Q4 2021 Zhihu Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the G who Inc.
Fourth quarter and full year 2021 financial results conference call.
At this time.
Participants are in listen only mode.
After the Speakers' presentation.
Excuse me.
Ladies and gentlemen, thank you for standing by and welcome to the G, who Inc. Fourth quarter and full year 2021 financial results conference call. At this time all participants are in listen only mode. After the speaker's presentation. There will be a question and answer session. Today's conference is being recorded.
At this time I would like to turn the conference over to MS. Changing do head of Investor Relations. Please go ahead ma'am.
Yeah.
Thank you operator.
Everyone welcome to our fourth quarter and full year 2021 financial results conference call. Joining us today are Mr. Gil Goodrich, Chairman and CEO of <unk>, Mr. Xu Lei, our CFO and Mr. Neil Young adults community business Division and strategic development.
Before we start we would like to remind you that today's discussion may contain forward looking statements, which involves a number of risks and uncertainties.
Actual results and outcomes may differ materially from those mentioned in today's announcements and it's just got here.
The company does not undertake any obligation to update this forward looking information except as required by law.
During today's call management will also discuss certain non-GAAP financial measures.
There's only.
For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Please see the earnings release issued earlier today. In addition, a webcast replay of this conference call will be available on our website at IR doctors without com.
I will now turn the call over to Mr. Sung Lee our CFO .
Okay. Thanks.
Thank you Cindy.
I'm pleased to deliver today's opening opening remarks on behalf of fund me starts Oh, yeah, founder and CEO obstacle.
Thank you for joining.
101 fourth quarter and full year earnings call.
One was a remarkable year of Portugal.
In March we successfully completed our I T O amidst a challenging market environment and the one time to complete the year with robust.
Robust financial growth.
For the year as part of our continual effort.
Its counting quality, we focused on promoting and distributing fulfilling content.
Our content that we believe broader horizon provide solutions and it resonates with mine.
However, with realization strategy supposed to be effective and well diversified with content library for new level.
This enabled a content creator contribute with even greater levels of creativity and a strengthened our capabilities music row in content consumption needs.
Users.
We continue to benefit from our work.
Our commitment to deliver fulfilling content in it.
Has our operating efficiency.
Another year of strong user base growth and a more appealing content ecosystem for visit putter.
Thank you for our user base reached a new high in the fourth quarter with average Emmy you exceeding $100 million and a year over year increase of 36, 4%.
Our comps essentially monetization approach maintaining his real basketball with momentum as revenue in Q4, increasing by 96, 1% year over year to RMB 1.0 to billing and the revenue for the full year, increasing by 118, 9% to RMB 296 billion.
And the contribution of non advertising business increased to $6 62, 9% in Q4.
At the same time.
Average monthly paying members for Q4 further increased by 102% year over year to $6 1 million and accounted for five 9% of total any use.
We believe these achievements are the results of not only the successful implementation of our content centric growth strategy, but also the joint effort of all the parties in the general community.
Throughout the year, we relentlessly strive to enhance the quality of the triple content to better understanding of our content creator a deeper comprehension I'll bet you who comes in.
And we focused on promoting them.
The beauty of appealing content or the content that we believe rather surprising provide solutions and it resonates with mine.
This high center has not only been the benchmark borrowed diverse content library, but also the cornerstone of a long term development of the Triple community.
As of the end of Q4, the accumulative pieces of content on our platform has reached 419 million representing a year over year increase of 39%.
All of which the number of questions and answers equates to 400, it's finding meal.
Representing a year over year increase of 33, 8%.
As of the end of Q4.
Average daily production of fulfilling content has increased fourfold compared to when we first launched the algorithm for most fulfilling content.
In 2020 . One we also adopt a scene that are authentic content operating efficiency, sorry operating strategy to further diversify our content offering.
What does the mine with deepened and refine operations based on the differentiated consumption demands of whereabouts communities across the important calendar events throughout the year.
These include it he can.
He answered from fine China's UC and the college entrance examination in the first half of the year.
Followed by the Tokyo Olympics they.
The OSM employment season, 100000 wide the Nobel Prize.
Plenty plenty one top 100 list.
And the year and reviewing the second half of the year.
As a result in Q4, the consumption percentage are fulfilling content you'd never cornerstone view and other categories, including education increased by 3% compared to the same period last year.
This demonstrates that our choice of appealing content is resonating with students and the young people in a way that meets their evolving demands for our self development and the lifestyle content.
According to a recent users are we.
Over 90% of the monthly active users onto the platform.
A small appreciation for fulfilling concept.
But you have reclamation and a constant consumption coupled with the simulator creating activities.
Sustainably throughout the rapid growth of our concert centric ecosystem.
Yeah.
We seek to become a popular destination for timely content inviting in depth discussion of training even.
Which further encourages a high level of content creation and user engagement.
It is also an important category that is well suited to address the demands of users age of about 30.
And help successfully drive our organic user growth.
As of the end of December the number of users for timely content consumption remains about 40% of total Mou.
Total Diego.
Browsing trending even to answer who has gradually become second nature for our users.
In the fourth quarter, multi dimensional and insightful discussions covering major international affairs, social news and topics related to People's livelihood.
January to quickly answer.
Eating timely content for users these.
These questions generated tens of thousands of answers no more than 100 million page views.
Along with millions of user interaction.
