Q1 2021 GSX Techedu Inc Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the G X Heck of do Inc.
First quarter 'twenty 'twenty, 1 earnings conference call all participants will be in listen only mode should you need assistance. Please signal on a conference specialist by pressing the star key followed by the fever.
After todays presentation, there will be an opportunity to ask questions.
Ask the question you May Press Star then 1 on your Touchtone phone to withdraw from the question queue. Please press Star then 2.
Please note. This event is being recorded on Wednesday May 26.2021.
I would now like to hand, the conference over to your first speaker today, Ms. Sandy Chen IR director of go to <unk>. Thank you. Please go ahead.
Thank you operator, Hello, everyone and thank you from Sony has.
And what's.
What's the CBD.
Available on the company's all of us at all.
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On the call of who are the loving Tan both of them.
On the quota.
And she exactly of alcohol.
Yeah, Shannon <unk> Chief Financial Officer.
While we won't be able general overview on the Shannon, who will discuss the financials.
All lines of which has been modest.
Level on the channel will be available to answer your question I was kind of from Florida.
All of the cool lots of them on to the gas conference.
Conference call contains forward looking statements as defined in the Securities litigation with Walmart.
The fall.
Well, we're looking for ones are based upon management's current expectations.
The first question.
On marketing it on operating conditions and the.
The 1 that the work more on along with affordable and all of those offered.
All of which I thought what sort of settle on 1 of the fish of water kind of more control on the calls the companies actually performed well it seems most of the form of family.
The nation regarding moving out of the on Florida.
The school quote, adding the call from filings with the Watson.
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The call does not undertake no obligation to update any forward looking statements.
The required under applicable law.
As a reminder, the call by the reported net.
So a lot in all kinds of work on this call the call will be available on go through lots of room. So that's fine.
We officially launched all the new website at all on spot.
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It's now my pleasure to introduce the lobby whether from Farhan frankly.
Thank you Sandy good EMU clinical the morning to you all from scale.
As of today on our first quarter 2021 earnings conference call and the first of quarter to further improve our survey of quality. We further lowered our student of per children of ratio of just over 104 of our promotional cost.
Cost reductions of 2 our promotional cost childress growth to a contract of floor, 20% of our quarterly revenue on spot.
The 5 percentage points sequentially that combine the ism.
<unk> expenses totaled RMB 500 on the street. Additionally, this quarter, we spend I'm be sorry of Andrew on the 52 of median on branding activities. It's true.
Julien the the factors our traffic acquisition costs were RMB, 1 part of the 3.7 billion.
While the first time of users on videotape a majority of it.
On the 1 times the expedient cross banner wage implies that on lifetime value basis, we're still profitable recently all of them.
Our school segments, including primary draw the ear on the senior of high schools. How did you try on the proper debate on lifetime value of basic standard we have witnessed the bonding trends the already converging class retention of I'm still the ends of reactivation of great.
And we implemented some cost control matters on the activity stayed away from the cash burning Walmart for the winter semester of student recruitment of Patriot.
At the same time, we've been trained north of 8 upgraded all of the products you have the all the accretion quantity on the services and adjusted our operations to improve our <unk>.
Long term of service quantity on the customer satisfaction, we have always believed that as the core of online education as the IDE.
Rather than I'm not a.
Tendency of the traffic growth no longer works for disease and the treatments. While every player has to compete by refining operations.
As a company that of all kinds of efficiency, we have decided to take the time to the current of education on the.
The quality of Freeman growth, so that we could return to a parcel of profitable growth in the.
Upcoming months.
We will have the feeder to our long term philosophy of the feeder to our folks on continually improve the efficiency of the quantity of the feeder to our car is the priority of the state's Brian It's still the ends on the pattern that we observed.
Here to expand sales.
Investment the our technology and the education quantity.
A major priority.
