Q1 2025 Helport AI Ltd Earnings Call
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Please standby we're about to begin.
Operator: Greetings and welcome to Helpport AI's First Half Fiscal Year 2025 Financial and Business Update Conference. At this time, all participants are in a listen-only mode. A question and answer session will follow.
Speaker Change: Greetings and welcome to help Port Ai's first half of fiscal year, 2025 financial and business update conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation and as a reminder, this conference is being recorded I would now like to hand, the call over to Ethan.
Operator: I would now like to hand the call.
Devine: Devine, HelpPort AI's Director of Investment. Thank you, operator. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward looking. While these forward looking statements represent our current judgment of what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to update, revise, or publicly release the results of any revision to these forward-looking statements in light of new information or future events.
Mine: Mine helped port Aig's director of Investor Relations. Please go ahead Sir.
Speaker Change: Thank you operator.
Speaker Change: While we begin the formal presentation I would like to remind everyone that statements made on the call and webcast may include predictions estimates or other information that might be considered forward looking.
Speaker Change: While these forward looking statements represent our current judgment on what the future holds they are subject to risks and uncertainties that could cause actual results to differ materially.
Speaker Change: Cautioned not to place undue reliance on these forward looking statements, which reflect our opinions only as of the date of this presentation.
Speaker Change: Please keep in mind that we are not obligating ourselves to update revise or publicly release the results of any revision to these forward looking statements in light of new information or future events.
Devine: Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our prediction. We should also review our most recent Form 6K and other public filings with the U.S. Securities and Exchange Commission for a more complete discussion of these factors and other risks, particularly under the heading risk factors.
Speaker Change: Throughout today's discussion we will attempt to present, some important factors relating to our business.
Speaker Change: They affect our predictions.
Speaker Change: You should also review our most recent form 6K, and other public filings with the U S Securities and Exchange Commission for a more complete discussion of these factors and other risks, particularly under the heading risk factors.
Devine: Your host today, Guanghai Li, Chief Executive Officer, and Amy Fung, President and Interim Chief Financial Officer, will present results of operations for the six months ended December 31st, 2024, as well as some more recent post first half operational highlights.
Speaker Change: Your host today, Guang highly chief Executive Officer.
Speaker Change: Amy Fong, President and interim Chief Financial Officer.
Speaker Change: <unk> results of operations for the six months ended December 31, 2024, as well as some more recent post first half operational highlights.
Devine: A press release detailing these results was issued earlier today and is available in the investor relations section of our company's website, ir.haleport.ai.
Speaker Change: A press release detailing these results was issued earlier today and is available on the Investor Relations section of our company's website.
Speaker Change: <unk> got held court.
Speaker Change: Hi.
Guanghai Li: At this time, I will turn the call over to Hellport AI Chief Executive Officer, Guanghai Li. Thank you, Ethan, and good afternoon, everyone. It's an honor to welcome you to today's first half fiscal year 2025 financial results and business update conference call.
Kwang highly: At this time I will turn the call over to help with AI, Chief Executive Officer Kwang highly.
Speaker Change: Thank you Lisa and good afternoon, everyone. It's an honor to welcome you to today's first half fiscal year 2025 financial result in this update conference call before I begin I want to take this opportunity to introduce my colleague.
Amy Fung: Before I begin, I want to take this opportunity to introduce my colleague, president, and board member, as well as our interim CFO, Amy Fong, who just joined us in January this year. Amy. Thank you, Guanghai.
Speaker Change: President and board member as well as our interim CFO and <unk>, who just joined US in January of this year.
Speaker Change: Thank you God I'm very glad to be joining my first earnings call with help point today. This is especially meaningful as not had the chance to be intimately working with the company and the team for three months after observing them from the sidelines since last August when the company went public.
Amy Fung: I'm very glad to be joining my first earnings call with Helpport today. This is especially meaningful as I've had the chance to be intimately working with the company and the team for three months after observing them from the sidelines since last August when the company went public. It took me four months to check them out and do my due diligence, and finally deciding to join after being convinced of their potential. And the last three months have given me even more confidence as I have watched our pipeline grow and seen firsthand how powerful our software is.
Speaker Change: It took me a four months to check them out and do my due diligence and finally, the final who joined after being convinced that their potential.
Speaker Change: And the last three months have given me even more confidence does have washed out pipeline grow and seen firsthand how powerful our software is.
Speaker Change: As a new join though I'm keenly aware of how new customers and new investors may need an explanation to fully understand where our products are what they do and how they serve customers I'm aware there are quite a few newcomers to our July earnings call. Today. So let me quickly give an overview.
Amy Fung: As a new joiner, I'm keenly aware of how new customers and new investors may need an explanation to fully understand what our products are, what they do, and how they serve customers. I'm aware there are quite a few newcomers to our joint earnings call today, so let me quickly give an overview.