During this winter Olympics, so who users have defended our title I'll be the master of skills and tactics in Chinese two times from Dasher, which gained from the Tokyo Olympics.
And we continue to provide the professional timely and broad based fulfill them content across various permits.
Questions like what are the highlights of the 2022 Beijing Winter Olympics, opening ceremony, and which showed impressive moat.
The way to answer it directly from the opening ceremony operation team.
Including direct cause it's all emo himself on the received close to 40 million page views and a 100000 Apple within a few hours from users.
In 2022 we will continue to iterate, our timely content recommendation algorithm and the related products.
And meet the diverse consumption needs of our users.
During 2021 we further integrated the video content into our library ecosystem through expanding the library of visualized answers providing to facilitate a tax to either or joined the integration in.
In the fourth quarter.
The number of monthly uploading videos onto your pool and the number of video creators increased by 211% and a 32% respectively.
Compared to the same period last year.
Meanwhile, the number of your youth, who consume the region continued to increase and excuse me, 45% in Q4.
In Q4, we have the throughput first highly voted joined equation computation.
In less than four weeks more than 4000 called the greater participation in the competition.
From using the authorized the 2 million pieces of high quality graphics and text content library more than 2000 <unk>.
Original videos video submissions are produced and the receipt.
These works cover dozens of diverse topics, including Syn <unk>.
<unk> career psychology, and extremely imaginative ideas and it received over 200 million views.
We firmly believe that he healthy content ecosystem is the one that made me walk arounds creator and fully support greater engagement across multiple permits.
Moving forward, we will continue to upgrades of our products and our business strategy and optimize our organization structure as needed.
Other inquiry to further encourage creation activities.
Well always our initiatives to further broaden the coverage of the offer.
Fulfilling content electrical platform, we have upheld community culture through proactive operating of the community to government governance system.
In Q4, we strengthened our ability to identify noncompliant content in a calm evolving cyber bully.
Mongering incitement and the wireless against children.
Without with more than $4 6 million pieces of Noncompliant content and spending more than 15000 outcome.
Moving forward, we will continue to uphold our social responsibility ensuring that the community culture of sincerity expertise and the respect and maintain our long term growth.
Our user base continued its rapid growth rates, driven by our healthy and a more diverse content centric ecosystem.
In Q4.
Average monthly I mean use electrical platform reached 100 033 million, representing a year over year increase of 36, 4%.
However, average most of the paying members reached $6 1 million, representing a year over year increase of a 102%.
And our average monthly viewers inquiries by seven 4% year over year.
We have a mess.
Fast growing diverse and highly engaged user base.
Currently the vast majority of users are under the age of 30.
Wow users from second in the lower tier cities accounting for 62% of our user base and our female users accounting for 47 of it.
It is worth mentioning that the organic growth of user base of new users continue to maintain a significant proportion in Q4.
Also our effort in refining operational efficiencies further accelerating the consumption in the relativity in the related verticals, including a baby care the lifestyles and also boosted the growth of our core users H in the 30 years old and above.
It is encouraging to see that the Dia, you'll tell me your ratio in the fourth quarter remained steady along with a rapid user growth and the average miles of engagements increased on a year over year basis.
Great is our one of the most important participants in our communities.
And not only flourish the community is of high quality content by sharing their knowledge experience and insight, but also gain inspiration respect and recognition from the community by interacting with other uses.
That's in 2021 we supported creators by improving their experience within the community launching a serious off of twos and the function and operating incentive plans for them.
For example, we made several upgrades to the fall of function, including an independent path in order to support creators for better attract and interact with followers.
As a result, we see a significant write off average new follower for creators.
One six ppt generation and a joint creation function.
<unk> creators will utilize a more convenient video creation experience.
In addition, however, refined operation tailored for different levels of creators, it's actually encourage their engagements and the multi genre of creation.
Thanks to these initiatives, we saw steady increase in both the average daily activities of the high level content creators.
And they're high quality productions in Q4.
We also saw a rising information and encourage interactions among creators within the community in.
In 'twenty, one we took great efforts to strengthen our ability to attract new content creators in.
In the rediscovering severity.
<unk> had it in Q4 more than 100, and you truthful content creators in Chinese singer that.
Were selected from wherever it's fused including science lifestyle, Social Sciences, Humanities fashion and a psychology.
Moving to a tiny tiny too we will continue to provide effective and the professional support with equator based on their own needs and our specialties.
At the same time, we will further encourage the production from new creators and it continued to improve their retention rates.
By fostering both existing and new creators, we are confident and excited to inject even more what <unk> seen sort of a community ecosystem.
To provide multi scenario content centric solutions to our brand partners.
In spite of many uncertainties in the macro economy during 2021 we have focused on building a high quality content centric ecosystem.
The foundation for a healthy long term business development.
Our total revenue for 2021 reached RMB 296 billion, representing a year over year increase of 118, 9%.
While our underlying revenue structure with further improved and optimized.
As a percentage of revenue non advertising revenue further grow to 68% in 2021 from a 37, 6% in plenty plenty.
Of which content Commerce solutions revenue for the year increased to 32, 9% from 10% in 2020.
Our paid membership business remains stable and accounting for 22, 6% of our total revenues in 2020 one.
Other revenue, which primarily contributed by e-commerce , and the vocational training related business.
By 196, 3% year over year to RMB 155 9 billion.
