BEST Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2023 Financial Results

HANGZHOU, China, March 27, 2024 /PRNewswire/ — BEST Inc. (NYSE: BEST) (“BEST” or the “Company”), a leading integrated smart supply chain solutions and logistics services provider in China and Southeast Asia (“SEA”), today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023.

FINANCIAL HIGHLIGHTS (1) 

For the Fourth Quarter Ended December 31, 2023:(2)

Revenue was RMB2,236.3 million (US$315.0 million), compared to RMB1,981.4 million in the fourth quarter of 2022. The increase was primarily due to increased revenue of BEST Freight and BEST Global.Gross Profit was RMB118.3 million (US$16.7 million), compared to gross loss of RMB58.5 million in the fourth quarter of 2022. The increase was primarily due to further improvements in operating efficiency across our business lines. Gross Profit Margin was 5.3% for the fourth quarter of 2023, compared to Gross Loss Margin of 3.0% in the same period of 2022.Net Loss from continuing operations was RMB283.5 million (US$39.9 million), compared to RMB365.8 million in the fourth quarter of 2022. Non-GAAP Net Loss from continuing operations(3)(4) was RMB177.9 million (US$25.1 million), compared to RMB338.0 million in the fourth quarter of 2022.Diluted loss per ADS(5) from continuing operations was RMB12.41 (US$ 1.75), compared to RMB17.96 in the fourth quarter of 2022. Non-GAAP diluted loss per ADS(3)(4) from continuing operations was RMB7.10 (US$ 1.00), compared to RMB16.52 in the fourth quarter of 2022.EBITDA(6) from continuing operations was negative RMB248.6 million (US$35.0 million), compared to negative RMB324.7 million in the fourth quarter of 2022. Adjusted EBITDA(6) from continuing operations was negative RMB143.0 million (US$20.1 million), compared to negative RMB296.9 million in the fourth quarter of 2022.

For the Fiscal Year Ended December 31, 2023:

Revenue was RMB8,315.8 million (US$1,171.3 million), compared to RMB7,744.1 million in 2022. The increase was primarily due to increased revenue for all business lines.Gross Profit was RMB250.4 million (US$35.3 million), compared to gross loss of RMB263.6 million in 2022. The increase was primarily due to further improvements for all business lines. Gross Profit Margin was 3.0%, compared to Gross Loss Margin of 3.4% in 2022.Net Loss from continuing operations was RMB908.6 million (US$128.0 million), compared to RMB1,464.8 million in 2022. Non-GAAP Net Loss from continuing operations(7)(8) was RMB765.6 million (US$107.8 million), compared to RMB1,380.4 million in 2022.Diluted loss per ADS(9) from continuing operations was RMB43.60  (US$ 6.20), compared to a loss of RMB72.68 in 2022. Non-GAAP diluted loss per ADS(3)(4) from continuing operations was RMB36.10 (US$5.14), compared to a loss of RMB68.36 in 2022.EBITDA(10) from continuing operations was negative RMB756.8 million (US$106.6 million), compared to negative RMB1,266.2 million in 2022. Adjusted EBITDA(6) from continuing operations was negative RMB613.7 million (US$86.4million), compared to negative RMB1,181.8 million in 2022. 

BEST Freight – BEST Freight recorded revenue growth of 19.1% in the fourth quarter of 2023, year over year. Freight’s gross margin was 5.3%, representing a 6.6 percentage points improvement from the same period of 2022. For the full year of 2023, Freight recorded revenue growth of 10.6% compared to 2022. Freight’s gross margin was 3.7%, representing an 8.3 percentage points improvement of 2022 as we continued to reduce operating expenses and improve efficiency. 

BEST Supply Chain Management – Driven by its best-in-class service quality and digital capabilities, BEST Supply Chain Management recorded gross margin of 5.8% compared to 4.4% in the same period of 2022. For the full year of 2023, Supply Chain Management recorded gross margin of 8.5% compared to 6.1% in 2022.

BEST Global – In the fourth quarter, BEST Global continued its robust post-COVID recovery. BEST Global’s revenue increased by 20.0% and its parcel volumes increased by 60.1%, both year over year, with parcel volumes in Vietnam and Malaysia, increased by 173.0% and 27.3%, respectively. Total volume of the cross-border business in the fourth quarter increased by 55.6% compared with the third quarter of 2023. For the full year of 2023, BEST Global’s revenue increased by 3.2% and its parcel volumes increased by 14.6%, both year over year, with parcel volumes in Vietnam and Malaysia, increased by 28.6% and 56.3%, respectively.       

