Q3 2023 Zhihu Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to <unk>, Inc. Third quarter 2023 financial results Conference call.
At this time all participants are in a listen only mode.
After the Speakers' presentation there'll be a Q&A session.
Today's conference is being recorded.
At this time I would like to turn the conference over to MS Irish Lou.
IR manager. Please go ahead ma'am.
Thank you operator, Hello, everyone welcome to our third quarter 2023 financial results Conference call.
It depends on today's call will include Mr. Joe Lin founder Chairman and Chief Executive Officer.
Mr. <unk>, <unk>, Chief Technology Officer, and Mr. Henry Sha, our Chief Financial Officer.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1919 five.
Forward looking statements in Bobby here are based in a certain category.
As such the company's results maybe materially different from the views expressed today.
Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U S Securities and exchange company.
The company does not assume any obligation to update any forward looking statements, except as required under applicable law.
During today's call management will also discuss certain non-GAAP financial measures for comparison purpose only.
All non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results.
The earnings release issued earlier today.
In addition, a webcast replay of this conference call will be available on our IR website at IR Docs Yahoo Dot com.
Now I'll turn the call over to Mr. Henry Sha CFO of <unk>.
Thank you Erez.
I'm pleased to deliver today's opening remarks on behalf of Mr. <unk> founder and CEO of <unk>.
Hello, everyone. Thank you for joining Shaw with third quarter 2023 earnings call.
During the quarter, we made considerable progress on the mountain.
And Jane commercialization across the entire community.
Boosting our total revenue by 12, 1% year over year.
Notably revenues from our membership and vocational training business increased 39, 2% and 85 point, the 6% year over year.
Contributing 45, 7% and a 14th 1% to 2% of our total revenues respectively.
Throughout the quarter, we continued to have loved the quality and the prosperity of the trickle community inspire.
Inspiring our content creators of high quality production, while continuously expanding our user base and the encouraging user interaction.
Our number of menus reached another milestone for the quarter rising to 110, and four 5 million.
We continue to view cost control and operational efficiency is one of our strategic priorities.
Consequently, we witness a five percentage points increase gross margin bring it to 53.7% for the quarter.
Along with a notable 10.1% reduction.
non-GAAP net loss compared to the previous year.
Going forward I won't be dedicated to leading the team to enhance our operating efficiency and to further narrow losses.
Now I'd like to delve into the details of our set of quota initiatives and discuss our progress concerning content creators and to the commercialization progress.
Let's start with our content and are constantly creators.
As of Q3, the accumulated of pieces of content across that Yahoo community reached 743.7 million, representing a year over year increase of 28, 4%.
In addition to expanding our overall content library across various verticals.
Since I would use is kind of kind of metal in shipments in July.
We have specifically focused on spending and enriching content that relates to the two new generation professionals involving get mountains include.
Including that Korea, gross lifestyle and consumption related to scenarios.
Furthermore to foster a community ecosystem we.
We continue to focus on the organic commercialization of all the content that's.
And how about your whole business conference in September we announced the official release of our new commercial accounts and to call a doctor She Yao.
Design flaw credential professionals.
With this product professionals can so questions sure for a doctor's experience and the provider industry insights as experts in specific fields.
Alongside these initiatives, we also enhanced our new generation professional content creators by providing high quality traffic support through our non core influence our incubation plan Huawei in K O P. What's your quad.
Leading to greater and more direct influence on.
Users' consumption decisions.
We also launched.
They have a product that you, who you'll hu Minho program, which can help our merchants and the branch capture a precise market growth potential.
Rising trending topics in this research and the many other factors.
Valuable part of our marketing services.
We also drove the increased operational efficiency and performance across the whole community in the third quarter as.
We continue to treat it.
Elevate our content supply right.
Integrating AI and other technologies.
I'm seeing algorithms and AI powered content comprehension, we were able to deliver more customized in a balanced of content to users, especially content there was a higher commercial value.
Yes.
However, Mr. Adas continue to contribute to immerse value to the community during the quarter. In addition to enhancing our content library with strobe to inspire new content creators to join US while also increasing support for our existing content creators during Q3 the average financial.
Income of content creators, who will receive the financial income from our platform.
Increased by more than 30% year over year with stimulated at both the quantity and quality of their production.
Tivoli engaging in operating activities.
Simultaneously, we provided a support through improve the community chief governance, and our strengths in the interest of protection mechanism.
Additionally, we intensified our craft down pirated content.
To promote the sustainable growth of our dynamic and the fluctuation comes in the ecosystem, we adopted a more active approach to a multi engine commercialization in this quarter.