In 2020 , one we have further improved our commercial country ecosystem through the following steps.
First step was to solidify the infrastructure of the commercial content launching our chief Buffalo and the connecting content greater with business partners, we helped to create or to improve their own monetization capabilities.
Well, let us find the marketing demands of business customers all the way from brand building to actual transaction conversion.
Father tooth like post and you'll you'll shoot.
We're launched to further improve the efficiency of commercial content creation, so as to further encourage content production.
As of the end of December 2021 .
The number of calling the greater who generate financial income through our content and commerce solutions exceeded 15000.
Yes.
Secondly, we have built the hunton pud for brands and merchants through a series of brand content marketing campaigns, such as the auto lap curiosity lap and Zhu whose top 100 list.
Our system, our business partner in guiding their customers well all the journey from brand name awareness to decision, making and finally getting user trials and if a penny visits growth.
In 2021 .
With housing revenues achieved.
Achieved a yearly growth rate of 37, 7%.
Furthermore, we continue to explore various potential vertical content ecosystem to elevate Zhu who is the overall commercialization for the villages well.
Well occasional 20th one of them.
The related content Anja, who platform is perfectly matched with the demands from core users age from 18 to 36 years old.
We call it the second 18 years of life.
Indicating a huge potential commercialization opportunities.
Moving forward, we will continue to improve our technical.
Capabilities to <unk>.
More user favorite it's paid educational courses and the related content.
Leveraging the advantage of our dual brand.
On top of a rapid revenue growth. We also continue to improve our operational efficiency.
By adopting a smart smart and irrational spanning strategy and a continuous technology improvement plan.
We achieved both quality and effective customer acquisition.
And further develop our commercial ecosystem by leveraging a rebound in user base and the Salt Lake technical infrastructure.
Our acquisition per member acquisition cost per Additionally, I mean, you for full year 2021 was approximately RMB 60, which remains relatively low compared to the whole industry.
In 2022 we will continue to recruit excellent R&D talent.
As we work to improve our recommendation algorithm strengthens the construction of our data system.
And solidify the technical foundation that drives the ongoing development of our communities.
Meanwhile.
We will further he has chico's brand name awareness by creating powerful IP.
She has a and adventurous evening with answers and Chinese dying to yellow plate and the annual juku content greater ceremony, interestingly enough way to achieve our growth across brand building and high quality user growth.
As of December 'twenty, 'twenty, one cash and cash equivalents term deposits and short term investments were RMB.
Seven 4 billion, which gives us strong financial resilience.
Our future development.
Stepping to 2022 to prioritizing the healthy development of our community and the hearing to a referral feeling content center, we will be able to further improve the experience for users and the creators.
And to inject our whole community was both trustworthiness and a sense of belonging.
For example, all.
Showing the improvement of product and the functions across training topics top searches live streaming video users, we're able to enjoy a better consumption experience for timely content.
There is a another case for content related to the Winter Olympics and the ongoing Russian Ukrainian War.
Where high quality discussions, we're aggregating across whereas permits.
Clothing graphic on tech life streaming video.
Having users who consume content according to their own preferences.
We committed to further upgrading our recommendation algorithm to ensure that fulfilling content can be introduced to users more accurately.
Our creator community sites.
Where we will enhance our initiatives to refine operational efficiency.
To help create or a cheap there goes both end user recommendation and our financial income.
We believe a healthy and vibrant community will lead to a more efficient and organic user base growth.
In addition to the above we will continue to explore more commercial commercialization opportunities within west verticals in our content library, and our mall, our users' diverse and embarrass you man.
Our emerging vocational training business is a good example, which kind of help us who both further diversify our business ecosystem and have contributed to drive our long term growth.
2022 may prove not to be an easy year. However, we believe that we are all well prepared in a better position us for the journey.
As we continue to unlock the value of our unique content centric ecosystem.
Benefits from growing scale, we will continue to enhance operating efficiency and the financial health as well as to fulfill our responsibilities to society.
This concludes the remarks from Mr. Julien I will now talk you through our Q4 financial performance in a little more detail.
As discussed we achieved another solid quarter of performance in Q4, 2021 .
The unpredictable headwinds.
In the fourth quarter, we recorded a total revenue of RMB, one 2 billion, representing a 90, 641% year over year increase.
This increase benefited from a very unique content centric business model.
Ah, we're fulfilling content library with further extended.
The diversified and Cooper.
This contributed to the continuous prosperity of our community and also.
To the sustained growth of our user base.
Every time, they use reached $103 3 million in the quarter, representing a year over year increase of 36, 4%.
Of note in Q4, 2021 .
Non advertising business, which mainly include condo commerce solutions and paid membership.
Joyce accelerating well.
Contributing.
62, 9%, but total revenue in Q4 compared to the 38, 6% in the same period last year.
This demonstrated not only the remarkable success of our content centric monetization model, but also the scalability of our content commerce solutions as well as the robust growth in demand for our other services such as paid membership and vocational training.
In Q4, the revenue contribution of our content Commerce solutions increased to RMB $367 3 million, representing a year over year increase of 380 plus 2%.
Our client base, our Ccs became more diversified compared to the same period in 2020.
We are also excited to see that more and more content creators are empowered by our diversified commercial platform and the tooth such as cheese platform.
As of the end of Q4, the number of content creators, who have joined our chief baffle nearly increased 50% compared to the number in Q3.
