Q3 2021 Quhuo Ltd Earnings Call
Good day, ladies and gentlemen, welcome to choose who was third quarter 2021 earnings conference call.
At this time all participants are in a listen only mode. After the management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded if you have any objections you may disconnect. At this time I would now like to turn the conference over to your host for today's conference call. Mr. Eric Q1. Please go ahead.
Ed.
Okay. Thank you operator, Hello, everyone. Welcome to Q4, so quarter 2021 earnings conference call. The company's results were released earlier today and are available on our website.
On the call today are.
Chairman and CEO cofounder Barry Bob.
And samples and Richie.
Let's see we'll reveal business operations.
Highlights followed by central who will discuss financials and guidance they will be available to answer your questions in the Q&A session that follows before we begin I would like to remind you that this call may contain forward looking statements made and are the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Such statements are.
Are based on management's current expectations, our current market and operating conditions.
To the events.
That involve known or unknown risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in our forward looking statements further information regarding these and other risks.
<unk> and certainties and other factors is included in the company's filings with the U S. SEC. The company does not undertake any obligation to update any forward looking statement as a result of new information future events or otherwise.
As required under law with that I will now turn the call over to our chairman and CEO. Mr. Alessi. Please go ahead Sir.
Thank you Eric and thank you all for joining our third quarter 2000 <unk> call.
We are pleased to report another strong quarter.
Total revenues grew by 44% year over year, reaching <unk>, one point to one 1 billion.
With our prior guidance all of our streaming to the lives on demand delivery mobility on the housekeeping solutions all enjoyed a continuous strong demand with our top line growth outpacing that whole thing gotcha.
Now, let me walk you through our key business performance in Q3.
First let's look at how do I think it's a revenue contributor so all demand the delivery business. It's a revenue reached RMB, one <unk> 5 billion.
38% year over year exceeding was RMB 1 billion Mark for the first time.
Fortunately that aggregate number one game in auto as well.
159 million up 15, nine year over year, Cisco's, right, who is clearly faster than the industry average showing our ability to quickly gain market share.
Since the impulsivity, largely our quality milder food delivery business was enabled by our strategy to aggressively penetrate into new cities and expand our service network.
By Q3 provided our all demand delivery associates here was solid in the 261 finished so course across several cities national what compelled always wins out within a 6% to 7%. So close that clause 70 cities in the same period in 2020.
In addition, we expand our coverage offsetting ching merchant.
But actually it including supermarkets and restaurants.
So call that new retail business gained strong momentum interest rate.
I'll leave that to the COVID-19 containment measures across China. So it adds a pulse cave catalyst.
For our Cogs in metro areas to adapt to new ways to purchase leaving the first case.
It plays to all those online and get it.
Delivery offline.
This positions us to quote anyway.
New business opportunities.
The new segment.
Evidenced by our community and the growth really deliberate in Georgia, and the explosive growth in Q3 with revenue up 262% year over year.
Furthermore, our expanding network easily enabling shoot well to sustain our leading position business scale and service quality, while also improve our operational efficiencies and our cost structure.
Moving to our housekeeping solutions business closely revenues increased to 538% year over year to RMB $21 million, we thought <unk> be 40 $62 million. We are pleased to announce that our housekeeping solutions has become our second largest.
Slide.
For our mobility business.
This is politics segment continued its strong growth in Q3 with revenues, reaching RMB $34 6 million up 364, 65% year over year on a 35% quarter over quarter.
Besides the share bike ride hailing stockholder to rise this year, we launched our fleet service for industrial customers.
Feeding into intra city and the long distance transportation orders.
We believe this is a very promising business with huge market potential.
Malte reflected our growing brand awareness.
Without a change in market share gains.
Lucrative category.
Let me now provide an update.
David I'll occupancies exciting molecule seasonality unemployment.
Wow, what she enables workers to have multiple jobs, all our platform to optimize the whole wall you can come in.
In Q3, the cumulative number of workers, we engaged in two or more types of jobs on our platform reached about two 10-K to solve several hundred increasing 28% quarter over quarter.
