Q3 2024 Youdao Inc Earnings Call
Good day and welcome to the you dialed 'twenty 'twenty four third quarter earnings Conference call.
Speaker Change: Today's conference is being recorded.
At this time I would like to turn the conference over to Mr. Jeffrey Wong Investor Relations Director of Yodel. Please go ahead Sir.
Jeffrey Wong: Thank you operator. Please note the discussion today will contain forward looking statements relating to the future performance of the company, which are intended to qualify for the safe Harbor from liability.
Jeffrey Wong: Established by the U S Private Securities Litigation Reform Act.
Such statements are not guarantees of future performance and are subject to certain risks and uncertainties assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.
Jeffrey Wong: Generally discuss it on the risk factors that could affect <unk> business and financial results is included in the company's filings with the U S Securities and Exchange Commission.
Jeffrey Wong: The company does not undertake any obligation to update these forward looking information except except.
Jeffrey Wong: Except as required by law.
Jeffrey Wong: During today's call management May also discuss certain non-GAAP financial measures full cup for comparison purposes only for their destinations of non-GAAP financial measures and recalculating shows GAAP to non-GAAP financial results. Please see the 'twenty 'twenty four.
Jeffrey Wong: Her financial results news release issued earlier today.
Speaker Change: Amanda This conference is being recorded.
Speaker Change: That caused a replay of this conference conference call. We will be also available on <unk> corporate website at IR Docs do adult dot com.
Speaker Change: Joining us today on the call from <unk> Senior management are dumped her sung Cho, our chief Executive Officer, Mr. Lei Chen our president mixture of pumps, you have our VP of strategy and capital markets and Mr. Wei Lee our VP of finance that went down.
Speaker Change: Turn the call over to Dr. Joel to reveal some of our recent highlights and strategic strategic direction.
Dr. Joel: Thank you Jeff.
Dr. Joel: Thank you all for participating in today's call.
Dr. Joel: Before we begin I would like to remind everyone that all numbers are based on renminbi, unless otherwise specifically stated.
Dr. Joel: We're thrilled to announce an outstanding quarter.
Dr. Joel: Net revenues for the quarter reached RMB 1.57 billion, marking a two 2% increase year over year, our profitability improves remarkably.
Dr. Joel: Income from operations reached RMB, $107 3 million compared with a loss of RMB $57 7 million in the same period last year. This represents our first profitable quarter and sets a new quarterly record record for income from operations.
Dr. Joel: We're on track to achieve our first full year operational profitability this year.
Dr. Joel: Finally, operating cash outflow narrowed to RMB $85 4 million, an improvement of 71% compared to the same period last year.
Dr. Joel: Now lets review the major difference.
Dr. Joel: Most of our business lines.
Dr. Joel: Net revenues from learning services were RMB, 767, 9 million down 19, 2% year over year.
Primarily due to our proactive focus on high demand for services and a reduction in low return of investment cause customer acquisition operations during the summer.
Dr. Joel: Notably.
Dr. Joel: Customer retention continued to improve and therefore, the overall financial health of our loading services segment significantly improved in Q3.
Within this segment net revenues generated by digital content and services.
Online courses were RMB $513 7 million.
Dr. Joel: These revenues cover the costs and operating expenses and yielded meaningful profit.
Speaker Change: Team focused on improving the product Savio Tung should.
Speaker Change: We expanded our knowledge video library to nearly 40000 targeting students of different learning levels.
Speaker Change: Additionally, with double the question back to around 100000 questions.
Speaker Change: And our advanced large language model.
Speaker Change: I can now automatically collect 10 categorize users mistakes.
Speaker Change: Adding new questions to enhance personalized learning experience.
Speaker Change: We also released a new small class study.
Experiences, including personalized monthly learning plans developed by our experienced learning counselors.
Speaker Change: Hey, I recommend this Christmas.
Speaker Change: This provides students with a welcoming and motivating learning experience that delivers great results.
Speaker Change: And high retention rates.
Speaker Change: Meantime, yoga literature continues to expand the use of AI riding refinements in Q3, leading to a seven percentage point increase in conversion rates.
Speaker Change: We expect to sustain the strong demand for online learning services in the coming years.
Speaker Change: The key to success lies in our ability to deliver high quality service and learning outcomes at scale.
Speaker Change: While we have made significant progress in all of our learning innovations as evidenced by quickly improving retention rates and.
