NaaS(NAAS) - 2023 Q4 - Annual Report

NaaS Technology Inc. 2024 First Quarter Financial Results First Quarter 2024 Financial & Operational Highlights NaaS Technology reported strong growth in the first quarter of 2024, with revenues increasing 166% year-over-year to RMB 96.2 million and gross margin expanding to 25.3%, alongside operational growth in charging volume and gross transaction value Q1 2024 Financial Highlights (YoY) | Metric | Q1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenues | 96.2 | +166% | | Gross Profit | 24.3 | +4.0 times | | Gross Margin | 25.3% | from 16.9% | Q1 2024 Operational Highlights (YoY) | Metric | Q1 2024 | YoY Change | | :--- | :--- | :--- | | Charging Volume | 1,216 GWh | +19% | | Gross Transaction Value | RMB 1.2 billion | +17% | | Number of Orders | 50.3 million | +13% | Management Commentary Management highlighted the company's robust growth, driven by strengthening mobility connectivity services and innovative energy solutions, focusing on high-quality revenue growth and financial stability - CEO Yang Wang emphasized the strategy of empowering charging point operators and diversifying revenue through innovative energy solutions to improve the end-user charging experience[3] - CFO Alex Wu noted that a focus on high-quality revenue growth and disciplined financial management led to increased revenue, gross margins, and enhanced profitability across business units[3] 2024 First Quarter Business Updates and Financial Results Business Updates The company saw its Net Take Rate (NTR) turn positive and reach a historical high in April 2024, indicating improved profitability from its mobility connectivity services, while also strengthening its commitment to innovation with over 250 patent applications filed globally - The company's Net Take Rate (NTR) turned positive and reached a historical high in April 2024, reflecting successful strategic initiatives and enhanced customer loyalty[4] - NaaS joined the Open Invention Network (OIN) to advance its charging infrastructure through open-source technology, filing over 250 patent applications worldwide as of March 31, 2024[5] Detailed Financial Performance In Q1 2024, total revenues grew 166% YoY to RMB 96.2 million, driven by charging services and energy solutions, leading to quadrupled gross profit and improved gross margin, despite a wider net loss Revenues Total revenues for Q1 2024 increased by 166% YoY to RMB 96.2 million, primarily fueled by a 99% increase in charging services revenues and a 334% increase in energy solutions revenues Q1 2024 Revenue Breakdown (in RMB million) | Revenue Stream | Q1 2024 (RMB million) | Q1 2023 (RMB million) | YoY Growth | | :--- | :--- | :--- | :--- | | Total Revenues | 96.2 | 36.2 | +166% | | Charging Services | 47.8 | 24.1 | +99% | | Energy Solutions | 47.2 | 10.9 | +334% | | New Initiatives | 1.2 | 1.2 | Stable | - Costs associated with end-user incentives, recorded as reductions to total revenues, increased to RMB 91.3 million in Q1 2024 from RMB 69.7 million in Q1 2023[7] Cost of Revenues, Gross Profit and Gross Margin Gross profit for Q1 2024 grew 4.0 times year-over-year to RMB 24.3 million, with the gross margin significantly improving to 25.3% from 16.9% due to increased profitable orders and enhanced project delivery capabilities Q1 2024 Gross Profit and Margin (YoY) | Metric | Q1 2024 (RMB million) | Q1 2023 (RMB million) | | :--- | :--- | :--- | | Gross Profit | 24.3 | 6.1 | | Gross Margin | 25.3% | 16.9% | Operating Expenses Total operating expenses rose to RMB 215.7 million in Q1 2024 from RMB 119.7 million in Q1 2023, but decreased as a percentage of revenues from 331% to 224% due to strong revenue growth and operational optimization Q1 2024 Operating Expenses Breakdown (in RMB million) | Expense Category | Q1 2024 (RMB million) | Q1 2023 (RMB million) | | :--- | :--- | :--- | | Selling and marketing | 71.2 | 66.4 | | Administrative | 123.0 | 45.5 | | Research