Q4 2020 Ihuman Inc Earnings Call
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Sure.
Good morning, and good evening, ladies and gentlemen, thank you for standing by for I humans fourth quarter and full year earnings conference call.
At this time all participants are in a listen only mode.
After managements prepared remarks, there will be a question and answer session.
Today's conference call is being recorded now I will turn the call over to your speaker host today, Ms. Cynthia Tan IR director of the company. Please go ahead ma'am.
Thank you operator, Hello, everyone and welcome to answer on the fourth quarter and true here in terms of 'twenty earnings Conference call.
And remember today.
Earlier today and is it.
Available on company's on Whatsapp.
And as well on on your score and understood before.
Before we begin I would like to remind you that this conference call contains forward looking statements as defined in the private Securities Litigation Reform Act of 19 not too good.
These forward looking statements are based upon management's current expectation and current market and appraise.
From competition and related to events Dr. Jim Wilson.
On uncertainties and other factors all of the current difficult to predict and many of which I'll be on the come to control, which may cause the company's actual results performance or achievements to differ materially further information regarding this and other risks uncertainties and factors included and the Congress evolving with the SEC.
The company does not undertake any obligation to update any forward looking statements and stuff.
Yes.
There's a little bit.
Today, you'll hear from Dr. Tom and.
Is that true and Chief Executive Officer, who will provide a general overview of the business and operations will then follow up on MS. Vivian Wow, Rockford and Chief Financial Officer, who will provide additional details on the company's financial results and discuss the financial outlook for a lot of managements prepared remarks, well open up the call.
But I.
I wouldn't and I would like to turn the call over to our CEO Tom touched.
Please go ahead.
Yeah.
Thank you, Jeff Hello, everyone. Thank you all for joining us on the call today.
We are pleased to report another quarter of strong growth as we further strengthen our position as China's number one market leader in the online childhood entertainment sector.
Over the past year, we haven't seen that China's online education market.
<unk> gained traction and accelerates the pace and the post pandemic landscape.
And of all lines technology, and digital penetration and education extra keep rising.
And children have grown more comfortable with online learning apps.
And importantly, we believe this acceleration will not be as soft need phenomena, but he is here to stay and millennial and Gen Z parrot increasingly look for technology enabled tools to help improve the learning results for their children.
And that's all on education market, obviously presents huge and attractive growth prospects.
And we offer a fairly specific value proposition in the sector.
Alright entertainment product really supplement and support a more formal education that cheap get elsewhere on.
Whether it's cloud based learning all of education or agitated. We believe constant quality is the number one factor that enables the company to gain market share and standout and meet the intense competition.
Our sales directly and the interactive learning for that either.
<unk> advantage and me.
And the demand from parents and not only improves the learning results well, they're cheap, but also to build their teeth on love learning.
This unique positioning and <unk>.
Can you help at.
All right both brand recognition and so I'll use the loyalty in the entertainment space.
These are our true assets and we think we have a huge runway to go.
In the fourth quarter for you.
Back into the rising demand and indeed industry tailwind to bring our proprietary entertainment technology, and and decades of expertise and both education and entertainment.
And our growing user base, we continued to leverage our sophisticated technology and capabilities, so deliver truly interactive and immersive learning experiences for children and help them more effectively while having fall through our best in class educational content.
As we step into the new year, we will take a long term perspective, and we remain firmly focused on creating premium educational content and pursuing technology advancement for <unk>.
And your birth and superior user experience.
We will take advantage of our viable and scalable business model to further enhance our existing portfolio and lost.
New education products and services to drive user growth and user engagement.
This in turn will help us maximize sustainable value creation generated healthy cash flow and deliver sustainable outcomes for our shareholders.
Now I'd like to walk you through our business development and operating results.
I'll start with our online learning business.
We are pleased that and we closed out <unk> on a high note.
In the fourth quarter on a year.
Over a year basis, we called the poker revenue, our learning services business to a record RMB 100, and and Nike immediate and almost tripled our average total and U S value hotel.