Female workers accounted for 16% over the total growth increasing from 10% the previous quarter four.
For wireless with an average months, leading commvault at least 5000, RMB say represented more than 54000 workers accounting for 51% of total group flat with the previous quarter.
In closing we would like also to highlight the importance of our aggressive investment in <unk> technology platform.
Ted Isaac auditing of our R&D research and development expenses from a year ago. We view this expenditures will enhance our competitiveness by improving operational efficiency and service quality, while expanding our services to more sectors.
A clear, yes tuition with our progress on the technology developed is a rollout this quarter of our new led peaks platform.
<unk>, a new family oriented housekeeping services.
Our goal is tweaks tend to our World Cup housekeeping services capabilities.
Hotels under restaurants to get update to home and the communities.
The sizable wage she has expanded to reach the Chilean R&D level.
The logistics platform integrated competitor and we expect to issue low loss and our sensors to monitor water and electricity consumption, which can effectively reduce the labor cost of property management and improve efficiency in our service quality.
Where does that box you will see smart system by mall property management companies, we will have a schedule stations near communities.
Fully utilize your sources of workers at hotels in the property management companies.
Losing five kilometers of service stations.
Meanwhile, through cooperation with more property management companies. We can also mobilized our existing housekeeping workforce and Hawaii infrastructures to engaging the community housekeeping services, creating a win win solution for all parties.
Yeah.
Finally, let me talk about our continued efforts in driving profitability in Q3.
In spite of all salt paging constraints from the streams of COVID-19 continues <unk>.
It was paid from the competition.
We're still able to achieve I'm D not accumulated net income, resulting in Q3 coming.
Compared with a net loss of RMB 10 million in the same period last year.
Adjusted net income for Q3 was RMB 28 immediately.
Results reflected our commitment to sustainable profitability.
We continue to advance our lucrative business model.
This concludes my prepared remarks, I will now turn the call over to our CFO centered on who will discuss our financial results for the third quarter. Thank you.
[noise] Hello, everyone I'll cover 221.
Okay.
They used to be reminded that our Moscow together here will be an easy unless stated otherwise.
So this quarter. Our total revenues were 1000 to 100, and a $5 5 million, representing an increase of 43.7% year over year, primarily due to the rapid growth of our major business lines.
Revenues from empty miles are delivering solutions were 1000 47 million, representing an increase of 38% from 758 8 million in third quarter authentic 20 forever. It due to the increase in the number of delivery orders were fulfilled.
Result of the industrial growth and our continued penetration and expansion into new geographic markets revenues from mobility service solutions consisting of share by convention is right. He is a free service solutions were.
$34 6 million, representing an increase of 364 points box sets from $7 4 million in third quarter of 2020 forever there due to our enlarged customer base and the service scope for a show by conventional solutions. After the commencement upgrade survey.
Solutions enjoy such a tiny one.
Revenues from housekeeping other accommodation solution its war chest at 1.9 billion, representing a significant increase of 538% from $3 4 million in the third quarter of 'twenty 'twenty, primarily because we're enlarge our customer base for housekeeping.
Accommodations that wishes to include the hotels and the BSP is following our acquisition of a lot of other potential hold.
Cost of revenues were $1055 1 million, representing an increase of 53.2% year over year, primarily due to our business expansion with our kids equates to costs.
Proportionate to our revenue growth.
They create that so hiring expenses at the heart of it.
<unk> cost to expand the workforce.
Platform and to secure additional resources in preparation for the anticipated increase the demand of <unk>.
Our solutions and our continuous business expansion plan in the first quarter General and administrative expenses were $56 2 million representing a decrease of.
A $45 six from 100, and the 3.2 really in third quarter of last year.
This was primarily due to a decrease in share based compensation expenses from substitute Lilly in the third.
Third quarter of last year to $9 1 million in the quarter.
Quarter of this year, primarily because we incurred a substantial share.
Sure sure.
Compensation expenses in the third quarter of 2020 as a waiting such as five the performance conditions of our share incentive awards upon completion of our initial public offering.
Operator.