The investment has been on technology on the education policy in the first quarter all of our investment in research on the divided momentum reached a historical high of the RMB 365 million over the past the ear, we have recruited by the technology experts.
And the that the regulatory label all of the BOP to enhance our technology across the Caribbean scenarios TTM content and education services. We believe is the the investments we are bringing us tremendous leverage in terms of half of bolstering our education.
On a day over the long term.
In addition premium of your structures are 1 of the most important the strategic resources for activation company. So we have been.
Also expanding our investments in our teachers on the education partner.
Since the beginning of the ear, we haven't raised the base compensation for each of the hour.
<unk> kind of go at the children's by RMB 500 per month.
We have also established the RMB.
All of them and new type of fat for each of our instructor charters and of course, the best moments professionals. So it's that type of that.
Vander worth lot of Spanish.
Our current strengths has always been already and structures and the this quarter, we ramped up our eyes to the truth on the debate of patents have the structures at the local level more globally, we continue to increase of our spending to trend chosen on.
The improved their family of the knowledge on the stream.
Capabilities through routine separate type of training on the nectarine contexts.
And the patient and the window of the biggest the factors that affect our percentage of wellbeing.
So responsibly to take on the either end of its about the enlightening 1 night with another <unk> in the first quarter share the per day and the pillow can people will tell you the 59% of of our if you trade out or would you go Mitch do you agree on the pandemic of Mac. The ear with on maintained 20 median worst of of winter.
On the master regular price the coffee the per watt.
We also funded on charity of project to support her family of the instead of a guy.
The context of Guizhou and the lab the behind the children in Shanghai on say the Avalere on.
By the on making normal growth carpet.
We have furnished the.
Painters of of the stay the scholarships in the shot G promised on the have provided approximately RMB 15 million worth of the regular price the current base to more than 2 handle at the end of 'twenty outstanding is still down from 8 local high schools the.
The impact of online education, the speaking they depend reform and finish of the society.
We will uphold our regional exploration on the BD about education shoulder, our responsibility the branch from social progress and the promoting equal access.
And the dedicated ourselves to bring part of the education be sort of based on more and more families.
Now I will pass the call of into our CFO Shannon to walk you through our financial and operations details.
Thanks, Larry and thank you everyone for joining the call now I will walk you through our operating and financial results for the past the quarter. Yeah on the conclude was that where I look for the coming quarter.
Please note all of financial data 18, RMB terms.
Since the second half of last year.
Have continued to focus on building up of our brand.
So the number we integrated all of our K 12 businesses and the go to brand.
At least the April we're part of an integrated all of our services and of the Gulf of brands, including Gulf of K 12 for Alex the travel business, Yeah on Gulf of professional 4 of our phone your language professional admission and other services.
Maybe the of that by bringing all of our services and the just the 1 Brent skull tool, whether they'll be able to strengthen the recognition of all the company in the market.
Over the past few months.
The continued to Wisconsin.
Net income.
Improving the quality of teaching services, you've all of you.
On the localized the teaching expanding our teach in product portfolio and upgrading of research and development to secure our long term competitive gen.
The law day couple of burning cash flow traffic against scale doesn't work.
We will focus our strategy on carrying for Alex and continually improving our education quality and developing more personalized and engaging teaching products.
Going forward what are the only.
Maintain our focus on the healthy growth and pay more attention on matrix, including paradox of health nice cash.
Oh, yeah, and overall profitability.
Florida, K 12 screens the retention period that just the finished our fulfillment exceeded our expectation.
In the first the quarter up 21, our net revenues increased 50% year over year to 1.9 billion.
And now I'd, rather needs from our K 12 courses increased by 62% year over year.
This was driven by the continued growth in all of student numbers. That's 2 hours. He has the education quality and brand recognition.
Our gossiping, well 118 billion debt.
Yeah, all of your day courses, what's due to a few factors.
On the 1 hand, the base last year was quite high due to the COVID-19 pandemic period, well a lot of students sign up for our classes.
