Q1 2025 Cheetah Mobile Inc Earnings Call

Operator: Good day and welcome to the Cheetah Mobile first quarter 2025 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Good day and welcome to the Cheetah Mobile first quarter 2025 earnings conference call.

All participants will be in a listen only mode.

Should you need assistance. Please signal a conference specialist by pressing the star followed by.

Zero.

Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and one on a touchtone phone. To withdraw your questions, please press star then. Please note this event is being recorded.

After todays presentation, there will be an opportunity to ask questions.

You asked the question you May Press Star then one on a touchtone phone.

To withdraw your question. Please press Star then two.

Please note this event is being recorded.

Helen Zhu: I would now like to turn the conference over to Ms. Helen Jing Xu, Investor Relations of Cheetah Mobile. Please go ahead. Thank you, operator.

Speaker Change: I would now like to turn the conference over to MS. Helen Zhang.

Speaker Change: That's the relation of Cheetah mobile.

Speaker Change: Go ahead.

Speaker Change: Okay.

Sheng Fu: Welcome to Cheetah Mobile's 4th Quarter 2025 Earnings Conference Call. With us today are our company's Chairman and CEO, Mr. Fu Shun, and our company's Director and CFO, Mr. Thomas Chin. And we believe this positive momentum will continue.

Speaker Change: Thank you operator, welcome to Cheetah Mobile's fourth quarter 2025 earnings conference call with US today, Our company Chairman and CEO Ms. Jessie sure outdoor company director and CFO, Mr. Thomas Kim or managements prepared remarks, well walk.

Speaker Change: Conduct the Q&A session. Please note that management's prepared remarks will be presented by an agent before we begin I refer you to the safe Harbor statement more urban cities.

Speaker Change: Also applies to our conference call today, we will make forward looking statements at this time I would now like to turn the conference call over to our chairman and CEO Mr. Fu Sheng.

Speaker Change: Please go ahead.

Speaker Change: Thank you for joining.

Speaker Change: Joe on <unk> 25 earnings call.

Speaker Change: Sure.

Speaker Change: Peter.

Speaker Change: 2020.

Speaker Change: With a clear plan.

Speaker Change: To strengthen our position.

Long standing.

Speaker Change: There's no barriers.

Speaker Change: Q1 marks a strong start to the year.

Speaker Change: I'm happy to share some great news about.

Speaker Change: How we are doing.

Speaker Change: First our revenue grew significantly and we made solid progress in kind of knowledge.

Speaker Change: Q1, total revenue went up 36% compared to.

Speaker Change: The last year or 9% compared to last quarter.

Speaker Change: And the feedback has been especially well with a 46% increase in revenues year over year.

Speaker Change: Yeah.

Speaker Change: I think all of these segments grew 23% year over year, and accelerating to 30% quarter over quarter.

Speaker Change: Just as important our law still sharply.

Speaker Change: Investing in AI and robotics.

Speaker Change: We believe this positive momentum will continue.

Sheng Fu: Second, AI agents are becoming a real game-changer. As smarter AI models keep improving, they can now go beyond chatting. They can handle real tasks and solve real problems. With our strong background in building and launching products, we believe Cheetah is well-positioned to take advantage of this big shift. We are actively applying aging technology to upgrade our consumer products and power our innovation pipeline. These smart enhancements are making our products more efficient, user-friendly, and aligned with the expectations of the new AI era. For example, we launched DeepMole's MAI tool app that turns videos, audio, PDFs, and other documents into concise summaries and mind maps, making knowledge easier to digest and act on.

Speaker Change: AI agent, becoming a real game changer smarter.

Speaker Change: Smarter AI models keep improving we can now.

Speaker Change: I'll be honest you think it.

Speaker Change: It can handle.

Speaker Change: And solve real problems.

Speaker Change: We've got a strong background in building and launching products.

Speaker Change: We are well positioned to take advantage of this big shift.

Speaker Change: We are absolutely aligned aging technology to upgrade our consumer products and our innovation pipeline.

Speaker Change: Charter enhancements, we're making our products more efficient user friendly.

Speaker Change: Aligned with the expectations of the new AI era.

Speaker Change: For example, we launched diesel and the AI tool that tons of video or audio.

Speaker Change: And the other documents to be too precise.

Speaker Change: Summaries and biomass, making knowledge easier to digest.

Sheng Fu: DeepMole, a strong example of how we are finding AI agents to create practical, daily-use tools that improve productivity. Third, AI has always been at the center of our AI strategy. We are investing even more in R&D and using AI agents to upgrade our consumer products and robotics. One of our biggest steps forward is AgentOS, our next-generation voice system for service robots. AgentOS is designed to be a successful digital purpose, AI brain that can handle everyday tasks and further strengthen our leadership in voice-enabled robots. Since its inception, we have been working with our distributors to test Agent OS.

Speaker Change: A strong example of how we are planning our agents to create practical 80 used tools.

Speaker Change: Improved productivity.

Speaker Change: AI has always been at the center of our AI strategy.