Clothing share based compensation expenses general and administrative expenses increased by 51% year over year corporate due to the increase in drop cost along with the rapid growth of our housekeeping solutions.
Professional service fees and expenditures in connection with our business expansion o'clock.
Our research and development expenses were $6 3 million, representing an increase of 189 wrong. So email in third quarter of 2020, primarily due to the incurrence of all sorts of expenses to develop a new sub system for our housekeeping solutions.
After the increase in staff cost absolutely enlarge our.
Our research and development.
I T E.
Operating loss was $19 3 million compared to operating loss of 24 million and third cultural all of last year.
Excluding share based compensation expenses, the adjusted operating loss was $10 2 million compared to adjusted operating profit of 48 million anthem culture. After 2020, we recorded other income of $39 2 million compared to other income net of.
32.13rd quarter of 2020, primarily due to the increase in fair value change of investments mutual funds. We also reported income tax benefits of 0.8 million compared to income tax expenses of $15 8 million.
The third quarter of 2020 property due to the lower estimated annual effective tax rate for the third quarter all the targets that you want.
Net adjusted EBITDA was $35 1 million compared to adjusted EBIT of 85 point, what the anthro close on October 20. The adjusted net income was 38.2 million compared to adjusted net income of 61 point. So it would be the anthro culture.
So if you're talking for.
For the balance sheet as of September 30, a ton Tucson to one we had cash and short term investments at the restricted cash of 237.1, there on the short term debt of 142.6 submitting now move to our financial outlook for the next culture further.
Culture outside till 'twenty, one we expect total revenues to be in a range of 1000 50 billion.
Two 1000 to 102 million, representing an increase of 36% to 32% year over year, the forecast to reflect our current and preliminary views on the market and operational conditions, which is subject to change.
This concludes our prepared remarks. Thank you for your attention we are not happy to take your questions. Operator. Please go ahead.
Thank you we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced.
If you wish to cancel your request please press the pound or hashed E.
Yeah.
Once again, if you wish to ask a question you May press star one on your telephone keypad.
Yeah.
Your first question comes from Dillon Heslin from Roth Capital Partners. Please ask your question.
Okay.
Hi, Good morning, good afternoon, where I'm doing well thanks for taking my questions.
First I know some other good economy companies in China, I talked about some weakness in consumer demand from both the Covid variance Delta and then so some flooding and other macro impacts.
Did you guys see anything similar in <unk>.
So has any of those trends normalize for for cube.
Okay.
Yeah.
Okay.
Yeah.
Hi, This is Leslie.
Even if there was a COVID-19 run contained the measurement across the whole of our China, we can see recaptured the business opportunity and we have very strong growth.
So compared with our according to our growth we consider that.
The market for on demand that is already kind of a housekeeping on the pool made it full mobility is still very strong.
We expect that the two pool as indicated by centralizing the.
Our financial outlook, we still expanding that will be hugely mountain I know where we are.
Being things is growth.
Those will be like Spring festival, followed after by Q4, so we mainly focused on the profitability two than in Q4, but we expected that the demand for the service and therefore the revenue growth is still strong. Thank you.
Yeah.
Thanks connected very well.
Your gross margins were a little bit under pressure again in <unk>.
Sounds a bit more from Q2 versus what they were last year how.
How much of that is onetime in nature from some of the platform expenses you incurred to grow in terms of like technology and hardware and then what sort of like it.
Steady state forward gross margin outlook for 14 and beyond.
Yeah.
I.
I would like to be screened on the reason why the gross profit.
In Q3 that piece because.
Uh huh.
We have recruited all balanced.
Preparing for this Q4, because we are already expecting a very strong growth compared with last year and overall, it's about 80% of birth compared with losses. So for this coming winter related to prepared people in one of the speakers do you see it particularly in the Mark.
The labor is.
More.
The supply of labors compared with the loss of a few years.
Relatively limited so we have to get more people on board with us.
Prepared for the Q4 and also acute confused.
We are freezing.
Extreme weather according to the forecast.
For this winter so repair parent for winter equipment.