On the out of hand, this means of where we partially of adjusted I'll I'll appreciate it.
Oh man rich referred to on your Goldman's price at or about 99 million decrease of 0.9% year over year to 767000.
Consistent with the seasonality of showing in the first of quarter of last year I wasn't even governments this quarter, what's the most of the lay of the first time users.
Breaking down our net revenues by business line for the Alto K 12, net revenues increased by 62% year over year to $1.8 billion.
And I'm kind of 4.4 per cent of group's net revenues.
I'd like to highlight our junior high school settlements, which actually had a particularly strong quarter.
The revenue grew by as high as 118% year over year, that's 2 out of good quality in factories, a competitive advantage that we have faced.
Florida, the swing here and we of course as part of our interactive scenario of design towers or neither.
The 8% of the critical them. So not all of course is that both interesting and effective.
That's spreading to contribute any bicultural K 12 was the 1 billion.
And of course, the enrollment for Gautam of K 12 range 606000.
Average in humans for cash where 2003 hundred in the first of quarter in 'twenty 'twenty, 1 compared it was 2006 hundred in the first quarter of last year.
Quarter over quarter, the number of fleets slightly because we have a wider range of cash levels and localize the classes to cater to virus students' needs.
Meanwhile, new instructors on gaining of courses and gradually growing their class with smaller sites to be on later.
Net revenues from golf to professional growth to 100 Mg twice, a day and let them.
Got it.
6% of group net revenues.
Oh Springs contributed by Gulf of professional well 181 million.
Pay the of course enrollments for golf of professional E 100, instead of about 1000.
Among them.
Related to the classes performed well with the pet enrollments growing 17% year over year on.
On the cost of revenues increased by 102% year over year, 2 of 500 of and 72 million.
The year over year goes well, it's mainly due to increases in compensation for the instructors and tutors learning materials and the rental cost exactly.
GAAP, that's probably the major and seek ways to.
71% down from 78% in the same peer on rate of 2020.
Non-GAAP gross profit margin, which excludes share based compensation.
272 per cent.
From 17, 9% in the same period of 'twenty 'twenty.
The decrease was primarily due to an increase in the number of inspectors and tutors to enhance our service level yeah on the personalized experience.
As well I think in placing compensation for that.
The bulk of localized our services the recruited and trained the over 50 experienced the eastern east sectors and the content development professionals with local experiences.
This summer we will launch localized the courses from junior and senior High school students in Beijing counsel to the job pulling on Shensi sandal exactly yeah. Good quote of students on provincial level.
In terms of Chipping with Florida optimized the quality of our services.
I'm fine tuned our services for free class Chipping infill take the groups of.
The students teach.
I said at the same time guidance can be classified according to whether that first time.
While the law leave on temporary and their relative of learning level.
Therefore, the can better manage our classes and make sure the students.
Parents is even better.
Selling expenses increased to about $2.3 billion.
It was in bad expenses for traffic acquisition will approximately 1.37 billion.
Expenses for branding activities with approximately 300 in 52 million.
And the remaining expenses kind of where labor servers is that correct.
R&D expenses increased by 200 and debt.
7% year over year, Juicy of Hungary, and 65 million.
The increase was primarily due to of your in place in the number of course professionals and technology development personnel as well as the enclosed in compensation force that stuff.
We expanded our investments to recoup the R&D talent as we look to enhance our overall education quality.
Especially of cross learning cereals.
King County.
Okay.
They found the massive amount of data on that'd be correct from our courses.
See you in class quizzes periodic exams homework correction and QA session.
We can provide instant feedback to our new sectors.
The upgrade of the pace of difficulty and accountant of the of courses.
Secondly, with low latency fab T networks, and AI and the way our technology, we aim to create a real time interactive classroom to provide our students weighs on Jim Murphy of a learning experience.
We believe at least that day investments in technology will benefit our company and it will be something because of outrage from many years to come.