Key Operational Metrics 

FINANCIAL RESULTS (11) 

For the Fourth Quarter Ended December 31, 2023:

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

Freight Service Revenue was RMB1,501.9 million (US$211.5 million) for the fourth quarter of 2023, compared to RMB1,261.2 million in the same period last year. Freight service revenue increased by 19.1% year over year, primarily due to increases in both volume and average selling price per tonne.Supply Chain Management Service Revenue decreased by 5.8% year over year to RMB471.4 million (US$66.4 million) for the fourth quarter of 2023 from RMB500.6 million in the same period of last year, primarily due to further optimization of its customer mix.Global Service Revenue increased by 20.0% year over year to RMB234.9 million (US$33.1 million) for the fourth quarter of 2023 from RMB195.7 million in the same period of last year, primarily due to volume growth in Vietnam, Malaysia and cross-border business.

Cost of Revenue

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Cost of Revenue for Freight was RMB1,422.4 million (US$200.3 million), or 94.7% of revenue, in the fourth quarter of 2023. The 6.6 percentage points year-over-year decrease in cost of revenue as a percentage of revenue was mainly due to reduced unit cost.Cost of Revenue for Supply Chain Management was RMB443.9 million (US$62.5 million), or 94.2% of revenue, in the fourth quarter of 2023. The 1.4 percentage points year-over-year decrease in cost of revenue as a percentage of revenue was primarily due to improved operating efficiency and optimized customer mix.Cost of Revenue for Global was RMB270.1 million (US$38.0 million), or 115.0% of revenue, in the fourth quarter of 2023. The 19.9 percentage points year-over-year decrease in cost of revenue as a percentage of revenue due to increased parcel volume.

Gross Profit was RMB118.3 million (US$16.7 million) in the fourth quarter of 2023, compared to gross loss of RMB58.5 million in the fourth quarter of 2022; Gross Margin was 5.3%, compared to negative 3.0% in the fourth quarter of 2022.

Operating Expenses

Selling, General and Administrative (“SG&A”) Expenses were RMB281.5 million (US$39.6 million), or 12.6% of revenue in the fourth quarter of 2023, compared to RMB263.4 million, or 13.3% of revenue in the same quarter of 2022.

Research and Development Expenses were RMB29.4 million (US$4.1 million), or 1.3% of revenue in the fourth quarter of 2023, compared to RMB29.2 million, or 1.5% of revenue in the fourth quarter of 2022.

Share-based Compensation (“SBC”) Expenses included in the cost and expense items above were RMB10.9 million (US$1.5 million) in the fourth quarter of 2023, compared to RMB15.6 million in the same period of 2022. Of the total SBC expenses, RMB0.05 million (US$0.01 million) was allocated to cost of revenue, RMB0.5 million (US$0.07 million) was allocated to selling expenses, RMB9.5 million (US$1.3 million) was allocated to general and administrative expenses, and RMB0.8 million (US$0.1 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss from continuing operations

Net Loss from continuing operations in the fourth quarter of 2023 was RMB283.5 million (US$39.9 million), compared to RMB365.8 million in the same period of 2022. Non-GAAP Net Loss from continuing operations in the fourth quarter of 2023 was RMB177.9 million (US$25.1 million), compared to RMB338.0 million in the fourth quarter of 2022.

Diluted loss per ADS and Non-GAAP diluted loss per ADS from continuing operations

Diluted loss per ADS from continuing operations in the fourth quarter of 2023 was RMB12.41 (US$ 1.75), compared to a loss of RMB17.96 in the same period of 2022. Non-GAAP diluted loss per ADS from continuing operations in the fourth quarter of 2023 was RMB 7.10 (US$1.00), compared to a loss of RMB16.52 in the fourth quarter of 2022. A reconciliation of non-GAAP diluted loss per ADS to diluted loss per ADS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations 

Adjusted EBITDA from continuing operations in the fourth quarter of 2023 was negative RMB143.0 million (US$20.1 million), compared to negative RMB296.9 million in the same period of 2022. Adjusted EBITDA Margin from continuing operations in the fourth quarter of 2023 was negative 6.4%, compared to negative 15.0% in the same period of 2022.