Positive customer feedback.
Speaker Change: There are still substantial room for further innovation.
Speaker Change: Fortunately, we now have a new AI tools at our disposal and customer demand remain robust, we look forward to serving learners and families and innovative learning solutions in the years ahead.
Speaker Change: Sales of our AI driven subscription services.
Speaker Change: And the learning services segment continued to grow rapidly approached.
Speaker Change: Approaching RMB 70 million in Q3, representing over 150% year over year growth. This marks the seventh consecutive quarter of more than 50% year over year growth.
Speaker Change: On the product front, we released a new AI translation upgrades are in Euro dictionary and Euro translation.
Speaker Change: These updates include.
Speaker Change: Includes multilingual translation support customized lotteries and multimodal input capabilities for images and documents.
Oh, Hey, I talked to him and translation service has processed over 100 million documents.
Speaker Change: Dictionary introduced an AI powered voice simultaneous interpretation feature.
Speaker Change: Powered by our large language models.
Speaker Change: This feature has seen over 4 million users in its first quarter and has become the most popular paid feature and without dictionary.
Speaker Change: Nickel also gained prestige has tejas recognition this quarter and was prominently featured on the Apple App store homepage.
Speaker Change: Also ranked in the top 10 for next day retention.
Speaker Change: None to pay application ranking charts by AI CPB Dot com.
Speaker Change: Following this lunch Mr. P a tutor.
Steve an enthusiastic reception.
Speaker Change: With nearly 20 million users in the third quarter, and then monthly gross wage exceeding 100%.
Speaker Change: Online marketing services net revenues reached RMB $489 4 million in Q3.
Speaker Change: Representing an increase of 45, 6% year over year.
Speaker Change: Gross margin increased to 36, 3% up four four percentage points year over year.
Speaker Change: This was mainly driven by our expansion into new sectors, and leveraging data applications and AI to optimize our performance pushing RTA revenues to a historical high and in over 100 per cent yogurt increase year over year.
Speaker Change: Additionally, we observed positive developments in overseas advertising, which accounted for approximately 20% of the AD revenue in the third quarter.
Speaker Change: Robust demand in games and related industries field gross driving overseas.
K O L AD revenue by over 50% year over year.
Speaker Change: We also upgraded our antifraud system for advertising in Q3, integrating real time monitoring across multiple dimensions, optimizing quality control and identifying potential audiences. We expect ongoing algorithm upgrades and enhanced service quality to support our long term growth.
Speaker Change: Our online marketing services.
Speaker Change: And the smart devices segment net revenues reached RMB $315 3 million in Q3 up 25, 2% year over year.
Speaker Change: And walking the highest revenue since two.
2023, alongside this growth difficult months overall health has significantly improved with gross margin rose to 40 42, 8% also reaching its highest level since 2023.
Speaker Change: In terms of product upgrades, we launched the latest generation of our flagship dictionary pen the X seven club.
Speaker Change: This high end device featured comprehensive 78 million words database and then AI camera that supports advanced.
Speaker Change: Functions, such as Mr. P AI teacher and AI translation.
Speaker Change: Notably the X seven series has become the first learning so device in the industry to support offline Lodge language model translation with accuracy.
Speaker Change: Passing on line.
Speaker Change: Euro machine translation.
Speaker Change: The strong performance of our new products drove over 50% year over year net income growth for dictionary pants in Q3.
Speaker Change: Building on this success I am pleased to announce that we will launch our new products in the fourth quarter. Please stay tuned for further details.
Speaker Change: So that is a summary of our progress in Q3 as discussed on this call earlier this year we.
Speaker Change: We have two key objectives for 2024.
Speaker Change: [noise] rapidly integrating generative AI technology across all our businesses the intense competitiveness, both now and in the future.
Speaker Change: And operational focus on streamlining our business lines to achieve full year operating profitability.
Speaker Change: With a robust results from Q3, we are making significant strides towards meeting these goals.
Speaker Change: By the end of the third quarter cumulative income from operations have reached to RMB $64 6 million.
Speaker Change: Significant improvement compared with RMB $542 6 million loss from operations in the same period last year.
Speaker Change: I'm confident that we will achieve full year operational profit profitability this year.
Speaker Change: Looking ahead we.
Speaker Change: We are committed to continue with the implementation of a large language models we are doing.