Speaker Change: Great.

Speaker Change: Good morning, guys and using AI to upgrade our consumer products and the likes.

Speaker Change: One of our biggest steps for its agents or our next generation going into some core service rollout.

Speaker Change: <unk> is designed to be a general purpose AI.

Speaker Change: Brain I can handle everyday tasks and further strengthen our leadership in voice enabled world.

Speaker Change: Since its inception.

Speaker Change: Working with our distributors to tax agent.

Sheng Fu: Customers say Agent OS makes the interaction with the robots feel much smarter. It understands the conversation, notices what people are wearing, and can use tools like maps. They also like that it doesn't get confused. If you pause, say something wrong, or switch between languages. We are already working with schools, therapy centers, libraries, and museums to bring AgentOS into their daily routines. Our goal is to create industry-specific apps on top of AgentOS that's smart, helpful, and personalized. These apps can greet people, give presentations, help care of the elderly, and offer companionship. They will use tools and keep learning over time.

Speaker Change: Customers say agent.

Speaker Change: The interaction with the robot steel much smarter.

Speaker Change: This stands the conversation notices what people are wearing it can use tools like that.

Speaker Change: We also like that it doesn't get confused did you pass base something wrong or switch between languages.

Speaker Change: We are already working with school therapy centers libraries, and museums should bring Asian Olaf into their daily routines.

Speaker Change: Our goal is to create industry specific absence of agents.

Speaker Change: Martin how cool and personalized.

Speaker Change: We've got some great people these presentations health care of the elderly for companionship.

Speaker Change: Used to keep running over time.

Sheng Fu: This will help us grow our market share and move closer to general AI that can handle many tasks. We plan to offer AgentOS for free first to enhance our robust performance. We see strong potential for a future subscription-based business model. In the coming months, we will add paid agents to our existing apps, including our flagship Dubai IMT license, and introduce new AI tools to help users work more efficiently in the LLM era. At the same time, our legacy Internet business remains strong. It continues to deliver steady revenue and profit, and it gives us a national entry point for our new AI experiences.

Speaker Change: So our market share.

Speaker Change: All sorts of general.

Speaker Change: That can handle many times.

Speaker Change: We plan for all agent OSV.

Speaker Change: Right right.

Speaker Change: Thanks, a lot.

Speaker Change: We see strong potential for a future subscription based business model.

Speaker Change: Coming months.

Speaker Change: Hey agents to our existing.

Speaker Change: Including our flagship Dubai.

Speaker Change: And introduce new AI tools to help it gives us a lot more efficiently and the L. L M ore.

Speaker Change: Same time, our legacy Internet business remains strong.

Speaker Change: Seniors to deliver steady revenue and profit.

Speaker Change: Can you sort of a natural entry point for our new AI experience.

Sheng Fu: Overall, the strength of our legacy business gives us the resources we need to push forward with our AI plans, while staying financially responsible.

Speaker Change: Overall, the strength of our legacy business.

Speaker Change: The resources, we need to push forward with our AI platform.

Speaker Change: How.

Speaker Change: So we are responsible to wrap our Q1 2025 was a strong quarter.

Sheng Fu: Throughout our Q1 2025 was a strong quarter. We grew our revenue, reduced our losses, and took steps in our AI journey. We believe agentic AI is driving the Chinese LLM industry into a new phase. Shifting from infrastructure development to application-driven innovation, this change benefits companies like us. Those with a proven track record of turning cutting-edge technologies into real-world products across the PC, mobile, and now AI eras. Our ability to productize innovation is what truly sets Cheetah apart in this new phase of AI applications. We remain focused on building AI, especially utility-focused AI tools and robotics that not only understand people but also help them get things done.

Speaker Change: Our revenue, we do saw losses and took steps.

Speaker Change: We believe the agency decided when determining L. L M industry into a new phase.

Speaker Change: Shifting towards infrastructure development to application driven innovation this change benefits companies like us.

Speaker Change: With a proven track record with Chinese cutting edge technologies into real world products across the PC mobile era.

Speaker Change: Our ability to predict type of innovation is what truly sets us apart in this new phase.

Speaker Change: Application.

Speaker Change: <unk> focused on building AI chat.

Speaker Change: Especially it seems like your focus AI too narrow body, that's not the only understand people, but also helps them get things done.

Unknown Executive: Thank you. Thank you, Xinxia.

Speaker Change: Thank you.

Peter: Thank you Peter.

Thomas Chong: Hello, everyone on the call. On my father's last day, all financial papers are presented in R&D. Q1 2025 marks another quarter of meaningful loss reduction and improved efficiency. Building on the momentum from 2024, how QRN results reflect our team's focus on disciplined execution.

Speaker Change: Hello, everyone on the call.

Speaker Change: <unk> stated all financial figures that percent of Tvs RMB.

Speaker Change: Q1, 2025 months of another.

Speaker Change: Meaningful loss reduction and improved efficiency.

Speaker Change: Building on the momentum from 2024 hours to learn the results reflect our focus on disciplined execution.

