Q3 2024 TAL Education Group Earnings Call
Okay.
Ladies and gentlemen, good day and thank you for standing by welcome to tell Education group third quarter fiscal year 2024 earnings Conference call.
At this time.
As a in a listen only mode. After the speaker's presentation question and answer session. Please be informed that today's conference is being recorded.
I'd now like to hand, the conference over to Mr. Jackson D Investor Relations director. Thank you. Please go ahead Sir.
Thank you.
And thank you all for joining us today for Tal education groups third quarter fiscal year 2024 earnings conference call.
The earnings release was distributed earlier today.
Climate coffee on the company's IR website or through the use of water.
During this call.
Here from Mr. Amit <unk>.
Mr. Amit: President and Chief Financial Officer.
Mr. Amit: Ourself Investor Relations director.
Mr. Amit: Following the prepared remarks.
Mr. Amit: Okay.
Mr. Amit: It will be available to answer your questions.
Before we continue.
Mr. Amit: 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.
Mr. Amit: Nike.
Yes.
Forward looking statements are subject to risks and uncertainties that may cause.
Mr. Amit: Actual results could differ.
Sure.
Mr. Amit: From our current expectations.
Mr. Amit: Potential risks and uncertainties include but are not limited to those outlined in our public filings with the SEC.
Mr. Amit: For more information about these risks and uncertainties please refer to acquire.
Mr. Amit: Awesome.
Mr. Amit: Our earnings release and this call include discussions of certain non-GAAP financial measures.
Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures.
Mr. Amit: I would like to turn the call over to Mr. Alex Paul.
Mr. Amit: Please go ahead.
Mr. Amit: Thank you Jackson I'd also like to thank all of you for participating in today's conference call during.
Mr. Amit: During this call will review, our financial performance and business progress in the third quarter of <unk>.
Mr. Amit: Full year 2024, after that I will share our path for the next quarter's outlook.
Mr. Amit: Throughout this fiscal quarter, we continued to manage our core businesses, while concurrently explore additional opportunities for kibali.
Mr. Amit: We've witnessed learning services continuing development trajectory.
Mr. Amit: Table learners growth as the Baldwin with are in virtual learning programs, both online and offline.
Mr. Amit: Vincent of learning services is underpinned by our execution on the quality of our service offerings and the capacity of our emerging Center network.
Mr. Amit: As for contact solutions, we remain focused on the creation curation and dissemination of quality content.
Alert to the unique learning pathways.
Mr. Amit: Our diverse user base.
Mr. Amit: In an effort to empower learners with the solutions they need to excel ensuring that each individual's journey, it's Matt what's resources that resonate.
Matt What: Elevate their learning experience with.
Matt What: We continue to execute on our product offerings as well as go to market capabilities for corporate solutions in this quarter.
Mr. Amit: We've been making programmatic advancement in our technological capabilities laying the strategic foundation for future innovations.
Mr. Amit: We recognize the transformative potential of this new wave of technologies.
Our business operation.
Mr. Amit: And we'll harness this power to serve our customers.
Mr. Amit: In terms of our financial performance, we reported net revenues of 373 5 million U S dollars.
Mr. Amit: $2 7 billion RMB for the quarter, representing an increase of 65% and 63, 7% year on year in U S dollar and RMB terms, respectively.
Mr. Amit: With respect to profitability.
Mr. Amit: Our non-GAAP loss from operation and non-GAAP net loss attributable to travel for the quarter or $10 2 million U S dollars and $1 9 million in gross dollars respectively.
Mr. Amit: So with that overview I'd like to hand, the call over factor Jackson.
Mr. Amit: I'll give you an update on our core business client operational developments and review our fiscal third quarter financial results after that I'll return to share more details.
Mr. Amit: Regarding our outlook for the next quarter and then open the call for questions.
Jackson Factor: Jackson. Please go ahead.
Jackson Factor: Yes.
Jackson Factor: Thank you Alex.