As a result of a membership it doesn't it's maintaining its extended rates hit a growth momentum and the revenue contribution from the vocational training and business continued to increase.
This is stands as a strong testament to our outstanding content monetization capability and the effectiveness and the resilience of our business model.
Although total revenue for the quarter was RMB 1.0 billion.
12.1% year over year.
Among our various revenue streams pay membership revenue grew by 39, 2% year over year.
Average monthly subscribing members increased by 35, 9% year over year to $14 8 million.
He is a strong revenue performance was boosted by our persistent efforts to broaden content coverage, while improving content to content distribution efficiency.
<unk> products.
<unk> demonstrates a huge potential within the online entertainment industry in China.
Our content and the blockbuster IP have kind of have gotten their broad recognition beyond that Yahoo community.
Amplifying the potential for audience base grows.
T V drama sense overtime adapted from Novo she channels on the platform.
That could change it youku in October to broaden the market up claim.
We believe that to the strong sense of connection and brought up here. After the original stories in Shaw, who was a library offer great opportunities for film and television that patient.
Which will further unlock our content ecosystem grows and the monetization potential for our valuable I teach.
People, who has already accumulated.
More than 100000, Ip's means library, including short stories, and the science fiction et cetera.
There are currently many others, who works in the film and television pipelines and we look forward to sharing more details of these projects once they are available.
By leveraging our technology and operation capabilities. We are confident we can share the massive value and influence of our IP with our users content creators and opinions partners.
We will continue advancing the development of our high quality content and integrate AI technologies from a content creation to commercialization.
Yeah Ray of functions and choice, we have recently launched or improved such as our AI gz powered illustration tool right is just too high.
Significantly boosted our content creation.
Meanwhile, our update here to interactive functions together with our broader and more diverse content categories.
Effectively expanded our use of coverage.
Moving forward, we will continue to strengthen our commercialization capabilities through innovation and exploration to increase our pool.
Moving onto marketing services.
The third quarter, our marketing services, what's do affect it.
The overall fluctuations in the macro environment.
Hi, this is challenging.
Our cornerstone verticals, especially as those advertisers products, requiring a relatively longer decision making process.
With high values have been widely recognized among brands and manufacturers.
For example.
And as we see in our home appliance continue to make solid progress.
Together these increases significantly by double digits year over year, highlighting the effectiveness of our content centric marketing solutions.
To further unleash the commercial value of the whole community is of high quality content.
Traffic and other opportunities for brands and manufacturers.
We have been consistently upgrading our products and expanding content consumption scenarios.
We have enhanced our partnerships with third party E Commerce cloud platform.
How about for traffic data and analysis.
This includes our live monitoring of comprehensive indices, including traffic volume user engagement user acquisition and transaction number.
This enables merchants and brands to enhance their ally through more optimized the performance based marketing.
I'm, a newly launched accounts and that product also helps to maximize the value of the credential professionals and the influence users' consumption decisions.
Furthermore, we continue to upgrade our underlying technology capabilities to achieve that Oh I follow brands through our smart advertisements allocation model and a streamlined order placement of functions.
Boosted by these efforts our advertising business recovery has begun to pick up sequentially in the fourth quarter moves.
Moving forward we are.
Our operational effectiveness and enhance the brand and recognition will enable us to capture the market growth potential.
Moving on shovel vocational training in person as we.
We have been striving to broaden and diversify our program offerings.
Finding and fulfilling users' ski mountain flux stomach and vocational qualifications.
As well as unemployment to skills.
Our well rounded a product and a service spectrum now covers post graduate H entrance examination C of O serious examination, ESG CFA and our CPA examinations language of testing, writing or data analytical skills and agi among others.
As a result vocational training revenue sort of 85, 6% year over year in the third quarter.
We'll continue to adjust our service offerings to capture market grows.
Also both stated the operational efficiency of our vocational training business and our focus on resources on post merger integration during the quarter.
<unk> optimized the alloy in user acquisition significantly strengthened our business product competitiveness.
Furthermore, we remain confident in the opportunities that the AI revolutions green into education industry.
Such we continue to fortify our.
R&D capabilities and integrate AI into products and services to improve user experience.
During the quarter, we released the AI powered a paper correction tool, which sets a new benchmark for user experience in the vocational training industry.
We also expanded our AI technology application scenarios to improve our sales conversion and the use of interactive learning experience.
Our strategic investment in the eye.
To your knowledge is it playing a pivotal role in our developments.
Approach our next stage of growth.
Large language motto July two AI, which we receive regulatory approval in you in early November.
<unk> reached 100 billion level parameters.
Was it regulatory approvals to cure it July two AI can serve more users and our commercial clients.