Amy Fung: First off, our product is not a bot. It doesn't aim to replace humans. It aims to empower you. It is designed for call centers and similar environments. And our product empowers all contact agents to perform at the level of the organization's best age.
Speaker Change: First off a product it's not a box it doesn't aimed to replace it.
Speaker Change: To empower them.
Speaker Change: It is designed for call centers and similar environments.
Speaker Change: And I'll call. It empowers all contact agents to perform at the level of the organization best agents.
Amy Fung: And you would ask, why is this distinction important? And I will share a recent Harvard study that found 30% to 50% of participants participating in the research study preferred to wait anywhere from two hours to two years for a human response, or simply have their experience read by a person rather than receive an immediate AI reply. This highlights the strong value that people place on human empathy and connection, even at a significant time cost. And this is exactly why our product came to be. It is designed to empower and encourage human empathy.
Speaker Change: And you would ask why isn't this distinction I'm quite.
Speaker Change: And I'll share a recent Harvard study that well, 30% to 50% of participants participating in a research study referred to wage anywhere from two hours to two years for a human response.
Speaker Change: It's typically how far experience.
Speaker Change: Our rec Fi person rather than receive an immediate AI required.
Speaker Change: This highlights the strong value that people place on human empathy and connection even.
Speaker Change: Second time cost.
And this is exactly why our product team to be it is designed to empower and encourage human empathy.
Guanghai Li: Giving people the tools to perform as experts while preserving that human I'll now hand the call back over to our CEO, Guanghai. Yeah, thank you, Amy, for joining us, and also for a reminder of why Helper AI's product is different and necessary in the world of AI and why our customers find it useful in serving their customers. This has translated into the great business progress we have made since our listing on NASDAQ on August 6, 2024.
Speaker Change: Giving people the tools to perform as experts, while preserving that human touch.
Speaker Change: I'll now hand over the call the hand to hand, the call back over to our CEO Guadalajara.
Speaker Change: Thank you Amy for joining us and also for a reminder of why help our AI product is different and necessary and the word of the AI and the why all customers by its use williamson as their customers.
Speaker Change: This has translated into the great progress we have made claims.
Speaker Change: Listing on NASDAQ on August six.
Speaker Change: 2024.
Guanghai Li: First, let's look at our global market expansion. As a profitable company with three consecutive years of earning growth, we went public with a clear objective. to scale our proven software product in key international markets, especially in the U.S. and the Southeast Asia. We remain firmly committed to this objective. Our US and Philippines operations are already seeing measurable and very promising traction. And we are actively expanding our footprint in North America and Southeast Asia to capitalize on surging demand, both from existing clients and untapped markets.
First let's look at our global mine expansions.
Speaker Change: A profitable company with three consecutive years of earnings growth, we went public with a clear objective.
Speaker Change: To scale, all proven software product in key international markets.
Speaker Change: Naturally in the U S and the South East Asia.
Speaker Change: We remain firmly committed to this objective.
Speaker Change: Our U S and Philippines operations are already seeing measurable and very promising traction and we are actively expanding our brand in North America, and southeast Asia to capitalize on a surge in demand both from existing clients and the untapped markets.
Guanghai Li: So let me provide an update on our technological advancement. On the technology front, we have successfully harnessed the power of large language models, significantly leveraging their ability to digest the raw, unconstructed information. But we don't just rely on large language models. We create domain-specific small language models and knowledge bases, which are optimized for specific sectors as customer use cases. These small language models and knowledge bases offer advantages in accuracy, response time, cost, and contextual relevance. We are continuing to roll out new product capabilities that support our customers' needs. This includes more domain-specific language models, introducing voice cloning capabilities, and offering multilingual versions of our software to further solidify our position in the AI-driven customer contact space.
Speaker Change: So let me provide an update on our technological advancement.
Speaker Change: All the technology problem, we have successfully harnessed the power of large language models significantly leveraging their ability to digest more unconstructive inflammation, but we don't just rely on large language models, we create domain specific smaller language models and knowledge.
Speaker Change: Basis, which are optimized for specific sectors as customer user case use cases.
Speaker Change: Smaller luxury models and argue basis offer advantages in accuracy response time cost and contextual relevance.
We are continue to roll out new product capabilities that support our customers' needs. This includes more domain specific language models.
Speaker Change: Reducing voice cloning capabilities and the offering multilingual versions of software to further solidify our position in the AI driven customer contact space.
Guanghai Li: We have invented our own tools and know-how in building and training a client AI software very quickly, usually within a few weeks, by working with customers and using their proprietary knowledge, materials, and the processes so as to ensure our customers can harness the true power of AI. Our in-house AI training and operation capabilities remain cornerstones of our competitive advantage. As we expand into new regions and verticals, we are significantly increasing investment in these core capabilities to deliver even faster client onboarding and accelerated time to value.