Jackson Factor: I am pleased to share some details on the progress we've made during the third fiscal quarter across our core business.
Please note that all financial data for the quarter.
Jackson Factor: Great.
Jackson Factor: Now, let's start with our learning services and others business.
Jackson Factor: Which consists of.
Jackson Factor: Among others, a broad range of learning programs for consumers.
Jackson Factor: For the third quarter of fiscal year 2024.
Jackson Factor: Learning services and others business continue to achieve year over year revenue growth.
Jackson Factor: Driven by underlying development.
Jackson Factor: Multiple product lines.
Okay.
Jackson Factor: The largest revenue contributor within the learning services and others is all a Richmond learning programs.
Jackson Factor: Through the design a boat enrichment learning programs.
Jackson Factor: We aim to nurture the full spectrum of.
Jackson Factor: Learners capabilities.
Jackson Factor: Enabling the world around us about.
Jackson Factor: <unk> accomplishes a breadth of competencies.
Jackson Factor: And our approach to enrichment learning.
Jackson Factor: We placed an emphasis.
Jackson Factor: On the cultivation of competencies rep.
Jackson Factor: Recognizing that it complements the EMEA acquisition of knowledge.
Jackson Factor: These competencies equip learners with the necessary tools to navigate a practical real world scenarios.
The revenue trend payoffs more class enrichment programs.
Mr. Amit: To correlate with the size of its learning Center network.
Mr. Amit: Year over year the increase in capacity.
Mr. Amit: Two enrollment.
Mr. Amit: We take a dynamic approach in managing our learning center expansion plan.
Evaluating several factors such as market demand in each area.
Mr. Amit: User acceptance of our products.
Our operating capability and efficiency.
Mr. Amit: An exception.
Mr. Amit: In alignment with our strategic objectives.
Mr. Amit: Our online with virtual learning business has maintained its course of operations.
Mr. Amit: In light of the evolving landscape and observable developments, a user behaviors and preferences within the online learning sector over the last couple of years.
Mr. Amit: We continue to innovate our product offerings and service delivery models.
Mr. Amit: Our online and virtual learning programs aim to offer a unique digital learning experience to its customer base.
Mr. Amit: Regarding our overseas operations.
Mr. Amit: I think academy sustained continuous growth.
Mr. Amit: Exemplified by the addition of new learning centers during the fiscal quarter.
Mr. Amit: As we progress.
Mr. Amit: Our strategy is to adopt a dual focused approach that.
Mr. Amit: That caters to international learners.
Mr. Amit: Randy standardized educational frameworks with tailored local adoptions.
Mr. Amit: In an effort to meet diverse educational needs, while maintaining a coherent global learning experience.
Mr. Amit: Let's transition to accomplish solutions business.
Mr. Amit: Comprising of Smartbooks print books learning devices and digital content.
Mr. Amit: Copper solutions continued its year over year growth momentum in this quarter.
Mr. Amit: Driven by the development in our product capabilities as well as go to market capabilities.
Mr. Amit: Learning devices, and primarily shares to act passed.
Mr. Amit: As the leading revenue contributor within the content solutions business during this fiscal quarter.
Mr. Amit: The act passed theaters AMC.
Mr. Amit: <unk> aims to offer a comprehensive learning experience for school age users at home.
Mr. Amit: Ex path.
It's designed to combine extensive content library with interactive learning experience.
Speaker Change: By our application of AI technologies.
Speaker Change: We market ex pass through a range of go to market channels.
Speaker Change: Such as online live streaming.
In e-commerce conflicts.
Speaker Change: Our ongoing efforts include the continuous expansion and management.
Speaker Change: Our sales channels.
Speaker Change: Throughout the quarter, we continue to work on product development initiatives.
Speaker Change: Iterating, our existing products as well as introducing new products and features.
Speaker Change: Our investments in product development includes software hardware, AI and algorithms contents and et cetera.
Speaker Change: Recently, we introduced a new product.