Another milestone in the process of transforming the community into Chu, who intelligence community.
We believe shy to advantage.
In the ability to naturally combine large language model with specific scenarios.
All of that by superior content understanding and the insurance abilities.
We will gradually opened our large language mogul benefiting our users and partners, while preparing the sustainable growth over the entire industry.
We bought better empower our content creators and users in various scenarios, while enabling brands and manufacturers to reap the benefits and reached their operational targets.
He shot true success and the resilience underpinned by our dynamic ecosystem with a high quality content that is cool.
With progress across content and the commercialization of our diverse revenue streams and this quarter, we are well positioned to capture drive driving healthy and a sustainable growth while enhancing profitability.
Going forward, we will continue to seek and to seize opportunities to empower users and the creators with the balance the tech knowledge, creating value for all of our stakeholders.
This concludes Mr. Gioia his remarks.
Now I will turn to our financial details in the soda quota for a review of our third quarter 2023 results. Please see our press release issued earlier today.
I'm pleased that you announced another solid quarter with accelerated progress on our multi engine commercialization driven by robust growth in paid membership ended the vocational training business.
How about total revenues for the quarter increased with strong resilience rising by 12, 1% year over year, which is in line with our momentum and guidance provided previously.
As we can't consistently broadened and diversified our products and Astellas pay.
Membership revenue for Q3 increased by 39, 2% year over year.
Wild vocational training revenue increased by $85 six from the same period last year.
Gross margin for Q3, so it has expanded by five percentage points year over year to 53, 7% has to be focused on higher margin business and it projects.
Our ongoing prudent cost control measures and operating efficiency enhancements also improve the company's bottom line.
Accordingly, our non-GAAP net loss for Q3 narrowed it by 10 point of 1% from the same period of 2022.
Our paid membership revenue for the quarter was RMB $466 8 million.
<unk> 39, 39, 22% from RMB $335 4 million for the same sheet of rate of 2022.
This increase was propelled by the continued growth of our subscribing members, which increased by 35, 9% year over year to $14 8 million.
Although vocational training business revenue for the third quarter was RMB $144 8 million up 85, 6% year over year.
This organic growth came from new courses offerings provided by always existing business.
Notably our newly launched the online courses for ESG related examination Corporation received excellent feedback from our users.
The remainder of the revenue growth was attributable to the acquisition of NBA Master.
Which is a quite a previously.
Our marketing services revenue for the quarter was RMB 383 million. Despite the overall industry challenges our call.
Strong verticals, including IGN is receipt in the home appliance maintain their growth momentum.
<unk> significantly by double digit year over year.
Gross profit for the third quarter increased by 23 point to 4% year over year.
M B 500, and the <unk>.
48, 5 million with gross margin expanding to 53.7% from 48, 7% for the same period of 2022.
Primarily due to our he has the monetization efforts as well as our improved the efficiency in cloud services and the bandwidth utilization.
Total operating expenses were RMB 898, 6 million for the third quarter compare there was RMB 723 million for the same period of 2000 ton tissue.
Selling and marketing expenses for the third quarter increased to RMB 500, and the city of $4 3 million from RMB 470 778.3.
3 million for the same <expletive> away to other 2022.
We continue to invest in promoting our products and the brand name.
Research and development expenses increased to RMB $249 7 million for the third quarter.
Quarter from RMB $160 8 million for the same period of 2022.
The increase was primarily attributable to our increased spending on technology and innovation as we believe strongly in the potential opportunities in large language model to acknowledge.
General and administrative expenses increased for the quarter to RMB $114 6 million from RMB $83 9 million in the same sheet of 2022.
The increase in rental expenses and an increase in share based compensation expenses from our acquired business.
In this quarter, we incurred approximately RMB 18 billion relocation expenses.
We moved into our new headquarters in Beijing.
Driven by our ongoing efforts to control costs and operational efficiency improvements our GAAP net loss for the quarter was RMB 278 points.
4 million narrowed up by 6.5% a year over year basis.
Our non-GAAP adjusted net loss, which primarily excludes the share based compensation expenses and amortization of intangible assets, resulting from business acquisitions was RMB $225 3 million for the third quarter. It narrowed a bio around 10% from the same period.
Last year.
As of September 30.
2023.
The company had a cash and cash equivalents term deposits and short term investments of approximately RMB five 7 billion compare there was RMB six 3 billion as of December 21st 2022.
As of September 20 <unk>.
September 32000, Twenty's, three we repurchased approximately $18 3 million class a ordinary ratios.
Total of 42.6 million U S dollars on both the New York stock change and the stock exchange of Hong Kong.
This concludes my prepared remarks.