<unk> point and 77 million.
For the growth was driven by our unwavering commitment to educational content and technology investments.
Which are the two cornerstones of our ongoing success.
In terms of and important reason.
And we continue to you and reached our curriculum.
Education products with significant new additions interactive content to all self directed learning.
And we optimize and updated our chief education product on a weekly or biweekly basis. So for.
And then you reach that breaks it out for.
For example, we continue to expand IQ My English to cover multiple levels with a more systematic curriculum, which keep activity patriot to children with different and can use levels.
Levels.
And with ice and the math, we added more interactive design to help children practice their math skills.
And having fun and it's net real world experiences.
And for our most welcome to IQ and with Chinese to help keep better master the difficult part of radicals of Chinese characters, we designed attractive section with funky shows well.
We also launched a special Chinese new year version of Ikea, and the Chinese and added a festival or seeing the teacher related characters.
Now, let me briefly update you on our education and product.
In terms of existing product, we will soon launch a.
And can independently charges and pension pot.
Additional Chinese EDM force within IC and the Chinese App.
Which will leverage interactive and she's scary stories, and all that and you came in technology to help children mastered the hard to understand Chinese traditional he did.
Broad and background of Chinese traditional culture.
As for IQ and the English.
We are also reaching out to various renowned global industry partners to cooperate on bringing world class content and IP to our users. The first thing. We are launching is the section based on the world famous mother Goose and those are revised.
We think this is another example of how we try to create and truly authentic English learning experience, which helps to elevate our brand recognition and enhancing the user experience and further increase the user stickiness.
And for the new product pipeline, we have a great lineup of different educational product.
But for competitive reasons I will only highlight a few of them.
First of all we are delighted to officially announce our strategic partnership with Oxford University Press, the largest university and publisher in the book.
So co develop and co promote a comprehensive new English level reading app called I assume and readers.
Which will combine world class content with our advanced Entertainment and technology.
Its highly anticipated new product will be launched and promoted globally by ice human and together with Oxford University press.
These assets will introduce and extensive collection of over a thousand books of Oxford's world renowned and novel reading content, including Oxford Reading tea tree tops project X et cetera.
Which have been expertly leveled to help she progressed, we are reading skills and capabilities.
In addition to that is also the first time, Oxford cooperates you'd wait for industry partner to co develop and digital published over 100 and cruise C level reading English books.
And for these assets, which had called fantastic Bret.
Combining their global leading expertise and advanced entertainment and technology. This app will provide interactive double reading experience to you and.
Boucher and passion and interest for English reading.
And this App will also include an assessment module that is being co developed by a human and Oxford expert team for the property scene and Chinese market.
And it won't be tailor made for Chinese speaking cheap from three to 12 years old and provide accurate assessments across levels and the detailed ammonia and advice to guide their learning progress and English.
As product quality and ease of experience have always been our top priority.
And because these assets is still comprehensive and cloud precision and.
Last time, you expect it to be around the middle of this year.
With more famous content and events and increased juicy expertise sophisticated assessed and the module and the other.
Human and superior Big data analysis, and entertainment technologies, we expect the product to be at the BD and level of the industry.
The App will also be published globally, and we will work together with Oxford to promote the product to reach more users and different regions.
We're also working on our next generation and a high courses on different subjects, which are a natural extension for us to meet different user needs, while leveraging our advantages and edutainment for.
It provides an interactive learning experiences for children as the first step we will launch on trial version of our Chinese AI core.
Better utilize the messy and loyal user base of our top notch IQ and Chinese and satisfy the unmet need from users requiring more detailed guidance.
Furthermore, for our offline business and.
We are speaking right now we are holding our annual national distributor of Congress for launch our next generation online merged offline or O M O education products.
Which includes acumen classroom solution.
Eddy and Lea course, and and some other courses.
The products are designed specifically for kindergarten says and include our high quality all on digital resources, including animation interactive features.
Boring teacher videos and so on.