Speaker Change: We have reinvented our own tools and Knowhow in building and training applied AI software very quickly.
Speaker Change: Really within a few weeks by working with customers are using their proprietary large materials and processes. So as to ensure our customers can harness the power of AI.
Speaker Change: In house, AI training and operation capabilities remain cornerstones of our competitive advantage as we expand into new regions and verticals. We are significantly increasing investment in these core capabilities to deliver even faster decline.
Speaker Change: Onboarding and accelerated time to value.
Guanghai Li: Next, let me give you an update of our recent progress in serving new market segments.
Speaker Change: Next let me give you an update on our recent progress in serving new market segments first in December we formed a strategic partnership with U S. Based Lance your mortgage Corporation, a wholesale lender with a network of over 100 stores a loan officer.
Guanghai Li: First, in December, we formed a strategic partnership with U.S.-based Landshare Mortgage Corporation, a wholesale lender with a network of over 100,000 loan offices. Our AI-driven software is expected to equip law officers with the tools they need to effectively communicate with followers and facilitate enhanced promotion of Landshare's products.
Speaker Change: Yes.
Speaker Change: Our AI driven software is expected to a quick loan officers with the tools they need to effectively communicate with followers and the facilities enhanced promotion of launch products.
Guanghai Li: Second, in the insurance sector, more recently, we have secured partnerships with seven leading insurance agencies across the U.S. with successful initial deployment and positive market feedback.
Speaker Change: Second in the insurance sector more recently, we have secured partnerships with several leading insurance agencies across the U S with successful any sure.
Speaker Change: Volume and positive market feedback. This first use cases served as a strong foundation for continued expansion and the large scale growth potential.
Guanghai Li: These first use cases serve as a strong foundation for continued expansion and large-scale growth potential.
Guanghai Li: And third, in the consumer financing market, since January, we've also made rapid progress in the debt collection space, securing partnership with three major consumer financing companies in Southeast Asia, two of which are listed in the U.S.
Speaker Change: And third in the consumer financing market. Since January we've also made rapid progress in the debt collection space securing a.
Speaker Change: Partnership with three major consumer financing companies in Southeast Asia, two of which are listed in the U S.
Guanghai Li: And lastly, we have also achieved important milestones in the public service sector. Our technology passed Google's stringent security standard, and we successfully supported Google in delivering service to one of its key US government accounts on the West Coast. We have already entered into the next phase of collaboration with that client, laying a solid foundation for future growth in the public sector and the further cooperation with Google Cloud. Our successful entry into this new market, coupled with our growing operational expertise, which has seen us rapidly deploy our software across these high-growth verticals, make us optimistic as we look toward the future.
Speaker Change: Lastly, we have also achieved important milestones in the public service sector, our technologic cask of Google's stringent security standout and we successfully.
Speaker Change: Supported Google in delivering service to one of his key U S accounts all in the West Coast.
Speaker Change: We have already entered into the next phase of our collaboration with that client laying a solid foundation for our future growth in the public sector and the further cooperation with Google cloud.
Speaker Change: Our successful entry into these new markets, coupled with our growing operational expertise, which has been which has seen us rapidly deploy our software across despite rose verticals.
Speaker Change: Because often they ought to mistakes.
We look toward the future.
Guanghai Li: So, what are our strategy priorities? Since the end of our previous fiscal year on June 30, 2024, Helper AI has achieved remarkable progress. Looking ahead, we are focused on four high-impact strategy priorities. First, we are doubling down our international expansion effort in North America and Southeast Asia with a focus on scaling operations and accelerating revenue realization in the high growth market. Second, we are continuing to expand and further monetize our AI plus BPO service model. Under this model, new customers can quickly see ROI by using our in-house AI-enabled customer contact agent. This approach provides a low-risk, rapid proof of concept for customers, and has been instrumental in gaining a foothold of new markets, such as consumer financing.
Speaker Change: So.
Speaker Change: What are our strategy priorities.
Speaker Change: Since the end of our previous fiscal year on.
Speaker Change: June 32024, however, AI has achieved remarkable progress looking ahead, we are focused on more high impact strategic priorities.
Speaker Change: First.
Speaker Change: We are doubling down on you.
Speaker Change: International expansion effort in North America, and Southeast Asia, with a focus on scaling operations and accelerating revenue realization in the higher growth markets.
Speaker Change: Second we are continuing to expand and further monetize all AI philosophy PEO service model under this model new customers can quickly see our oi by using our in house AI enabled customer contact agents. This approach provides a low risk royalty.
Speaker Change: Rapid.
Speaker Change: You've all concepts, but customers and has been instrumental in gaining a foothold of new markets such as consumer financing.