Our financial performance for this quarter.
Let's turn the call over to the operator for Q&A session. Thank you.
Yes.
Thank you.
We will now begin the question and answer session.
To ask a question you May Press Star then one on your Touchtone phone.
If youre using a speakerphone please pick up your handset before pressing the keys.
If 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 today comes from Steve <unk> with Goldman Sachs. Please go ahead.
Hey wait question.
Uh huh.
Sure.
And until Wenger claims on imaging that almost 10 journey with you.
She's a twilio shall hold seven years or two to achieve tried whom listen they go up they are hopeful things always hydrogen with me yeah. It's almost you could see jobs easier.
<unk>, Shanghai that even though the short and sweet.
Thanks for taking my question. So first quick question relating on receiving the approval for Avalanche language model try to AI.
Can management share with us the lead.
This progress of our large language model as far as the future amortization robot. Thanks.
Although this isn't going to be it wasn't sort of sticky on the downside.
Everyone.
Well no.
So a couple of I forgot before I come to the topic.
Sure.
It would put us as a culture now maybe a little.
Sure.
One more thing that you can't have hung in there. So another thing that you don't.
No more opportunity and I think you'll find that I'm working with here.
So even though north excuse me in Arizona.
Yeah.
Thank you Steve for the question. This is.
Did you ask you who to summarize.
Well south of Cushing as a content company that had high quality companies.
And we have made tremendous progress in terms of building out our San please.
In the past I mean, the future our our key focus will be on the application of Howard.
And for different scenarios.
Oh excuse me I saw exactly yeah, he doesn't do anything.
For multifamily.
Yeah, you see your thoughts your thoughts how much in VR.
Sorry, if I'm watching a lot of people that neighborhood you can put in front of us without.
Without much anymore.
Sometimes it isn't.
Well typically speaking our truth.
Q1 hundred Binney never Colorado.
Martin.
And in November we have obtained the regulatory approval for <unk>.
In terms of application internally, we have coverage.
Hydro motto in two different.
Okay.
Uh huh.
They don't need your phone there unless you one more thing.
Isn't it.
Football weekend shocking.
She then either or mentor high school Boston.
Sometimes he says I see I'm, sorry, you got to do.
So Keith I'll, let you.
And she says you know I mentioned some below the historical norm okay.
So you're starting off with the Chinese.
I think you know content comprehensive our large languish motto.
Hum.
Our content search and recommendation.
Operating efficiency for example.
In the past our content classification.
Thanks.
One country now shorten since your week.
In this way, we will enhance our user engagement.
Sorry, if I had this appointment.
I don't know I'm watching thinking God I can't remember, what I think you called it on dog.
Are you starting to somehow find ourselves or something.
In terms of marketing services are not just another housekeeping Q to refine the title of our country.
<unk> architectures and helped us to refine our content product excuse me our commercialization conversion rate.
Oh, sorry, yeah.
Yeah, Yeah Award.
Yeah, well actually one.
One more time working on their.
For me I know Sunshine.
Hello.
But at all of course, the central pool nice to meet you.
So on your own pool for NASA Langley I'll, let you know, but yeah, what's the label.
Our market models are extinguished smarter.
There's a generation of cover pictures I've started if I remember it paid membership.
And in this way, we don't want to be.
Able to interact with the virtual character of our short story and get it in depth understanding after after.
After the.
To start.
Alright, yeah patients.
Oh I'm in New York I'm, working when I say.
No one so that he can he got being she thought I tell what else. So two extrusion agenda once you're thinking.
Absolutely Paul.
Yeah, Hello, Sir shall we deal with the economy.
Speaking of our location our training business, our natural language smarter.
10-Q correctly.
And so how power.
And just one quick one question.
From the students and this makes me, hence increasing efficiency of our replication I'm trying to get that.
Fantastic.
But since I'm used to be on that.
So for me it gives you some fruitful.
They don't necessarily have shown yourself with the golf option windows for salary.
In terms of our content auditing, the lax English market, but the health of our simply smart.
Ooh, maybe identification affinity deductions languished smarter able to future how does he kind of thing and I think he fights noncompliant content of our questions.
You sort of a theory.
In this way to enhance their overall efficiency.
Thank you Richard.
You sound Muslim that's called the <unk>.
Oh of course, you saw the Thomas in San Juan.
Yes.
So to summarize our past its correlation in terms of digitalization.
So for smartphone.
So there's not that much impact and other onetime elements you want to answer.
It doesn't go on doing food containers have been small QQ sounds popular xiaomi.
Yeah.
So it has to have a future plan make the approval the regulatory risk.
The record date.
That's a huge night.
