Q2 2024 QuantaSing Group Ltd Earnings Call
Operator: Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to Quantasing's earnings conference call. At this time, all participants are in a listen-only mode.
Good morning, and good evening, ladies and gentlemen, thank you for standing by and welcome to Qantas things earnings Conference call.
At this time all participants are in a listen only mode.
Operator: We will be hosting a question and answer session after management's prepared remarks. Please note that today's event is being recorded. I will now turn the conference over to Ms. Leah Guo, the Investor Relations Associate Director of the company. Please go ahead, Ms. Guo.
We will be hosting a question and answer session. After management's prepared remarks.
Please note that today's event is being recorded.
I will now turn the conference over to MS. Leah, while Investor Relations Associate Associate director of the company. Please go ahead ma'am.
Leah Guo: Thank you. Hello, everyone, and welcome to Quantasing's earnings call for the second quarter of fiscal year 2020. With us today are Mr. Peng Li, our founder, chairman, and CEO, and Mr. Tim Xie, our CFO. Mr. Li will provide a business overview for the quarter, then Tim will discuss the financials in more detail. Following their prepared remarks, Mr. Li and Tim will be available for the Q&A session. I will translate for Mr. Li.
Thank you Hello, everyone and welcome to Quanta things earnings call for the second quarter of fiscal year 'twenty to 'twenty four.
We've got today, unless got sung Lee, our founder Chairman and CEO and Mr. James <unk> our CFO.
Gary will provide a business overview for the quarter and Jim will discuss the financials in more detail.
Following their prepared remarks in Italy, and Spain will be available for the Q&A session.
Both Mr. Lee.
Leah Guo: You can refer to our quarterly financial results on our IR website at ir.quantasing.com. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Before we continue, I would like to refer you to our Safe Harbor Statement in our earliest press release, which also applies to this call, as we will be making forward-looking statements. Please note that all members stated in the following management prepared remarks are in R&B terms, and we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnest release and filings with the SEC. I will now Okay. Hello, everyone.
You can refer to our quarterly financial results and our I O website and I just wonder if things don't come you can also access a replay of this call I don't know what I am upset when it becomes available a few hours after its conclusion.
Before we will continue I would like to refer you to our safe Harbor statement in our earnings press release, which also applies to this call as we will be making forward looking statements. Please note that all numbers stated in the following management's prepared remarks are in RMB terms, and we will discuss non.
GAAP measures today, which are multi really explained and reconciled to the most comparable measures reported in our earnings.
Our news release and filings with the SEC.
I'll now turn the call over to the CEO and founder of Qantas thing Mr. Li.
Okay, Hello, everyone and thank you all for joining us today.
Peng Li: And thank you all for joining us today. Last quarter we saw a solid 24.7% increase in revenue, proving that our strategy to expand our cost offerings is paying off. Following the past success of our financial literacy courses, we have been actively adding new courses to diversify our revenue streams. We are also addressing the opportunity presented by the growing demand for courses made for senior learners. We have adjusted our revenue presentation under other personal interest quotas this quarter. We further broke down other personal interest courses into skills, upgrading courses, and recreation and leisure courses.
This quarter, we saw a solid 24 upon two 7% increase in revenue.
Our approach are proving that our strategy to expand our course offerings is paying off.
In the past the success of our financial resource. He calls it we have been actively adding new content to diversify our revenue stream.
We are also seeking the occident opportunity presented by growing demand for coffee is made it all in there.
Yes.
Well you know the dusted off our revenue presentation on there are the plus no interest to call tests. This culture.
Further broke down other plus no interest to colchicine to skills.
Upgrading our culture, and our recreation and a lagger Cortez.
Peng Li: We think the new revenue breakdown better reflects our business strategies and can provide useful and updated information to investors under the new breakdown. Skills upgrading courses mainly include courses for training productive skills, such as short video production and memory training content. Recreation and leisure courses mainly include more personal enrichment courses, such as personal well-being topics. Electronic Keyboard Courses, Understanding Meditation Courses.
We think the new revenue breakdown better reflects our business tragedies.
On the Con provides useful and update Casey information to investors.
Under the new breakdown Skus upgrading Cortes mainly include include coffee is for training.
Duct tail skus.
Such as software.
We do production and a library of training culture right.
Recreation and lateral Cortes meli include more personal enrichment causes.
Such as personal L P and causes.
Electronic keyboard causes understanding vegetation Cortes.
Peng Li: Now, let's pivot to discuss some new developments and initiatives with our organization. Recent government data have highlighted the strong growth of China's elderly population. China had over 297 million people aged 60 and above in 2023, which was 21.1% of the total population.
No. That's P were to discuss some new development Saturday at noon.
Initiatives with our organization.
Recent government data has highlighted the strong growth of China's elderly population.
I had a or 200 and the <unk>.
<unk> 7 million people, aged 60 and about in 2023.
Which was 21 punch one person talks the total population.
Peng Li: As such, China has officially become a super-aged society by World Bank standards. The silver economy is currently valued at around RMB7 trillion, or US $982 billion, and is focused to start to reach RMB 30 trillion, or US 4.2 trillion, by 2035. This would make up roughly 10% of the country's total GDP.
As such China has basically become a super age the societal society.
I would bank send us.
<unk> economy is currently valued at around RMB.
Seven Treaty U S night, a T two really.
And is forecast to search to RMB 30 Treaty.
As Paul points to treaty by 2035.
This was made up roughly 10% of the country's total total GDP.
Peng Li: According to China National Rating, the evolving needs and desires of middle-aged and elderly people in China represent a significant opportunity for us. This is a growing number for personalized services in the silver economy sector. In a positive mood, the government recently introduced measures to strengthen the silver economy. This initiative urges enterprises to enhance their offerings for the elderly population, for example, to enhance digital services; thousands of websites and apps are being revamped, and standards are being established for senior-friendly mobile devices. This development is also beneficial for us, as it will enhance the learning experience for our users. From a hardware perspective, we are prone to how anticipate this shift in demand. We have been preparing for this opportunity for years. Our team has built a solid foundation and mature business model, and we are well positioned to meet this growing demand. As living standards improve, Middle-aged and elderly people seek more than just health or longevity.