Our paid membership contributed RMB 200 zero 8.8 million to a total revenue in the quarter.
Representing an increase of a 100 per cent compared to the same period last year.
At the end of Q4, our average monthly paying members reached $6 1 million with a payout ratio of five 9%.
But the basketballs rates of this business line was.
Solid solidly underpinned by the increasing what's reality within our creator community.
Meanwhile, our advertising business achieved solid growth in Q4, despite the weaker market.
This quarter advertising revenue recorded RMB, $377 8 million, representing a 18, 4% year over year increase.
Which the display based advertising grab a greater percentage revenue from E Commerce Internet services F. M. C G consumer electronics in the vocational training or the top five contributors.
Bolstered by our diversified our content library and highly engaged community. Our advertiser funded it is natural and effective guided their targeted customers during the whole decision making process.
And to build the franchise and the long term.
Other revenue mainly.
Comprising of a vocational training and e-commerce .
Year over year growth of 231, 5% one 5% in Q4.
Increasing to RMB 65 4 million.
It is worth mentioning that our vocational training business had a very strong quarter and achieved multiple times year over year growth.
Setting to 2022 .
Bridging to whose deep understanding of our users' needs and our brand named reclamation combine that with further increase operational efficiency. We believe these new business lines will be able to continue to achieve strong growth momentum.
As a U D C based content platform, we enjoyed the benefits of having a healthy gross margin of 47, 1% in the fourth quarter and 52 parts 55 safety.
Safety, two 5% for the full year.
Meanwhile, we have been investing in building a healthy ecosystem in order to broaden and enhance content offerings for all of the other users.
Ever will be very conscious of maintaining high efficiency on our cost structure.
Our total operating expenses of RMB $855 1 million decline as a percentage of total revenue on both a year over year basis, and a quarter over quarter basis.
Our operating expenses in the quarter were primarily compared also composed of the sales and marketing expenses and our investment in human resources.
Seven by the abundant constant coverage and the diverse Thompson permits electrical platform the organic growth of new users continued in Q4 and effectively promoting the health healthy in the long term development of the general community as a whole.
As a result, all day about our non-GAAP adjusted net loss, which primarily excludes share based compensation expenses was RMB 248 million in the fourth quarter of 2021 .
Well focusing on improving our cash flow management as of December 2021 the company had a cash on cash equivalents term deposits and short term investments of RMB, seven 4 billion compared with RMB three 1 billion on December 20 funny.
So I will conclude with our overall financial outlook looking to the first quarter of 'twenty to 'twenty two the company expects total revenue to be in the range of RMB 720 million to RMB 740 million.
Please do note however that the about a low although reflects two whose current and the preliminary estimates that maybe subject to change.
Okay.
This concludes our prepared remarks.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you were using a speakerphone please pick up your handset before pressing the keys.
At any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
The first question comes from Yun Young Joe with C. I C C.
Please go ahead.
She said according to who can see change in the year, we always know when you're going to shoot.
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I'll go and teach you acquire you could check with English and hydro.
Sure to your children to nail that showing you hard she said to me where you just rounded to chalk well what did you find Asia. Thanks.
Thanks management I have two questions and first one dates about how that state management think of the strategic direction of the company.
In 2022.
And the second question is regarding the content ecosystem.
Initially for the content to create a creative side and for.
For the Oh commercialization.
Commercialization, so what other potential enforcement and Dr trying to you're trying to fix.
Anyhow.
Okay.
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No.
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To listen to us.
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I know you know, but if you don't tell me all.
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Foods itself well empowerment thing it just all the audience I'd tell you what I see.
Surely shouldn't Peggy.
Okay.
Yeah.
Thank you very much this is D I'm sorry from CEO , Mr. Julien first of all in the year of 2021, we have made some concrete achievements at the current stage.
In terms of content sensor for acquisition as a sense of fulfillment S. L. S medium upgrades and based on this foundation, we will push our strategic focus for the year of 2022 to ecology first.
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Right.
Okay.
What do I mean by ecology first well first of all first of all it means that there are things that we have to accomplish on top of the user number increased and also revenue number increased what is more important than higher up on the top of our hierarchy or the experiences of concentrated.
The a word of mouth of consumers F. L. S D satisfaction level of the community atmosphere. All of these factors that I mentioned will be a test to whether or not we have done a good job and of course. The numeric. All kpis are also very important and we'll try to also hit those.
Targets and also reduced the loss for the year.
Yeah.
And so it goes from there and especially a woman.
Jacob.
Tempting.
Yourself.
Yes.
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Paul.
It's all mobile.
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So let me too.
Yes, yes.
But they're not done.
And it seems like you can say what that means.
Okay.
Second in terms of the product and operations that we have tied to unleash the full volatility off the community that we've built.
Perspective, as I said before a good ecosystem focuses on a couple of things first is multimedia and also mao-tai forms of media and multi forms of monetization and the third is and to end and how it is elaborate a little bit more indeed.
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Yeah.
By multiple format and mediums and then that by using different mediums, we'll be able to cater for different needs of our users in different scenarios. It's just like I'm, having a dinner you have motor you'll have a U S. S. Doj empathize, there and then and the men course, and then followed.
What some decided at the end.
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Oh, I'm, a simple Nathan I'll pushes all almost all right seem Schneider.
Okay.
By multiple ways of monetization I mean today D are popular.