Thank you.
Two more.
Well the function that can be accessed by our users to enhance our content creation and consumption experience.
Yes, so far yes, that's only other tier one.
On the pulpwood side High school, Yeah, it's almost.
Since essentially from them.
All of those are choosing telecom.
You saw on the second part of the summer.
Yeah could you who is a very important opportunity.
And to the R&D.
I star sensors motto and continuously upgrade our basic model.
Yeah.
He will provide better experiences for our users and content creators.
So in terms of commercialization.
Thank you for your question.
Okay.
The next question comes from switching Zhang with C. ICC. Please go ahead.
She can't go any transitional or keep that grocery JP too Jim.
No major retooling you Woodside tissue can I turn to Xinjiang <unk> shower cleaning your way like the fragile Chardonnay, Ashish I am Hong Kong through June.
She got Duke highest package.
Hi, Thanks for taking my question and congratulations on another site in Iraq.
Membership finished with a gun vendors changed John Gosh this quarter.
What's the strategy for this business in the future and health as a company deal generation development chain of Michael a drama series.
Yeah.
Especially if you're on your home was Oh yeah.
I think well when does it go away you'll walk I'm sure she'll do they just don't work.
Oh gosh.
Starting to pay off.
Not only in Chile.
Oh, well a J of the see the.
Oh.
Just because it was supposed to do.
Hold on tissue.
And then just a small chunks all at all.
It's a little it's all of them in the child's watching sheet.
So you'll see what I'm Gonna Jewish health insurance.
Thank you for the question.
This is Joanne you after your home.
You can see that.
Yes, we'll have introduced previously it was the first quarter this year.
Our.
Membership.
Yeah.
39 of them.
And we have accumulated average monthly pay you for.
Sure.
Yes.
And in the future.
We have accumulated.
Audi Audi.
Okay.
Sure.
Almost all of them. So those are the tragic.
Yeah, we're failing to song.
If I'm gonna Jacob.
Jim come on someone's out why if I'm Gonna Chissano me as I took that to I'm talking with citizens.
Just to check on because that's really a choice.
So Michigan.
I mean should the opinion and I'm, not showing me or check.
Check our Starwood Hepatology go sit here.
Yoko it's on the tender.
Well as you know has a hobby not a well known.
Well the tangible changes.
Tasha.
And thank all of our content business there for them.
<unk> paid membership there.
Jim.
Yeah.
And firstly.
Our country.
Commercialization correctly and in October our teach out.
And has this broad market appeal.
Martin.
So anyway, if I may on Shin oak.
So I think Oh.
So if they don't you should Oh sure. So sure that's our attention to switch on the T cell.
I'm trying to see no I'm not sure you're biased.
So I'd, rather just got home gala well merchandised. It teaches about Jay I, just want to you know with all of them.
Joan.
Contest to get all the chicken, Oklahoma, it's how they're going to do so.
So I'll take a chunk of it which I'll touch on that sure.
Yeah.
Well, there aren't going to choose one Michigan anyone's homebuilders shown.
Okay.
Our younger ships.
Huntington constantly improved in terms of our operating.
Technology and innovation.
As mentioned just now with the approval of that sensors market.
Our AI technology.
It comes out.
Tim.
So it's covered picture generation.
Sorry.
Membership.
I'm glad that she thought to take a pause at all it's just single hold on live also choose somebody.
So I'm just checking on the woman that's for sure.
Bushel you take a shot at both of them.
So should we take that.
So I'm going to Asia.
Charlie not to run all of them, but some of that.
It turns out but on the torch it I'm sure you're all familiar with.
Oh gosh, it's your history on Oh, no particular, if I'm gonna choose Okay. You don't want that you won't get it all.
C J.
Or how am I supposed to finance housing nearby branches opened and I saw no need to talk with you.
And another aspect.
Exactly has enough already.
Okay.
You'll have to quit smoking.
That interaction.
Got it.
For example interaction virtual characters.
And in this way, we do quite well.
Hum.
And how soon.
Great.
I'll take that.
That's all you need to take a pause at good times you.
I mean, as you know not just at the old level.
On the data.
So what are you trying to change their I'll call. It a night cause anything today, that's her wall shake out of.
How was sweating people particular horse a clause also I don't know if they actually the Oh yep.
Sure Sean.
Oh sure Yeah, that's right for them.
So not only did you list the Intel chip.
Okay.
Okay.
I would like to mention that we are constantly.
<unk> paid membership.
Your selection.
Not arnie there shortly.
That is developing very rapidly in China recently.
That was it.
Okay.
Sorry, four countries.
Our paid membership.
And we will constantly.