Speaker Change: To enhance user experience and create a greater value through our digital content services AI, driven subscription services and smart devices in our online marketing services, we aim to explore new domestic opportunities, while also expanding internationally to better support client success.
Speaker Change: Lastly, financially we remain dedicated to prudent operations and strengthening our profitability.
Speaker Change: With that I will turn the call over to Sue Palmer to provide you with more detailed insights into our financial performance. Thank you.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Second with Doctor, Phil and Hello, everyone today, I will be presenting some financial highlights from the quarter of 24.
Speaker Change: We encourage you to review our press release issued earlier today for further details.
Speaker Change: Well the so called her total net revenue of RMB, one 6 billion or U S. Dollar 224 planes, representing 2.2 per cent of interest from the same period of 25 to three.
Speaker Change: Now revenue for all of our lending forbearance were RMB 767, 9 million or U S. Dollar behind me on that point for a minute representing a 19, 2% decrease from the same he wrote off contracts right. So your over year decrease reflects our commitment to a more effective customer acquisition approach prototyping and higher all right.
Speaker Change: Oh, that's much engagements. This strategy has helped to enhance our overall visit inside of the efficiency of the business.
Speaker Change: Net revenue for our smart devices were RMB 315 points of it made it all U S dollar political opinion I'm going to.
Speaker Change: 25, 2% in France are simply were up all kinds of things right.
Speaker Change: Which was primarily driven by the popularity of newly launched products into on hunting for.
Speaker Change: Net revenue for our online marketing service, that's where I'm be fine to 89 point for a minute what was that dollar 69, representing.
Speaker Change: Representing a 45, 6% of interest for all the same here at all 10 Ministry. The increase was mainly attributable to the increased demands on for four months and what has much sort of certain third party internet properties, which was driven by our continuing investments in cutting edge technology.
For the third quarter. Our total gross profit was RMB 789, 5 million or U S. Dollar 100, and trough claim 5 million, representing a eight 2% decrease.
Speaker Change: The third quarter oftentimes shrink.
Speaker Change: Of course market for learning services was 62, 1% for the so called four compared with 67, 8% for the SMP Rocco I'll turn to that story.
Speaker Change: Of course market for smart devices was 42, 8% for the quarter upon anymore comparator with 42, 6% for the same here at about 10 minutes for it.
Speaker Change: We're smarter for online marketing services was 46, 3% and four support heartfelt turnaround before compared with 41, 9% for the same people write offs 20 times three.
Speaker Change: But so far we've reduced our total operating expense to RMB 682 point to me that we've got a dollar nine seven points two minutes.
Speaker Change: Terrorists RMB 917 points of immediate puzzle simply write off last year.
Speaker Change: Looking at all expense in more details. She also marketing expense declined to RMB $519 6 million compared with RMB 600, and some people point to me that in the quarter all right.
Speaker Change: Research and development expense.
Speaker Change: Chris to RMB, $119 6 million compared with RMB 187 planes for a minute in the so called out content story.
Speaker Change: Our operating income Margaret was six 8% in the support helps on 24 compared with operating loss margin of three 7% for the same here at Lafayette.
Well so quarter after accounting for net income attributable to ordinary shareholders was RMB 86 months, where I mean, well you asked all our top lines or any other comparison that loss attributable to ordinary shareholders of RMB 102.9 minutes for the same period of last year non.
Speaker Change: non-GAAP net income attributable to ordinary shareholders for the third quarter was RMB 88.7 minutes or so.
All of our $12 6 million.
Speaker Change: Compared with non-GAAP net loss attributable to ordinary shareholders of the RMB 667 planes for a minute plus impure over last year.
Speaker Change: Basic and diluted net income per a D S attributable.
Speaker Change: Attributable to ordinary shareholders for the third quarter, and therefore, well M. B zero plan for them for all U S dollar theater, playing Mumbai.
non-GAAP basic and diluted net income attributable to ordinary shareholders for the third quarter was RMB European seven six oil field to play them on my.
Speaker Change: Our net cash used in operating activities was RMB $85 4 million or U S. Dollar top one 2 million plus a quarter.
Speaker Change: Looking at our balance sheet. That's all at September 30, a 24 hour contract liabilities, which mainly consists consist of stuff before revenue generated from our learning services were RMB 839 points I've made it will be a stellar $119 7 million compared with RMB 1.1 did an absolutely fantastic.
Speaker Change: Sorry.