According to China National Radio.
So your mobile.
Norway needs and desires of middle aged on the hourly people in China represents a significant opportunity for us.
This is growing demand for <unk>.
Person and that person.
Now, let's somebody says in the steel rod economy sector.
And the positive move the government recently.
To reduce the virus to strengthens our silver economy.
This initial initiative.
Birch and enterprises to enhance their offerings for the elderly population.
Temple.
Two it has paid a theater toll services thousands of websites.
Apps are being rolled out.
And the standards are being established the fall senior friendly mobile devices.
This development is also beneficial for us.
It has a learning experience for our users from a how do we are perspective.
We are proud to how our anticipated this shift in demand.
We have been preparing for this opportunity is four years.
Our team how.
Build a solid foundation and a mature business model.
And we are well positioned to meet this growing demand.
As living standards improve.
Middle aged elderly people take more than just the house.
The launch of HG.
Peng Li: They want an experience that will provide cultural, cultural, and intellectual enrichment; our world's range of online closets includes many which are, tailored-made to the interests of this demographic. Our platform is dedicated to lifelong learning, and we have always emphasized user engagement and satisfaction. This means we are all equipped to fulfill user desires for intellectual stimulation and personal growth. Now, let's move on to our ongoing efforts to enhance user engagement and satisfaction. We will be diligently engaging our learners in a variety of offline and online initiatives, leveraging the power of AI to elevate users' learning experience. Additionally, we utilize our scalable, self-operated system to boost learners' repurchase risk. Additionally, we have hosted a series of community events surrounding our recreation and leisure activities. This event includes standing meditation sessions and appreciation sessions for pursuits like Electronic Keyboard and Calligraphy. We provide ample opportunities for interaction, communication, and personal enrichment for our middle-aged and elderly users. For example,
They want to experience that rail provides caucho.
Uh huh.
Cultural and in intellectual.
Rich bench.
Our.
Diverse range of Allah Colchicine close many Blue chart.
Taylor right. So the interest itself is the bulk of our fixed.
Our platform is dedicated to lie lifelong learning.
We have always emphasized user engagement in China, such as spectrum.
Yeah.
This means we are all equipped it to fulfill user desire for inter lateral.
Stimulation and the personal growth.
Now, let's move onto our ongoing efforts to enhance user engagement and satisfaction.
Will be it.
They recently engaging our let us in a variety of offline and online.
Initiatives.
They were reaching the power of AI to.
Anyway, its users a learning experiences.
Additionally, we utilized our schiphol scalable.
Self operated system to boost to learn as we purchase series.
We how allstate a serious of community events surrounding our the creation and the larger causes.
This even seen it.
Claude standing meditation sessions and the appreciation acceptance.
For pursuit like.
Electronic keyboard and a colleague Rafi.
We provide ample opt.
Opportunities for interaction.
Indication and the personal enrichment for our middle aged on the hourly users.
For example.
Peng Li: Our recent initiative involved offering a Complimentary trial process to residents of a community in Beijing. Our offline and online initiatives have resulted in constantly high levels of user engagement; attendees of our sharing sessions speak highly of the valuable knowledge they gain from instructors and peers during events. We have received lots of positive feedback from participants for both our online courses and offline activities, especially from elderly learners. They express deep appreciation for activities like calligraphy and understanding meditation and recognize them as valuable opportunities for personal growth and learning.
Our recent initiatives involved with offering.
Company mentor, a trial called taste.
Two residents off up.
Commodity in Beijing.
Our offline to online initiatives.
Resulting H E constantly high levels of user engagement.
10 days off our sharing fashions.
<unk> highly of the available knowledge chickens from structures and appears during events.
We have received lots of pork to feedback from participants for both our online Cortes and offline activities.
Especially from elderly learn us.
They expressed deep appreciation for activities like to telegraph fee understanding mutation.
And recognized as valuable opportunities for personal growth and the learning.
Peng Li: This feedback highlights their strong desire for spiritual and cultural enrichment, which emphasizes the importance they place on these experiences. Among the variety of measures we have used to apply AI in our business, we have successfully enhanced live streaming quality using AI, improving both visual clarity and stream stability.
This feedback.
They are granted they are false theater spiritual and cultural enrichment.
Which also says.
The importance they place on this experiences.
Among the variety of merits, we how we used to apply AI in our business.
We have successfully it has to live streaming quality using AI.
Improving both visual clarity clarity and a stream that ability.
Peng Li: Additionally, we have leveraged the AI in our online tutoring system by intelligently identifying and anticipating learners' behavior. As a result, learners have been able to significantly reduce their waiting time during Q&A sessions with our tutors. Our commitment to learner satisfaction is closely followed by a more efficient approach to retaining our learners. Recently, we upgraded our integrated business management process and conducted payload testing before rolling it out to more SQs. Our tutors can now easily manage tasks, like one-click class reminders and optimizing private domain traffic. Doing so will not only increase our cost and complete risk but also enhance overall repurchase, for example. The repurchase rate of our standing meditation course has improved from 20, 26.2% in the last fiscal year to an impressive, 34.7% in this quarter. We aim to streamline the operation system across all SQs and to maximize user retention on our platform. Next
Additionally.
We have leveraged the AI, yeah, well online tutoring system by in halogen play.
Then he fighting and are anticipating learners behavior.
As a result.
Learn is how <unk> been able to significantly reduce their way teams hard during Q&A sessions wayside with switches.
Our commitment to learner satisfaction is closely followed by a more efficient approach to returning our learners.
Recently, we upgraded our integrated business management process.
<unk> conducted.
P alerts testing before rolling it out to more skus.
Our two hotels can now easily managed task it task like one click class reminders on the optimizing private domain traffic.
By doing so.
Not only increased our cost complete the race.
But also you have overall repurchase.
