Q3 2023 Jianpu Technology Inc Earnings Call
[music].
Speaker 1: Good day and welcome to the Jane Doe Technology Inc. 3rd Quarter 2023 earnings conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.
Good day and welcome to the J D.
<unk>, Inc. Third quarter 2023 earnings conference call.
All participants will be in.
Should you need assistance. Please signal conference specialist by pressing the star key followed by zero.
After todays presentation, there will be an opportunity to ask questions.
Speaker 1: To ask a question, you may press star, then one on your touch tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Lee Ting at FIR. Please go ahead.
To ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two.
Please note. This event is being recorded I would now like to turn the conference over to Julie.
Please go ahead.
Speaker 2: Thank you, operator. Hello everyone and thank you for joining us today. Our third quarter 2023 earnings release was distributed earlier today and is available on our IR website at ir.jianfu.ai as well as on PR Newswire services.
Thank you operator, Hello, everyone and thank you for joining US today, our third quarter 2023 earnings release was distributed earlier today and is available on our.
Our IR website.
Yeah, Jennifer that AI PR.
PR Newswire services.
On the call today from Gen. Four technology, we have Mr. Devin co founder Chairman and Chief Executive Officer, and Mr. Oscar Chen Chief Financial Officer, Mr. Yeah, We're talk about operations and company highlights followed.
Speaker 2: We have Mr. David Yeh, co-founder, chairman, and chief executive officer, and Mr. Oscar Chen, chief financial officer. Mr. Yeh will talk about operations and company highlights, followed by Mr. Chen, who will discuss champions such as morning nut biscuits, scientific SATs, and scientific studies research too.
By Mr Chen who will discuss our financials.
Speaker 2: They will all be available to answer your questions during the Q&A session that follows.
It will all be available to answer your questions during the Q&A session that follows.
Speaker 2: Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and current market and operating conditions and are related to the current situation. I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1995 and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and current
It would be good I'd like to remind you that this conference call contains forward looking statements.
I'm a section called one E of the Securities Exchange Act of 1934 in the U S. Private Securities Litigation Reform Act of Nike Magnify. These forward looking statements are based on management's current expectations and current market and operating conditions.
And then related as it relates to.
Speaker 2: events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results or performance to differ materially.
Event, that's involved not unknown risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control. That's risks risks may cause the company's actual results or performance to differ materially.
Speaker 2: Further information regarding this and other risk uncertainties or factors is included in the company's filings with the U.S. Census Bureau.
Further information regarding this and other risks uncertainties or factors is included in the company's filings with the U S. S E C.
Speaker 2: The company does not undertake any obligation to update any forward-looking statements.
Company does not undertake any obligation to update any forward looking statements.
Speaker 2: as a result of new information, future events, or otherwise, except as required under applicable law. Finally, please note that unless otherwise stated, all figures mentioned during the conference call are in IMB.
As a result of new information future events or otherwise, except as required under applicable law. Finally, please note that.
Otherwise stated all figures mentioned during the conference call I E I N b.
Speaker 2: It is now my pleasure to introduce our co-founder, chairman, and the chief executive officer, Mr. David Yeh. David, please go ahead.
It is now my pleasure to introduce our co founder Chairman and Chief Executive Officer, Mr. David Yes, David. Please go ahead.
Speaker 3: Thank you, Liting. Hello, everyone, and thank you all for joining us today. As a company dedicated to embracing new technology, we are constantly exploring ways to improve our productivity and efficiency.
Thank you Eddie King Hello, everyone.
Thank you all for joining us today.
So a company dedicated to embracing new technology, we are constantly exploring ways to improve our productivity and efficiency.
Speaker 3: Today, I'm glad to use a trained AI assistant to walk through my CEO script.
Today, I'm glad to use a trend.
Just want to walk through my C O script.
Speaker 3: The next part of my presentation will be delivered using an AI generated voice that has been approved by our team and myself.
The next part of my presentation will be delivered using AI generated a voice that's supposed to being a true, but our team and myself.