Speaker Change: At the end of the period, our cash cash equivalents current and non current industry cash time deposit and short term investment totaled RMB $489 4 million or U S. Dollar 69 points on.
Speaker Change: This concludes our prepared remarks simply put our attention we would now like to open the call to your questions. Operator. Please go ahead.
Speaker Change: Okay.
Speaker Change: Thank you very much. So we will now begin the question and answer session.
Speaker Change: Ask a question you May press Star then one on your telephone keypad.
Speaker Change: If youre using a speakerphone please pick up your handset before pressing the star keys.
Speaker Change: Anytime you question has been addressed and you would like to withdraw your question. Please press Star and then two.
Speaker Change: Again, if you would like to ask a question. Please press star and then one.
Last question Debbie have comes from Brian Gong of Citigroup. Please go ahead.
Brian Gong: Yeah. Thanks for taking my question I have a very good question.
Speaker Change: And we have noticed that many of our peers have.
Christian: Christian you mentioned the cost of electricity supply.
Christian: So commencement share our strategy of selling days and are we finding to increase our you've last night.
Christian: Learning services sector in the future. Thank you.
Thank you Brian.
Speaker Change: So Paul I will handle the question first.
Speaker Change: I think aligned with all the strategy of retrieving the possibly if we are operating profit in the near future, we focus on strong demand and services.
Speaker Change: Uh huh.
Speaker Change: Getting back on the low returns as customer acquisition efforts during the last summer splits during the summer.
And we'd be that's a healthy and a sustainable development is more essential for the long term success.
Speaker Change: And.
Speaker Change: You may not have so you'd already true stuffing is the strategic priority for our business.
Speaker Change: Although there are sometimes some short term headwinds we remain optimistic about the medium and the long term growth we expect.
Speaker Change: That's the same Rocky mountain for the learning services in the coming years.
Speaker Change: Before I, even got the National health fitness, maybe off of select interrupt the knobs that on our service.
Speaker Change: Sure. They believe that's why you saw where our long term strategies.
Speaker Change: Maybe if that's the increasing our marketing chairs marquee sheriff in a word for midterm.
Speaker Change: The long term, we've got primarily come from with a private I think the differentiation differentiated and high quality products and services to the users and the re proving they are learning outcomes.
Speaker Change: We thank all of our flagship products offer a unique combination of itself the AI.
Speaker Change: Learnings videos and the comprehensive learning compliance consulting services.
Speaker Change: So what's the AI enhanced enhancements and ongoing product the upper grade themes, we enabled users to achieve some nice personalized.
Speaker Change: I do patient improve learning efficiency and alcohol.
Speaker Change: The comprehensive services, including the loading dock.
I'll fix learning paths are running passive planning.
Speaker Change: Per the learning video yeah. It creates the recommendations and the air collection and the catch up.
Categorization itself the students' mistakes.
Speaker Change: Learning and consulting services, one class Saudi experience and also the college admissions advisors I think that that's the kind of the full survey says January and driven borrower yeah.
Speaker Change: We will definitely do continue to invest in our products and services, which have strengths or you'll start slowly I haven't seen the upgrade in tanker rates for the fourth quarter. The current retirement rates. If we can just give you a little.
Speaker Change: Liberty colors with an insurer has already hits already hate about 70% by now although the retention period I have not finished yet.
Almost all were wrapped up about four 5% comparable store similar up last year.
Speaker Change: Looking ahead, I think I'm confident enlink for development for next year on one hand, we will continue to focus on our personalization prerecorded video learnings leveraging our AI capabilities and upgrades and hence I will use a learning experience.
Speaker Change: We will explore more offline opportunities offering an all source and service to our customers with I think that that's all we're proud and are in long term last point is we expect to incur.
Speaker Change: And Chris Inglis, our investments on the product upgrade and also the cost of acquisition customer acquisition. Following the strategy also total company. Thank.
Speaker Change: Thank you.
Speaker Change: This is a telephone.
Speaker Change: At one point.
Speaker Change: Yeah for.
Speaker Change: Sure, so marketing and customer acquisition, particularly in the summer Ah is a very important for us.
Speaker Change: It's gross and our performance. So there were some challenges in on this front. This this summer so.
Speaker Change: On the other hand, Oh, yeah, well, we always believes that too.
Speaker Change: Our customer satisfaction.
Speaker Change: Satisfaction and retention are more important and more fundamental yeah, so as long as ours.