For example.
So repurchase rates of our standing meditation cost has improved from 20.
Plenty of 6.2% Alaska fiscal year two are impressive.
So if you fall, 0.7% this quarter.
We aim to streamline the arbitration.
System across all our skus and to maximize user retention on our platform.
Yes.
Peng Li: Let's turn to our efforts to increase operational efficiency while growing our top line. We remain focused on streamlining processes and optimizing resource allocation. By carefully investing in sales, marketing, and leveraging technology, we aim to enhance our market presence. Our Test and Scale Approach ensures efficient results, ah utilization. Uh, minimizes financial risk, and allows us to seize market opportunities.
Let's turn to our first Inc.
We increase operational efficiency, while growing our top line.
We remain focused.
Pakistan streamlining process and the uptick lightly optimizing our resource allocation.
By carefully investing yourself marketing and leveraging technology, we aim to enhance our market presence.
Our task to under scale approach.
<unk> insurers if patients to resolve.
Our utilization.
Yes.
Uh huh.
Mainly in my face, our financial risk and allow us to seize market opportunities.
Peng Li: At present, we are focused on streamlining processes and the results allocation to boost cost efficiency. We aim to ensure that the quality of our services also remains top notch. We have managed to limit our relative growth in headcount. This demonstrates our ongoing commitment to prudent resource management. Maor, we are assembling a new team in Hefei.
At the present.
Focused on streamlining processes.
Of course that is on the resource allocation to boost coffee efficiency.
We aim to ensure that the quality of our services also remain top notch.
How manage it too they meet our reality Goldstein head count.
This demonstrates is our ongoing commitment to prudent resource management.
Malware.
We are assembling a new team.
Eight way efficiently.
Peng Li: We efficiently capitalized on the cost advantage of operating in that region, including but not limited to labor costs and administrative expenses. We also made improvements to our operational system. Specifically, we developed our own instant messaging system, which has been officially named the strategic. The strategic will not only significantly reduce our operational expenses but also enhance real-time interactivity, among others. We achieve highly efficient sales and marketing by leveraging technology. We are carefully allocating results to enhance our market presence, for example. We leverage tax, including big data and our advanced operational systems to create diversified and effective marketing channels during this course. We upgraded our technologies so we were able to reach paying users more efficiently and effectively. Meanwhile, we are employing a test at a scale methodology book methodology.
<unk> capitalized on the cost to the long pitch days of operating in that region.
<unk> bye.
But not limited to labor cost.
And Oh that maybe the street you expenses.
We also made improvements to our operational system.
Special Fe Corp.
Yeah.
Special fit culturally.
We developed our own is tens many messaging system.
Which has been officially.
Deploys it is our culture.
The stretcher take so stretch it.
Just to try to tick.
Well not all of these are significantly reduce our operational expenses, but also you have real time.
Chile.
I'll, let us.
We have two highly efficient itself and the marketing by leveraging technology.
We are carefully allocating result is to enhance our Max to.
For example.
We leverage taxes, including big data under our at the last operational systems to grow.
Right.
<unk> diversified and if it in fact to marketing channels the Orient.
This culture.
We upgraded our technologies, so we were able to reach paying users more efficient.
Effectively.
Meanwhile, we are employing a task that our scale our methodology, but methodology.
Peng Li: For this methodology, we must modestly introduce new initiatives such as a new cost offering, marketing campaigns, and lastly, e-commerce product offerings. Then we access the ROI. We only take steps to process and expand the initiative if the RIM actually exceeds our expectations.
Paul This methodology.
You must have a more there's a mall, that's Italy and new.
New initiatives such as <unk>.
New course offerings.
Marketing campaigns.
And the last E Commerce e-commerce product offerings.
Peng Li: This data-driven decision-making process maximizes our resource allocation and minimizes the financial risk for new initiatives. Also, by collecting feedback from the market and our customers, we can get a better understanding of their needs. This broadens our reach and enhances our ability to address shifting demands. The flexibility of our business model allows us to scale up our operations without sacrificing cash flow. Ultimately, this enables us to seize market opportunities as they arise.
We assessed all right.
We only take steps to press that and the expense initiative, if the Orion is Oh I see.
I'd say it is our aim.
It's packed patients.
This data driven decisions.
Decision, making process, Maxine Mathis, our resource allocation and a mini.
And my face the financial risk for new initiatives.
Also by Black King and feedback from the <unk>.
My page and our customers.
A better understanding of their needs.
Peng Li: In addition to our ongoing efforts to drive revenue growth and maintain cost efficiency, we are actually purchasing and pursuing new initiatives that offer significant potential for expanding and diversifying our business. Live commerce and overseas markets are important to broaden our revenue streams. Thus, we have launched a new number of strategic initiatives in these areas.
This broadens our reach and enhances our ability to address shifting demand.
The flexibility of our business model allow us to scale up our operations.
That's we are sacrificing cash flow.
Ultimately.
This enables us to seize market opportunities as they arrive.
Peng Li: Last eCommerce provides an interactive platform to enhance sales and drive customer engagement. Recognizing this, we are currently leveraging live e-commerce to strengthen our online presence and increase our market share. We're also developing private label products that prioritize Innovation and Customer Satisfaction. The recent launch of our private label, Chinese Baijiu brand, Yunqing, is one example. Meanwhile, our focus on overseas.
Yeah addition to our ongoing efforts to drive revenue growth and maintain cost efficiency.
We are actively purchasing.
Uh huh.
Pursuing new initiatives that offer significant potential.
For our expanding and.
Diversifying our business.
Life E Commerce, and the aerospace market.
And to broaden our revenue streams.
We have launched a new a number of stress to check our initiatives in these areas.
Peng Li: Expansion aims to access new markets and demographics. Therefore, by diversifying our revenue streams and broadening our market reach, we are carefully planning our expansion strategy for sustainable growth. Calis Education serves as a key trial venture, proceeding broader international expansion efforts.
Lastly, commerce provides an interac interrupting platform till you have Samsung driven customer engagements.