Cash and Cash Equivalents, Restricted Cash and Short-term Investments

As of December 31, 2023, cash and cash equivalents, restricted cash and short-term investments were RMB2.3 billion (US$321.5 million), compared to RMB3.2 billion as of December 31, 2022. In 2023, the Company repurchased approximately US$75 million (RMB542 million) aggregate principal amount of its existing Convertible Senior Notes due 2024.

Net Cash Used In Continuing Operating Activities 

Net cash generated from continuing operating activities in the fourth quarter of 2023 was RMB0.9million (US$0.1 million), compared to RMB241.9 million of net cash used in continuing operating activities in the same period of 2022.

For the Fiscal Year Ended December 31, 2023:

Revenue

The following table sets forth a breakdown of revenue by business segment for the periods indicated.

Freight Service Revenue was RMB5,404.4 million (US$761.2 million) in 2023, compared to RMB4,888.3 million in 2022. Freight service revenue increased by 10.6% year over year, primarily resulting from increases in both freight volume and average selling price per tonne.Supply Chain Management Service Revenue increased by 2% year over year to RMB1,858.6 million (US$261.8 million) in 2023 from RMB1,822.1 million in 2022.Global Service Revenue increased by 3.2% year over year to RMB946.5 million (US$133.3 million) in 2023 from RMB916.9 million in 2022 primarily due to volume growth in Vietnam, Malaysia and cross-border business, partially offset by the decrease of parcel volume in Thailand.

Cost of Revenue 

The following table sets forth a breakdown of cost of revenue by business segment for the periods indicated.

Cost of Revenue for Freight was RMB5,207.0 million (US$733.4 million), or 96.3% of revenue in 2023. The 8.3 percentage points year-over-year decrease in cost of revenue as a percentage of revenue was mainly due to reduced unit cost.Cost of Revenue for Supply Chain Management was RMB1,700.5 million (US$239.5 million), or 91.5% of revenue in 2023. The 2.4 percentage points year-over-year decrease in cost of revenue as a percentage of revenue was primarily due to improved operating efficiency and optimized customer mix.Cost of Revenue for Global was RMB1,131.5 million (US$159.4 million), or 119.5% of revenue in 2023. The 1.5 percentage points year-over-year increase in cost of revenue as a percentage of revenue was primarily due to lower parcel volume of Thailand.  

Gross Profit was RMB250.4 million (US$35.3 million) in 2023, compared to gross loss of RMB263.6 million in 2022; Gross Margin was 3.0%, compared to negative 3.4% in 2022.

Operating Expenses

Selling, General and Administrative (“SG&A”) Expenses were RMB994.4 million (US$140.0 million), or 12.0% of revenue in 2023, compared to RMB1,127.3 million, or 14.6% of revenue in 2022.

Research and Development Expenses were RMB115.9 million (US$16.3 million), or 1.4% of revenue in 2023, compared to RMB144.2 million, or 1.9% of revenue in 2022.

Share-based Compensation (“SBC”) Expenses included in the cost and expense items above were RMB48.3 million (US$6.8 million) in 2023, compared to RMB72.1 million in 2022. Of the total SBC expenses, RMB0.2 million (US$0.03 million) was allocated to cost of revenue, RMB2.1 million (US$0.3 million) was allocated to selling expenses, RMB42.5 million (US$6.0 million) was allocated to general and administrative expenses, and RMB3.6 million (US$0.5 million) was allocated to research and development expenses.

Net Loss and Non-GAAP Net Loss from continuing operations

Net Loss from continuing operations in 2023 was RMB908.6 million (US$128.0 million), compared to RMB1,464.8 million in 2022. Non-GAAP Net Loss from continuing operations in 2023 was RMB765.6 million (US$107.8 million), compared to RMB1,380.4 million in 2022.

Diluted loss per ADS and Non-GAAP diluted loss per ADS from continuing operations

Diluted loss per ADS from continuing operations in 2023 was RMB43.60 (US$6.20), compared to a loss of RMB72.68 in 2022. Non-GAAP diluted loss per ADS from continuing operations in 2023 was RMB36.10 (US$5.14), compared to a loss of RMB68.36 in 2022. A reconciliation of non-GAAP diluted loss per ADS to diluted loss per ADS is included at the end of this results announcement.