Guanghai Li: Third. We will continue to invest in R&D and innovation to further strengthen our technological leadership and competitive edge. Our industry is at the critical juncture in which enterprises are actively looking for AI solutions to automate tasks. gain productivity, lower cost, and drive revenue. Our unwavering commitment to our customers is based on our ability to continuously innovate. Finally, we will focus our resources and prioritize expansion in five high-growth verticals, BPO contact centers, insurance, mortgage sales, consumer financing, and public sector. By tailoring our AI solutions to each vertical, including knowledge-based generation, AI training, and IT integration, we aim to build category leadership and accelerate adoption in these high-potential markets, which are fine for disruptive technologies such as ours.
Speaker Change: Third.
Speaker Change: We will continue to invest in R&D and innovation to further strengthen our technological leadership and the competitive edge.
Speaker Change: Our industry is critical.
Speaker Change: Critical juncture, you'll wait.
Speaker Change: <unk> enterprise are actively looking for AI solutions to automate tasks.
Speaker Change: <unk> productivity lower cost and drive revenue.
Speaker Change: Unwavering commitment to our customers is based on our ability to continuously innovate.
Speaker Change: Finally, we will focus our resources and prioritize expansion implied high growth verticals.
Speaker Change: <unk> contact centers insurance mortgage sales consumer financing and public sector.
Speaker Change: By tailoring, our AI solutions to each vertical including larger base generation AI training and integration, we aim to build category leadership and accelerate adoption in these high potential markets.
Speaker Change: Each one well at disruptive technology, such as ours.
Guanghai Li: As we look ahead to the remainder of fiscal year 2025, these four strategy priorities reflect our focus on execution, scalability, and technology leadership. We believe these initiatives will position Helper AI for sustainable long-term growth across both developed and emerging markets.
Speaker Change: As we look ahead to the remainder of fiscal years why we fight. This all strategy priorities reflect our focus on execution scalability and technology leadership.
Speaker Change: We believe these initiatives will position <unk> for AI for sustainable long term growth across both developed and emerging markets.
Guanghai Li: Thank you for your attention.
Speaker Change: And thank you for your attention I will now pass it over to our president and interim CFO, Amy for our financial overview.
Amy Fung: I will now pass it over to our president and interim CFO Amy for our financial overview. Thank you, Guanghai. As a newcomer to Hellport AI, I'm glad to see the continuous and consecutive revenue growth on a half yearly basis since 2023. This healthy trajectory gives me confidence that we have a solid product and proven ability to track further progress in the future. Now let me walk you through our financial performance for the first half of fiscal year 2025. For the six months ended December 31st, 2024, Helpport AI recorded a revenue of $16.4 million, reflecting a 13.1% period over period increase.
Amy: Thank you Bob.
Speaker Change: As a newcomer to help what AI I'm glad to see the continuous and consecutive revenue growth on a half yearly basis from 2023.
Speaker Change: This healthy trajectory gives me confidence that we have a solid product and proven ability to attract further progress in the future.
Speaker Change: Now, let me walk you through our financial performance for the first half of fiscal year 2025.
Speaker Change: For the six months ended December 31st 2020 for California, I recorded a revenue of $16 4 million, reflecting a 13, 1% period over period increase.
Amy Fung: This growth was driven by continued demand for our AI-powered communication tools, particularly within enterprise sales and contact centers. We also saw a 29.1% increase in average monthly subscribed fees. What we see as a clear signal that our platform continues to resonate with customers seeking scalable, intelligent AI solutions. And I know many of you on the call are experts in SAS business models.
Speaker Change: This growth was driven by continued demand for our AI powered communication tools, particularly within enterprise sales and contact centers.
Speaker Change: We also saw a 29 29, 1% increase in average monthly subscriber fees.
Speaker Change: What we see as a clear signal that our platform continues to resonate with them with customers seeking scalable intelligence AI solutions.
Speaker Change: And I know many of you on the call are experts in SaaS business models. Indeed, while our company has a demonstrated track record of success in Asia for a number of years, our deliberate but the global market since last year requires us to power through sales cycles with new customers that took.
Amy Fung: Indeed, while our company has a demonstrated track record of success in Asia for a number of years, our deliberate pivot to global markets since last year requires us to power through sales cycles with new customers that typically need at least six months, and sometimes more with larger customers. What attracts me to this company is its SaaS model, which has already demonstrated strong revenue stickiness in Asia. In the US, we are now seeing green sprouts growing with more and more pilots and proof of concepts happening with new customers. While the revenue contributions are still small, they are promising and represent important steps towards the buildup of a robust, long-term SAS model.
Speaker Change: Quickly need at least six months and sometimes more with larger customers.
Speaker Change: What attracted me to this company is SaaS model, which has already demonstrated strong revenues stickiness in Asia.
Speaker Change: In the U S. We are now seeing green sprouts growing with more and more pilots and proof of concepts happening with new customers.