Recognizing this we are currently leveraging e-commerce to strengthen our online.
Present presence and increase our market share.
Peng Li: We are closely monitoring its process to refine our strategies and inform further expansion plans, ensuring a prudent and well-informed approach to scaling our international operation. In conclusion, the second quarter of our fiscal year 2024 demonstrated strong revenue growth, reflecting the success of our strategic initiatives.
We're also developing private labor alert level products that are.
Ray already tight.
In no way to innovation and a customer.
Inspection.
The recent launch of our private label Chinese bite you round Inching is one example.
Meanwhile, our focus on overseas.
Ams to access new markets and the demographics.
Peng Li: We have taken steps to diversify our cost offerings and to cater to the burgeoning demand for middle-aged and senior learners. We are also actively pursuing new opportunities in live e-commerce and the international market, while still maintaining a lean and efficient operational model. With a focus on innovation and prudent resource management, we are well-positioned to sustain our growth trajectory and deliver lasting value to our shareholders. With that, I will turn the call over to Tim to discuss the details of our financials. Thank you. Thank you.
Thereby are diversifying our revenue streams and the broadening our market reach.
Roughly.
Planning our expansion stretched.
G. Four so its $10 a Boe gross.
Palace Education service as a key trial winter.
Proceeding broader international expansion efforts.
We are closely monitoring is process to refine our strategies and our inform further expansion plans.
Dong Xie: Before I go into the details of our financial results, please note that all amounts are in RMB terms, that the reporting period is the second quarter of fiscal year 2024, ending on June 30, 2024, and that in addition to gap measures, we'll also be discussing non-gap measures to provide greater clarity on the trends in our actual operations. For the second quarter of fiscal year 2024, we grew our total revenues by 24.7% year-over-year and 12.8% quarter-over-quarter to $980.5 million, mainly driven by growth from skills upgrading courses. Among our revenues, revenues from individual online learning services grew by 24.1% year over year to $873.6 million, or 89.1% of total revenues, mainly due to continued demand for skills upgrading courses. Alcross Billings for Individual Online Learning Services increased by 15.4% year-over-year to 944.6 million.
Ensuring a prudent and well informed approach to scaling our international operations.
In conclusion.
The second quarter of our fiscal year 'twenty before.
The mouse <unk> strong revenue growth.
Reflecting the success of our strategy initiatives.
The initiatives.
We have taken steps to.
Diversify our course offerings sounded to cater to.
Butch on burdening our.
Demand for Middle age I'm, the senior lenders.
We're also actively purchased are pursuing new opportunities in life E Commerce and the international markets.
While still maintaining a lean and efficient operational model.
With a focus on innovation on prudent resource management, we're all well positioned to sustain our growth.
The trajectory and deliver lost.
Les lasting value to our shareholders.
Is that I will turn the call over to Jim to discuss the details of our financials. Thank you.
Yeah.
Thank you.
Before I go into details of our financial results. Please note that all amounts RMB terms.
The reporting period, the second quarter of fiscal year 2024.
On June 32024, and that in addition to get matters will also be discussing long term measures to provide.
Greater clarity on the trends in our actual operations.
For the second quarter of fiscal year 'twenty to 'twenty four we grew our total revenues by 24, 7% year over year and choke points, 8% quarter over quarter to 985 million, mainly driven by growth from Skus upgrading courses.
Dong Xie: Revenues from enterprise services were 57.6 million, a change of 30% from a year ago and representing 5.9% of total revenues, primarily due to a decline in revenues from related party transactions. Gross profit was $835.5 million, representing a gross margin of 85.2%, compared to 87.4% in the same period last year. Total operating expenses were $733.2 million, compared to $731.7 million in the same period last year.
Our revenues revenues from individual online learning services grew by 24, 1% year over year to 873 six.
<unk> made it.
Oh 89, 1% of total revenues, mainly due to continued demand for skus upgrading courses.
Our gross billings.
If indeed, we do all our learning services, Inc increased.
<unk> increased by 15, 4% year over year to $944 6 million.
Revenues from Enterprise services were 57, six Neely the change of 30% from year ago.
Representing five 9% of total revenues, primarily due to a decline in revenues from related party transactions.
Gross profit.
$845 5 million.
But it didn't have a gross margin of 32.
Five 2% compared to 87, 4% in the same period last year.
Dong Xie: To break this down, sales and marketing expenses were $657.1 million, representing a change of 5.5% year-over-year. The change is mainly due to our increased spending on outsourcing labor and marketing efforts. The increase is partially offset by a decrease in our staff costs, which also included a decrease in share-based compensation as a percentage of total revenue. Non-gap sales and marketing expenses, which excluded share-based compensation, decreased to 68.6% from 77.3% a year ago. Research and Development Expenses were $41 million, representing a decrease of 36.2% year over year, primarily driven by a decrease in share- As a percentage of total revenue, non-GAAP R&D expenses, which exclude share-based compensation, decreased to 4% from 5.6% a year ago. General and Administrative Expenses were $35.1 million, representing a decrease of 21.3 percent year-over-year, primarily due to decreases in share-based competition and office expenses, partially offset by an increase in professional service fees. As a percentage of total revenue, long gap G&A expenses, which excluded share-based compensation, decreased to 2.8% from 3.1% a year ago. Net income was $107.6 million, excluding share-based compensation.
Total operating expenses were $733 2 million compared to $731 7 million dosing period last year.
To break this down sales and marketing expenses were $657 1 million, representing a change of five 5% year over year.
The change is mainly due to our increased spending on all sourcing labor and marketing efforts.
<unk> is partially offset by decreasing our Stockholm, which also included a decrease in share based compensation as a percentage of total revenue non-GAAP sales and marketing expenses, which excluded share based compensation decreased to 68, 6%.
From 77.3.
3% a year ago.
Research and development expenses were $41 million.
Representing a decrease of 36, 2% year over year.
Primarily driven by a decrease in share based compensation.