Our products will be highly efficient and effective for these traditional offline organization.
Especially for the post pandemic era.
Transforming the teaching approach from a traditional paper based method. So we mostly big screen direction, and moat, which makes Crosby is more interactive and inspire.
And I was children's and interests and improves learning results. This will also help us discover and new growth driver for our offline business and it forms a close loop to integrate our online and offline businesses.
And create a big cross selling opportunity within our mass and exclusive user base.
F 2021 unfolds.
And we'll continue to invest and improving product quality and the user experience and devote to building out our already strong pipeline, adding more innovative and interactive educational products and of course is to our comprehensive product portfolio with that I will and I'll hand, the call over to our CFO.
We've yet to talk about our financial results.
Thank you Paul and thank you everyone for joining on the call I will now walk you through our financial results. Please note that all financial data that I talked about will be presented in RMB.
We achieved a robust growth both for the full year and the fourth quarter apart from strong revenue growth. We also saw and increasing operating efficiency and strong cash and liquidity.
I'll briefly recap our financial performance for the fourth quarter of 2020.
Total revenue in Q4 came and you had all of our expectations, increasing 206% from the same quarter last year to 190 million.
This was mainly due to and that the growth in revenues from our learnings and services, which leaves 330 per cent to hit a record high of 157 million.
The robust growth was powered by our user base expansion and.
And the user engagement as we continue to build on our unrivaled reputation for superior credit quality.
And Hey, you offer on life business reached a record high of 12, 27, and 7 million in Q for the number of paying users was 141 million and increase of 133% from the same quarter last year.
We have delivered three consecutive quarters of triple digit topline growth year on year.
Which is a clear testimony to our award, leading entertainment and technology and proven educational products and content and innovation capabilities.
Revenues from learning material and devices were 32 million and increase of 28% from 25 known and in the fourth quarter of 2019.
Along with the rapid growth of our online businesses.
And which has a higher gross margin or gross profit and gross margin improved significantly.
Gross profit was 133 million and increase of 243% from the same period last year.
Our gross margin further improved to 69, 9% in Q4 from 62, 4% and same quarter of 2019.
And we'll move along for a pretty expenses now.
Total operating expenses were 196 million, which increased 322% from 46 million in the same quarter of 2019 for you.
Increase was mainly due to SBC of 78 million that were rich and Mike because certain IPO performance conditions of the work we're satisfied.
S. P C were incurred in the fourth quarter of 2019.
Excluding SBC, our total operating expenses were 118 million and increase of 155 per cent from the same period last year.
And from R&D and product driven company, we have always focused on R&D to maintain our core competitive advantages.
Our R&D expenses were $70 million and increase of 128% from 31 on them in the same quarter of 2019.
Including the SBC and the R&D expenses were $50 million and increase of 65 per cent from the same period last year, primarily due to a REIT and payroll related expenses and <unk> expenses as we continued to expand our R&D capabilities and to enhance and develop our educational product.
And and services.
Our sales and marketing expenses were 45 million and increase of 431% from 8 million in same quarter of 2019, excluding SBC sales and marketing expenses were 42 million and equally sell for 397% from the same period last year.
For my people and an increase in advertising and promotion expenses as we statistically strengthen our brand recognition is the problem list for the company and marketing effort to supplement organic user growth.
Sales and marketing expenses were also higher because of certain channel partner offered and incentive plan, but we think which can be used to conduct and marketing and promotion will be and upon of channel.
We utilized a certain amount of rebate to conduct marketing and promotion.
For them, it's a nice and sales and marketing expenses, leading to a lower ratio on cost of revenues and higher ratio of sales and marketing expenses as a percentage of revenues for this channel.
Even though we accelerated our marketing effort this quarter, which was in effect and supplement our organic user growth. The vast majority of our user growth still came from word of mouth with for a moment.
As a percentage of total revenue on sales and marketing expenses stayed at a relative low level.
Our G&A expenses were 82 million, an increase of 999% from 7 million in the same quarter last year.
