As of mid-May this year, we have achieved nationwide coverage with our entrusted shipment program as well. Although there were mounting external challenges, including the COVID outbreaks, suspension of new user registration, these all affected shipping volume. The program's average fulfillment rate is still significantly higher than other type of matching services. The advantage of the entrusted shipment program lies in its platform-led pricing, which typically results in a higher matching certainty and faster matching. We also sort order placement by prioritizing high-quality trucking resources to ensure the service quality.
In addition, we have a dedicated customer service team equipped to provide various services such as scheduling, order reviews, and manual matching when it's necessary. These value-added services also created additional commissioning opportunities. Up to now, the entrusted shipment programs commission business has achieved nationwide coverage with overall progress in line with our expectation. The successful launch of the program enable us to further improve our user ecosystem and optimize user composition. Going forward, we will continue to optimize our products and services by categorizing our transportation resources to allow more high-quality truckers to join the program, enhance service quality and user experience, and increase user sticking on the platform, eventually raising the overall matching efficiency.
The next question comes from Jialu Li with CICC. Please go ahead.
[Non-English content] This is Jialu Li from CICC, and thanks for taking my questions. I have two questions here. The first one, what's the progress of the new business, including LTL and Intracity in first quarter? The second one, we have recently noticed that some media reported that FTA will resume new user registration. Does this mean the cybersecurity review is coming to an end? Thank you.
Thank you. On the first question, first of all, because new user registration has not yet resumed, we do not extend our Intracity business to more regions in the quarter. For those pilot cities we have already entered, our Intracity business remained stable over the quarter despite the impact from the pandemic. Monetization in those cities also progressed smoothly. In Q1, the transaction commission combined with membership fee contributed to a positive gross margin in those cities, proving the sustainability of our business model. Going forward, as new user registration resumes, we plan to expand steadily to meet shippers' one-stop shipping demands. On LTL, currently, we are mainly exploring in the dedicated line model.
This is a franchise model that integrates offline dedicated line transportation capacities, where the shippers order online with our platform, and we dispatch the orders to franchise dedicated line responsible to fulfill those orders, as well as the LTL last mile delivery. In Q1, the Chinese New Year and the COVID outbreak both impacted the LTL business model. However, as we kept improving our operational efficiency and refining the economic model, the gross margin of the LTL business in those provincial cities is consistently improving. Regarding your second question, unfortunately, we're not able to comment on any such media posts. We will update the market on any material progress through public disclosures.
We have been cooperating actively with the Cybersecurity Review Office of the CAC throughout the review process. Going forward, we will continue to work with the CRO to comply with the regulatory requirement and remain committed to protecting our platform's cybersecurity by implementing effective measures.
That concludes the question and answer session. I would like to turn the conference back over to management for any additional or closing comments.
Thank you once again for joining us, today. If you have any further questions, please feel free to contact us at Full Truck Alliance directly or TPG Investor Relations. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a good day.
This conference is now concluded. Thank you for attending today's presentation.