And.
So food procurement with Q3.
The reason why we.
The cost has been increased in our operational cost to produce one of the investment in the winter recruitment and also in our labor recruitment costs.
Yeah.
Yeah.
Uh huh.
Fisher shipment levels.
I can't give you a ross a picture of the first quarter product gross profit margin, we expect the margin will be better than this quarter.
Thank you.
Got you that's helpful. One more if I may.
Can you.
Sort of talk a little bit more about the multi city deployment.
What's your go to market strategy, there like how do you select which which said I'm not I'm, sorry, not multi city multi service.
Which cities get the multi service and how do you how do you onboard some of your workers onto that platform.
[noise] for multiple job opportunities.
Also we consider the use of multi scenario deployment and tree that two way she sees a national wide on the strategy and we basically will provide a pause.
Workers for multi job opportunities, but for this war could possibly on the seat.
That's not how it looks it's kind of no skill or capability. So we have online trading system.
Yes.
Equipped with insight approaching so with these two system will help them to adapt them to the new job opportunities and help them to get to the income.
Mortgage income BC.
Besides that we have qualities.
Second.
Screaming screening system, Yeah, we have screens he has come off to hold cost since screen system will help to record on.
This is a problem.
Now onto the.
Qualification and skill set.
Look back call it in the system.
Use that kind of like the equity all of them to help us to identify had to merge the people to the right jobs.
No wonder if people in the system being matched.
<unk> provided them with the Chilean program announced kind of encouragement and yes, there will be a better easier and also be encouraged but to walking the new job opportunities to Cogs the weekend.
We keep a.
Well look talking about paintball two Uh huh.
More job opportunities and increasing about 20% quarter over quarter yeah. Thank you.
Yeah.
Yeah.
Great. Thank you that's it for me.
Okay.
Yeah.
Fair enough further questions at this time, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.
Yeah.
Mhm.
[music].
[music].
Good day, and ladies and gentlemen, welcome to choose who was third quarter 2021 earnings conference call.
At this time all participants are in a listen only mode. After the management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded if you have any objections you may disconnect. At this time I would now like to turn the conference over to your host for today's conference call. Mr. Eric Q1. Please go ahead.
Ed.
Thank you operator, Hello, everyone. Welcome to Q4, so quarter 2021 earnings conference call. The company's results were released earlier today and are available on our website.
On the call today are <unk>, chairman, CEO, and cofounder, Barry bonds, and a sample and Rajiv.
Lastly, we will reveal business operations and company highlights followed by central who will discuss financials and guidance. They will be available to answer your question in the Q&A session that follows before we begin I would like to remind you on that on this call may contain forward looking statements made under the safe Harbor provisions of the primary cause of children.
With the lack of 1995.
Such statements.
Are based on management's current expectations, our current market and operating conditions right related.
Related to the events.
That involve known or unknown risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in our forward looking statements further information regarding these and other risks.
<unk> and certainties and other factors is included in the company's filings with the U S. SEC.
The company does not undertake any obligation to update any forward looking statements as a result of new information future events or otherwise.
Except as required under law and with that I will now turn the call over to our chairman and CEO. Mr. Alessi. Please go ahead Sir.
Thank you Eric and thank you all for joining our third quarter 2000, <unk> earnings call.
We are pleased to report another strong quarter.
<unk> total revenues grew by 44% year over year, reaching RMB 1.1 billion.
In line with our prior guidance all of our streaming because it allows all demand.
<unk> mobility on the housekeeping solutions, all enjoyed a continuous strong demand with our top line growth outpacing that whole thing gotcha.
Now, let me walk you through our key business performance in Q3.
First let's look at how our biggest revenue contributor so all demand the delivery business. So revenue reached RMB 1205, being up 38% year over year exceeding was RMB 1 billion Mark for the first time.
Fortunately the aggregate number one game in autos was 159 million.
It came down year over year, this growth rate or we could even faster than the industry average showing our ability to quickly gain market share.
This impressive results in the I'll call. It the amount of food delivery business somewhere in neighborhood of by our strategy to aggressively penetrate into new cities and expand our service network.