Speaker Change: <unk> is leading our satisfaction is leading I believe you will always find ways to grow the business and some of the students.
Speaker Change: Look at.
Speaker Change: The number that we had just a quick one just shared.
Speaker Change: Recent retention periods that we've already reached 70%.
Speaker Change: Our retention that that's very good and already competitive with Oh so.
Speaker Change: I think that is the key and the key thing and we are building future growth on the solid foundations yeah. Thank you.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Uh huh.
Speaker Change: Thank you Sam.
Speaker Change: The next question we have comes from Britain Lasalle of TICC. Please go ahead.
Speaker Change: Apologies.
Speaker Change: The next question we have comes from Thomas Chong of Jefferies. Please go ahead.
Thomas Chong: Hi, Good evening management.
Thomas Chong: My question Oh, Yeah piece do you see that might be why is it.
Speaker Change: Oh, yeah, well in the first quarter at 10 minutes back to school will be sustainable. Thank you.
Speaker Change: Hi, Thomas.
Speaker Change: Yeah. So no revenue from smart devices reached a RMB $315 million in the third quarter up 25% year over year I believe several factors contributed to the rebound of our device revenue.
Speaker Change: Now this is the first one is a positive outcome from our.
Speaker Change: Our strategic focus and the channel reorganization. So earlier this year, we had a review of our device business and we decided that we need to focus the teams work yeah, we want to do fewer things and do really well so.
Speaker Change: No.
Speaker Change: But since then I think increase the focus of our operations in particular, a more focus on the a dictionary pen products are really paid off well in Q3 are the Nu X seven seven pro our one of our most successful.
As ever.
Speaker Change: So our high end product X seven.
Speaker Change: Equipped with the new AI camera.
Speaker Change: And our suite of the exciting features like higher co. Mr. P. A a tutor.
Speaker Change: <unk> has.
Speaker Change: Received the widespread acclaim from users.
Speaker Change: This positive reception in turn drove net revenues and a.
Speaker Change: Our gross margin.
And the gross margin of smart devices and revenue reached the highest levels since 2023, so during the recent double.
Speaker Change: February 11th I also want to share double 11 shopping Festival Dictionary pen has again secure the top spots in terms of sales volumes in its category on both Tmall and JD com that.
That is for.
Speaker Change: Five consecutive years in a row.
Speaker Change: More are.
Speaker Change: Newly launched dictionary pen accident pro achieved.
Speaker Change: Highest single product sales in this category.
Speaker Change: Tmall and JD com.
Speaker Change: So these accomplishments I think reflect our continued.
Speaker Change: <unk> dominance in the market with or without the outstanding performance. So our.
Speaker Change: Revenues of smart devices.
Speaker Change: We expect them to continue to perform in a in there.
Speaker Change: In the first in the fourth quarter.
Continue to grow in the fourth quarter.
Speaker Change: The second factor is.
Kind of.
Speaker Change:
Enhanced our team capabilities.
Yeah.
Speaker Change: The team I think it's much more it's more important than.
Product or the strategy.
Speaker Change: So I'll chip device team has seen ups and downs in particular, we faced a much pressure since last year leading to a.
Speaker Change: All of the reflections replanting and changes are in.
Speaker Change: So I'm pleased to see that in such a challenging environment. Our team has shown.
Speaker Change: Remarkable resilience.
Speaker Change: As to the right tough questions.
And executed on the new focusing strategy.
Speaker Change: So I think the team executed really well across functions.
Clothing product design, R&D supply chain sales and marketing.
Speaker Change: So leading to a significant recovery of the business.
Speaker Change: I I believe any team.
Speaker Change: But that was able to go through.
Speaker Change: <unk> done test and re emerge stronger.
Speaker Change: More likely to succeed in the future.
Speaker Change: So looking ahead from a.
Our product pipeline in perspective, we expect to launch a new product in Q4 with more new products scheduled in Q1 as well.
Speaker Change: So in terms of what our strategy for a dictionary pen. So we emphasize cost effectiveness for the range of products, including our a M. S series.
Speaker Change: Our high quality and differentiation for high end products.
Speaker Change: That is the X series.
Speaker Change: And the whole product line will employee more large language model features to greatly enhance user experiences.
Speaker Change: We're more convinced of that Oh and has a lot more to offer for education products for years to come.
Speaker Change: So the team will be busy integrating more such features into.