The percentage of total revenue non-GAAP, R&D expenses, which exclude share based compensation decreased two 4% from five 6% a year ago.
General and administrative expenses were 33.
$35 1 million, representing a decrease of 21 point Street meeting a percent year over year.
Normally due to decreases in share based compensation and office expenses, partially offset by an increase in professional service fees.
As a percentage of total revenue non-GAAP, G&A expenses, which excluded share based compensation decreased to two 8% from three 1% a year ago.
Net income was $107 6 million excluding share based compensation.
Dong Xie: Adjusted net income was $103.9 million, representing an adjusted net margin of 10% to 10.6% during the quarter. Basic and Diluted Net Income Per Share were RMB0.65 and RMB0.64, respectively, during the quarter. Adjusted Basic and Diluted Net Income Per Share for RMB0.63 and RMB0.62, respectively, during the quarter. Turning to our balance sheet, as of December 31, 2023, our company held One Billing, $1,050.8 million in cash and cash equivalents and short-term investments compared to $930.6 million as of June 30, 2023. Lastly, I want to provide some color on our outlook for the third quarter of fiscal year 2024, which ends on June 30, 2024. We expect revenues to be between $900 million and $930 million, representing a year-over-year increase of between 11.5% and 15.2%.
Adjusted net income was 103 9 million, representing an adjusted net margin of 10% pinpoint 6% during the quarter.
Basic and diluted net income per share were RMB 65, and RMB <unk> 64, respectively. During the quarter adjusted basic and diluted <unk> per.
Sure well RMB <unk>.
<unk> 63, and RMB <unk> 62.
Respectively during the quarter.
Turning to our balance sheet.
As of December 31st 2023, our company held.
One bidding.
1000 <unk>.
58 million in cash.
Cash equivalents and short term investment.
<unk> two 930.6 million as of June 32023.
Rusty I want to provide some color our outlook for the third quarter of fiscal year 'twenty 'twenty, four which ends on June 30, 'twenty 'twenty four we expect revenues to be between 900 million and 900 and sort of made it better.
Didn't hear a year over year increase of between 11, 5% and 15, 2%.
Dong Xie: These projections take into consideration the current market conditions prevailing in the industry. In summary, our steadfast commitment to delivering exceptional online learning experiences and a broad spectrum of courses, coupled with our focus on cost efficiencies and cash flow optimization, delivered solid results this quarter. Our expansion efforts are executed with a keen eye on maintaining profitability, as we continue to create long-term value for our shareholders. Looking ahead, our strategic direction will remain aligned with our dedication to sustainable growth.
These projections take into consideration the current market conditions prevailing in the industry.
In summary.
Desktop commitment to delivering it.
No all of that learning experiences and a broad spectrum of courses.
With our focus on cost efficiencies kind of cash flow optimization.
If you were to solid results this quarter.
Our expansion efforts executed with a keen eye on maintaining profitability.
As we continue to create long term value for our shareholders.
Looking ahead.
Our strategy direction, we remain aligned with our dedication to sustainable growth.
Operator: That concludes my prepared remarks. Operator, let's open up the call for questions. Thank you. Thank you. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.
That concludes my.
Prepared remarks, operator, let's open up the call for questions. Thank you.
Thank you we will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
Yeah.
Operator: To withdraw your question, please press star then 2. When asking a question in Chinese, please translate your question into English for the convenience of everyone on the call. For the benefit of all participants, please ask one question at a time. Our first question comes from Howard Halpern of Taglich Brothers. Please go ahead. Congratulations, guys. Great, great quarter.
To withdraw your question. Please press Star then two.
When asking a question in Chinese please translate your question in English for the convenience with everyone on the call for.
For the benefit of all participants. Please ask one question at a time.
Okay.
Our first question comes from the line of Howard Halpern of Tag Glitch Brothers.
Go ahead.
Congratulations guys, great great quarter.
Yep.
Howard Allen Halpern: In terms of your live e-commerce offering, you talked about, I guess you announced in January the first private label brand. So how come, how is this offering being received, and are we going to see additional private label offerings launched throughout the year to continue the growth in that segment? Thank you, Howard.
In terms of your wives ecommerce offering you know you talked about I guess you announced in January the first private label brand.
So how can how you know.
This offering being received and.
Are we going to see additional private label offerings launched throughout the year or two.
Continued growth in that segment.
So that's how I would answer the question regarding our recent production with you in June our first label for our first private label Chinese Baidu brand using our e-commerce offering.
Unknown Executive: I will answer the question. Regarding our recent introduction of Yunting, our first private label Chinese Baijiu brand within our live e-commerce offering, we are pleased with the initial reception it has received. Yunqing represents a significant milestone for Quantasing, as it marks our entry into the private label business through live streaming, leveraging our expertise in live streaming e-commerce. The response from our customers has been positive, with many expressing appreciation for the rich taste and quality of Yunqing Baijiu. The limited edition gift box is specially designed for the Chinese Lunar New Year.
Im pleased with the initial reception it has received.
You can read presence.
<unk> milestone for Qantas scene as it marks our entry into the private label business.
Real live streaming are leveraging our expertise in life love streaming E Commerce.
The response from our customers has been positive because many experiencing appreciation for their reach taste and the quality of shrinking our bite you.
The limited edition gave the books, especially designed for the Chinese lunar new year.
Unknown Executive: The dragon-themed packaging has resonated well with consumers, symbolizing good luck and future success. And also, I think we still need time to test the market and try this kind of private label live e-commerce business. Then, this becomes more evidence that the private label business is positive.
Dragons themed packaging.
We didn't need it about consumers.
Symbolizing goudelock and future success and also I think we still need time to type of market and to try these kind of private label E Commerce business and then.
These are the.
More evidence that the private label business.
Oh, the positive view well continue our test and scale approach has been the strategy to enlarge.
Unknown Executive: We will continue our test and scale approach and business strategy to enlarge this kind of business. As for future plans, well, we don't have a specific announcement to make at this time. We are actively exploring opportunities to extend our private label offerings through the year. We recognize the importance of providing unique and high quality products and services to our customers and retail staff. And the launch of Yunqing reinforces our confidence in pursuing additional private label initiatives.