Create a population they're a diversified go both population and we as a platform we have to be adaptive to cater for their needs and experiences rather than having the creators coming to us and adapting to our platform.
And finally, the anesthesia as supposed to just put.
Listen that's almost an awful thing.
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I'm going to have more photos hunger Goldman My Cup.
Since it will come down.
Okay.
And last but not least by end to end I mean, we have multiple types of creators at different levels and we would want to make sure that our platform is running efficiently and quickly so as to create a close loop are afraid those creators to be able to.
Finished home country patients and make money. So according to this are three key factors that I. Just mentioned, we do have a lot of rooms for a further upgrades.
Yes.
Some of our switches to be honest with you.
One of the things that Apollo puts.
It looks at all of them in Shandong.
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Let me.
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All right.
Okay.
If you know Gee, who well you may noticed already that we have made quite a lot of changes to our product last year and through this process. We have also got quite a lot of learnings and this year. Our plan is to further reduce the level of difficult now as for the content creators and also to increase.
The consumer experiences to have further iterations of our product and also at the same time, we'll try to continue to allocate more resources to those who are continuously creating content that are bringing higher sense of fulfillment.
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Yes.
So do you know how quickly it all she says and dwell.
Haven't even farther out.
Okay.
The third point I want to make is that everybody knows that only by having healthy content a healthy commercial products.
Which could we able to have y'know continuous revenue and created new Italy valuable useful values and as you can see that we have a very nice to see C. S. Impressive performance I'll, just say, yes and around Ccs. This year. They are many many more you know changes to production.
<unk> to come in a year a 2022.
Yeah.
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Okay.
The last point I want to make is that we had already fought out to our business and vocational training this year.
Due to the beliefs that we think gets that goods come a supplementary to our ecosystem and we just discovered that the demand for taking exams and having a vocational training is really huge and the size and so quite impressive.
Impressive and therefore, we will have somewhere our progress to be made in vocational training and by working with our education partners. This year.
Yes.
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She was around the deal.
I mean, it's I don't want to be.
That's the figure something out.
So as I said before ecology first is oh for strategy and we believe that by implementing the strategy well will have improved the numbers for years to come and I will direct my second question to our two new job.
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I'm on the phone that once you Patricia Shlomo Dror can walk on border tax even got often job.
So this is Neil Jones the.
Oh, Chief strategy officer responsible for the community.
For the content creators and sense of social feeling we will focus on the concentrated especially the original content creators by creating a by giving them a bit.
At our creation tools are used to our products and our technology and to support them to have multi medium format of a it's a I'll say expression.
So as to help them what better.
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Sean do you know when you go back from the photos.
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Secondly, it's about the traffic and the benefits are.
Benefit to innovation skins, especially for those who are with us for a longer time than a cornerstone areas. We would have some muted skins in terms of benefits and no one had to supplement with the cheese I system and he implant system that we already have so as to benefits those are great.
With a better traffic and better monetization.
Yeah.
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Because I know I'm, I'm, calling job easier needle yeah coming out.
Don't go to the meat, but you know women and what that I know you don't want them.
Once you Dolphin powertrain you handle that you guys have you guys thought so you've put only cope with Hong Kong for the combo job who are.
Cool fun box could you soon transport him the shelter at home now you call me on the Trust you to Charlie as you go along.
I don't know why.
Call Me and tell me. It's the only reason you don't see all the trends look like if you're only looking at home.
Okay.
Standard F sensor fulfillment, we had already completed the plane are preliminary and the reason for that and we have deeper understanding as to the content and capacity of our content creators. So that we'll be able to have a higher efficiency and better control of cost intensive.
The supply Oh for contents to all the way up to the distribution of the content.
And for those content creators from different areas and at different levels, we'll be able to create a cellphone better areas of communications to our algorithm improve there. So that will have a boat squares and also clubs.
So hold on here you charge or so Oh, let's see I'll tell you actually don't vote found out Oh I'm.
No question Valeo says sometimes.
Well you know one of them could you don't say I suppose you guys almost homebuilder choices all the homemade all women people don't they don't start with Goldman and Virginia announced tissue dog's life. What are you on that one of the things out of home to Oklahoma payroll.
By way of summary, just as our CEO , Joe Yes that will continue to have a ecology first and continue to help all contemplated to support them for their content creation and to give them some very nice monetization mechanism.
Okay.
Yeah.
Okay.
Yeah.
Yeah.
Are we ready for the next questioner.
Yep.
Thank you.
Next question comes from Natalie <unk> with high Tong International. Please go ahead.
Hi.
So that's one nah, oh, well not to ask you to Halloween Shaoguan conchology cash you're doing so and I think that Jonathan do you change that.
We got just enough Glen gate and that's why they didn't happen. They are just talk what's I'm trying to understand absent that one call.
He doesn't want golf Genesis yesterday, you know Glenn.
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Gaucho way ducking weak national nationally.
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Oh Jewish on Covid.
Uh huh.
Oh sure I'd, just use the phone calls and digital contango with the culture and she doesn't want Washington.
No matter, what your Chilean that showed a firewall message at all changed.
Nat Cat.
So just kicking myself they think.
So I have good evening management, thanks for taking my question.
My question is related step out the online advertising.
We don't see that uptake.
Hum.
Hi.
No I just want to know.
Just wondering what's the latest Chang and I look for it.