The products in the coming quarters. So we are on the right track I believe to more leading products better financial health and profitability for the device segment. Thank.
Thank you.
Speaker Change: Thank you.
Thank you.
Speaker Change: The next question we have comes from Brenda Zhao of TICC. Please go ahead.
Speaker Change: Good evening children's to Tom Thanks for taking my question.
Speaker Change: I noticed that your online marketing service continued to see strong growth momentum. However, as the business had a high base in the fourth quarter of last year.
Speaker Change: Where should we anticipate the future growth potential of this.
Speaker Change: Our advertising business. Thank you.
Speaker Change: Thank you this is.
Speaker Change: Net revenues from online marketing services.
Speaker Change: If it goes well eight cultures are primarily driven by our advancement in our.
Speaker Change: Including all the Google algorithm optimizations on the hospital applications.
Speaker Change: Additionally, our teams excuse me to steadily improve.
Speaker Change: Looking ahead.
Speaker Change: I believe that there is a good growth potential for both domestic and the international advertising in the medium to long term.
Speaker Change: In the domestic market.
Speaker Change: Anticipate a substantial opportunity.
Speaker Change: Her.
Speaker Change: The entertainment industry.
Speaker Change: Sometimes that gave me on the social media the summer work season.
Speaker Change: We drove it to pay me a D revenues to a historical high in Q3.
Speaker Change: No it isn't.
Data analysis and optimize the models havent.
Speaker Change: How do we improve the monetization rates by over 90%.
Speaker Change: Second Yeah, I truth, it seems the revenue development.
That's a language models. The later half of the last year later attack culminate at the significantly increased the markets, even probably well there yet.
Translate captured onto a driving rapid growth during the last several quarters.
Speaker Change: There's a demand for it yet.
Speaker Change: Advertising so excited with this future.
Speaker Change: Third the automotive.
Speaker Change: Three.
Speaker Change: So consumption and assimilating policies Hot I think they anticipate to benefit the automotive and the related services sectors.
Came back in April.
Speaker Change: Increased otherwise heightening demand.
Speaker Change: In the international market, we became a preliminary.
Speaker Change: Agent for ticket Hawk in the first half of this year recently, we have established the initial intention for collaborations with several global packaging.
There's a formal partnership with you.
Speaker Change: In the near future.
Speaker Change: Being a solid foundation for our future global expansion.
Speaker Change: In the meantime.
Speaker Change: Of course in our advertising business also.
Speaker Change: Also based on a certain short term challenges.
Speaker Change: I feel I imagine.
Speaker Change: Neither of them knows that a very high pace in the fourth quarter over the last year.
Speaker Change: In the U E Commerce advertising has not been so robust during the recent the double.
Double 11 shopping festival.
Speaker Change: In addition, recent nowadays theres no marketable private hurts either off the 10 day, what's the otherwise Heidi however from a.
Speaker Change: Our financial Health perspective.
For mobility of the idiot advertising expected to maintain through the level in the first culture.
Speaker Change: The poker sale aligns with our rather athletics, our objective for the year and doesn't mean, a geometric under the current the confusion.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Last question, we have comes from boson.
Speaker Change: <unk> Securities. Please go ahead.
Speaker Change: Oh.
Speaker Change: It sounds cool cooking in that fashion.
Speaker Change: John Baugh, a math exercise.
Speaker Change: It's about what is the Mad men article called a false contract.
Speaker Change: Thank you assemble and this is a win.
Speaker Change: As we mentioned before.
Speaker Change: I'll focus on the digital content and services online marketing services and AI driven subscription services this year.
Speaker Change: With a particular emphasis on advancing generative AI to achieve full year profitability in the near future.
Speaker Change: For the past three quarters of this year.
Speaker Change: <unk> seen significant improvement from our financial side.
Our revenue for the first three quarters of this year.
Speaker Change: The RMB four 3 billion.
Speaker Change: This is anything a increase of around 10% on a year over year.
Speaker Change: We achieved a positive cumulative income from operations are down.
Speaker Change: The 65 million compared with around RMB 543 million loss from ops.
Speaker Change: In the same period of last year.
Another significant improvement.
Speaker Change: The strong financial performance to fully demonstrate that our strategy around the AI technology.
Education and on the right path.
And we are very confident that we will.
Speaker Change: We'll achieve that profitable objective of this year.
Looking forward, we will continue to facilitate the integration of generating AI technology around our business to enhance competitiveness.