Speaker Change: While the revenue contributions are still small they are promising and represent important steps towards the buildup of our robust long term SaaS SaaS model.
Amy Fung: On the earnings front, we remain profitable during the period with net income of $1.1 million and non-GAAP-adjusted net income of $1.6 million. Growth margin came in at 54.6%, reflecting elevated amortization costs from software R&D, increased outsourcing operation fees, and expanded cloud infrastructure spending. Of course, this is not the same profit level as we saw previously. But as a growing AI tech company, we're strategically prioritizing expansion into new markets and investing in additional R&D, as well as in our sales team and G&A to support our continued growth. We believe that these efforts are crucial in helping us compete effectively and capitalize on our technological strength.
Speaker Change: On the earnings front.
Speaker Change: Mean profitable during the period with net income of $1 1 million and non-GAAP adjusted net income of $1 6 million.
Speaker Change: Margin came in at 54, 6%, reflecting elevated amortization costs from software R&D increased outsourcing operation fleet and expanded cloud infrastructure spending.
Speaker Change: Of course this is not the same profit level as we saw previously.
Speaker Change: That's a growing AI Tech company, we're strategically prioritization prioritizing expansion into new markets and investing in additional RMB as well as in our sales team and G&A to support our continued growth.
Speaker Change: We believe that these efforts are crucial and helping us compete effectively and capitalize on our technological strength.
Amy Fung: Since I joined in January, I've been talking to many large potential customers across industries, as well as across geographic regions. What excites me tremendously is the receptiveness and enthusiasm for our product. Time and again, after seeing our demo in action, the prospective customers ask for a second meeting with us together with their technology team. Within weeks, they're often ready for a pilot. This has translated into a strong and robust pipeline so far. The challenge now is to guide many of our customers through this space quickly and effectively, accelerating the path to revenue conversion. Simply put, our focus going forward is clear.
Speaker Change: Since I joined in January I've been talking to many large potential customers across industries as well as across geographic regions.
Speaker Change: What excites me tremendously.
Speaker Change: Except the Smith and <unk>, yes for all products.
Speaker Change: And then again after seeing our demo inaction and prospective customers ask for a second meeting with us together with that technology.
Speaker Change: Within weeks after ready for a pilot.
This has translated into a strong and robust pipeline so far.
Speaker Change: The challenge now is to guide many of our customers through the space quickly and effectively accelerating the path to revenue conversion.
Simply put our focus going forward is clear execute with determination scale responsibly.
Amy Fung: Execute with determination, scale responsibly, and deliver sustained growth. In the second half of fiscal year 2025, we aim to build on the foundation already laid in the fiscal first half by emphasizing on three focus areas. One, turning pipeline into performance, particularly in North America and Southeast Asia.
Speaker Change: Deliver sustained growth.
Speaker Change: In the second half of fiscal year 2025, we aim to build on the foundation already late in the first fiscal first half by emphasizing our three focus areas one turning pipeline into performance, particularly in North America and Southeast Asia.
Amy Fung: 2. Improving profitability through operational efficiency and margin discipline. And three, investing in long-term value, including further development of our product and operation. With growing customer engagement, support from strategic partners, and our expanding international presence, we see meaningful tailwinds heading into the second half. I'm sure many of you on today's call are curious about our 2025 remaining of the years outlook. While I'm extremely excited about the promising developments in our technology, partnerships, and customers, many of the contributions from recently signed partnerships and penetration in the US and Southeast Asia are just beginning to materialize. With that in mind, we're forecasting 15 to 20% top-line growth for the full first fiscal year.
Speaker Change: Two improving profitability through operational efficiency and margin discipline.
Speaker Change: And three investing in long term value, including further development of our product and operations.
Speaker Change: With growing customer engagement support from strategic partners and our expanding international presence, we see meaningful tailwind heading into second half.
Speaker Change: I'm sure. Many of you on today's call are curious about our 2025 remaining of the year outlook.
Speaker Change: Well I'm extremely excited about the promising developments in our technology partnerships and customers. Many of the contributions from recently signed partnerships and penetration in the U S and southeast Asia are just beginning to materialize.
Speaker Change: With that in mind, we're forecasting 15% to 20% top line growth for the full fiscal year.
Amy Fung: Growth, margin, and net income will remain under pressure in the short term as we continue to execute on our international expansion efforts and invest in our core technology, which is essential for us to stay competitive in enterprise AI. Looking ahead, we remain focused on balancing top-line growth with profitability to set ourselves up for innovation, leadership, and success long-term. That concludes our financial update.
Speaker Change: Gross margin and net income will remain under pressure in the short term as we continue to execute on our extra international expansion efforts.
Speaker Change: Invest in our core technology, which is essential for us to stay competitive and enterprise AI.