By Q3 provided our all of the amount of dealer Association. He always salary in the 231 and there's still of course, a cost center city's national what compelled away is one element of six to seven is so close that clause 70 cities in the same period in 2020.
In addition, we expand our coverage of sudden change marshals did.
But absolutely, including Chikamatsu cynosure restaurants. This so called new retail business, given the strong momentum interest rate weighted.
We believe that for the COVID-19 containment measures across China, so that as a positive catalyst for our Cogs magical areas to adapt to new ways to purchase leaving necessities.
He placed all of those online kind of get willful deliberate offline.
Fifth position was Q well anyway are you capturing new business opportunities, you'll see us burdening segment.
As evidenced by our community and the close very deliberate in Georgia, and the explosive growth in Q3 with revenue of 262% year over year.
Furthermore, our expanding network is enabling shoot well to sustain our lead installation business scale and service quality, while I'll say improve our operational efficiencies and our cost structure.
Moving to our all screen solution business kills me revenue increased to 538, 8% year over year to RMB 21, 1 million, we've got Jim Neal I'm be 40 62 million.
I'm pleased to announce that our housekeeping solutions has become our second largest business line.
For our mobility business.
<unk> segment continued its strong growth in Q3 with revenues, reaching RMB $34 6 million up 364, 65% year over year, and a 35% quarter over quarter.
Besides the sheer bike ride hailing start since July of this year, we launched our fleet facilities for industrial customers.
By feeding into an interest rate on the long distance transportation orders.
We believe this is a very promising business with a huge march the potential.
All our malls will be connected to our growing brand awareness and the resulting in market share gains.
This lucrative category.
Let me now provide an update.
I'll I'll keep this exciting molecule seasonality unemployment.
Wow, what she enables workers to have multiple jobs, all our platform to optimize the whole wall income in.
In Q3, the accumulated number of workers, we engage them into our mall types of jobs on our platform reached about two 10-K, 2700, increasing 80% quarter over quarter.
Female workers accounted for 16% of the total goal increasing from 10% in the previous quarter four.
For wider with an average monthly in Kabul for at least the 5000 to RMB same represented more than 54000 workers accounting for 51% of total group level as the previous quarter.
In closing we would like also to highlight the importance of our aggressive investment to ensure our technology platform.
It is a doubling of our R&D research and development expenses from a year ago. We view these expenditures will enhance our competitiveness by improving operational efficiency and service quality, while expanding our services to more sectors.
A clear your application with our progress on the technology front is a rollout this quarter hold our new led peaks platform.
Including a new family oriented housekeeping services.
Our goal is tweaks tend to our world class housekeeping services capabilities from hotels, and the restaurants to directly to home behind the communities.
Much the sizable wage she has expanded to reach the Chilean R&D level.
So less fixed platform integrated in parallel we expect to issue low loss and our sensors to monitor water and electricity consumption, which can effectively reduce the labor cost of property management.
Improved efficiency in our service quality.
What does the adoption to smart system by more property management companies, we all sit how to sell your stations near communities on a fully utilized you sources of workers at hotels under property management companies what.
What are you doing five kilometers of studies of stations.
Meanwhile, through cooperation with more property management companies, we can also mobilized our existing housekeeping workforce.
Why infrastructures to engaging the community housekeeping services, creating a win win solutions for all parties.
Finally, let me talk about our continued efforts in driving profitability in Q3.
In spite of all saw patient constraints from the streams of COVID-19 contain measures.
It was paid in the compensation.
Still able to achieve RMB 19 million net income, resulting in Q3 compare.
Compared with a net loss of RMB 10 million in the same period last year.
Adjusted net income for Q3 was RMB 28 immediate.
The results reflected our commitment to sustainable profitability as well.
Continuing to tread allows our lucrative business model.
This concludes my prepared remarks, I will now turn the call over to our CFO Alessandra, who will discuss our financial results for the third quarter. Thank you.
[noise] tenacity Hello, everyone I'll cover 221.
Okay.