Thank you everyone for being with us today.
Speaker 4: The macroeconomy showed signs of improvement in the third quarter, as GDP grew 4.9 percent year over year, surpassing market expectations.
The macro economy shows signs of a promise.
Third quarter.
<unk> grew four 9% year over year, surpassing the market expectation.
Speaker 4: Total social financing, a broad measure of credit and liquidity in the economy, continue to increase sequentially, standing at RMB 372.5 trillion at the end of the third quarter.
Total social financing, a broad measure of credit and liquidity in the economy.
The increase sequentially standing at RMB $372 five trillion at the end of the third quarter.
Speaker 4: We also observed that the steady uptick in retail sales growth reflects a certain degree of resilience in the economy.
We also observed a steady uptick in retail sales growth reflects a certain degree of resilience in the economy I.
Speaker 4: Meanwhile, the overall recovery of consumer confidence was relatively slow, and it would take some time for the stimulus, such as the current accommodative monetary policy, to have a noticeable effect at the grassroots level.
Meanwhile, the overall recovery of consumer confidence was relatively slow.
And it will take some time for the stimulus such as the current accommodative monetary policy to have a noticeable effect at the grassroots level.
Speaker 4: We have made progress in carefully navigating this challenging environment since earlier this year, and continue to diligently execute our diversification strategy. Our total revenue has witnessed a commendable increase of 12.0%.
We have made progress and carefully navigating this challenging environment since earlier this year and continue to diligently execute our diversification strategy. Our total revenue has witnessed a commendable increase of 12, 8%.
Speaker 4: year-over-year to RMB 830.5 million during the past three quarters.
Year over year to RMB, <unk> $30 5 million during the past three quarters.
Speaker 4: Thanks to our capital light platform model and our relentless efforts of efficiency improvements, ROI reached 133.7% for the first three quarters of 2023, and our loss from operations narrowed by 65.0% to RMB 42.9 million.
Thanks to our capital light platform model and our relentless efforts of efficiency improvements all ROI reached 133, 7% for the first three quarters of 2023, and our loss from operations narrowed by 65% to RMB $42 9 million.
Speaker 4: In the third quarter, our total revenue experienced a decrease of 4.9% year-over-year and 10.5% quarter-over-quarter, mainly due to certain headwinds and challenges on our businesses.
In the third quarter, our total revenue experienced a decrease of four 9% year over year, and 10, 5% quarter over quarter.
Mainly due to certain headwinds and challenges on our businesses.
Speaker 4: For example, banks continue to tighten their marketing budget, particularly on credit cards, given the softening consumer spending and rising delinquency.
For example, banks continued to tighten their marketing budget, particularly on credit cards, given the softening consumer spending and rising delinquency.
Speaker 4: However, as we successfully executed our strategy to prioritize efficiency over scale, we managed to achieve a significant efficiency gain with a higher ROI of 141.2% in this quarter.
However, as we successfully executed our strategy to prioritize efficiency over scale well.
We managed to achieve significant efficiency gains with a higher ROI of 141, 2% in this quarter.
Speaker 4: I will now take you through our key performance highlights for the third quarter.
I will now take you through our key performance highlights for the third quarter.
Speaker 4: First, we continue to benefit from our platform model with rich product offering and network effect.
First we continue to benefit from our platform model with rich product offerings and network effect.
Speaker 4: We leveraged our deep industry insights, market-leading technologies, and diversified business model to maintain steady revenue growth since the start of the year. Revenues from loan recommendation
We leveraged our deep industry insights market, leading technologies and diversified business model to maintain steady revenue growth since the start of the year.
Revenues from loan recommendation.
Credit card recommendation.
Speaker 4: Big data and system-based risk management and marketing and other services accounted for 30 percent, 38 percent, 8 percent, and 24 percent.
Big data system based risk management, and marketing and other services accounted for 30%, 38%, 8% and 24%.
Speaker 4: respectively of our total revenues during the first three quarters.
Respectively.
Total revenues during the first three quarters.