Our media and to help us to enhance our paid membership.
And our shifting emphasis at Henry CFO of the company. So thanks for the question.
I say that when answers to our CEO about short form TV drama.
We believe it's a it's a huge it's a huge amount in market with that.
Brilliance that potential.
And as our CEO mentioned, a Jew, who it was.
Equivalent was a very large we accumulated more than 100000 to.
Our story in the library, so we believe that's a.
The market will recognize our I T.
The scarcity value of debt you why teach English very I'll, just say a unique and.
Booming market. Thank you.
The next crop comes.
The next question comes from Vicky Wei with Citi. Please go ahead.
According to televise Aha, because it does show what the tier one well.
Are you guys sell into Asia.
Oh, so that sorry to elementary question Jacob.
First of all I'll show you that you can call. It's just that the wound up well Melinda will have come down and that's that one.
Thanks management for taking my question, but let me provide some color about the progress of the marketing services business and the performance of the double 11 performance, how should we think of Tenda tenda, although for that but that's it. Thank you.
And you asked me about what they're doing Oh, well, that's not the harnessing VI konkle.
It's also you know.
Oh, I'm, sorry, I didn't get all of them go to check it seemed like there's just a lot more.
So I hope you all should have.
Women don't take a fantastic team.
Hershey.
On the shingle.
Thank you Vicki for a question this is joanne.
Those would be some of the noticeable progress double 11 campaign, our content Commerce solutions.
Have made some historical mark Mark.
For the past definitely 11 campaign.
No no it took our south eastern Gentlewoman's engines, I think feels like Illinois, tethered Columbia citizens on though.
Oh sure.
Oh, so should that typically youll.
I'm not going to take a chauffeur that ginger.
He says that by.
Took a tick tick tick I suppose on a Saturday.
Michelle.
Sure.
Sundar.
So for some of the specifics progress for metrics, we have achieved for the double 11 campaign.
Jordan.
Kevin Perez, our relevant content search volume has increased year over year by about 108% and in terms of our ever selling price of our hum of our commerce products being the ever selling price have achieved more than 1300.
Right.
Oh, Mike Thompson as I'll call it just a.
So what are you sure that.
Here's a kind of a bundle that you were sort of getting off to a good how does it go down and I was hoping to answer essentially is not until she will you go.
But when you talk to you. So there you go.
Jenny mentioned that syndrome.
So I take a Hawaii.
So how many jong Sydney all chicken the chicken the Yelp and your decision to take its own job.
I was hoping and I'm glad to be us Angela.
And in terms of different off.
Our.
Content marketing.
Firstly speaking for our I T Tracy.
Thank you Victor.
This is martin have achieved them.
The year over year and for other sectors.
And consumption and cosmetic products.
Okay.
Well no it's not going to go do something that I know you'll be out soon so I don't see him go.
The so it is a science.
Pennsylvania attention to golf shoes, you're just telling the Jake.
Uh-huh Stockholm.
She is an old mature can't handle.
No Joe.
Hum.
Well, it's always sort of fashion they'll go.
Uh huh.
How did it go.
Single digit God, she got a bead each of Dos Angela children.
And we have established collaborations or partnerships with a lot of.
E Commerce platforms in terms of public data.
Ah the FX and during that definitely 11, Prs that transaction volumes.
Trying to wait for the our marketing services I'm still increased noticeably.
Oh man I suppose about this whole and they've got changes then they go Oh, yeah that probably aren't even on changes that I talked about.
Yeah, all of them and so each of hunger that they're all in on Chinchillas.
Sure.
Just I used to not just to survive.
Consequently, Daniel I'll talk to you about cotton.
Those are strong each other yet to a biologic.
If I go out to a whole another channel drop off.
For some of the copper.
Marketing.
Conversion rates or.
Sure.
The commercial rates.
Marty has reached about 8% so.
So that is to say about 100 up to people who have visited our platform.
Yeah.
Yeah.
So you wont, Virginia N P. All fungible your onshore the Jennie O T T O.
Xinjiang change when he was here yesterday.
So I think I showed you the oh.
So Peter I, just wanted you know kind of a junior good labor.
Take a selfie touches how are you going to synching up so it sounds like.
So I don't have a D a.
She did yeah, we doubt it sounds yeah, that's the one that I'm doing it that's what you should visit.
Yeah.
We have been targeting generation professionally.
Here is why.
One of our key targeted.
And indeed, we have noticed some trend interesting shank, great than probably some of the lifestyle related consumption has increased.
In our platform for example.
Cameras, and washing machines or high quality T I T E.
Yeah, why don't I take a Saturday I mean, it kind of a genesis she's only syndrome, a second job.