Featuring upgrades to both hardware and software.
Speaker Change: Offering users a range of configuration options.
Speaker Change: So the product incorporates refinement on multiple use cases.
Speaker Change: Including motion detection base interactions.
Speaker Change: Excellent question and answer.
Image recognition based learning feedback.
Speaker Change: And et cetera.
Speaker Change: In addition to <unk>.
Mr. Amit: We're also exploring new product formats to meet the diverse demand of various use cases.
Mr. Amit: One of our early education in Loveland product was awarded the latest twice picks award.
Mr. Amit: At CES 2024.
Mr. Amit: With that overview.
Mr. Amit: I would now like to share our key financial results for the quarter.
Mr. Amit: We recorded net revenues of.
Mr. Amit: 373, 5 million U S dollars.
Mr. Amit: And $2 billion.
$715 7 million RMB.
Mr. Amit: An increase.
Mr. Amit: 65% and 63, 7% year over year in USD in RMB terms.
Mr. Amit: Our revenue growth is attributable to the growth of both our learning services and others business.
Mr. Amit: And our content solutions business.
Mr. Amit: Gross profit also increased in the third quarter of fiscal year 2024.
Mr. Amit: Rising from $129 $7 million.
Mr. Amit: Same period.
Mr. Amit: Last year to $203 million for this quarter.
Mr. Amit: Gross margin decreased to 53, 6% from 55, 8% for the same period last year.
Mr. Amit: The year over year decrease in gross margin.
Mr. Amit: Due to a combination of factors.
Mr. Amit: Including the change in revenue mix from each business line.
Mr. Amit: As well as changing gross margin.
Mr. Amit: Underlying business locked themselves.
Mr. Amit: Selling and marketing expenses for the quarter or $122 million, an increase of 73, 3% compared to $74 million for the fiscal third quarter in Austria.
Mr. Amit: non-GAAP, selling and marketing expenses, which excluded share based compensation expenses increased by.
Mr. Amit: 82, 6% to $116 4 million U S dollars.
Mr. Amit: From $63 $8 million.
Mr. Amit: For the third quarter of fiscal year 'twenty three.
Mr. Amit: The growth of selling and marketing expenses is mainly driven by increased selling and marketing activities.
Mr. Amit: General and administrative expenses increased by 19% to $110 7 million U S dollars.
Mr. Amit: <unk> $93 million.
Mr. Amit: In the third quarter of fiscal year 2023.
Mr. Amit: non-GAAP general and administrative expenses, which excludes share based compensation costs increased.
Mr. Amit: Increased by 29, 3% year over year to nine.
Mr. Amit: And $96 7 million U S dollars from $74 $8 million for the <unk>.
Mr. Amit: Same period of fiscal year 'twenty three.
Mr. Amit: Total share based compensation expenses allocated to related operating costs and expenses decreased by 22, 4% to $22 million in the third quarter of fiscal year 'twenty to 'twenty four.
Mr. Amit: $28 $3 million in the same period of fiscal year 2023.
Mr. Amit: Lots of operations.
Mr. Amit: Was.
$32 $2 million in the third quarter of fiscal year 2024 compared to loss of operations.
Mr. Amit: $32 9 million U S dollars.
Mr. Amit: Third quarter of fiscal year 2023.
non-GAAP loss from operations, which excluded share based compensation expenses was $10 2 million U S dollars compared to non-GAAP loss from operations of <unk>.
Mr. Amit: Finally in Asia.
Mr. Amit: In the same period of the prior year.
Mr. Amit: Net loss attributable to <unk> was $23 9 million <unk> in the third quarter of fiscal year 2024.
Mr. Amit: Compared to the net loss attributable to Tal.
Mr. Amit: $51 $6 million.
Mr. Amit: Third quarter of fiscal year 2023.
Mr. Amit: non-GAAP net loss attributable to Tau, which excluded share based compensation expenses was $1 9 million U S dollars compared to non-GAAP net loss attributable to Tal of $23 $2 billion.