Speaker 4: We also expanded the reach of our AI solutions beyond the financial sector, addressing opportunities in adjacent categories.
We also expanded the reach of our AI solutions beyond the financial sector addressing opportunities in adjacent categories.
Speaker 4: Through these services, we have equipped our financial partners, as well as non-financial partners, including the partners offering telecommunications, e-commerce, and lifestyle products and services to explore new operating models in the context of digital transformation.
The services, we have equipped our financial partners as well as non financial partners, including the partner's offering telecommunications e-commerce and lifestyle products and services to explore new operating models in the context of digital transformation.
Speaker 4: Revenues from marketing services and other services saw a year-over-year growth of 72.1% during the first three quarters of 2023.
Revenues from marketing services and other services saw year over year growth of 72, 1% during the first three quarters of 2023.
Speaker 4: Starting from the second quarter, banks have refined their credit card-related strategy, further tightening credit policy, enhancing risk management, and placing greater emphasis on the quality of services provided to existing credit card holders.
Starting from the second quarter banks have refine their credit card related strategy.
Further tightening credit policy.
Lansing risk management, and placing greater emphasis on the quality of services provided to existing credit card holders.
Speaker 4: As a result, banks further cut down their marketing budget on new card issuance, providing challenges for our credit card recommendations.
As a result banks further cut down their marketing budgets on new card issuance.
Providing challenges for our credit card recommendation services.
Speaker 4: We have proactively streamlined our acquisition channels to stay agile in response to the market and to align with the policy adjustments of banks.
We have proactively streamlined our acquisition channels to stay agile in response to the market and to align with the policy adjustments of banks.
Speaker 4: Additionally, the industry where our big data and risk management services are situated has been affected by recent regulations. Due to these impacts, our total revenue in the third quarter experienced a year-over-year decrease of 4.9% to RMB245.6 million.
Additionally, the industry, where our big data and risk management services are situated.
It's been affected by recent regulations due to these impacts our total revenue in the third quarter experienced a year over year increase of four 9% to RMB two first $5 6 million.
Speaker 4: Second, we further enhanced our efficiency and improved our cost optimization.
Second we further enhanced our efficiency and improved our cost optimization.
Speaker 4: Despite the fluctuation in revenue, our ROI experienced a remarkable 5.9 percentage points increase year over year, reaching 141.2% in the third quarter.
Despite the fluctuation in revenue.
Oh, hi experienced a remarkable five nine percentage points increase year over year, reaching 141, 2% in the third quarter.
Speaker 4: We continue to integrate various AI tools into an internal one-stop portal used across all our departments.
We continue to integrate various AI tools into an internal one stop portal used across all of our departments.
Speaker 4: These tools have consistently streamlined our work processes and boosted our operational efficiency.
These tools have consistently streamline our work processes and boosted our operational efficiency.
Speaker 4: At the same time, we continue to diversify our marketing and acquisition channels and successfully signed up a number of strategic partners in the third quarter.
At the same time, we continue to diversify our marketing and acquisition channels and successfully signed up a number of strategic partners in the third quarter.
Speaker 4: Through our continued efforts to balance growth and efficiency, our cost of operation and cost of promotion and acquisition decreased by 30.5% and 7.0% year-over-year to RMB 14.6 million and RMB 167.6 million in the third quarter of 2023, respectively.
Through our continued efforts to balance growth and efficiency, our cost of operation and cost of promotion and acquisition decreased by 13, 5% and 7.1% year over year to RMB, $14 6 million and RMB $167 6 million in the third quarter of 2023, respectively.
Speaker 4: Effective cost control measures over research and development expenses, as well as general and administrative expenses, have led to a decline in our fixed costs by 5.4 percent, reaching an M&B 48.8 meeting. As a result of our continued efficiency gain and cost optimization, our net loss was RMB 6.4 million in the third quarter, achieving 74.5 percent improvement year over year.
Second cost control measures over research and development expenses as well as general and administrative expenses have led to a decline in our fixed costs by five 4%, reaching 48 three to eight meeting.