They take a particular agenda.
Oklahoma is a context, where it's just all let's see all you all for the junk out there you can push it up.
Didn't necessarily it all up it was real attention to pay for a long time, so I'm going to say, if I'm going to touch it and what kind of a junior that sounds like a media L. D.
Oh, Hello, Jonathan go on with that so what it sounds like she's a proportion of patients with attrition.
Okay.
And another interesting trend we have noted in our content platform how users.
Bear in mind, the introduction of the.
Professional.
In theory introductions out there are different products, especially some detailed matrix.
Yes.
For some of the product okay.
They are different electronic devices.
The cut the.
Transaction volume has almost doubled Archie pouch packaging.
Well I'm not sure if I'm going to take a social you know to hold such a tender total DAU Jacob.
Okay now that you guys showed.
Yeah sure sure no actually the sofa centralization, so wondering if I'm really.
Shouldn't that just finally, if I may end up but on the synergy Apache shell element conduct children the shale on mainland.
Uh huh.
Her club until they take on all that.
Yeah.
Another thing is that thanks to our continuously improve data governance and data operationally different e-commerce platform the capabilities.
The capabilities, that's one has significantly improved and in this way our contact numbers.
Content recommendation kind of anything happened, so converted or translated into higher all right for performance based marketing.
Especially I know, there's some kind of a well that's a good chunk of that same call Shaw whistlejacket patches.
Yeah, No that's right yeah, it sounds like Oh, gosh, yeah, sorry, triple the faithful, but should Oh, I'm, sorry, a J sabo their sugar they saw strong attempting a total tissue.
And finally, the outlook for next year or Q4 of this year.
And for the country of D. C. We have noticed a recovery trend for our marketing.
And he has been a couple of months.
<unk> marketing solution.
Again next year.
A more.
Recovery.
Thank you the next question.
The next question comes from Daisy Chen with Hite Hung International. Please go ahead.
Alright. Thanks.
Funny I've got hot.
Oh boy.
The one piece of glass.
So when they all come out of torture the people the salary sacrifice.
How about just how it works out but he comes off I think Mitchell Betsy.
But people tell you what are the thoughts I'm sure Hi, Alan do you when do you think you need to.
Got what.
I'll check in with myself.
Management. Thank you for taking my question My question about about education business.
Nokia Bachelor two horse, but of course, it will take them out yet.
One year ago.
So okay, that's why I'm sure you'll be it.
Goes right the market is going on over there.
Florida in Mexico.
Yep.
Well. This is it does it take a woman dogs.
When they tell you when or how about you forgot that doing well.
Well I'm not telling you on this just like a tender.
I'm, sorry, I had to build private Jacob passenger.
Oh, just wondering was there some kind of well known.
Do you know somebody so let's just focus on the particular to the Justice Department store channel in China. So it won't be a kind of a sega fish I'm glad that you could send out.
Thank you for your question this is Joanne.
In terms of our revenue from the vocational training business is rapidly growing before this quarter the revenue from focusing on Germany wrong.
85% year over year comparison, thank you rune.
And during the first half of the.
Revenue Oh, okay, so I'm trying to be.
Already comparable to the full year last year.
No I'm not sure Oh, yeah, well know Todd.
Touches them only once a month with over one point.
And you know who that Jacob Sony and issues.
<unk> will materially change or is it a G fast.
Uh huh.
Well, what I signed the two books all ship.
Good to hear from Yeah, downhole tool machine Fujihara.
I thought I saw something that just how kind of you know, let's just use up some of it.
Okay.
The different difference.
The vocational training courses provided by our business is actually serving.
Similar.
All good things at the same target group.
One for new generation professionals and.
Our course is helping to grow in terms of personnel development and career development and education and certification.
Now we're platform.
We already have about more than 10.
Ken.
Of course, as you know platform.
Yeah, Hi, Hello don't go so it will show you also don't trigger Chen Tong showed you the detail.
Oh, God I wait that a bunch of Florida.
But actually you believe.
And we have paid attention to the data in terms of user growth.
Accretion and I will give a more specific example.
Take a.
Defense your door took a J a.
It shouldn't take Oh, you know what he called out and then you take the yes. The deal that's just physics.
With that let's take a decision.
Uh huh.
It's also in the shipyard you enjoyed it.
So what's your feel for the Eagle Golf's U.
Yeah sure so I'm glad to have the fastest home there you go.
Sure.
It appears all I personally don't take tend to agree on the pitch will call and don't forget I think that some of them, especially that you've got parts of it that you got some time.
Yeah.
This culture, that's my personal training that.
Training business has seen.
Testing trend for some of the genre is provided in our platform.