It's kind of a business.
Total future plans are well, we don't have a specific announcements to make at this time they are actively exploring opportunities to.
Two.
Expand our private label offerings through the year.
We recognize the importance of providing unique and high quality products and services to our customers.
And the launching of marine team reinforces our confidence in pursuing additional private label initiatives I think based on our customer the large customer base and also our business strategy to.
Unknown Executive: I think based on our customers, the large customer base, and also our business strategy to launch businesses catering to the needs of our business, suitable to the customer's demographic and profile, I think in the future, we will make more efforts to launch this kind of private label e-commerce business. And we will notice and will publish any significant news in the future, if any. Thank you. The next question comes from Hunter Diamond of Diamond Equity. Please go ahead.
Launch the businesses catering to the needs of our this oh suitable to the customers the demographic and profile I think in the future we are well give you.
Two more efforts for.
For this kind of like a private label E Commerce business and Veeva you noticed I didn't mean to publish any significant news in the future if any thank you.
Thank you.
The next question comes from Hunter Diamond Diamond equity. Please go ahead.
Hunter Louis Diamond: Firstly, congratulations on the results. It was noted that Quantasing's live e-commerce segment has been demonstrating promising growth. Could you elaborate on some of the key performance metrics that underlie this growth? And then, additionally, what strategic initiatives are being implemented to capitalize on this momentum? Yeah, I think I will ask my CEO to answer this question, and Matt will answer it in Chinese. Leah will help translate. Okay, thank you for your question. I'll speak Chinese.
Firstly congratulations on the results.
It was noted that Qantas things like E. Commerce segment have demonstrated promising growth could you elaborate on some of the key performance metrics that underscore this growth and then additionally, what strategic initiatives are being implemented to capitalize on this momentum.
Yeah.
I think I Akamai CEO to answer this question and.
Matt that'd be entre and Chinese literally don't have the conflict.
Yeah.
Oh.
Okay.
Oh, so the cotangent.
Well I mean, the there's.
So I'm going to take quite a big deal to get you to come to a high sure a couple of Florida for sure well I mean, the progress you could hang out for coal generators.
Unknown Executive: Our e-commerce business is doing well this quarter. Our key indicators, such as our customer price and GMV, are doing well. Women, He kept the product and the content of the course in a strategic way, thereby providing more LTV value to our users. Our live e-commerce business has shown promising growth with key performance metrics such as the average order value, repeat purchase rates, and paid users and GMs, a strategically-reliant product offering with cost-consumption. Enhancing relevance and value for our users. For example, our health management class will integrate products like iQIYI into the course and form a complement to the course. Then the short video course will be combined with the short video software.
Jim where do you see a quanta and should be all about so sure so hydrophone possible.
Well I mean.
Tushar TV, the particular timing couldn't put on them, they're going up at Sheila.
Tomorrow, unless youre, Shaquille O'neal, which you won't go into whether you go TV that you could gotcha, Okay sure Felicia.
I always like ecommerce business assurance promising growth with key performance metrics, such as average order value repeat purchase rates and paid users and G. M D.
Strategically align product offerings with cost content and housing and value for our users.
So you could easily just sure Jim Hong quality Cook casually boss Al are you all down the time here you know once you lap plugging such unless you until you go.
Oh gosh, if you can put on Opana ER.
Josh interesting article about yet that you assume a topic that's out of the heart of all of them and you don't go with volatile or when they're talking to switch on the whole should the Chinese food agenda.
Unknown Executive: In this way, we can ensure that our education course has a cooperative effect with subsequent product services. In this way, the user's experience and participation will be improved. For example, for the health management courses, we introduced complementary projects like MOOCs.
She totally I tell them to go you know what does it go.
Yes, that's how you do you'll quickly see you soon.
For example, we introduced for the House management of course, we introduced complementary.
Milkshakes.
Unknown Executive: And as for the short video editing courses, we pair the course content with software services. This approach ensures synergy between the education and also consumer goods, optimizing the customer experience and engagement. In addition, because we have a strong user base, operational capability, and some technical expertise, we have expanded the product range to products related to the courses. For example, the Baijiu we just mentioned.
That's for sure.
Courses with patterns of course content myself to what I said is this approach interesting synergy between education and also consumer goods.
I think the customer experience and engagement.
So you don't have the hardest sure you may Wanna, you'll you can share with you.
Are you going to need high oil it's useful call me in particular, Chile. So you won't in particular time gains you can finally quadrant gung Ho chunk chunk on the Tommy and truck Julien, but I just want you to come out to get all the article about you.
Unknown Executive: Because we are also grasping the underlying needs of users and the changes in the market to expand our product range. In this way, we can highlight that we provide a comprehensive solution based on the same user. In this way, we will also get a greater space for growth.
Even women that Babu, especially all the decent usual I was just trying to be all she taught element that I think are telling me a ton of it let's say I don't know.
Apologize angle.
Just a pushout woman to sure check on Gee I don't know, whether you could try a miniature your pharma down the heart of.
On top of that because it turns out in the cold yet.
Unknown Executive: In addition, we leverage our robust customer base, our operational capabilities, and technology so that we can expand offerings beyond course-related products, such as Baichu. This means that we are seizing opportunities to diversify and extend our product range in line with evolving market demand. This approach is quite flexible and underscores our commitment to delivering comprehensive solutions and capitalizing on growth opportunities in a live e-commerce landscape. Okay, that's all. The next question comes from Steve Silver of Argus Research. Please go ahead. Steve, your line is open on our end. Are you muted on your end?
In addition, we leveraged our robust customer base, our operational capabilities on the tax structure. So that we can expand offerings beyond of course related to projects that's right.
Thank you.
We are seizing opportunities to diversify and expand our product range and long receivables and market demand.
Our approach is quite flexible and under courts underscores our commitment to delivering the comprehensive solution.