As a result of our continued efficiency gain and cost optimization. Our net loss was RMB $6 4 million in the third quarter, achieving 74, 5% improvement year over year.
Speaker 4: Third, we remain committed to cultivate our company culture. Last month, we celebrated our company's 12th anniversary by organizing an outdoor sports day with a live show of rock music, which marked the first gathering of all our employees post-COVID.
Third we remain committed to cultivate our company culture.
Last month, we celebrated our company's 12 month anniversary by organizing and outdoor sports day with a live show of rock music, which marks the first gathering of all our employees post COVID-19.
Speaker 4: Looking back into the past 12 years, we have experienced remarkable achievements as well as challenging obstacles.
Looking back over the past 12 years, we have experienced remarkable achievements as well as challenging obstacles.
Speaker 4: Thanks to our commitment to the corporate culture, the unwavering collaboration and mutual support of all employees have brought us to where we are now. Our culture also encourages being open-minded and embracing changes and innovation.
Thanks to our commitment to the corporate culture, the unwavering collaboration and mutual support of all employees have brought us to where we are now.
Our culture also encourages being open minded and embracing changes and innovations.
Speaker 4: Inspired by such culture, an AI hackathon event has been successfully organized to pursue new avenues of AI development.
Inspired by such culture, and AI Hackathon event has been successfully organized to pursue new avenues of AI development.
Speaker 4: Encouragingly, a number of projects and initiatives from the event are undergoing continuous development and some of them have entered the internal testing phase during this quarter.
Encouragingly, a number of projects and initiatives from the event are undergoing continuous development and some of them have entered the internal testing phase during this quarter.
Speaker 4: Moving forward, we will remain committed to our vision of becoming everyone's financial partner and foster a culture of continuous learning and innovation.
Moving forward, we will remain committed to our vision of becoming everyone's financial partner and foster a culture of continuous learning and innovation.
Speaker 4: Our unwavering dedication to being user-oriented will drive us to consistently deliver services and products that deeply connect with our customers.
Our unwavering dedication to being a user oriented will drive us to consistently deliver services and products that deeply connect with our customers.
Speaker 4: Before I turn the call to Oscar, let me briefly discuss the macro environment and our business outlook.
Before I turn the call to Oscar let me briefly discuss the macro environment and our business outlook.
Speaker 4: The Chinese government has taken proactive steps to address the current economic conditions characterized by lingering uncertainties and the need to strengthen the momentum of the recovery.
The Chinese government has taken proactive steps to address the current economic conditions characterized by lingering uncertainties and the need to strengthen the momentum of the recovery.
Speaker 4: The continuous implementation of stabilization policies has yielded encouraging results, driving a recent acceleration in growth. We believe that the government's recent measures to stimulate demand and stabilize the property market will act as positive catalysts, injecting new energy into the ongoing economic recovery.
The continuous implementation of stabilization policies has yielded encouraging results driving a recent acceleration in growth. We believe that the government's recent measures to stimulate demand and stabilize the property market will act as positive catalysts injecting new energy into the ongoing economic.
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Speaker 4: Furthermore, we are cognizant of the immense opportunities that come with the advancement of AI and will target to develop flexible and low-coupling AI solutions with comprehensive coverage in AI product architecture.
Furthermore.
We are cognizant of the unmatched opportunities that come with the advancement of AI.
And we will target to develop flexible and low coupling AI solutions with comprehensive coverage and AI product architecture.
Speaker 4: We will continue to execute on our strategy for driving the digital transformation of the financial and other industries, empowering our ecosystem partners with digital technology and artificial intelligence.
We will continue to execute on our strategy for driving the digital transformation of the financial and other industries empowering our ecosystem partners with digital technology and artificial intelligence.
Speaker 4: I will now hand over to our CFO , Oscar Chen, to run through our financials.
I'll now hand over to our CFO Oscar Chen to run through our financials.
Okay.
Speaker 5: Thank you, Davey, as well as Davey's AI system, what is a great, great job.
Thank you David as well David.