G&A expenses increased by 203, 1% to 2 of Hangu at an $18 million.
Mainly due to an increase in G&A head count and the related compensation.
G&A net loss was the 1400 of and 26 million.
Compared with net income.
1 of them doing it and what day of the milling and the splits of quarter of 'twenty 'twenty.
The loss was mainly due to the continued in place in the investments me all of a brand the instructor research and technology, which of all essential to the long term compounded hasn't been competitiveness of our business.
As of March kind of hurt.
'twenty 'twenty 1 we had 2 of 4.9 billion of cash on cash equivalent to.
2.4 billion of short term investments and the 527 million of long term investments.
Though some app to be filed 4.9 billion.
As of March the first the 'twenty 'twenty, 1 I worked before revenue.
Well 1 night the them.
The first revenue of primarily consists of tuition that is collapsing in the wrong.
Net operating cash flow for the first of quarter of 'twenty 'twenty, 1 or 2 point of 1 billion.
The outflow was primarily due to higher branding activity expenses related to improving our market share on the brand awareness.
And you can place the conversation, which includes the antibody that's what we're trying to 'twenty the cash.
Cash outflow to push as long term assets totaled 197 million, including about 101 million for Zhengzhou property.
Before I provide our business outlook. Please allow me to update.
The ensure outgrowth is substantially on healthy all all on the.
Colin level and ensure our on what happened in full compliance with regulations.
In the second quarter, the gradually reduced and later.
Completely terminated the traffic acquisition all fees both on this channel.
Meanwhile, with also stopped engaging new branding contract.
Taking into consideration of the possible impact of all of these south of them. All please don't let the Jasmine all sales leads.
Estimate our net revenue for the second quarter of 'twenty or 'twenty, 1 to be between 2.14 billion and 2.16 billion representing a in place of.
30% excuse of the 1 per cent all of year over year basis.
That concludes my prepared remarks, operator, we're now ready to take the question. Thanks.
We will now begin the question and answer session to ask a question you May Press Star then 1 on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the key the.
The withdraw from the question queue. Please press Star then 2 our first question comes from Mark Li of Citi. Please go ahead.
Hi, Larry I imagined the search for the presentation.
Presentation.
This is on marketing from city, they're on.
On coupons.
Safety regulations from the.
The couple of months, what things have easy compares European per Oh.
Our operations also the rest of the Cortez on all but the next year.
The share more color and.
And also on my second question is Oh.
All of them.
All of ours could you share more color on the all of ours into 1.
What do we see going forward. Thank you.
Oh, Thanks, Mark for the first question about the regulation the impact so we haul being fully the oh opinions on regulating all opposite of voters many institutions in 2018 and whether Oh.
Oh opinions on regulating off the school.
All of my Opex buoy institutions are issued in 2019 in the past the ear and recently the government has issued a regulator of guidance El Salvador X box off all of the education, including first of prepaid at 2 of you shouldn't be management on a Lady twenty-first force.
The department in Beijing jointly released the guideline listing out, especially with like the requirement on all of the 2 of you shouldn't see exactly you can go to all of US, including 2 of you shouldn't see coverage of period of all.
So you shouldn't the clocks and timing and I'll show you shouldn't the monetary they provided by the detailed guidelines.
And second about what type of men.
All companies should of follow the law of the wood housing and the law of on against the on fire of computation.
The Department also provided a leased about 1 of the company should now doing commercials, it's a very detailed list of.
Also of regulators provided guidelines all of teaching counted of course format.
The guy schedule of the Tcl call of vacations, a homework and the other than the rest time exactly so tobacco employment of these regulations. All we have proactively at the bad I used the a a cough department a compliance team within the company. This team consists of all senior management team.
Teams and we have organized the several rounds of the meetings.
Initiate the balance of study all of the new regulations, they've taken down on Noncompliant, although attachment and the jacks 8 hour a homework of procedures and all of the chapter of the Classic guide you to meet the requirement of from off load the regulators the regulators.