For the online advertising industry in China and for.
More specifically for our traditional Baghdad, So let me state that and 60 and 50 as et cetera.
Also our board does how does it fit in that she in terms of the Hum.
How's that.
Just wondering any particular, particularly stronger or weak Oh, yeah, you face two filling up with I guess, I'll see and house wholesale like social for that and Oh something comes up that Oh, yeah.
After a couple of times at Q, how should we think about your yeah. It goes what the other person business Oh, sorry, that's just yes. Thank you.
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Yeah.
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Yeah.
Yes.
Hello.
Hello, Yes, we can hear you Grace. Please go ahead.
I think so we have problems hearing the crop can we check.
Just one moment please.
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Yes.
Excuse me of Rieke joined the speaker location.
Please go ahead.
I believe the answer to our MS. Ruth question.
Yeah, Yeah, Yeah, Hi, Natalie.
Ola comes up I think you've been living can you talk a little bit about loyalty, but you've done well, which means that with Ikea.
Well I used to go to Chicago, how many of those either.
I don't think you'll come back we'll miss his young triple double and go into a lot of them that would be an easy on the T shirt.
These attrition that just isn't that big a hole in the kidney in terms of a Jaguar and if there's anything that tricia should be cooking with a degree in telling you that converted at that time.
The 2 million children about your though like what you did you can do you can show you saw in the difficult times that those who.
Actually I was going to each other you can shop off that just won't go into a lot easier now the ardian a CAGR a woman kind of cuda and Joe you talked about a year ago, if I sum it up the other children.
Yeah, like I said, what I can tell you.
Hum in the pole shot I'm triangle nudging the latest impact she found her yoga user name and we teach with them. They don't yeah bulk when they also true that the Chinese are cool yeah that you told them that they don't impact you know you could be at times, you don't they won't even against us.
The tender Chile.
Oh no no no no you to point that out though you didn't also choose sure you go she could Tricia the median though so Egypt I just don't want to have all of the Onvia.
Of course.
Thank you very much not only for Ya and I for your question. We actually have made a two observations in terms of Oh. My advertisement recently first is because of the uncertainty surrounding macro economy deep holiday as well as deregulation.
The the general environment. Indeed, it has make some negative impact on our clients marketing budget in the past couple of quarters, you'll see that the total size of their marketing budget had probably dropped quite a lot and the second is that we noticed that there is a major structural change to the marketing.
Budget of our clients more and more much more and more marketing budget are switching from traditional media platform. Two words content platforms that has a better and higher quality of our content, including our content community.
Therefore, our clients they have focused more and more on making long term investment in building their brands and also to make our accumulations of high quality content assets and doing this are switching.
Or are shaped also about structural budget shifts community.
Content community high quality content community like Q4, we are actually benefiting from this trend.
Okay.
I think one town Oh, yeah, well, if I can a woman who's either yes, Josh I'm, calling golf challenge cannot cope with Oh Jesus you know he's like look I hope. They don't tell you can sell it you send them to go too far because if you don't go through those and talk.
The CIT ample Ventura County that I know I'm kind of Altria and trained younger and younger consumers with passenger you know it was about tusa the Indian consumer patterns of basketball.
Okay.
So against this backdrop, we see that you see as plus our first high Smith S. M modal flies its giving us a very nice growth for instance, a year on year growth for the whole year 21 increased by 180% and fourth quarter year on year increase was 88%.
Okay, that's pretty amazing when you go and when I kind of Dongguan generally I just wasn't sure what you're getting at there Bobby pop on top of that choose to go to get them to what you shouldn't do that too.
You shouldn't do they usually go home.
Can you like kind of a quango, that's in Dallas, Virginia and button push it.
Okay.
Structure wise, we see advertisement is still the number one source of revenue. We had in Q4, we had a faster growth rate than the industry average and for the whole year, we reached around 40% in advertisement increase.
So I'm going to take a ticket was already known so I'm getting all that kind of thing that won't all of those will not go quite a junior like on Sydney about looser or just how they're going to go is what we're gonna jumpy, though so that should get you. So that's why I'm, calling out all the Hong you assemble that kind of what kind of potential quite still I don't know if there's this one might be true, but those will not be telling us, particularly those with no triple.
So that's you got to go it may only use whatsapp, but that's only the only do computing.
You can find in Oakland kidney hopeful that you could help me telling me I was hoping to just.
As long as you go into that kind of.
In terms, so said Brent.
Advertisements, we see that it's growing even faster at about 50% for the whole year and then as a percentage to total online advertisement revenue. It is also growing and getting a bigger part in terms of flared. He calls we see E Commerce F. M. C. G suite C electronics and automobile.
Our growing very significantly wishes very unique characteristic to Zhu who because we believe that this too.
Yes, they are closer to the consuming scenarios if they use us and also closer to peoples are consuming decision point.
So Ccs as you go through like kind of the number of generally I should say Todd that you go through the Vermillion Chi Tung could you do with them down. So did you saw that in the 10 years, you'll talk a little bit up and down.
Carlos you see I suppose I'll, let you go coakley mobile app, which will be a hindrance.
C. C. S is still the biggest twice so crest in Q4 increased by four times and for the whole year about six times Ccs is a highly scalable and it is highly garage I already answered I believe that this has been proven to.