and development | 21.5 | 7.8 | | Total Operating Expenses | 215.7 | 119.7 | - Costs for excess end-user incentives, included in selling and marketing expenses, decreased to RMB 26.6 million from RMB 41.7 million in Q1 2023[12] Net Loss and Profitability Net loss attributable to ordinary shareholders widened to RMB 227.4 million in Q1 2024, but the non-IFRS net margin significantly improved from -283% to -131%, indicating better underlying profitability Q1 2024 Profitability Metrics (YoY) | Metric | Q1 2024 (RMB million) | Q1 2023 (RMB million) | | :--- | :--- | :--- | | Net Loss Attributable to Shareholders | (227.4) | (109.7) | | Non-IFRS Net Loss Attributable to Shareholders | (126.4) | (102.3) | | Net Margin | -236% | -303% | | Non-IFRS Net Margin | -131% | -283% | - Finance costs increased to RMB 17.7 million from RMB 7.1 million in Q1 2023 due to higher utilization of borrowings[14] Other Information and Statements Recent Development In May 2024, NaaS amended its 2022 Share Incentive Plan to increase the maximum number of Class A ordinary shares available for awards from approximately 490.6 million to 644.7 million - The company amended its 2022 Share Incentive Plan, increasing the total number of Class A ordinary shares available for grant to 644,746,682[18] Conference Call Information The company will host an earnings conference call on May 10, 2024, at 8:00 AM U.S. Eastern Time, with details provided for registration and access - An earnings conference call is scheduled for 8:00 AM U.S. Eastern time on May 10, 2024[19] Financial Statements Unaudited Consolidated Statements of Loss and Other Comprehensive Loss For the first quarter of 2024, NaaS reported total revenues of RMB 96.2 million, a significant increase from RMB 36.2 million in Q1 2023, leading to a net loss of RMB 227.7 million despite quadrupled gross profit Q1 2024 Statement of Loss (in thousands RMB) | Line Item | Q1 2024 (thousands RMB) | Q1 2023 (thousands RMB) | | :--- | :--- | :--- | | Total Revenues | 96,237 | 36,161 | | Gross Profit | 24,348 | 6,114 | | Operating Loss | (186,595) | (113,111) | | Net Loss | (227,732) | (109,655) | | Net Loss Attributable to Equity Holders | (227,399) | (109,655) | | Basic and Diluted Loss Per Share (RMB) | (0.09) | (0.05) | Unaudited Consolidated Statements of Financial Position As of March 31, 2024, NaaS had total assets of RMB 1.295 billion, a decrease from RMB 1.465 billion at the end of 2023, primarily due to reduced cash and cash equivalents, resulting in a total equity deficit of RMB 161.8 million Statement of Financial Position (in thousands RMB) | Account | As of Mar 31, 2024 (thousands RMB) | As of Dec 31, 2023 (thousands RMB) | | :--- | :--- | :--- | | Cash and cash equivalents | 297,071 | 436,242 | | Total Current Assets | 1,017,790 | 1,143,967 | | Total Assets | 1,295,204 | 1,465,099 | | Total Current Liabilities | 885,255 | 817,030 | | Total Liabilities | 1,456,966 | 1,508,704 | | Total Equity | (161,762) | (43,605) | Unaudited Reconciliations of IFRS and Non-IFRS Financial Measures The company provides a reconciliation from IFRS to non-IFRS measures to offer a clearer view of underlying business performance, adjusting the IFRS net loss of RMB 227.4 million to a non-IFRS adjusted net loss of RMB 126.4 million for Q1 2024 Reconciliation to Adjusted Net Loss (in thousands RMB) | Line Item | Q1 2024 (thousands RMB) | Q1 2023 (thousands RMB) | | :--- | :--- | :--- | | Net loss attributable to ordinary shareholders | (227,399) | (109,655) | | Add: Share-based compensation expenses | 80,316 | 20,940 | | Add: Fair value changes of convertible instruments | 7,790 | — | | Add: Fair value changes of financial assets | 12,928 | (13,571) | | Adjusted net loss attributable to ordinary shareholders | (126,365) | (102,286) | - Share-based compensation was the largest adjustment, totaling RMB 80.3 million, with the majority (RMB 60.3 million) allocated to administrative expenses[33][35]