Adjusted EBITDA and Adjusted EBITDA Margin from continuing operations 

Adjusted EBITDA from continuing operations in 2023 was negative RMB613.7 million (US$86.4 million), compared to negative RMB1,181.8 million in 2022. Adjusted EBITDA Margin from continuing operations in 2023 was negative 7.4%, compared to negative 15.3% in 2022.

Cash and Cash Equivalents, Restricted Cash and Short-term Investments

As of December 31, 2023, cash and cash equivalents, restricted cash and short-term investments were RMB2.3 billion (US$321.5 million), compared to RMB3.2 billion as of December 31, 2022. In 2023, the Company repurchased approximately US$75 million (RMB542 million) aggregate principal amount of its existing Convertible Senior Notes due 2024.

Net Cash Used In Continuing Operating Activities 

Net cash used in continuing operating activities in 2023 was RMB554.7 million (US$78.1 million), compared to RMB1,051.7 million of net cash used in continuing operating activities in 2022.

SHARES OUTSTANDING

As of March 11, 2024, the Company had approximately 401.9 million ordinary shares outstanding([13]). Each American Depositary Share represents five (20) Class A ordinary shares.

As previously announced, effective from April 4, 2023, the Company changed the ratio of its American Depositary Shares to its Class A ordinary shares, par value US$0.01 per share, from the original ADS ratio of one (1) ADS to five (5) Class A ordinary share, to a new ADS ratio of one (1) ADS to twenty (20) Class A ordinary shares.

Effective as of September 25, 2023, the Company’s board of directors terminated its previously announced share repurchase program, under which the Company could repurchase up to US$20 million worth of its outstanding American Depositary Shares over a 12-month period. Prior to the program’s termination, the Company repurchased a total of 1,265,685 ADSs for a total amount paid of approximately US$3.3 million (excluding commissions) under the program. 

ABOUT BEST INC.

BEST Inc. (NYSE: BEST) is a leading integrated smart supply chain solutions and logistics services provider in China and SEA. Through its proprietary technology platform and extensive networks, BEST offers a comprehensive set of logistics and value-added services, including freight delivery, supply chain management and global logistics services. BEST’s mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain. For more information, please visit: http://www.best-inc.com/en/.  

SAFE HARBOR STATEMENT

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as BEST’s strategic and operational plans, contain forward-looking statements. BEST may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report 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 BEST’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. 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: BEST’s goals and strategies; BEST’s future business development, results of operations and financial condition; BEST’s ability to maintain and enhance its ecosystem; BEST’s ability to compete effectively; BEST’s ability to continue to innovate, meet evolving market trends, adapt to changing customer demands and maintain its culture of innovation; fluctuations in general economic and business conditions in China and other countries in which BEST operates, and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in BEST’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and BEST does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

USE OF NON-GAAP FINANCIAL MEASURES 

In evaluating its business, BEST considers and uses non-GAAP measures, such as non-GAAP net loss/income, non-GAAP net loss/income margin, adjusted EBITDA, adjusted EBITDA margin, EBITDA, and non-GAAP Diluted earnings/loss per ADS, as supplemental measures in the evaluation of the Company’s operating results and in the Company’s financial and operational decision-making. The Company believes these non-GAAP financial measures that help identify underlying trends in the Company’s business that could otherwise be distorted by the effect of the expenses and gains that the Company includes in loss from operations and net loss. The Company believes that these non-GAAP financial measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making. The presentation of these non-GAAP financial measures 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. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Measures to the Nearest Comparable GAAP Measures” in the results announcement.

The non-GAAP financial measures are provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors’ overall understanding of the Company’s current financial performance and prospects for the future. These non-GAAP financial measures should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for, or superior to, U.S. GAAP results. In addition, the Company’s calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

RECONCILIATIONS OF NON-GAAP MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

For the Company’s continuing operations, the table below sets forth a reconciliation of the Company’s net loss to EBITDA, adjusted EBITDA and adjusted EBITDA margin for the periods indicated:

For the Company’s continuing operations, the table below sets forth a reconciliation of the Company’s net loss to non-GAAP net loss, non-GAAP net loss margin for the periods indicated:

For the Company’s continuing operations, the table below sets forth a reconciliation of the Company’s diluted loss per ADS to Non-GAAP diluted loss per ADS for the periods indicated:

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SOURCE BEST Inc.