What did a great job just now.
Speaker 5: Hello everyone, as David mentioned earlier, we have made progress in carefully navigating this challenging environment.
Hello, everyone.
David mentioned earlier, we have made progress and carefully navigating this challenging environment during the third quarter, we continue to diversify our business mix in.
Speaker 5: During the third quarter, we continue to diversify our business.
Speaker 5: our operational efficiency and optimize our cost structure.
Improve our operational efficiency and optimize I'll call it the structure.
Speaker 5: In the third quarter, the total recommendation service revenues decreased by 9.6 percent year-over-year to RMB 191.2 million. Revenues from loan recommendation services maintained a strong growth momentum.
In the third quarter. The total recommendation service revenue decreased by nine 6% year over year to RMB $191 2 million.
Revenues from loan recommendation services maintained strong growth momentum.
Speaker 5: increasing by 25.3% year-over-year in the third quarter.
Increasing by 25, 3% year over year in the third quarter.
Speaker 5: mainly driven by a 48% year-over-year increase in the number of loan applications to approximately
Mainly driven by a 48% year over year increase in the number of loan applications.
Approximately $7 4 million.
Speaker 5: Revenues from credit card recommendation services decreased by 31.8% year-over-year, mainly due to that certain bank credit card issuers tightened their credit policy and lowered their marketing budgets since the second quarter.
Revenues from credit card recommendation services decreased by 31, 8% year over year, mainly due to that.
Certain bank a.
Credit card issuers tightened their credit policy and the Lord of their marketing budget.
Since the second quarter.
Speaker 5: Credit card volume decreased by 27.3% year-over-year to approximately 0.8 million.
Quite a bit of volume decreased by 27, 3% year over year to approximately 0.8 million.
Speaker 5: Revenues from our big data and system-based risk management services decreased by 24.4% to RMB 18.9 million in the third quarter of 2023.
Revenues from our big data in our system based the risk management services decreased by 24, 4% to RMB $18 9 million in the third quarter up 2023.
Speaker 5: from RMB 25 million in the same period, 2022.
From RMB 25 million in the same period 2022.
Speaker 5: The decrease was mainly due to the deconsolidation of a subsidiary and to a lesser extent a gradual shift of our business model of data-based risk management services towards the cooperation with the licensed credit reporting agency.
The decrease was mainly due to the deconsolidation of our Elfa subsidiary.
And to a lesser extent, a gradual shift alcohol business model off database, the risk and risk management services to walk the cooperation with the licensed.
Credit reporting agencies.
Speaker 5: Revenues from marketing and other services increased by 41.3% to RMB45.5 million in the third quarter of 2023.
Revenues from marketing and other services increased by 41, 3% to RMB.
45.5 minutes in the third quarter up 2023.
Speaker 5: from RMB 32.2 million in the same period of 2022.
From RMB $32 2 million in the same period of 2022.
Speaker 5: primarily due to the growth of our insurance brokerage services and other new businesses.
Primarily due to the growth of our insurance brokerage services and other new businesses.
Speaker 5: This is a strong testament to our success.
This is a strong testament to our success.
Speaker 5: in applying our advanced AI technologies and strong digital marketing capabilities beyond the financial sector into adjacent categories. Let me now move on to
In applying a lot about AI technologies, and a strong digital marketing capabilities beyond the financial sector into adjacent categories.
Let me now move on to costs and expenses.
Speaker 5: Cost of promotion and acquisition decreased by 7% year-over-year to RMB 167.6 million in third quarter. The overall ROI for recommendation services and marketing and other services improved by 6 percentage points year-over-year to 141% in third quarter, reflecting our continuous efforts to expand new business initiatives.
Also promotion acquisition decreased by 7% year over year to RMB 100.
$167 6 million in third quarter, the overall alloy for recommendation services and the marketing and other services improved by six percentage points year over year to 141% in the third quarter, reflecting our continuous efforts to expand.
The new business initiatives monitor customer acquisition costs and improve operational efficiency.
