Q4 2020 LAIX Inc Earnings Call
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Ladies and gentlemen, thank you for standing by for of likes Inc. Fourth quarter 'twenty 'twenty 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 I will now turn the call over to your host Mr have U K Investor Relations director of the company. Please go ahead Sir.
Thank you Mario.
Everyone and welcome to the fourth quarter 2020 earnings.
Earnings Conference call for lack of <unk> also known as <unk> the company's results.
Joe O'dea of today and you can download the earnings press release and the fire.
The Companys and distribution list by visiting our IR website at IR.
Okay.
The EUR, obviously, Johan and Honda and Mr. Pinto and our CFO will begin with some prepared remarks.
Please note that today's discussion will contain forward looking statements relating to future performance of the company and Inc.
And then qualify from the Safe Harbor statements on that ability as we 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 all of.
These risks at the end of the company's control and of course actual results could differ materially from those mentioned in today's earnings release and of this discussion.
The general discussion of.
The risk factors that could affect <unk> business and the financial results is included in certain filings of the company with the Securities and Exchange Commission, including its annual report the company does not undertake any obligation to update forward looking information.
Required by law and.
Today's call management will also discuss certain non-GAAP financial measures for comparison purpose only four of definition of non-GAAP financial measure and the reconciliation of GAAP to non-GAAP financial results. Please refer to the earnings release issued earlier today.
I will now turn the call over to our CEO of the Eva.
Please go ahead.
Thank you Harry Hi, everyone. Thank you for joining.
Over the fourth quarter of 2000 and towards earnings Conference call.
And the fourth quarter, and we continue to put great efforts and to enhancing operating efficiency.
And have made solid progress on both our organizational restructuring and cost control initiatives the.
Total net revenues in the quarter.
RMB.
$235 5 million.
Which beat our per.
The guidance.
Gross profit margin grew to 75, 4% from 72, 9% and the previous quarter.
Our net loss was reduced to RMB.
$34 seven minutes of.
59% decrease from the previous quarter and.
Except the expected.
The expected to improve even further in the first quarter of 2021.
Since our inception, we have been constantly exploring the user needs and the improving the user learning experience.
The technology based and the content oriented and user experience centered company culture system.
Looking ahead, we plan to expand into new markets and the countries.
With high growth potential increasing use of acquisition channel efficiency and developing new three two and content.
In terms of the enterprise so the only services, we plan to utilize AI technologies to provide corporate customers with.
More customized solutions and professional talent training system tailored.
Our specific industries and needs.
In summary, we will continue to.
Execute on our growth strategies, bringing our strong value proposition to the market and.
And maximizing long term value to all of our shareholders I will now turn the call over to our CFO, Mr. Bing Sun, who will discuss our key financial results.
Thank you <unk> and Hello, everybody.
Let's now take a look at our key financial matrix and the first quarter of Tucson and into 'twenty.
That's the revenue or RMB 200, the city of flight quantified milling.
One point of 7% the decrease of RMB 200 of $39 4 million for the previous quarter and the.
The one 8% the increase of RMB 231 points of $4 million for the same quarter last year the core.
And of course, the decrease was primarily attributable to a decrease gross billings plus the by the companies the stringent cost control and user acquisition expenditures.
First of the revenue was RMB 57 to 8 million, 11% the decrease from RMB six day fly millions for the previous quarter and 25% of decrease from RMB 77 points of $1 million for the same quarter last year.
The quarter over quarter of change it was primarily due to the cost per control in it related the service and the optimization of the personnel management.
Gross profit was the RMB 100, the assembly of seven six milling.
The one 8% the increase from RMB 174 point of 5 million for the fourth.
For the previous quarter.
And a 15 point of 1% the increase from RMB 154 point of $3 million for the same quarter last year.
Gross margin was 75 points of 4% compared with 72 punch of 9% and for the previous quarter and the $6 six appointed and 7% for the same quarter last year.
Total operating expenses were RMB $215 2 million.
14 point of 6% of decrease of all of <unk>.
The 252 point of 1 million for the previous quarter and a 41, 5% the decrease from RMB 367 points of $7 million for the same quarter of.
For the same quarter last year.
The changes were primarily due to stringent cost control and use the acquisition expenditures and the optimization of the operations structure.
Since then the marketing expenses were RMB 150 upon the toll milling.
At 18, 9% the decrease from RMB 185 upon the filing for the previous quarter and a 43, 6%. The decrease from RMB 200 of 66 points of $9 million for the same quarter last year.
The decrease was the primary due to the company's the stringent cost control and the editor.
The timing and the user acquisition expenditures and the secondary the decrease in salary and benefits due to the optimization of the personnel management.
R&D expenses of <unk>.
So the seven points of two milling 18, 9% of decrease from the RMB 45, 8 million for the previous quarter and that certainly point of 1%. The decrease from RMB $53 2 million for the same quarter last year.