Mr. Amit: The third quarter fiscal year 'twenty three.
Mr. Amit: Moving onto our balance sheet.
Mr. Amit: As of November 32023.
Mr. Amit: We have $2 billion $193 1 million of cash U S dollars of cash and cash equivalents.
Mr. Amit: $974 $2 million.
Mr. Amit: Short term investments.
Mr. Amit: And $329 million.
Mr. Amit: Current and non current restricted cash.
Mr. Amit: Our deferred revenue balance was.
$507 7 million U S dollars.
Mr. Amit: As of the end of the third fiscal quarter compared to 200 and.
Mr. Amit: $237 $4 million.
Mr. Amit: February 28 2023.
Speaker Change: Now turning to our cash flow Santa <unk>.
Net cash provided by operating activities for the third quarter of fiscal year 2024 was $247 1 billion of U S dollars.
Speaker Change: And the April 2023, the company's board of directors authorized to extend its share repurchase program launched.
Speaker Change: In April 2021, part of our model.
Speaker Change: Pursuant to the extended share repurchase program the company may purchase up to approximately.
Mr. Amit: $737 4 million.
Mr. Amit: The proceeds of its common shares through April 32024.
Mr. Amit: When we last spoke.
Mr. Amit: As of August 31, 2023, the company has repurchased approximately.
Mr. Amit: $13 4 million common shares at an aggregate consideration of approximately <unk>.
Mr. Amit: $233 $6 million under the share repurchase program.
Mr. Amit: We did not make any additional purchases in this.
Mr. Amit: Quarter three.
Mr. Amit: Sure.
Mr. Amit: That concludes the financial section.
Mr. Armstrong: Ill now hand, the call back to Mr. Armstrong to briefly update you our business outlook.
Mr. Armstrong: Please go ahead.
Mr. Armstrong: Thanks Scott.
Mr. Armstrong: As I mentioned earlier, despite a slight quarter over quarter revenue decrease we've made material progress, let's fiscal third quarter now I would like to share some of my talk.
Mr. Armstrong: Our company has all of the typical fourth quarter.
Mr. Armstrong: Concerning our learning services and other business, we will continue investing into building services to bring our users quality learning experience, both online and offline.
Mr. Armstrong: The overseas market remains one of our new areas for Kibali looking ahead, we will keep extending our services to more customers what dynamic product format, while leveraging our online and offline capabilities.
In terms of content solutions.
Mr. Armstrong: Target to iterate the functionality of our learning devices by harnessing AI technologies. This effort aims to transform these products offering users a learning experience that integrates technology with learning conflict.
Mr. Armstrong: Founded in 2003 were known as a learning technology company that focuses on the essence of education explores the science of learning and assess individual in approaching learning more scientifically.
Over the past years.
Mr. Armstrong: We'll never new technology.
Mr. Armstrong: Mergers such as television computers, the internet they've been a client to education.
Mr. Armstrong: We are currently exploring the possibilities of educational transformation in the AI era.
Mr. Armstrong: Tempting to integrate AI, what are those things products.
Mr. Armstrong: We remain open to cooperation and sharing our fiber that's what the hope of contributing some valuable enterprise So the global education unit.
Mr. Armstrong: So that concludes my prepared remarks, operator, we're now ready to open the call for questions.
Mr. Armstrong: Thank you.
Mr. Armstrong: We will now begin question and answer session to ask a question. Please press star one on your telephone keypad.
Mr. Armstrong: You wouldn't hear an automated message advising yohan is raised.
Mr. Armstrong: To withdraw your question. Please press star one again.
Mr. Armstrong: Please standby, while we compile the Q&A roster once again this one one for questions.
Mr. Armstrong: Our first question comes from the line of Timothy Zhao from Goldman Sachs. Please ask your question Timothy.
Zoe Zhao: Hi, Alex Hi, Jackson. Thank you for taking my question and congrats on the strong quarter.