And capitalizing uncle growth opportunity.
<unk> e-commerce.
Landscape.
Okay. That's all.
Yes.
Yes.
The next question comes from Steve Silver of Argus Research. Please go ahead.
Yeah.
Steve Your life as a your line is open on our end are you muted on your end.
Steven Silver: I'm so sorry about that. Thanks. And thanks for taking the questions and congratulations on a strong quarter as well. You guys spoke quite a bit in the prepared remarks on your efforts to grow the company efficiently and sustainably over the long term, using AI for many of these initiatives. I was just hoping you could provide any additional color on the company's current thinking about scaling the size of the workforce over time as these e-commerce enterprise services and geographic expansion like Kelly's Education continue to ramp up. Thanks. Okay, thank you.
Oh, I'm, so sorry about that.
Thanks, and thanks for taking the questions and congratulations on a strong quarter as well.
You guys spoke quite a bit in the prepared remarks on your efforts to grow the company efficiently and sustainably over the long term user.
Using AI for many of these initiatives.
You could provide any additional color on the company's current thinking about scaling the size of the workforce over time.
As these E Commerce enterprise services and.
Geographic expansion like Kelly's education continue to ramp up thanks.
Okay.
Okay. So okay. So I'll answer this question.
Unknown Executive: I will answer this question later. I think as we grow across a number of areas, especially for our main business, the online learning business, we focus on efficiency and lowering costs by using technology, including AI, to streamline operations, especially in the area that can, which is useful to use that kind of technology to streamline the efficiency of the operation process. Instead of hiring more people, they are now improving and trying many possibilities to improve our processes and reducing headcounts through automation and AI-driven solutions, especially As e-commerce and enterprise services grow, we will also use AI to work smarter and faster. This includes automating everyday tasks, improving decision-making processes, and enhancing resource allocation to reduce costs while maintaining operational effectiveness.
The occupiers, we grow across a number of areas, especially for our members.
On our learning business and they focus on efficiency and lowering cost by using our technology, including to streamline operations.
Especially in the area that which Ken.
Mitch can which is suitable to use such kinds of technologies to streamline the efficiency of the operation process instead.
Instead of hiring more people now.
Improving I'm trying to many.
Possibilities to improve our processes and reducing head counts through automation and AI driven solutions.
Specialty in the.
In the processed food in the area.
As E Commerce and enterprise services grow and we also use AI to work smarter and faster this.
This includes automating everyday tasks.
Proving decision, making processes and hunting resource allocation to reduce costs, while keeping our operational effectiveness.
Unknown Executive: During the whole process of our daily operation to deliver services to our online learners, Likewise, with the acquisition of Calis Education and our entry into the global online education market, I think we are trying to test and use AI technology and other technologies, such as big data technology, and so on, to scale operations efficiently and lower overhead costs. We automate admin tasks, personalize learning experiences, and optimize cost delivery to achieve greater cost efficiency while expanding our reach and impact. But I think overall, our strategy for managing our workforce involves using technology, including AI and other technologies to reduce costs and improve efficiency across all business segments. By using the power of technology, we achieve our growth objectives by reducing the need for more manpower and resources. But I think in the end, all of the technologies and solutions we adopted, the aim is to, depending on the business nature, upgrade our service level. It can improve operation efficiency if we use it, and we invest in it. So that is our methodology. I hope that's helpful. Thank you so much.
During the whole process of our daily operation to deliver the services to our on our learners.
Likewise with the acquisition of Kelly's education, and our entry into the global online education market.
I think we were trying to test and use our.
Technology and other technologies.
Data technology and so on.
To scale operations efficiency lower overhead.
<unk> costs.
Nate.
<unk> tasks personalized learning experiences and optimize our cost of you worry to achieve a greater.
Cost efficiency, we're expanding our reach and impact.
But I think.
Overall, our strategy for managing our workforce in golf's, using our technology, including AI and other technologies.
To reduce cost and improve efficiencies across all business segments.
By using the power of the technology that we achieve our growth objectives, while reducing the need for more manpower and resources, but I think in the end.
All of those technologies and solutions, we adopted.
M is too.
Peter to our customers' needs and ability there and to improve and upgrade our service level to our customers. So in the end the weatherby use our technology, including or not.
Depends on the servicing and two the service quality, we provided to our customers and also determines depends on the business nature. It used to be at kind of <unk>.
Operator: Thank you. The next question comes from Pat McCann of Noble Capital Markets. Please go ahead.
<unk>, our service level, it kind of improve the operation efficiency. If you use that and have you invest that.
Patrick McCann: Hey, thanks for taking my question. My question is that given the acquisition of Kelly's education, can you comment on the market opportunity for youth online learning in Asia given that you traditionally target a market that's more adult learning focused? Okay, thank you. Yeah, indeed, in mainland China, we are currently an adult online learning service provider. We are the largest.
So that's it's our methodology. Thank you.
That's helpful. Thank you so much.
Okay.
The next question comes from Pat Mccann of Noble capital markets. Please go ahead.
Hey, Thanks for taking my question. My question is that given the acquisition of Kelly's education.
Can you comment on the market opportunity for our youth online learning in Asia, giving given that you are traditionally target a market that's more adult learning focus.
Okay.
Okay. Thank you.
Yeah Ah indeed in mainland China. We are currently at a 1000 on a server.
Its provider, they're the largest and also using our technology edge and also our experiences we cooperate on the review help kind of Kelly's education to enlarge their service offering to the children's online learning in Asia maybe.
Unknown Executive: And also, using our technological edge and also our experiences, we cooperate, and we will help college education to enlarge their service offering to children's online learning in Asia. Maybe currently, the major market is Hong Kong. And also, our acquisition of college education is an important step for us to enter the rapidly growing market for children's online learning in Asia. You know, in Asia, many parents are very keen about their children's education and the massive need for this kind of service.
Maybe currently the meter market in Hong Kong and also we are researching.
Researching and trying other markets.
And also our execution of palace at Cushing.