Speaker Change: Looking ahead, we remain focused on balancing top line growth with profitability and set ourselves up for innovation leadership and success long term.
Speaker Change: That concludes our financial update.
Amy Fung: Before we move to the Q&A section, I'd like to take this opportunity to welcome investors, analysts, and our shareholders to visit us in San Diego, experience a live product demo, and get a closer look at what's ahead. It's an exciting time at Hellport AI and we're thrilled to have you with us on this journey.
Speaker Change: Before we move to the Q&A section I'd like to take this opportunity to welcome investors analysts and our shareholders to visit us in San Diego experienced a life product demo and get a closer look at what's ahead.
Speaker Change: It's an exciting time at <unk> AI and we're thrilled to have him with us on this journey.
Amy Fung: We'll now open the floor for questions. Thank you. Thank you, Ms. Fong.
Speaker Change: We will now open the floor for questions. Thank you.
Speaker Change: Thank you Ms Fang, ladies and gentlemen at this time for any questions over the phone. Please press star one if you find your question has been addressed you may remove yourself from the queue by pressing star to once again star one for questions and we will pause for just a moment.
Operator: Ladies and gentlemen, at this time, for any questions over the phone, please press star 1. And if you find your question has been addressed... by pressing start. star 1 for questions.
Speaker Change: Ladies and gentlemen, I have nothing coming in over the phones at this time.
Speaker Change: Okay.
Speaker Change: And it appears we have no further questions over the phone Mr. <unk> I'll turn the call to you for any webcast questions.
Operator: We have no further questions over the phone, Mr. Hullabaloo.
Unnamed Questioner: Our first webcast question asks, it appears that your top line growth is slow compared to previous periods. Why are you confident in your future growth?
Speaker Change: Our first webcast question asked it appears that your top line growth has slowed compared to previous periods.
Speaker Change: Are you confident in your future growth.
Guanghai Li: Thank you, that's a great question. As we mentioned when we went public last August, we aspire to becoming a leading global company, tapping into high growth new markets, such as North America and Southeast Asia. To that end, we have intentionally shifted efforts and resources to these new markets, away from where we used to generate the bulk of our revenue. While we have sold seats in the new markets, as you can imagine, we need to work through normal sales cycle, which is typically six months and longer with larger customers. This is translated into slower revenue growth for the time being.
Speaker Change: Thank you that's a great question as we mentioned when we went public last August we aspire to becoming a leading global company tapping into high growth new markets, such as North America and Southeast Asia.
Speaker Change: To that end with.
Speaker Change: Intentionally shifted efforts and resources to these new markets away from where we used to generate the bulk of our revenues.
Speaker Change: We have <unk> and the new markets as you can imagine we need to work through the normal sales cycle, which is typically six months and longer with large larger customers.
Speaker Change: This is translated into slower revenue growth for the time being as expected.
Guanghai Li: We believe this is a necessary transitional phase of our company's evolution as we prove ourselves with new customers in new markets. There is certainly a tradeoff in terms of short-term revenue, but we believe such tradeoffs are necessary for us to tap into bigger market opportunities globally.
Speaker Change: We believe this is a necessary transitional phase of our company's evolution as we prove ourselves with new customers and new markets.
Speaker Change: There is certainly a trade off in terms of short term revenue, but we believe such trade offs are necessary for us to tap into the favorite market opportunities globally.
Guanghai Li: Most importantly, we're now seeing some very promising early signs from our efforts. Truly, we're very pleased with our success working with Google within a few months of meeting them, signing up more and more users, such as large insurance broker and mortgage brokers, such as Lensure in the US, as well as large consumer lending companies in Southeast Asia doing debt collection. Time and again, these new customers have told us that our mature and easily deployable product is best in class. And as evidence, their endorsements are substantiated by the robust pipeline that we are seeing, which is very encouraging.
Speaker Change: Most importantly, we're now seeing some very promising early signs from our efforts.
Speaker Change: Truly we're very pleased with our success working with Google within a few months of meeting that signing.
Speaker Change: Signing up more and more users such as large insurance broker and mortgage brokers such as venture in the U S as well as large consumer lending companies in Southeast Asia June debt collection.
Speaker Change: Hi, Alan again, these new customers have told us that are mature and easily deployable product is best in class.
Speaker Change: And as evidenced their endorsements are substantiated by the robust pipeline that we're seeing which is very encouraging.
Guanghai Li: Now, the challenge for us is to power through the space of proof of concept pilots to convert these into sustainable revenue. Given our track record in doing so in our original market, we're confident that we can replicate that success in these markets, especially given these promising markets.
Speaker Change: Now the challenge for US is to power through this space are proof of concept pilot to convert these into sustainable revenues.
Speaker Change: Given our track record in doing so.
Speaker Change: Original market, we're confident that we can replicate that success in these markets, especially given these promising signs.