Zoe Zhao: My question is regarding capacity expansion, just wondering if management can share any color regarding the commercial potential for the past quarter and into the longer term what is your longer term growth plan, often offline learning center competitive tension.
Jack: Timothy Thank for the question. This is Jack I'll take this one.
Jack: So you asked about capacity expansion in this last quarter.
Jack: As we mentioned.
Jack: The revenue from <unk> small class business tends to correlate with what's its capacity expansion plan.
Jack: Last quarter our capacity.
Jack: Expansion was in line with our revenue.
Jack: You also asked about long term development plan.
<unk>.
Jack: How we would look at it.
Mr. Armstrong: We take a pretty dynamic approach in managing our offline learning Center network.
Mr. Armstrong: When we think about.
Mr. Armstrong: Our expansion plan for our offline learning centers, we consider.
Mr. Armstrong: Factors.
For example market demand in that particular area.
Mr. Armstrong: For example, customer acceptance of our products.
Mr. Armstrong: Our own operating capability.
Operating efficiencies and etcetera, so, it's a pretty dynamic and balanced approach when we think about capacity management.
Mr. Armstrong: Moving forwards.
Mr. Armstrong: When we think about the footprint offline learning Center network is should more or less along with the overall pace of payoffs more cost.
What was the overall growth of <unk>.
Mr. Armstrong: Revenue coming from <unk> small class business.
Mr. Amit: And our first will be made to manage operating indicators, while we expand our learning centers.
Mr. Amit: I hope that answers your questions.
Mr. Amit: Yes, that's helpful. Thank you gentlemen.
Tim: Thank you Tim.
Tim: Our next question comes from the line of Eddy Wang from Morgan Stanley. Please ask your question.
Tim: Hi, Alex Jackson. Thank you for taking my question and also congratulations on the good results. So my question is.
Tim: Regarding the smart device. So can you share with us your latest plan of the.
Alex Jackson: Smart device business and.
Eddy Wang: What are the considerations for the specific functions in the future development of the second generation of smart devices. Thank you.
Alex: Hi, Andy This is Alex Thanks for that question, let me take us one.
Alex Jackson: So firstly, let me take a step back and just share a little bit better.
Alex Jackson: Broadly speaking of how we will look at these devices.
Alex Jackson: We're looking at these devices hours.
Alex Jackson: Integration of <unk>.
High caliber content.
Alex Jackson: Advanced.
Alex Jackson: AI technology.
Alex Jackson: And high quality hardware these three together.
Actually build.
Alex Jackson: A very.
Alex Jackson: Compelling learning experience.
Alex Jackson: For students at all where they will learn on their own at their own pace.
Alex Jackson: According to their own individual learning journey.
That's kind of broadly speaking, how we look at things right. So what's that basically the three components constant technology or AI technology and hardware. They go hand in hand, and we're really looking at.
Strategically programmatically advance our offering across all of those three dimensions.
Alex Jackson: So was the launch of our latest flagship products.
Alex Jackson: You actually see the advancement across all of these three.
Alex Jackson: While we continue to update and upgrade.
<unk> four cross all our devices.
Alex Jackson: Just as an example.
Mr. Armstrong: The flagship device with launching did some perhaps a larger screen has more managed ISR protected technology for the screen.
Mr. Armstrong: It introduces intelligence functions, such as AI dialogue fingertip translation.
Speaker Change: It incorporates the capabilities from map GPT.
And then really the aim is to facilitate a.
A much more smooth and personalized learning experience for users therefore.
Speaker Change: I'll also speak.
Speaker Change: On our go to market side.
As you know and as I shared in prior calls our primary sales channels are online.
Speaker Change: Including both Hawaii screaming and ecommerce.
Obviously very proactively working our existing channels.
Speaker Change: On the efficiency and the reach of these channels.
Speaker Change: While exploring additional distribution models.