Important step for us to enter into the rapidly growing market for children's learning a shirt.
You know in Asia. Many parents are very keen about their children's education and it would be a massive need for these kinds of services.
Unknown Executive: And we are also expanding beyond our former focus on adult education. This growth of the children's online education and online learning market is driven by increasing digital adoption, parents' focus on education, and the post-COVID rise of online learning. As parents seek convenient and effective educational solutions for their children, I think we are ready to use our expertise to become a leading provider of personalized online learning experiences, meeting the changing needs of families across this region. But in terms of the method we use to develop and deliver our services to each of the local markets in Asia, maybe worldwide, we always stick to the methodology that we cater to the local market, we research the local market, and we make our services suitable for the local market.
We're also expanding beyond our former a focus on without having kitchen. This growth of the children's online education online learning market is driven by our increasing digital adoption parents focus on education and as opposed to Covid drawings of online learning.
As parents seek convenient and effective educational solutions for their children and I think we are ready.
To use our expertise to become a leading provider of course went live on our learning experiences.
Meeting the changing needs of families across this region.
But.
In terms of the mass or to be used to develop to deliver our services to the to each of the local market in Asia, maybe a worldwide view.
All the dig to the methodology that we view are cater to the local market, we view research the local market.
Our services are suitable to the local market.
Unknown Executive: By creating these are all fresh, new curriculums, and with our commitment to excel, I think we plan to take advantage of this huge market opportunity and drive growth in children's online education in Asia and maybe worldwide. I think this is a good start, and we will stick to our test and scale methodology for this kind of market. Thank you. The next question comes from B.J. Cook of Singular Research.
By creating.
Fresh new curriculum and our commitment to excel I think we plan to take advantage of this huge market opportunity and to drive growth in children's on allocation.
Asia will be worldwide.
Good start I kind of gave you sneak two hour test on a scale methodology for these kind of market.
Thank you. Thank you.
The next question comes from P. J Cook of singular research. Please go ahead.
Operator: Please go ahead. Hi guys, thanks for taking my call. Can you just talk about your strategy for attracting repeat customers and turning them into paid customers? Okay, I think for attracting repeat customers or turning them into paid customers, our strategy for attracting them and converting them revolves around continuously enhancing our online learning platform's quality, ensuring it's user-friendly, interactive, and filled with valuable content. For example, because we are now catering to and delivering services to more and more elderly people, we cater for, and we tailor-made our APP, we tailor-made our products to suit, to make them suitable for their personal habits, and suitable for their physical use.
Hey, guys. Thanks for taking my call.
Can you just talk about your strategy for attracting repeat customers and turning them into paid customers.
Okay.
Yeah.
Yeah, Okay, I think for the fourth.
Attracting rupee costumers or turning them into pig costumers.
Our strategy for attracting them and we're working to.
It's all around.
Continuously enhancing our online learning platforms quality.
I mean, it's user friendly and to act too in a field with valuable content. For example, because we are now getting into a three ring.
Mrs to more and more elderly people love it.
Peter Levy.
Taylor made our a P P. You're telling me to our products to suit to make it suitable to beer or personal habits to tupelo for their physical use.
Unknown Executive: And also, for regular updates driven by our user feedback and educational trends, to maintain our competitive edge. In addition to this, we host a diverse range of engaging events, both online and offline, including webinars, workshops, seminars, and networking sessions tailored to our customers' interests and learning needs. I think these events not only enrich the overall learning experience but also foster a sense of community among our learners. In summary, by integrating these efforts, we cultivate a loyal customer base, driving sustainable growth for our online learning service company and our platform. And also, I think maybe more importantly, during the past years of operation experiences, we accumulated a similar technological operation process using technical and technological skills, and also our experience can streamline the operation of the cost during cost delivery.
And also for regular updates are driven by our user feedback and educational trends and maintain our competitive edge.
Sure.
I think in addition to this the host a diverse range of engaging events, both online and offline, including Webinars workshops seminars and network concessions are tailored to our customers' interests learning needs.
I think this event not only enrich the overall learning experience, but also foster a sense of community among our learners.
I think they're in a summary by integrating these offers we cultivate a loyal customer base driving sustainable growth for our online learning services company our platform and also I think maybe more importantly, b during the past two years of operation.
It seems to be accumulated.
Oh seamless.
Technology co operation process do you think that the technical the tech technology skills and also our experience kind of streamline the operation of the cost you during the course delivery.
Unknown Executive: For example, for our initial launch, the financial literacy courses, we delivered a very strong repeat purchase rate, and by leveraging such kind of experiences, we scaled up our skills, personal skills upgrading courses, and later recreation courses. For such kinds of courses, we can duplicate and leverage our experiences accumulated for the financial literacy courses to launch the repeat purchase programs, to launch the, and to attract repeat customers to our advanced courses so that we demonstrate a very healthy ratio for our operation metrics. So that is our methodology.
For example, the full hour initial launched kind of resource causes we have do they work very.
Very strong repeat purchase rate and bilateral even with those kinds of experiences.
Scale our.
Oh skus personal skills upgrading courses on the later recreation causes a forecast kind of closer to kind of duplicate and leveraging our experiences accumulated for the financial literacy closer to launch the repeat purchase programs to launch the <unk>.
Hum.
The to attract repeat costumers two hour, but wants to causes.
So that demonstrating a very healthy rate.
So for our operation metrics.
So that is our methodology.
Okay.
Operator: Thank you. This concludes our question and answer session. I would like to hand the conference back to management for closing remarks. Thank you again for joining our call today. If you have further questions, feel free to contact us or submit a request through our IR website. We look forward to speaking with everyone on our next call. Have a good day. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect. BF-WATCH TV 2021
Thank you.
Okay.
This concludes our question and answer session I would like to hand, the conference back to management for closing remarks.
Thank you again for joining our call today. If you have had for the attachments feel free to contact US also have made a request through our IR website.
Look forward to speaking with everyone on our next call have a good day.
Yeah.
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
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