And with regard to instructor of qualifications are excited before track the the the paper just certificate of the T shirts, quanta vacations, but also of course tact the.
The tissue of qualifications all lying on the from out of China. So all of my 21st at the same day. It was the was the perpetual you shouldn't the imagine the rule of the central comedian al comprehensively, depending on Luzon launched its 19th meeting. The eventually also approved the opinion of all reducing burden from.
On the homework and I'm joking for compulsory education students that is called on some debt.
So we haven't received the specific accounting yet once the opinion is published we will immediately take measures to comply in all levels. So after school tutoring a ah it's part of the education of industry and education, especially for P. Tau education shoot of focus on this.
Social Ian packet on call that is all of the regulations provided timely unclear the directions for the industry, we will proactively voice of the policy and takes all the actions M code. The monitor are the following the tuitions. They believe only when all of the companies are complying with the government of policy at the highest allow.
All of the whole industry can achieve a lasting how's the honest that's been about the alignment.
Okay Yeah.
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With your non go a number of young Josie adult from Kim if you want it all to hold of bolt on deals.
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She is from people looking what the.
Ginger, each and gosh I think of your Manhattan.
So a year.
What's the well couldn't day yeah.
Our sales enjoyed the.
Debate on that 1 for sure.
The all cause go away I don't mean, the woman Tinder should choose what you all.
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When you go the I'm kinda half year on that as you saw the path to doing a which on a new way legal cum GAAP trunk she's out when viewing the Jack on the HOKA.
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I'll cover more on point.
The small the 4 for 1 application for customized attribution from sedans on Thailand.
The tunnel all of them definitely on the powerful rasp on online education.
Affordable price.
For a wide of secure 4 equal access to the agitation.
Of course, 1 Oh agitation is able to collect data with all of that from the state.
So it's easier, but I don't want other people will want more of a compromise solution.
Yes.
So each 1.
Personally I am optimistic about the future of online education.
And I believe that Oh.
Education of the move to hard with all of them.
Home sales move Oh go ahead of this sector will have a bunch of longtime I'm comfortable with all of them.
And your second question is about the IRI in Q1 still on those.
The Q of the ROI in Q1 is actually lower than the normal and if the like I would call. Our last earnings call. We mentioned that they would like to spend less of.
Our cost of acquisition baggage on traffic acquisition from social platforms and invest more all of you know way from China with such as the last Jimi Mall Python's M C and and even offline kind of so why would the reason Tonight I'll observation days and it's actually the traffic acquisition on so.
The 5 songs actually the Jack down the aisle I level. So let's call. Her we gradually reduce the spending and now we have completely solved the traffic acquisition on social platform. So we expect students to come from out of China in the future for instance through our past the Brandy I can take the trade promotional quarters on the free courses.
They have accumulated it had it on a finite of large student pool, but also of K 12 brand has improved the brand awareness and the reputation over the past of quarters.
So so which we would expect it can go up the organic traffic flow to our E. P. P on the website.
The second as for 1 of the must be photos, we are renting out the explorations of such as adding key referral campaign or providing a benefit to to encourage these are with where it was in the future. We will focus more on education content to help our students and parents.
You actually resolve their questions you know all of the 2 increased trust and Oh, what's the ability of our brand. We are also starting in localized the studio recruitment, we will pull out of more differentiator of the personal lines of the services and content on 2 to 4 to attack of the students to join us.
Oh, Thanks Mark.
Thank you.
Okay.
The next question is from V S. Kim of J P. Morgan. Please go ahead.
Hi, Good evening, Mr. Chen on Shannon on the thanks for taking my question.
Well can I check kind of why and how the.
The address each of your of each of them in a building in the.
Enrollment of this corner I mean the.