Speaker Change: We see really our sales channel, it's not just a way to distribute our products, but it's also a way to engage in a dialogue.
Speaker Change: With our potential and existing customers.
Speaker Change: <unk> learning journey getting their feedback getting how they are using these devices to help us continuously.
Speaker Change: Prove and enhance the features.
Speaker Change: So I hooked up.
Speaker Change: To answer your question.
Speaker Change: Yes.
Alex Jackson: Thank you Alex.
Andy: Thank you Andy.
Alex Jackson: Our next question comes from the line of.
Alex Jackson: Leo.
Alex: Please ask your questions Alex.
Alex: Hi, Good evening, Alex and Jackson, congratulations on the strong quarter.
Alex: Quarter. My question is on AI, which.
Alex: And you mentioned for your one of the key pillar of your future strategy.
Alex: Could you elaborate a bit more on how do you plan to apply AI to our existing businesses.
Alex: You mentioned.
Alex: The applications in your second Gen hardware.
Alex: Do you see any other applications and how do you plan to monetize such AI adoption and also on <unk>.
Alex: Our investments in AI.
Mr. Amit: Do you think we should expect an increase in Aam's Ben for current level is already sufficient thank you.
Alex Jackson: Alright. Thanks for that question. This is Alex again.
Alex Jackson: I think Jackson medicine.
Alex Jackson: Earlier.
Alex Jackson: I wish there were.
Alex Jackson: Many colleagues from across the globe.
Alex Jackson: I think there is really a consensus of.
Alex Jackson: This generation of generative AI is bring a truly transformative moment to.
Alex Jackson: To education that we're able to provide high quality learning experience individualized.
Alex Jackson: Pathways and affordable cost at the same time, but I think there is also an increasing realization that this is a long journey, it's not going to happen in just a few months few quarters were just a year. So I think we're really in this for the long haul.
Alex Jackson: And we're looking at where AI is concerned I think our Pos broadly speaking.
Mr. Amit: Three of the marrow shows I think there is obviously a huge opportunities to increase.
Mr. Armstrong: The first of these.
Mr. Armstrong: Of all of our board.
Mr. Armstrong: We do have a lot of knowledge workers in the company.
Mr. Armstrong: I think there's this huge opportunity and that's.
Mr. Armstrong: One of the most private opportunity.
We're working on.
Mr. Armstrong: AI provides a very different type of <unk>.
Mr. Armstrong: Interaction.
Mr. Armstrong: Along the learning journey.
Mr. Armstrong: As I mentioned earlier.
Smart devices, so I think you're already seeing that early.
Mr. Armstrong: <unk>.
Forms of this type of interaction where the device is able to be much more helpful.
Mr. Armstrong: Along the learning journey.
Much more into interim somewhere that's due to this are the <unk> and <unk>.
Mr. Armstrong: The task of any challenges faced by individual students along their journey.
Mr. Armstrong: Firstly, obviously there is there's also exploration for AI.
Zoe Zhao: AI native.
Alex Jackson: Use cases and education.
Alex Jackson: So I think the effort will be along.
Alex Jackson: All of these.
Alex Jackson: <unk> medicines.
Alex Jackson: Well again I think if you look at.
Alex Jackson: In the past few quarters, I think we were able to really bring the synergy.
Between the foundation model.
Our education Knowhow.
Alex Jackson: So domain knowledge and Knowhow and put it into a device.
Alex Jackson: So that's really a service that's a valuable reference points.
AI in this context honestly is it's not only it's not only operates independently.
Alex Jackson: But also.
Alex Jackson: Contribute to the development of lots of existing justified.
Alex Jackson: So we're really actively engaging the pre.
Alex Jackson: Roddick design operational improvement.
Alex Jackson: And we're taking in a lot of user feedback from both internal.
Speaker Change: <unk> bin as Wawa is up.
Speaker Change: Our customers.
Speaker Change: From.
Speaker Change: Across the market.