That's a ton of it look when you're done I kind of just a team that has shown a chance you Tyler Johnson alert them there because he has the CAGR. So you are sure there'll be more why not soon so did it also do the work you do to Tricia team had a tornado that swell in downtown La.
You don't kidney.
In terms of the Saudi content creators are they by using the cheese quite fun they entered into our ecosystem for RCC as them be able to scale up significantly and meaningfully so that they can have a better income by the end.
For the fourth quarter, the total number on cheese platform as 15000 all creditors.
Hum Oh, yeah, well the ships will find out kind of tie the shutdown Kobe there do we show you that shoots milk Eugene. So you go to a woman she would have a year, where you came out with something that was pulled down you're that's pretty efficient.
So telling you that kind of did show cause I mean, it won't go forward or I should say does feel it so long forecourts their dog eat dog food home Shield Gambia.
We're benefiting with better and better what else mouth in terms of the associates. We are seeing those the number of brands and merchants are working with us on their race vertically, we see e-commerce and our personal care are the two biggest.
Verticals, whereas our Internet service and vocational training are showcasing very nice driving force.
Google and it's also kind of Guangdong, Zhejiang Tcs Julian Dashwood House, Yeah, that's Ohio that kind of gives out won't quite show. She took it he says he oh Gee gioia patient you'll see the agenda you know that's a lot of trouble dabashi she's owner does not want to pay.
He says he came in the CEO Q on Q, that's awful, but like I said.
Josh without having to do so even if we don't question Linda.
Okay.
So overall speaking in for Bose advertisement and C. C. S. We have a e-commerce , so we see vocational and gaming at office categories puts it at their accounting for 80% plus of the total.
I have her husband revenue and then D E Commerce Internet service automobile and three six quarter on quarter, they registered a growth rate ranging between 20% to 60%. So that's very impressive.
Mhm.
Joe are you in the Sunbelt I find them when we come out to eat turnkey those who know who he bought Regal total bamboo shoot up when we think about tenure like huh Shoeboxes ideally should only wish to meet your goals.
Is that too high as well some of you all got to get them done.
Okay.
For the year 'twenty 'twenty to Q1.
Note that the growth will be over 50% year on year and for the whole year, we expect it to be 60% to 65%, which will be higher than the industry average.
Okay.
Okay.
Well, but I think those things are yet to go.
Rhode Island, Natalie photo Lindsay.
Okay great.
Good Dan.
I look at the what it seems like she's not going away, but how do you get visibility into.
In terms of California cold.
Yeah.
Yeah.
Stay tuned here like kind of what kind of yellow womanhood junkie trend you're in there. So that those who are who is that I'm really says it all.
That's really what kind of Dallas, where you play it won't tell me if you all called out you go get them done, but do you see asthma, you'll see run until lays it out and you go through like Oh, Jacob Mongolia tissue, the sometimes Oh, yeah, No G suite, which I'll, maybe I'll quit especially from China.
Yes, it did yes.
You know I should say that you guys did in <unk>.
Jesus M D E Shaw.
Okay.
Got it got it yeah I look like.
For the whole year outlook, we're talking about 60% to 65% growth, which will be higher than the industry average and intensive contributors size Ccs will be probably the biggest country better by taking up about one third of the total following up with a you know advertisement in paid membership also on the rise.
Okay.
Yeah.
Hmm.
Are you ready for the next question please.
Yes.
Thank you. The next question comes from Steve <unk> with Goldman Sachs. Please go ahead.
But he's doing yoga even gone.
There's all of which have been bumpy usual by Eagle Glen you could Oh, yeah, Yeah, you bet.
We bought T O.
Sports and why do you come home and go down.
Yeah.
Shouldn't tragical syndrome.
Yeah.
Oh I'm sorry.
So you wouldn't.
You called out.
So you go in the Navy ships.
So the hurdle once you book the whole go to Boston legacy issue.
So I totally get it.
Are you.
Usually it depends.
<unk>, please peter to the mix.
If you could go with that market.
Okay.
Okay I'll briefly translate myself, thanks management for taking my questions. So I have one question on behalf of Piyush, who buy a regarding although vocational education, so understand that because at some stage, but could management share with us some high level thoughts in terms of.
Actually manufacture or create.
High quality educational content only sustainable basis, so except for the content that's already on our platform how would we actually corporately with our industry partners is that going to be done through M&A or is it going to be created by all the partners and then will be the publisher education clunky.
And last one would be could you please share with us some of the data points such as the book.
Well, it's a mix as far as the market contracts.
Yeah.
How does your go to sort out.
Hmm.
Well it was just in Hollywood.
Hum.
One woman when when kind of the two.
Sure Justin.
When I talk to each other to go up when we just to call it for yourself.
There's also no kind of given the soil.
At home.
Hum Schistosoma shows that some girls so truly.
So there you go.
Hum.
Somehow either kitchen, yeah, so Joe.
We like how much is if somebody industry leader Omega T C.
Hum.
Joanna Parsons cool just the huge holdup shoot I'm shocked that whole teams have done well.
What do you know what I've got the.
Well, while it's a nice way to go to.
And then how does the math work sure take a woman.
So let me turn the call you made them, though you'll corridor.
Yeah, you would have all you can tell what all you might want to yogurt as Europeans stuff a me too right.
They want to actually use them in.
On the take out you go meet with them Okay.
Okay.