It's particularly surprising because it's so the margin of U S. You've mentioned length of paid them not to be twice. The boost convenient end of this quarter wasn't even heard material would be part of the regulatory pressures yes.
And following question was for the on our second quarter guidance could you a breakdown of the growth in the first half of second quarter versus the compass to gauge the impact from the change of marketing that you just made Shaun.
And do you think that this the termination trophy post Ah is temporary or more of a lingering change so you're into the somewhat premature.
True.
Uh huh.
It sounds from each other to the from yet.
But I got on kind of I D.
If I'm gonna do share already on Union the Utah.
So at the yards due the showroom.
I'm sure you'll already on them yet do you think you'd look like the switchable, you'll choose the abuse would you do it accurately.
Our already of our Union the D.
Can you tease with the share and do showroom.
Oh, you proof of National Army the Army and.
A piece of that you do the 2 weeks.
You do the sharp you shy of your friend to assure you of and Oh.
She talked about on the field I sort of argument.
Non women die junior in the abuse of that you do this the whole women the assay.
San Jose on the edge I'm good.
Good day.
Could you do the usual down the road that are trying to assure a chunk of it.
Women Die junior and the sharp initial hold on I'm sure. Some of it all went into I should talk up on the payroll.
Yeah elements of more kind of on that guidance and you end up you do there's a whole no woman.
2 of them Pseudomonas of unusual rule on.
In terms of you saw the force right now.
Oh, Okay. So I've lived with the kind of lead times.
The 4.7 points.
Boy, there's not revenues of Q1 excuse me true.
On a level of loss levels of the lives of all how much from fund in the second half of 'twenty bundle, especially lots of Q4.
So the school falling off the simple quota of 'twenty 'twenty 1.
Part of it is also the 1.
On the.
The founder of lost almost yourselves on the marketing spend.
You can see last Q4 on the self marketing margin of wallet of well lots of December we actually actively.
Into the medical some cost of control on the south and a marketing some of them.
And that of what it's looking all of the growth Q1, because the goes down.
They are not sure a woman the.
Did you do with the changes.
Changing the over the telephone and they're trying to yes, Shanghai shipyard on now Youll year Duncan from within 5 years.
In our opinion the do you achieved with the team to the whole of a come.
From bad Xiaomi, Y'all chianti easier to deal with the whole bunch on bearish on the food bank not the modem. He talks about your page here the ultra woman that didn't get there can you do the with the Shanghai.
The rule.
So I can pull from Google in the fourth the quarter.
On the south of marketing channel.
The casting of provisions on performing channel.
For a pretty high proportion on the cause of the fierce market competition.
The customer acquisition cost of the performance channels.
Hi, I'm talking of the same period of blocking the box.
Somehow also caused the.
The change of all of the field.
Do you find that you're sure a woman's day junior debt, the Egypt crashing oney volume.
On a 10 megawatt phase of women do you use the 2 or the month of young out.
Of the crescendo about when they go on major medical from a copy of a donkey, but could you touch on nausea.
But again the buoys headroom.
1 of the starter I know, there's a chart on who's got true from Tom Good idea on.
The only Vietnam I kind of it.
Pat.
Now on women's I didn't get the did you do a women the R&D the feed.
Yeah somebody of sure thought on at least the Cingal and the only there's only a drip on many of you should they come to your question on on Gotcha.
The women die of junior and the did you do the triple net to shop out all day, yeah structures on the children the dome.
Not just here.
Net loss for the Jewish true yeah.
Yeah, you'll be their tongues you'd get into of women don't.
At the time.
Quickly on this.
Q1, 1 of the first.
The first com, we saw the scallops running off some of the funding.
We believe all of the phone I'm going to throw off some cash for this quarter my math.
Could you maybe it wasn't 1 of the games and box of it in the long time, it will become less of an awesome.
Secondly, core of the physical part of our all the expenses also of reached a historical high.
That will also create long time levels.
Lots of selling points of the quota. We also have plenty of our recruitment and training of important inflection of thank you though.