It's cooling SBC G&A expenses were 26 million and an increase of 251% from same quarter last year.
Primarily due to an increase and payroll related expenses and one time IPO related expenses.
Operating loss was 64 million compared with 8 million in the same quarter of 2019, adjusted operating income was 16 million compared with adjusted operating loss of 8 million and the same quarter of 2019.
Income tax benefits were 8 million, which was mainly due to the tax exemption benefit as one of our major operating entities and what's embedded to qualify as a software enterprise for fiscal year 2020.
And this compares with income tax expense of zero, and 25 million and the fourth quarter of 2019.
Net loss was $54 million compared with $6 million and the same quarter of 2019.
Adjusted net income was 26 million compared with an adjusted net loss of 6 million and the same quarter of 2019.
Basic and diluted net loss per ads were 140.
Compared with 17 cents and the same quarter of 2019.
Adjusted diluted net income per ads was 48 and <unk>.
Paired with adjusted diluted net loss per ads of <unk> 17 cents and the same quarter of 2019.
Deferred revenue and customer advances were 269 million as of December 31st 2020.
And increase of 274% year on year from 72 million as of December 31, and 2019, primarily driven by our user expansion and enhanced user engagement.
Cash and cash equivalents were 862 million as of December 31, 2020, compared with $105 million as of December 31, 2019, primarily due to strong operating cash inflow together with IPO proceeds and.
As a result, we have a healthy balance sheet with a strong cash balance and no debt. The majority of our current liabilities is deferred revenue, which actually gave us a great visibility on our future revenue growth.
Next let me go through the key financials for the fiscal year 2020.
2020 total revenue came in at 532 million and increased sell for 100, and a 43% from 219 million in 2019.
Revenues from other any services were 430 million, which quadrupled from that on 2019.
The increase was driven by our user expansion and he has a user engagement as we continued to pursue with the best product quality and capitalized our proprietary interactive technology to cater for the increasing demand from parents and kids.
Average total M and you for our learning services for 2020 for $10 61 million and increase of 187% from 2019, and our paying users, reaching 373 million and increase of 183%.
Year over year.
Revenues from learning materials and devices for $101 million compared with 111.002 million 19, despite the impact from the COVID-19 pandemic. There was only a slight decrease from 2019.
Gross profit was 365 million and increase of 172% year on year.
Gross margin was 68, 7%, which improved from 61.5 per cent in 2019.
The increase was driven by the strong growth of our learning services business with a higher gross margin.
Total operating expenses were 410 million a slight decrease from $413 million in 2019.
And this included share based compensation cost of about 78 million this year.
Compared with 271.002 million 19.
As clothing SBC total operating expenses were 332 million and increase of 132% from last year.
Our R&D expenses were 200 million increased 17% from 170 million in 2019.
Excluding SBC and the expenses were 180 million and increase of 92% from last year and.
The increase was primarily due to a rise and payroll related expenses as we continue to expand our R&D team and to enhance and develop our products and services.
Our sales and marketing expenses were 19, 6 million and increase of 78% from 54 million and 2019.
<unk> S. P C sales and marketing expenses for 93 million and increase of 234% from last year for.
The amount of data on and increasing advertising and promotion expenses as we statistically strengthen our brand recognition and marketing efforts to supplement organic growth.
Our G&A expenses were 115 million decreased 39% from 189 million in 2019, excluding.
S. P. C. G&A expenses were 15 9 million and increase of 180% from last year, primarily due to increasing payroll related expenses and one time IPO related expenses.
Operating loss was 44 million compared with an operating loss of 279 million and 2019.
<unk> operating income was $35 million compared with an adjusted operating loss of 8 million and time and 19.
Income tax expenses were $25 million compared with one 4 million in 2019.
Net loss was a 37 million compared with 276.002 million 19, adjusted net income was $42 million compared with an adjusted net loss of bus Milan and 2019.
Basic and diluted net loss per.