Guanghai Li: Thank you.
Unnamed Questioner: The next question asks, This is more of a macro question. There are so many AI companies out there with more appearing almost daily. How are you different?
Speaker Change: The next question asks.
Speaker Change: This is more of a macro question. There are so many AI companies out there with more appearing almost daily.
Speaker Change: How are you different.
Guanghai Li: I'm glad you asked this question, that was also my question when I considered joining this company. Indeed, there's a proliferation of AI companies out there, each offering a different proposition to customers hungry for AI solutions. And as you and I know, many of them do not yet have a product and are still in a product development state.
Speaker Change: Okay.
Speaker Change: Glad you asked the question that was also my question when I considered joining this company.
Speaker Change: Hi.
Speaker Change: Indeed, there is a proliferation of AI companies out there each offering a different proposition to customers hungry for AI solution.
Speaker Change: As you and I know many of them do not yet have a product and are still in the product development stage.
Guanghai Li: We're different. We have a proven product, a SaaS application, which has already been deployed with over 30,000 users. We also have a proven fast business model, already revenue generating and profitable for a few years. Our founding team has worked together for decades for call center businesses, knowing intimately the challenges and pain points of call centers. Therefore, develop the product that is highly fit for purpose, immediately usable by call agents.
Speaker Change: We are different we have a proven product a SaaS application, which has already been deployed with over 30000 users. We also have a proven SaaS business model, our rabbit ready revenue generating and profitable for a few years.
Speaker Change: Our founding team has worked together for decades with call center businesses slowing incrementally the challenges and pain points of call centers. Therefore, the product that is highly fit for purpose immediately usable by call agents.
Guanghai Li: And we're not everything to everyone. Our product is focused in call center and call center like settings, giving call agents the tool to do their jobs effectively and accurately, and allowing their supervisors to do their job efficiently and in full compliance with relevant rules and regulations. We do not replace human. but empower your mind. We're also very focused on specific sectors, such as insurance, mortgage, consumer finance, and public sector. This allows us to be laser focused on developing in-depth knowledge in these sectors, which will ultimately be the barrier of entry to new competitors, which we have yet to see in the future.
Speaker Change: And we're not everything to everyone. Our product is focused in call center and call center like settings, giving call agents the tool to do their jobs, effectively and accurately and allowing their supervisors to do their jobs efficiently and in full compliance with relevant rules and regulations.
Speaker Change: We do not replace humans.
Speaker Change: But in power.
Speaker Change: We're also very focused on specific sectors, such as insurance mortgage consumer finance and public sector.
Speaker Change: This allows us to be laser focused on developing in depth knowledge in these sectors, which will ultimately be the barrier of entry to new competitors, which we have yet to see in the future.
Guanghai Li: We have a clear idea of who we are, what we provide, and who we aim to serve, allowing us to focus deeply on what we do best.
Speaker Change: We have a clear idea of who we are what we provide and who we aim to start allowing us to focus deeply on what we do best I believe this is what sets us apart from other companies out there.
Guanghai Li: I believe this is what sets us apart from other companies.
Unnamed Questioner: Our next question asks, You mentioned some of your new U.S. customers like Lensure and insurance brokerages.
Speaker Change: Our next question asked.
Speaker Change: You mentioned some of your new U S customers like when sure and insurance brokerages.
Guanghai Li: Why do you think these accounts are promising and helpful for your long-term growth? North America is the world's largest customer contact market. We know this market's high purchasing power and widespread SaaS and AI adoption makes it a prime market for scalable, rapid growth of our product and service. Within this large market, there are particularly attractive verticals like mortgage sales and insurance sales, where AI-driven sales tools can deliver maximum impact. These are highly regulated sectors with large numbers of workers and acute needs for productivity, compliance and revenue growth. Requirements that our products address perfectly.
Speaker Change: Do you think these accounts are promising and helpful for your long term growth.
Speaker Change: North America is the worlds largest customer contact market. We know this market high purchasing power and widespread SaaS and AI adoption makes it a prime market for scalable rapid growth of our product and services.
Speaker Change: This large market there are particularly attractive verticals like mortgage sales in insurance sales, where AI driven sales tools can deliver maximum impact. These are highly regulated sectors with large numbers of workers and acute wounds for productivity compliance and.
Speaker Change: Revenue growth.
Speaker Change: Requirements that our products address perfectly.
Guanghai Li: Knowing how these factors work will allow us to build a long-term barrier of entry, giving us an advantage vis-à-vis our competition in the long run. Of course, the relatively high value of the products being sold, mortgages and insurance, is very attractive.
Speaker Change: Knowing how these sectors work will allow us to build a long term barrier of entry, giving us an advantage vis vis our competition in the long run.
Speaker Change: Of course to relatively high value of the products being sold mortgages in insurance is very attractive. This means our software ability to drive outbound sales can yield meaningful.