We will also create volume for all of a long time.
How do you sort of agile share of women die Oh.
So I have initial hold on I'm sure, Oh, Huber gotcha, and showing a good use of cash that we're not going to do the.
The loss.
On the day, which I don't really know sure of champion on a change of the pullback you probably I'm sure a window of Xiaomi will get the pivotal on it.
I'm not sure of all of the job drinking on.
Without your all your prediction on that.
<unk> syndrome, the nation should that from them.
Oh.
Oh, gosh, I don't even before the actual job.
What's going on in the.
March we pass on.
Well into the north of come along the east all we're finding in the <unk>.
Our provision on some form of channel.
Of course momentum we have completely stopped all the funding type of acquisition from the performance channel.
On the 1 who wanted the full.
We will comply with this resolution on the.
On the walls are we will want to be true to that the size of education, we came to of quality pool and growth all of them.
Even amongst the sovereign alone of people see some benefit.
The thing I always the idea of sure all women surgeon neighborhood during the year.
Women's day, you got to use within our Union those show any of our sorry, Josh.
And so the name of throwing caution cut off the type of person.
Hum.
The women product intended to go green more option and on about it in terms of ideas on page into the channel I guess, they don't women from Gotta do go down the street.
What kind of in a woman a quasi of course, you don't don't share.
The women the store she has to what the rest of choice.
The only of any woman back to me in the Donald Trump I Wonder if you go on the journey with a shopping cart Julien the Shanghai cartridges.
Also internally, we are not satisfied with our operating efficiency in the first.
Quarter internally, we have 1 on Bravo comprehensive review on the function.
As of today with our current.
Income from that because I mentioned on the ways our gathering of so many pounds I can move on.
And the following day, we will be.
Table, 2 of which means of whatever we have the luck on the whatever we have observed on the web.
All of them have stopped stop into our operations and we'll bring a set of assumptions.
Yes.
Why do you feel like yard you'd do the Jojo met 1 of their dock yard to do with any of the Joseph.
A copy of the.
Oh excuse me with the.
The 2 shows the Rfps with a clean shot from a squeeze on 1 yet.
1 of them that we think the woman decides beautiful studies that you do with the shoulder will be chartering of accounts a women's I say its on.
So on women put them on the she'll get on on costs.
The docs are you in charge of a shot you should total about when you kept the cash outgo publish of women.
Do you Yakov circling back on the shoe body I always wanted to the Doctor of Doctor unless your body to challenge the Xiaomi already on when you don't have triggered on adoptions of the cash right now so you Wanna.
Actually you did you end up in jail women.
Sure.
You All day excuse me, we don't want it in the.
I think to the judge of the midyear of June.
Jimmy Yes, she does I when I, the mold, Michigan with the vote.
All right.
He doesn't know oxygen.
Absolutely the cells on the marketing of publicly of southern Florida.
In Q2, but Oh formula to the student recruitment of 5.4.
Hmm and the stomach on that day.
On the quarter and it also will affect the bottom of the Q on Q4.
Based on the data we have collected so far we see the operating efficiencies from the second quarter Pos.
Despite the moving noise, especially for the conversion rate and we've taken away from food.
From a.
But then the positive movement.
All 4 of problem with a lot of things on the I believe was definitely 1 of the home to our original belief about operations and we hope and sometimes quite a few of them.
Thank you the profitable growth.
Thank you very much of Mr which is very helpful.
Yeah.
This concludes our question and the answer session I would like to turn the conference back over to Sandy Chen for closing remarks.
Okay. Thank you operator, and thank the how they want the blending of calls per day.
Do you have any sort of questions. Please don't hold me to call him off the pumping work on them have most of your email on all of the.
Bob.
Absolutely the old.
Although we will continue to do the available.
With the squad to all of the news of alert was.
Following lots of new models on the company of all of that's fine. Thank you very much.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.