Speaker Change: And we'll be continuously on that journey.
Pushing therefore, I hope that answers your question.
Speaker Change: Yes.
Speaker Change: Okay. Thank you.
Speaker Change: Congratulations again on the results. Thank you. Thank you.
Thank you gentlemen.
Our next question comes from the line of shiny Wang from C. ICC. Please ask your question Tony.
Jackson Factor: Hi, Jackson.
That's on the strong results again.
Tony: And my question is regarding the cash is in place.
Tony: Do you see that our main business is really going well and we are accumulating much.
Tony: Our cash our Dallas, So I'm just wondering what is our subsequent plans on our buyback plans or any other question. Thank you.
Tony: Thanks for the question. This is Jackson I'll take this one.
Jackson Factor: Maybe let me adjust a buyback plan part first.
Jackson Factor: And I think I am.
Jackson Factor: May have mentioned this earlier.
Jackson Factor: Under the current share repurchase currently extended.
Jackson Factor: Share repurchase program.
Jackson Factor: We have repurchased approximately $13 4 million common shares at an aggregate consideration of approximately.
Jackson Factor: $233 6 million U S dollars.
Jackson Factor: And as for this fiscal quarter three we did not make any additional repurchases now if we take a step back and look at kind of broadly how we think about.
Jackson Factor: Use of cash.
Mr. Armstrong: We take a pretty.
Mr. Armstrong: Pretty comprehensive considerations of both short term and long term.
Investor.
Mr. Armstrong: Short term long term shareholder return.
Mr. Armstrong: When we think about.
Mr. Armstrong: Or would you use of cash.
Mr. Armstrong: There are multiple potential users.
Cash in the future.
Mr. Armstrong: Proving investing into our core businesses.
Mr. Armstrong: Our learning services and others business of our content solutions businesses business or other.
Mr. Armstrong: Also the galloping new initiatives.
Mr. Armstrong: As well as generating shareholder returns.
Mr. Armstrong: I hope that answers your question Tim.
Jackson Factor: Yes. Thank you Jackson, that's very helpful.
Tony: Thank you Tony.
Tony: Yes.
Tony: Our next question comes from the line of.
John: When John from China Renaissance. Please go ahead.
Sure.
John: Hi.
John: Thanks for taking my question first congrats on another strong quarter. So in your prepared remarks, you mentioned that the new products.
John: Richmond.
John: You said launching this year.
John: So can you discuss a lot of it is progress.
Progress there thank you.
John: This is Jackson I'll take this one.
Jackson Factor: Yes, so as we've talked about earlier, if it'd be online.
Jackson Factor: The online enrichment space.
Jackson Factor: As I involving landscape.
Jackson Factor: Sure.
There have been an observable.
Jackson Factor: User behavior developments and progresses.
Jackson Factor: And the last couple of years.
Jackson Factor: So as a result, we have been observing such developments and acting on innovating our product formats and our service delivery models.
Jackson Factor: When we think about these new products.
Jackson Factor: We aim to deliver innovative and interactive online.
Jackson Factor: Learning experiences.
Through such new products.
Jackson Factor: And we're focused on delivering products Cree.
Jackson Factor: Create user value.
Jackson Factor: Societal benefits.
Jackson Factor: So we'll.
Jackson Factor: We will continue to explore and the links on these products and we'll continue to observe how our.
Jackson Factor: Customer preferences develop over time.
Jackson Factor: I hope that answers your question.
Okay, yes. Thank.
Thank you Joseph.
Anne: Thank you Anne.
Anne: So we have reached the end of the question and answer session. I will now turn the conference back to the management team for closing comments, yes, operator, thanks again, everyone for joining the call today.
Anne: As we approach Chinese new year, just wish everybody a high.
Anne: <unk> year of the Dragon and we'll see you next quarter Bye bye.
Anne: Thank you that concludes today's conference call. Thank you for participating you may now disconnect.
Anne: [music].
Anne: Thank you.
[music].