Unnamed Questioner: This means our software's ability to drive outbound sales can yield meaningful gains in revenue for customers and for our Our next question asks, gap net income really took a hit. What was the main component? R&D, cost of being a public company, global expansion. What drove these declines? There are four components that significantly affect our gap net income. The increase in amortization of intangible assets, software R&D, global expansion efforts, which saw a significant jump in headcount, particularly in sales, marketing, operations and management as we open new offices in overseas markets. Highly outsourced operation fees and elevated expenses.
Speaker Change: Revenue for customers and for ourselves.
Speaker Change: Okay.
Speaker Change: Our next question asks GAAP net income really took a hit what was the main components.
Speaker Change: R&D cost of being a public company global expansion.
Speaker Change: What drove these declines.
Speaker Change: Therefore components that significantly affect our GAAP net income increase in the amortization of intangible assets software R&D global expansion efforts.
Speaker Change: Which saw a significant jump in head count, particularly in sales marketing operations and.
Speaker Change: Management as we opened new offices in overseas markets.
Speaker Change: Highly outsourced operation fees and elevated expenses legal accounting.
Unnamed Questioner: Legal accounting from being a public company.
Speaker Change: Being a public company.
Amy Fung: How should we think about net income going forward and the balance of fiscal year 2025? These investments will continue in the long short term as they're critical to our R&D and expansion efforts. As such, we expect net income to remain under pressure for the balance of fiscal year 2025. As revenue begins to materialize from our pipeline in North America and Southeast Asia, we expect our profitability to rebound.
Speaker Change: How should we think about net income going forward in balance and the balance of fiscal year 2025.
Speaker Change: These investments will continue in the long term as they are critical to our R&D and expansion efforts as such we expect net income to remain under pressure for the balance of fiscal year 2025.
Speaker Change: As revenue begins to materialize from our pipeline in North America, and Southeast Asia, We expect our profitability to rebound.
Amy Fung: Last webcast question. Based on cash available and reduction in net cash provided by operating activities in the first half, it seems the company may need to raise additional capital. Yes. Cash was $0.9 million as of December 31, 2024, as compared to $0.1 million a year earlier. However, this figure does not fully reflect the cash position available to the company. $2 million of additional cash is held on the company's behalf by a contracted third-party entity that collects payments from customers. This amount is recorded as prepaid expenses and other receivables on the balance sheet. When we adjusted these funds, the company's total available cash is $2.9 million.
Speaker Change: Last webcast question.
Speaker Change: Based on cash available and reduction in net cash provided by operating activities in the first half it seems the company may need to raise additional capital.
Speaker Change: Yes.
Speaker Change: Cash was $2 9 million as of December 31, 2024, as compared to <unk> 1 million a year earlier. However, this figure does not fully reflect the cash position available to the company $2 million of additional cash is held on the company's behalf by contracted third party entity that collects.
Speaker Change: Payments from customers. This amount is recorded as prepaid expenses and other receivables on the balance sheet. When we adjust for these funds the company's total.
Speaker Change: Available cash is $2 $9 million that being said the company is certainly open to partnering with right strategic investors to bolster our balance sheet and to provide additional cash to scale, our sales and operations invest in R&D and pursue opportunistic M&A transactions.
Operator: That being said, the company is certainly open to partnering with right strategic investors to bolster our balance sheet and to provide additional cash to scale out sales and operations, invest in R&D, and pursue opportunistic M&A transactions. That concludes our webcast Q&A. Thank you operator.
Speaker Change: That concludes our webcast Q&A.
Thank you Mr Hall will then again, ladies and gentlemen, it appears we have no further questions over the phone at this time so Mr. Lee I would like to turn things back to you for any closing comments.
Speaker Change: Thank you operator.
Guanghai Li: I'd like to thank each of you for joining our financial results and business update conference call and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of our questions, please reach out to our IR firm and the group, who would be more than happy to assist. This concludes our update for this past half year. Thank you.
Speaker Change: I'd like to thank each of you for joining our financial results and business update conference call.
Speaker Change: And look forward to continuing to update you on our ongoing progress and growth.
Speaker Change: If we were unable to answer any questions. Please reach out to our IR firm MZ group, who would be more than happy to assist.
Speaker Change: This concludes our update but this past half year. Thank you.
Speaker Change: Thank you Mr. Li again, ladies and gentlemen that will conclude todays <unk> first half fiscal year 2025 financial and business update call again. Thanks, so much for joining US everyone and we wish you all a great day Goodbye.
Operator: Again, ladies and gentlemen, that will conclude today's Hellport AI's first half fiscal year 2025 financial and business update call. Again, thanks so much for joining us, everyone, and we wish you all a... MMM MMM MMM MMMM MMMM MMMM
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