For 107 cents.
Compared with the 700.
Third and 62 cents in 2019.
Adjusted diluted net income for <unk> was 66 cents compared with adjusted diluted net loss per a D. S F sixteens and sense and <unk>.
And 119 list.
With that I will now provide our business outlook.
And based on our current estimates total revenues for the first quarter of 'twenty 'twenty. One are the spud it to be between $220 million and 226 million, representing an increase of 182% to 190% year on year.
And this takes into consideration the expected growth from the strong and continued expansion of our learning services and <unk>.
First the demand represents management's current and preliminary view, which is subject to change that concludes our prepared remarks.
Operator, we're now ready to take questions. Thanks.
Thank you.
And we'll now begin the question and answer session.
Ask a question you May press Star then one on you touched on phone.
And youre using a speakerphone, please pick up your handset before pressing and the keys.
To withdraw from your question please.
Please press Star then two at this time, we will pause momentarily to assemble our Austin.
The first question today comes from Mark Li with Citi. Please go ahead.
Oh, Hi management, congratulations on the results I wish to ask firstly I noticed on our Q4 graph for you.
And with our previous guidance could you share what are the drivers for that and.
And your view is that gonna be itself for the first quarter outlook could you give us a color on the growth momentum.
And I'll have the expectation for the call are learning services revenue. Thank you.
Yeah. Thank you Mark.
And as we mentioned.
And keep continue to expand our our accountants.
To make sure that we really deliver a best in class.
Learning experience for our kit sales.
So do and this quarter and and then Q4 well you know we made a lot of the initiatives to keep extending and expanding and optimize our content as we mentioned earlier. Our for example for a human English we actually expense two on multiple levels are with a more systematic.
The curriculum.
And as for our human Oh, we actually design a are you know from practice session to help the kids are connected with the real world experiences.
And also as for and you know I human Chinese we also designed a a practice session would be true up to help them on you know a better master the very difficult part all the verticals all slide Chinese characters and.
And so you know with a lot of the.
Progress going on.
With that I'll continue with the improvements and enhancements of our content and we were able to deliver a.
Robust growth and notably our you know I human Chinese our flagship titles continue to rank number one and India, Apple App store and took silver within the education category every day and.
And a lot of the time, you know three or even for all of the top five ranked and <unk> are all our products.
And besides a human Chinese with AR, which enjoyed a very nice growth on our I human he and I human now and on human English also enjoyed a robust growth during the quarter.
And during the quarter. We also had a you know a makes a lot more initiatives in terms of follow up on those sales because.
On my product and also offline product that can match exactly with each other.
Well, we actually.
And I've beaten outside of bad on the battlefield.
So our our kids and parents and.
And we found about that and you know parents really involved with us and get a bundling product because by bundling and the of the online and offline products. They can really all for the kiss them you know a a oh the learning experience from online to offline.
And for that there is and.
Effectively moved and on there are learning cycle and increase their learning efficiency.
And does this the acuity and advantage for us compared to a lot of the other peers.
You know we are able to kind of how has this and.
Bundled up or a combined the capability of offering superior both online and offline for that.
So that's why you know are we actually came in ahead of our expectations are in terms of the AR Q for them.
On the lumber or other revenues and and looking at all for up to Q1 and beyond.
We continue to owe to offer them, you know more and more content and would they leave that are where we're a we're on a very on kind of up to.
Per trend and in terms, so far and you know high peripheral and and specifically for for Q1, where we're on we're offering a lot of other you know different content continue to up and hence you know our other human Chinese opinions on math and English.
And of course beyond Q1, and we're also launching some of the major part of it as Powell mentioned she'll Yeah, we really look forward to up to up and you know I'll go bust for future growth yeah.
Thank you.
Sure. Thank you and for your Q1 number are actually Oh, what's your growth expectation and your pricing for the call and I loved and subject to our portfolio.
For your Uh Huh.
200, and Ikea per se on your on your growth. Thank you.