The changes were primarily due to the efficiency optimization in personnel and management.
G&A expenses were RMB 27 points of six milling.
It is 3% the increase from RMB Fintech point, the $8 million for the previous quarter.
Primarily due to a one time impairment charge of our leasehold the improvement.
The G&A expenses decreased by 42% from RMB 47, 7 million for the same quarter last year.
Primarily due to the efficiency optimization and personnel and management.
As for operations of <unk>.
So the seven months of six milling.
The leaves the RMB $77 million to $6 million for the previous quarter and the RMB 211 to 1 million for the same quarter last year.
Net loss was the IMD certainly for the seven milling compared to RMB seven to eight point, the 6 million for the previous quarter and RMB 200, and the $5 6 million for the same quarter last year.
The adjusted net loss was RMB 29, 9 million compared with RMB 61 point of formulating for the previous quarter and.
And the RMB 200, and the two point of the <unk> mailing for the same quarter last year.
Basic and diluted net loss per ordinary share attributable to ordinary shareholders for the first quarter of two some of the 'twenty was the RMB seven day.
<unk>.
Compared with the RMB, one and 43 cents for the previous quarter and the RMB <unk> 16 for the same quarter last year.
In terms of our balance sheet as of December 31st the Tucson, and the print Inc.
The company's cash cash equivalents to restricted of cash and short term investment. The total of the RMB 200 of $29 6 million compare that with the RMB 300 of $27 2 million as of September 32, some of the 'twenty.
And the RMB 500, the 50 to plan the six mailing as of December So the first bits of southern the 19.
Net cash used in operating activities of RMB.
The three points of three milling and the RMB 63 points of 9 million Inc. For the three months period. The ended the December sitting close to some the neutrality and this was done and the 19, respectively.
Primarily due to a decrease in gross billings.
And as of December 31 of the Tucson, and the printing the <unk>.
Companies the total share flow the FSA was the RMB 702.
<unk> month of six milling and the terms of liability exceeds the turns of assets by the RMB $748 2 million.
The company's liquidity to meet the it's the future of working Pepto is based on its ability to the enhanced user engagement and the retention by offering high quality and the device and diversify the closers, while optimizing traffic acquisition and strategy to efficiently control and reduce the user really.
The the task.
The company will further preserve liquidity and the manage the cash flow and reducing various of discretionary expenditures and Caribbean labor cost and the other operating expenses.
The Companys liquidity is also based on its ability to obtain pepto the financing from the equity or debt investors.
Currently the company believes that it has sufficient cash to fund the operations. So far at the least of their next 12 months with the implementation of the above mentioned the measures.
As of December 31, the Tucson, and the printing the companys deferred the revenue and the long term deferred the revenue totaled the RMB $746. Two milling competitiveness of RMB 800 of something the street part of the full milling as of September 32020, and.
And the RMB 690 day 6 million as of December So the first of 2019.
Now, let's turn into our outlook for the force for the first of quarter of through some into 'twenty one the <unk>.
<unk> currently expects net revenue to the between RMB 180 milling. The RMB 200, the milling, which would represent a decrease of approximately 12 points of focus and the 271, 2% from RMB 200 of 28 point of Sri mailing for the same quarter last year.
This forecast the refresh of the Companys current and the preliminary review and the terms of business the situation of the market the conditions, which is subject to change. This concludes our prepared remarks.
Operators. Please go ahead.
Okay, and we have the question coming from the line of Lee of fan from China of Roth Capital. Your line is open.
Hi, and thank you Mike Thanks for taking my question and thank you.
And Mark you mentioned, the net loss will be sort of the income in the next call here could you. Please elaborate more of that thank you.
Well thank you for the question.
As we continue to focus on improving operating efficiency and the.
Yes.
Cost savings the operating expenses decreased by.
42% of year over year, Inc. Q4 of 2020.
This is.
Part of the positive sign so.
Even decreased.
Especially more in Q1 of this year 2021.
Which proves again, our company's commitment and execution.
Ability and cost control.
As you all know right now.
Main contributor to our revenues to the adult business and we see.
The good opportunity to continue to.
The leverage.
Different meaning to acquire users and.
And improve our product offering too.
Optimize the overall from <unk>.
<unk> efficiency.
As our main business begins to stabilize we hope that our new business initiatives.
And time will be able to contribute more and the future.
So I'd be happy to discuss further when there are more of a materialized. Thank.
Thank you for the question.
And we don't have further questions at this time I will now turn the call back to Mr. Harry Yes.
Thank you and thanks again for joining us if you have of further questions. Please feel free to contact the investor relations towards the contact information provided on our website or TPG Investor Relations.
Operator.
And this concludes today's conference call. Thank you for participating you may now disconnect your lines.
Thank you.
Okay.
Okay.
And.
The forward.
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