NaaS Technology (NAAS) Q3 Earnings call transcript Nov 20, 2024
2min read Cathy Wang Yang, CEO of NaaS, announced the company's successful operational breakeven in June, leading to a positive non-IFRS net profit of RMB 20.6 million in the third quarter of 2024. This significant achievement is attributed to a strategic shift towards core charging services, which have seen a 36% year-over-year increase in revenues to RMB 42.37 million. By focusing on high-growth, high-margin core charging services, NaaS has improved its overall gross margin to an all-time high of 57%.
The company's strategic move has not only boosted profitability but also enhanced operational efficiency. Selling and marketing expenses as a percentage of revenue have been substantially reduced, from 160% in the third quarter of 2023 to 67% in the third quarter of 2024. This reduction in expenses, combined with a 30% year-over-year increase in users transacting through the NaaS platform, has directly enhanced the company's profitability.
NaaS's focus on core charging services is strategically positioned to meet the market's demand for AI-driven and digitalized charging resource allocation. By concentrating on its core business, the company is unlocking greater profit potential and laying a more sustainable growth foundation for the future. The success of this strategy is evident in the company's ability to reduce operating costs, particularly in selling and marketing expenses.
Looking ahead, NaaS aims to continue strategically focusing on interconnectivity charging services, leveraging technology and innovation to support growth on both the supply and demand side. The company's goal is to strengthen its industry position and enhance profitability by capitalizing on economies of scale.
Steven Sim, the newly appointed CFO of NaaS, provided a detailed overview of the company's strategic progress and financial performance. He highlighted the importance of focusing on core charging services and the strategic shift away from lower-margin, capital-intensive energy solutions. This move has improved profitability, with record high gross margins, and positioned NaaS for long-term success.
Key partnerships with companies like FAW Volkswagen and IM Motors, as well as the expansion of its network of charge point operators and chargers, are enhancing connectivity and convenience for users. NaaS's AI-driven NEF system optimizes charging operations and unlocks customer site benefits, demonstrating the value of technology in boosting efficiency and monetization potential.
NaaS's sustainability efforts remain central to its business strategy, with a focus on expanding green energy access and partnerships with initiatives like the Carbon Inclusive City Corporation Alliance and China ESG Alliance. This commitment to sustainability reinforces NaaS's leadership in sustainable development.
The company's financial highlights for the third quarter of 2024 underscore the success of its strategic direction and operational execution. With a positive quarterly non-IFRS net income, substantial revenue growth, and improved operational efficiency, NaaS is well-positioned for continued success in the evolving EV market.
The outlook for NaaS in the fourth quarter of 2024 and full year 2025 centers on profitability, scale, and technology. The company's strategic focus on interconnectivity charging services, leveraging technology and innovation, and capitalizing on economies of scale positions NaaS for long-term success and value creation for shareholders.