They used to be reminded that that's all about culture to hear will be an easy unless.
That stated otherwise.
This quarter, our total revenues were 1100, and a 5.5 million representing an increase of 43.7% year over year.
I'm really due to the rapid growth of our major business lines.
News from anti malware delivery solutions were 1040 7 million, representing an increase of 38% from 758.82 million in third quarter of 'twenty 'twenty forever. It due to the increase in the number of delivery orders were fulfilled as a REIT.
All of the industry grows as our continued penetration and expansion into new geographic markets revenues from mobility service solutions, consisting of share by conventional ride hailing industry survey solutions work.
$34 6 million, representing an increase of 364 points box sets from $7 4 billion in third quarter of 2020 traveling due to our enlarged customer base and the service scope for a show by conventional solutions at the commencement upgrade survey.
Solutions enjoy such a such a while revenues from our housekeeping and accommodation solution. Its war chest at 1.9 billion, representing a significant increase of 538% from $3 4 million in the third quarter of 'twenty 'twenty, primarily because we're enlarge our cost.
From a base for Husky and accommodation solutions to include the hotels and the BSP is following our acquisition of a lot of other potential hold.
Cost of revenues World 1050, 5.1 billion represent an increase of 53.2% year over year forever. They do to our business expansion with altice equates to costs.
Proportionate to our revenue growth.
The incremental hiring expenses at the heart of equivalent cost to expand the workforce our platform and to secure additional resources in preparation for the anticipated increase the demand.
Our solutions and our continuous business expansion plan in the first quarter General and administrative expenses were 56 point shouldn't really representing a decrease of.
A $35 six from 100, and so it shouldn't really anthro culture of last year. The decrease was primarily due to a decrease in share based compensation expenses from substitute billing in the.
Third quarter of last year to $9 1 million in third quarter of this year, primarily because we incurred substantial.
Sure sure.
Compensation expenses in the third quarter of trying to you're trying to.
Such as five the performance conditions of our share incentive awards upon completion of our initial public offering operate that excluding share based compensation expenses general and administrative expenses increased by 51% year over year, primarily due to the equal.
<unk>, Inc drop cost along with the rapid growth of our housekeeping solutions and professional services fees at our expenditures in connection with our business expansion plan.
Our research on that.
<unk> expenses were $6 3 million, representing an increase of 180 point knife wrong. So email in third quarter of 2020, primarily due to the incurrence of all sorts of expenses to do you lap that.
You saw system for our housekeeping solutions after the increase in staff costs as the way enlarge our.
Research and development team.
T.
The operating loss was notching pulling story, meaning compared to operating loss of 24 million Anthro culture all of last year excluding.
Excluding share based compensation expenses. The adjusted operating loss was 10.2 million compared to adjusted operating profit of 48 million anthro called her off 2020, we recorded other income net of $39 2 million compared to other income net of.
32.1 in the third quarter of 'twenty 'twenty, primarily due to the increase in fair value change of investments mutual funds. We also recorded income tax benefit of 0.8 million compared to income tax expenses of $15 eight really in the third quarter of 2000.
20 property due to the lower estimated annual it back to you with tax rates for the so called her all the time to talk to you once.
Adjusted EBITDA was $35 1 million compared to adjusted EBITDA of 85 point than what the anthro closer all the time to try to the adjusted net income was $28 2 million compared to adjusted net income of 61 point. So it would be the anthro culture.
So if you're talking.
For the balance sheet as of September 32 times to one we had the cash short term investments at the restricted cash of 237.1, there on the short term debt of 142.6, amazing and I'll move to our financial outlook for its ex culture further.
First quarter Altra until 'twenty, one we expect total revenues to be in the range of 1000 50 million to 1002, a hunter that their 2 million, representing an increase of 36% to 32% year over year, the forecast to reflect our Congress and a preliminary.
So all of the market, but it's operational conditions, which are subject to change.
I think this concludes our prepared remarks that crude for attention and we're not happy to take your questions. Operator. Please go ahead.
Thank you we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced if you wish to cancel your request. Please press the pound or hashed E.