And Sir from C O Joanne well actually for the vocational training business are in our mind. We believe that this is a real demand generate head genuinely we think the community as we see it over the years and we see that there is a mid to long term a long tell education education system that is.
Gradually taking shape in our community from the demand generated from all uses them by way of example, our in our Masters examination part, we see and actually if a D. A U off about a 1 million or even higher than 1 million. So the deemed.
<unk> is real and huge.
Yes.
Or should I say, good and then once you've seen a pause.
Well, it's you know truly effective.
So good on a thoughtful question and I just want to go agenda, how should someone doesn't ship Hollywood. So that's your favorite answer here.
He was a quota.
Limitation, that's a triple lashes, she gudrun hsinchu coastal CMO.
So a piece of jewelry hotel agent here in New York with Hydro.
Yeah. So you know.
A woman when we have tried to go Pee volumes. Once you go when you got the idea that young who does.
Good Thiago Shabaniyah I'd just touch on your you.
So Gavin Shabaniyah, what dose without fans, who are Yokohama, yet I should touch on Gerhard to us since all too well.
Okay.
Okay.
Okay.
Okay.
Thank God.
Yeah.
Sure.
Okay.
Yeah.
As I said before the contract is something we see in our.
Yeah.
Just on Oh, we think that the people who are very active so if we want to pursue like our professional certificate. Some use it as a forum to talk to like minded people and they also talk about their hobbies their skills and how they can achieve a certificate or improve their skills in our community. So we could provide.
Great test support to those people based on our content.
Okay.
Oh, Okay, all right I'll take Uh huh.
Yeah.
Because it's you're talking about so just somehow.
Sure.
So China is Oh, Gee, I'd tell you that you're going to call it.
So that was I guess what are your ocean that she is the first time he said.
Okay.
Okay.
We believe such a community that we have a beauty already is a very good job platform in order to generate an ecosystem specifically for education and community can serve as an engine. It's an entrance for people to take up you know the contents with regard to education that they required.
Yeah.
Yeah.
What's just no matter, what what what between now and so you're going to tell you. The see the food you can I'm a bundled Steve go home to help you.
I can tell you what do you see that our young person knows them dollar for dollar tree in school and all of them kind of once you go out and I kind of change your initial assistance yellow compete highwall b doesn't that doesn't really jumping out.
So oh woman arguments that shouldn't cause either our unions, because you're going to have pilot envy somebody lives or I swear to god easily when my but I found that I wasn't yet, especially on when we kind of already I'm.
So Steve I'll show you if you don't quite so he can talk about what we do know that Q1 is a whole people who deal with NBC comedy, which hold what I'm doing a town cheap.
An example of a year long term like how are you going to do a lot to put on Keytruda nursery shot okay.
Okay.
From CFO Mrs. So way in terms of numbers education vocational training in 2020 one the size increased by five times year on year and in terms of percentage is still rather small at the beginning so we put that under the category of other income. However in the year of 2021 in Q1, we saw that.
Increasing to more than 5% and for the longer term what believes that they have a potential of taking up about 20% of our total revenue.
Hmm the whole mechanical until they forgot actually won't let me do forgot the bulk or culturally what's you know patient allegedly I'm guiding you to talk.
Total rescue people thought that culturally it when the Mauritania forgot like I'll call, Yeah, Oh, the CAGR since a couple of damage that you know cause you Lena well, maybe needles don't CFA C. P. A F R F.
Yeah, Yeah, No G O U.
Yeah, Yeah and patient about what's your because you know you can go out the window.
Okay.
In terms of the types of product or category yourself for that that we have developed for training.
In terms of exam, we have masters entering examination, we have civil servant examination in China. We also cover a different type of professional skills, such as CFA or CPA or F. Our and we also have how business English training or writing skills training.
Okay, but you know some people so sure sure well I mean as you went to a metallurgical will show you can kind of strip out at.
Ah Tony Jake Oh, I'm going to tell you that we made on windows, there's sometimes some oh.
A couple of dry bulk Rodriguez CEO shoulder AR Auto show you. The CRM is at home even though.
And I realize we're going to see a general Triple T. I'm not telling you the cushing price through to them they'll tell you that don't know, how you're seeing sort of single engine with people accordingly.
Yeah.
In terms of our infrastructure our beauty, we had already completed the mid office required for education for instance, we have those CRM education system that we'll be able to cover the whole value.
At that point from content creation and distribution of content. So in the future either we can run it ourselves operate it ourselves where we can acquire a partner and very quickly and efficiently incorporate that business into our own system as an infrastructure.
Okay now don't you do without and they're gonna see even in the Golan to you I mentioned the blue the chunk of the Cushing on social E mail send Peter push them dark without even being packaged food to go to Chicago business partner to close your sandwiches cinzano since you've been CEO tea leaf.
And also specifically to Stephen's question. They fly all the classes that we have for the time being our one Pete instead of three P. But maybe there will be three piece in the future.
Well this is Jim.
Oh, that's okay.
We don't want to guess.
Did that answer your question.
Okay.
Thank you.
That concludes today's question and answer session. At this time I will turn the conference back to Jingjing due for any closing or additional remarks.
Thank you operator, thank you all again for joining us today and if you have any further questions. Please contact our IR team directly or TPG Investor relations. Thank you.
Thank you. The conference has ended you may disconnect your line.
Yeah.
Yeah.
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Uh huh.
Yeah.
Okay.
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