Speaker Change: Uh Huh learning services.
But the demand for online learning services is expected to persist well into the coming years and we are.
Speaker Change: Confident in the medium to long term growth potential of our learning services.
Speaker Change: Our success.
Speaker Change: Will hinge on our ability to deliver high quality services and then learning.
Outcome that skill.
Speaker Change: As mentioned in previous question High School Denise mentioned.
Speaker Change: Our top priority with demands for high school opinions, but which is likely to sustain us in the coming years.
Speaker Change: We will be including the bathroom and stripped the team and incorporating AI functions in our learning services for years.
Speaker Change: Joe.
Speaker Change: Knowledge of them advantages give us confidence in the Sterling pumped competitive advantages in high school business.
Speaker Change: Yeah.
Speaker Change: And the tenor of the AI driven subscription services.
Speaker Change: We are committed to.
Advancing our current offering while exploring new avenues to enhance the user experience and learning.
Speaker Change: Work on the daily life.
Speaker Change: For the fourth quarter, we still expect the total sales in subscription services to maintain rapid year over year growth.
Online marketing services.
We have witnessed rapid growth and the continuing crude pump ability of online marketing services for eight consecutive quarters.
Speaker Change: In the near term this hasn't been easy serves as a cash cow.
Speaker Change: Crucial coffee center.
Speaker Change: Over the long term.
Speaker Change: We will continue to explore strategic growth area, both in the domestic and the international market.
Speaker Change: We will provide updates on significant developments as yet right.
Speaker Change: Smart devices, we cheat.
Speaker Change: Integrated smart device. It has one of the most exciting aside.
Speaker Change: Exciting opportunity of recent years, while smartphone and tablets continue to dominate many newsy scenarios the market for traditional smart glasses into shrinking.
Speaker Change: The integration of <unk>.
Speaker Change: Into smart devices paves, the way for innovation, including the creation of devices, either smaller than smartphones or larger ones and happen to meet user demand.
In addition to that space.
Speaker Change: And unlock new opportunities for smart devices.
Speaker Change: As discussed in today.
Speaker Change: Repair and remodel our dictionary pen XM and Sirius helped returns at first to learning.
Speaker Change: In the industry to support offline.
Speaker Change: Translational accuracy testing online mutual machine translation.
As we are attacking the potentials.
Speaker Change: Integration of Ash basin and into our smart devices to better serve our users.
In the long hour does that our past experience in.
Speaker Change: And the reason is.
Speaker Change: Supply chain management, and the sales channels provide a strong foundation for sustainable growth in our smart devices segment.
Speaker Change: Additionally, our planning for next year is underway.
Speaker Change: We are looking forward to share more insights investor earnings call.
Speaker Change: Thank you.
Speaker Change: Yeah, let me at a little bit more information you know this is a telephone.
Speaker Change: If you look at our financial performance this year than last year.
Speaker Change: See that we improves the overall financials a lot. This year, we are growing their business and operationally profitable.
Speaker Change: Two or three quarters. This year, so far and are on the right track for Q4 and the full year.
Speaker Change: In addition to that we have a creative to new products and high growth revenue streams like our new online closest car T. A ads.
Speaker Change: International K O L ads.
Speaker Change: Yeah, driven subscription services, that's a highlight and Oh, so high in the dictionary pen the acceptance Cirrus.
Speaker Change: These will drive our gross in the immediate future and we will have more of a two two to discuss it.
Speaker Change: Of course, yeah, putting these together it means are focusing strategy. This year and also our bet on the large language model applications. Since last year are these two strategies have I'll have really been.
Oh, Hey are plus education is an exciting opportunity and is already having a great positive impact on our business. So you would always aiming to lead.
Speaker Change: In AI plus education in China, Yeah. Thank you.
Speaker Change: Hello.
Sam: Thank you Sam.
That concludes our question and answer session.
Sam: I'd now like to turn the conference back to Jeffrey Wong for any additional or closing comments. Please go ahead.
Jeffrey Wong: Thank you once again for joining us today, if you have any further questions. Please feel free to contact us.
Jeffrey Wong: Actually or reach out to the peers and financial communications in China, or the U S have a great day.
Thank you so ladies and gentlemen that then computes today's conference. Thank you for joining US you may now disconnect your lines.
Jeffrey Wong: Hum.
Jeffrey Wong: [music].