Yes.
Once again, if you wish to ask a question you May press star one on your telephone keypad.
Okay.
Your first question comes from Dillon Heslin from Roth Capital Partners. Please ask your question.
Yeah.
Hi, good morning, good afternoon.
Doing well thanks for taking my questions.
First I know some of the other good economy companies in China, I talked about some weakness in consumer demand from both the Covid variance Delta and then some some flooding and other macro impacts.
Hum.
Did you guys see anything similar in <unk> and if so has any renew those trends normalize for <unk>.
Okay.
Yeah.
Yes.
Yeah.
Oh, Hi, this is Leslie and even if there was a COVID-19 run contain the measurement across the whole large China. We can see we capture the business opportunities we have very strong growth.
So compelled or with our according to our growth we consider that to.
The market for on demand that is already on a port housekeeping Unimplemented full mobility is still very strong.
We expect that the two pool as indicated by centralizing the financial outlook. We still are you expanding that will be huge amount on the way, we I'm being things is growth.
Although there will be a dry spring festival, followed up by Q4. So we are mainly focused on the profitability two than in Q4 by the way you expect paid is that demand for the service on the pools of revenue growth is still strong. Thank you.
Okay.
Thanks.
Secondly.
Your gross margins were a little bit under pressure again in <unk>.
Sounds a bit more from <unk> versus what they were last year.
How much of that.
Is one time in nature from some of the platform expenses you incurred to grow.
In terms of like technology, and hardware and then what's sort of like it.
Steady state forward gross margin outlook for 14 and beyond.
Yeah.
I.
I would like to spring on the reason why the gross profit.
In Q3 that is because.
We.
We havent recruit lagnado stuff.
Preparing for this Q4, because we are already expecting.
Very strong growth compared with last year and overall, it's about 80% growth compared with losses. So far this is coming in one term relates to prepared people in advanced producer this year, particularly in the markets and the labor issue.
More I'm, just tired of labors compared with the last few years.
Relatively limited so we have to get more people on board with us.
<unk> for the Q4 and also Q fused.
We are freezing some extreme weather according to the forecast.
For this winter so repair parent for winter equipment.
And it really.
So food procurement through Q3.
The reason why we.
The cost has been increased in our operational cost to produce one of the investment in the winter recruitment and also in our labor recruitment costs.
Okay.
Oh got it Martin.
Or which are somewhat level.
Ah I can give you a ross a picture of the first quarter, our gross profit margin we expect.
The module B factor of that this quarter.
Thank you.
Got it. Thank you that's helpful. One more if I may.
Can you.
Sort of talk a little bit more about the multi city deployment.
What's your go to market strategy, there like how do you select which which said I'm not I'm, sorry, not multi city multi service.
You said you'd get the multi service and how do you how do you onboard some of your workers onto that platform.
[noise] Oh for smartphones job opportunities.
Also we consider the use of mounting scenario deployment entry that until we see the national wide on the strategy and where basically we are provide a pause of our workers for multi job opportunities, but for this war could possibly on the seat.
I've not heard because it's kind of no skill or capability. So we have online training system.
Yes.
Equipped with inside the coaching so with these two system will help them to adapt them to the new job opportunities and help them to get to the income.
Mortgage income.
Besides of that I know we have qualities.
Yeah.
Second screen.
Screaming screening system, Yeah, we have as Greenfields come on cure cost. This screen system will help to record on the AR is a problem.
Chris Mail.
Modifications on the skill set and all that.
Correct call. It in the system and then we use that kind of like the equity all of them to help us to identify and to match the people to the right jobs.
And if people in the industry from being matched and encourage them and provided them with the Chilean program I know the.
Kind of encouragement and then there will be a better easier and also be encouraged to walking the neo job opportunities to call the weekend.
Keep Uh huh.
Look parking about paintball two Uh huh.
More job opportunities and increasing about 20% quarter over quarter yeah. Thank you.
Yeah.
Okay.
Great. Thank you that's it for me.
Okay.
Yeah.
Hearing no further questions at this time, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.
Yeah.