Speaker 5: monitor customer acquisition costs, and improve operational efficiency.
Speaker 5: We also continue to execute our cost optimization initiatives. As a result, cost of operation decreased by 30.5% to RMB 14.6 million in the third quarter of 2023 from RMB 21 million in the same period of 2022.
We also continue to execute our cost optimization initiatives as a result cost of operations decreased by 35% to RMB 14, six minutes in the third quarter of 'twenty to 'twenty three.
RMB 21 million in the same period of 2022.
Speaker 5: Our sales and marketing expenses, R&D and the general and administrative expenses decreased by 3.8 percent, 8.4 percent, and 1.7 percent year-over-year respectively, measured as the
Our sales and marketing expenses R&D in the general and administrative expenses decreased by three 8% eight 4% and the one 7% year over year respectively.
Measured as a percentage of total revenue.
Speaker 5: Sales and marketing, R&D and the G&A expenses in total stood at 32.1% in the third quarter.
Sales and marketing R&D and G&A expenses in total stood at 32 point of 1% in the third quarter.
I'll try to defend the street.
Speaker 5: with our continued efforts to optimize our cost structure and improve productivity of our business.
With all continue their efforts to optimize our cost structure and improve productivity off up isn't it.
Speaker 5: Loss from operations was RMB 8.7 million in the third quarter of 2023 compared with RMB 31.9 million in the same period of 2022.
Loss from operations was RMB eight 7 million in the third quarter.
The 20th unnecessary.
Compare was RMB 31, 9 million in the same period of time it wanted to.
Speaker 5: Operating loss margin was 3.4% in the third quarter of 2023, compared with 11.9% in the same period of 2021.
Operating loss margin.
131, 4% in the third quarter up 23.
Imperative was 11, 9% in the same period of 2022.
Speaker 5: In the third quarter, we recorded net loss and adjusted net loss of RMB 6.4 million and RMB 5.6 million respectively.
In the third quarter, we recorded net loss and adjusted net loss of RMB, $6 4 million and RMB five 6 million respectively.
Speaker 5: compared with RMB 25.1 million and RMB 9.4 million in the same period of 2020.
Compare was RMB 25, 1 million and RMB $9 4 million in the same period, a plenty of 'twenty two.
Speaker 5: Our net loss margin and non-gap adjusted net loss margin for third quarter improved to 2.5% and 2.2% respectively, compared with the same period of 2020.
Our net loss margin and non-GAAP to non-GAAP adjusted net loss model, well third quarter improved to 2.5% and a two 2% respectively compared with the same period of 2022.
Speaker 5: As of September 30, 2023, we had RMB $687.3 million in cash and cash equivalents, time deposits and the restricted cash and time deposits on our balance sheet.
As of September.
30, <unk> hundred 23, we had RMB $687 3 million in cash and cash equivalents time deposit on the restricted time restricted cash and time deposits all balance sheet.
Yeah.
Speaker 5: This concludes our prepared remarks. Operators, please go ahead. Thank you.
This concludes our prepared remarks, although it is please go ahead.
Okay.
Thank you.
We will now begin the question and answer session.
Speaker 1: To ask a question, you may press star, then 1 on your touchtone phone.
To ask a question you May Press Star then one on your Touchtone phone.
Speaker 1: If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press...
If youre using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
Speaker 1: At this time, we will pause momentarily to assemble our roster.
At this time, we will pause momentarily to assemble IRA Sir.
Speaker 1: Doing no questions, this concludes our question and answer session. I would like to turn the conference back over to the team for any closing remarks.
Showing no questions. This concludes our question and answer your question I would like to turn the conference back over to you.
Thank you for any closing remarks.
Speaker 2: Thank you once again for joining us today. If you have any further questions, please contact us at iratroom360.com. Thank you for your attention, and we hope you have a wonderful day.
Thank you once again for joining us today, if you have any further questions. Please contact us at IR at real three six <unk> Dot com. Thank you for your attention and we hope you'll have a wonderful day.
Speaker 1: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Yeah.