S T or artificial intelligence related courses it's.
It's better cater to the growing demand of the market to fulfill their career goals.
For example.
Related courses have seen almost doubled or tripled and the reason why.
So as I say it but does it go further until it's I'm not sure what's wrong again do you know.
Hi, This is Jake.
Sure. So you know you'll jacobson at our courtyard Soma just wood.
Since it yourself.
Yes.
Yeah.
And we're going out to the future I think I mean, our coupons.
Are you focused on the expansion.
Different kinds of course.
Platform.
Our operating efficiency will be enhanced.
New idea not just a.
So I don't you don't know.
It took us longer than you might have a problem. It's just being put on golf on the Jensen finish and they'll take the children to sort of the general tone. So it doesn't mean, they're not.
There you go goes all shades in St. Joe clubs, you telephones are telling me sounds illustrated to put your cell phones or the thinking yeah.
Let's just go towards getting a $10.
Yeah.
And in this industry would have seemed happier.
In Q.
For the digitalization.
Or enhancements in the industry and what we are doing currently is that we are focusing on integration and operating efficiency enhancements for these segments.
Hum.
The business expansion and commercialization, we are confident that the there.
Investments.
We have made in this segment will be will be will be seen in the future.
Okay. So to conclude it so.
Hum.
We have the vocational training, okay. So I think there's a vocational training business will achieve more than like a 20% you'll be a growth in next year.
There still is that Julien.
Mentioned that we made.
Knowledge of investment into integration that business. So we believe that as you like.
The investment at this stage.
Isn't it.
Question.
The next question comes from Thomas Chong with Jefferies. Please go ahead.
Well, it's not just about each.
Okay. So what have you, but oh, well they've been history one renewable.
GP margin high album satisfying that Tricia.
One is hopefully if I'm, sorry, Joe sure well do a.
But given the timing that he does he turned it thanks management for taking my questions. My question is about margin and the Opex trend can management comment about the outlook for our GP margin as well as the Opex outlook or best friends 10 minutes, you mentioned comments about the timing.
To achieve breakeven.
Thank you.
Okay.
Okay.
Okay, Hi, Tom So I was trying to tell us.
I think it was no questions. So.
Oh Wow, okay for the GP margin that will be somehow.
Yeah don't be more certain.
Certain are more sustainable.
Around the maybe a 53 to 55 percentage points I'd put them out per cent as we are improving our utilization of it is as you may know as we introduced the M D.
Our remarks that that's what we said is that we improve our utilization of the cloud services and our focus on improving the operation efficiency.
Cost control.
And as you can see you have a shift in our revenue structure.
It goes to see the business for example, like a paid membership.
The vocational training business.
Maybe it that much is not as high as the advertisement business.
Going forward, we believe that we will keep that says hey, Ron that the GP margin B C.
53% to 55%.
That's question one.
While OPEC trend that we believe that we are seeing some like opportunities to lower our per cent per cent of our marketing as a.
The percent of our revenue in the next few years because of we are content per platform. So we believe that there is still some room space.
As you do more of like a better cost control in the Opex spending and.
And about the breakeven point that we believe that to what happened in the next year. Yeah. Thank you for your question.
Thank you.
Yeah.
The next question comes from Eileen Lin with China Renaissance. Please go ahead.
Yeah.
Oh and your line is now open.
Okay.
Okay.
Okay.
Yeah.
Yeah.
Okay.
Okay.
Yeah.
Yeah.
Okay.
Alright.
Do you know what I'm, saying there.
Cleanup.
Oh really.
Oh, well digitally in glaucoma.
Sure.
You gave a break even in the June quarter.
Oh, Yeah, no you cool them.
I'm, sorry that either go buy a home that's all behind marketing says Oh, no you can't.
Thanks at the end.
Oh I wish I find myself. Thanks for taking my question I have one follow up question to Tom. The question, Okay, and then you're going to hear more oh quite a good quarter of churn for the breakeven timing and is there any color you can share on the selling and marketing side.
I mean, I guess, it's a Henry thank you for your question.
Because we are in the year end budgeting our work.
Work streams. So I think we will update the markets are our progress about the breakeven point, we believe that it will be somehow.
Some quarter, maybe at what I'm quoting an extra year about is just now kicking in as I mentioned in the previous question. We believe that there is to do something like a central point space to lower our.
Marketing as a percentage of our total revenue in the next year and even in agriculture.
That's my answer to a question.
Thank you.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to Iris for any closing remarks.
[noise]. Thank you once again for joining US today, if you have any further questions. Please contact our IR team directly or PSS financial communications. Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Thank you all.
Okay.
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