Yeah for Q1, we are also expanding a pretty nice growth for our learning services.
So yeah, we are within the other up the other.
So I actually Oh.
Q1 is typically a pretty good excuse me and for US we're on.
Also seeing a very nice kind of you know traffic growth for both them and you and paying users and.
And of course in terms of our pool and we also keep improving our our pool are pretty nicely. So on.
And on a combined factor Ah Yeah, we are and you know I'm pretty confident to deliver another robust growth quarter and Q1 yeah.
Sure. Thank you.
Thank you.
The next question comes from thin Wang with SM Securities. Please go ahead.
Oh, Hi, Thank you for taking my questions on my first question is about the and you put on top line and.
And what's the timetable and how do you expect their revenue contribution and the next and once you two years.
And my second question is about the user expansion on striking chi so besides the content and your house and then what's your strategy to drive user base expansion. This year. Thank you.
Yeah.
Okay. Thank you.
For our product pipeline and actually as we mentioned earlier, we will have you know.
Several different dimension to continue to drive our product and content development.
Firstly for our current and existing portfolio of for apps, we will continue to upgrade and update new content.
And for example for IQ and Chinese we will launch and.
And a new expansion pack, which is Chinese medium of course and pretty early on you know.
In Q2, which will and all we will.
Launch very soon and this will be a very.
Very interesting course, and with a lot of entertainment and features and interactive features so the cheeseburger love them and they can just better understand the Chinese traditional Oems and that is just for the beginning of our expansion packs actually moving forward, we will for they introduced several other expansion packs with Yankee and retraining.
And at the same time for IQ My English and Maths, we will also continue to build more new levels of content.
Being a bit you took the two apps so that the whole curriculum will be expanded and also will you should use.
Just to know.
Expansion packs for example for like them and that we will be.
Paul and they're found at current for Foundation course, we will also introduce new and <unk>.
Higher age groups course, which is more about the calculation package you know.
And then we will have another extension of course package, which for which is about the mathematical thinking skills.
So these RB and new core packages.
Which will be and should use to within our current portfolio and also at the same time because.
Because we are you know we have a very unique product strategy and would you say you know we call a pure made product structure. So the current apps are at the foundation of these pyramid structure and based upon that we will continue to introduce more new categories.
Categories of products, new types of products and <unk> and we can leverage the current use of pool to come.
Converge and attract more new users into these new products for example.
As we mentioned earlier, we are working with Oxford University press two two.
To develop a tumor readers did you say English for level reading up and with that and we won't be able to you.
And our age group coverage from the current and like the free two eight and it was owed to likely to 12 years old because a lot of content from the from these ads will be focusing on the primary schools and students and two.
To help them to build and upgrade their.
And Lisa reading capability.
And also for our new and next generation AI courses.
She said you know the.
The first one will be our Chinese AI of course, and this will also be introduced a pretty early on in.
In Q2 and various.
Soon and.
And this will also help us too.
To meet the different on Mac needs from the users, especially based on our current IQ and Chinese.
And as a base for this new course, well have two.
Penetrating too.
And you know.
And from the use of boots.
And also other income and they won't help us too.
Penetrates mid to higher <unk>.
This level.
So these are new courses and new products will help us to expand our you know H coverage and also the day customer need coverage and.
And at the same time, we were also working to upgrade our offline on you know PC solution.
As we mentioned earlier range.
Introducing the new AMOLED product solutions.
You know the human classroom and the related courses. So this will help us to a computer and new growth driver for offline business and also help us to promote more cross selling opportunities across the.
And the online and offline businesses.
So these are our new pipelines moving forward and your second question about the the user expansion and all the user growth actually and <unk>.
And we you know introduced earlier for some of the new products and the new courses and they will have to.
Upgrade or E. H good coverage from the current a free to eight year old and coverage to three to 12 years old and.
And at the same time.
And actually the geographic coverage expansion is our also our strategic focus so we will continue to to penetrate into lower tier cities actually we do see a very good growth momentum during the past two quarters now in terms of the they're.
They're used for mix from the lower tier cities and it will continue to drive the growth and to those lower tier cities and and actually our pricing and the quality of our products are pretty feeding these kind of meet our customer needs from these lower tier cities.
Yeah, we do see a very good you know.
<unk> momentum and growth opportunities for different age group coverage and to those lower tier city coverage yep. Thank you.
Yeah. Thank you for that very detailed and I'm sorry.
Yeah.
And if you have another question or if you have a question. Please press Star then one the next question comes from Alex Xie with Credit Suisse. Please go ahead.
Hi, I mentioned and thanks for taking my question I have two questions on behalf of Alex on the first one is about a human and Chinese app.
Would you share and be more color on your target for its penetration rate and art for in the next few years and the second one is about our product E. S. P. A given current competitive landscape anchor and penetration into lower tier city, what would you be your pricing strategy. Thank you.
Yeah.
Yeah.
Yeah. Thank you for your questions for I, human Chinese or for any and every single of our products will continue to on that.
Lunch expansion path.
And not to count on and optimize our our and user experience and so by doing so and we're able to you know are always able to monetize better for example for ice and the Chinese are as we mentioned and we'll announce a new expansion pack shoen.
April which is the Chinese E P M and it will it's hard and separately and it will leverage the interactivity and his free stories and our agile team and technology to help children and master the very hard to understand Chinese traditional mediums in a broad and and background.
And also a Chinese traditional cott true and in the future and we'll also launch a series of our expansion pack to a human Chinese.
Chinese traditional China literature, and such as the Chinese point and so on I'm sure with a you know continue to adding a lot of content.
We believe that we can oh.
Better abroad, and our user base.
Both in terms of age group and in terms of that and you know penetrations down into lower tier cities.
You know and you know for for mass Anglos, you know at the same logic will continue to you know expand.
Expand multiple levels of our enhanced the content to make sure that our kids really love our content and have fun with the journey with that are we are pretty confident that we can and pet better penetrate our product up into our and you know from and Ah.
Area and it doesn't.
From geographic that are in terms of the you know our internal tracking of.
Data, we're seeing that are actually Oh, do you have more and more users coming from lower tourist cities and and pricing wise because of you know our pricing is on you know kind of pretty affordable and.
And you know, we really can address a lot of the Oh Dear.
And the parents are kind of on knees in terms of helping their kids learn with fun to you know, what we're seeing a better penetration already and up and the future. We we think that we cannot you know.
And our our penetration penetration and gradually.
And in terms of N T of course and.
You know as a product driven company and we always believe that so long.
You know weekend on a better kind of optimize our content and it's always a chance for us to better monetize our product and as you can see and the paths are our pool as true you'll continue to improve quite a bit of gradually a quarter over quarter of course with the launching of new expansion.
Packs and.
Added features we are able to increase E. S. P N V.
Ear for all of our major product.
But on the other hand, we are also launching a lot of the new product.
And especially some of the premium product that can naturally kind of meat are.
Users are different knees as Paul mentioned and you know we have on a pyramid modeling for myself off for that portfolio.
While we can actually expand you know on our part on into some of your higher pricing a premium on kind of course product that can also help us increase the ARPA and you know quite a lot and.
And also there are a lot of the cross selling opportunities are as we mentioned all the concerned Lee our leverage on the current already very big user base to a better on co promote our part up and cross sell and ensure all of our different products.
So we believe that we have a long.
Long way to go in terms of increase of our pool and the future.
And I hope that answered your question.
Okay.
Thank you that's very helpful.
Thank you.
This concludes our question and answer session I would now like to turn the conference back over to MS. Cynthia Tan for any closing remarks.
Thank you operator and coding on behalf of on humans management team wed like to thank you for your pocket passive dissipation on today's call. If you recall on the army for threat information from free to reach out to ask exactly and.
<unk> for joining us today. This concludes the call.
Thank you everyone.
Thank you.
This conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.