Unknown Executive: Operational Efficiency and Strategic Investments in AI.

Speaker Change: Operational efficiency and a strategic investment.

Thomas Chong: Let me walk you through the team members. in two-hour corporate revenue reached $259 billion. of 36% year-over-year and 9% quarter-over-quarter. gross profit increased by 67% year over year and 10% quarter over quarter to 190 million Russ Marshall was 73.2% up from 59.2% a year ago and 72.9% in the previous quarter. Dongguo Girls' Profit was $190 million, an increase of 67% year-over-year and 10% sub-principal. Non-Gap Girls margin improved 73.2%. up from 59.6% a year ago. and 72.7% in the private quarter. We also made meaningful progress in reducing loss. Operating loss was $27 million, reduced from $81 million in the year-ago quarter and $207 million in the previous quarter.

Speaker Change: Let me walk you through the numbers.

Speaker Change: In Q1 total revenue reached 459 million.

Speaker Change: 36% year over year.

Speaker Change: 9% culture.

Speaker Change: Yeah.

Speaker Change: Gross profit increased 67% year over year, 10% quarter over quarter to 190 beauty.

Speaker Change: Gross margin was 73, 2%.

Speaker Change: 59, 2% a year ago.

Speaker Change: 72, 9% the previous quarter.

Speaker Change: Moving on to gross profit was 190 communities, an increase of 67% year over year, 10% sequentially.

Speaker Change: non-GAAP gross margin increased 73%.

Speaker Change: 2015.

Speaker Change: Nine 6% a year ago.

Speaker Change: 727%.

Speaker Change: We also made meaningful progress reducing losses.

Speaker Change: Operating loss was 27 million reduced from 81 million the year ago quarter.

Speaker Change: 207 immediately previous quarters.

Thomas Chong: Mumbai, operating loss, narrowed to 14 million. down from $66 million in the year quarter and $42 million in the previous quarter. Net loss attributable to Cheetah Mobile's shareholders of $33 billion. reduced from 18 million in the year-over-quarter at 367 million in the previous quarter. Among them, net loss attributed to Cheetah Mobile's shareholders decreased to $21 million, a significant improvement from $66 million in Q1 2024 and $202 million in Q4 last year. By segment, our internet business continues to provide solid cash flow and probability. Operating margin nearly double year over year to 15.5%. driven by improved mitigation and a leaner cost structure.

Speaker Change: non-GAAP operating loss.

Speaker Change: Okay.

Speaker Change: Down from 66 million in the U S.

Speaker Change: 2 million previous quarter.

Speaker Change: Net loss attributable to <unk> shareholders.

Speaker Change: Sure.

Speaker Change: 30 to visa.

Speaker Change: Reduced from 18 million a.

Speaker Change: The year ago quarter.

Speaker Change: 67 million in the previous quarter.

Speaker Change: No.

Speaker Change: Net loss attributable to <unk> shareholders decreased $21 million.

Speaker Change: A significant improvement from 66 in the Q1, 2024 and 202 D B.

Speaker Change: Q4 is cheap.

Speaker Change: By segment, our Internet business continues to provide solid cash flow productivity.

Speaker Change: Operating margin nearly doubled year over year to 15, 5%.

Speaker Change: Sure.

Speaker Change: Litigation and a leaner cost structure.

Thomas Chong: losses from our AI and other segments narrowed to 46 million. compared to 82 million a year ago and 228 million in the previous quarter. This reflects ongoing efforts to strike the right balance between investment and efficiency. We remain focused on scalable, modernizable use cases. We also see railing programs in operation in fishing. AIS-2640 is now part of our daily workflow, improving efficiency and helping our team to scale faster. On the robotic side, we have prioritized use cases that can be deployed at scale that address real customer needs. We also leverage open source models like VAA model.

Speaker Change: Losses from our AI and other segment narrowed to 46 million.

Speaker Change: Compared to 82 million a year ago, and 228 meetings with the previous quarter.

Speaker Change: This reflects ongoing efforts to strike the right balance between them.

Speaker Change: And efficiency.

Speaker Change: We remain focused on scalable modernized single use cases.

Speaker Change: We also see real improvements in operation efficiency.

Toby: Yeah. This is Toby there's no part of our daily workflow will really efficiency and helping them achieve scale faster.

Speaker Change: On the robotics side, we have prioritized user cases that can be deployed at scale that address real customer needs.

Speaker Change: Total language bookings source models like me a malls.

Speaker Change: Yes.

Thomas Chong: to enhance hardware performance, including robotic arms. All in the Arrived Star position in late 2023.

Speaker Change: Uh-huh hardware performance.

Speaker Change: <unk>.

Speaker Change: Following the Iranian stars position might be.

Speaker Change: 23.

Thomas Chong: We have continued to consolidate teams and optimize operations. March 31st, 2025. Our total headcount was approximately 815, down from 860 to a year ago. Despite continued cost and expense control.

Speaker Change: We have continued to consolidate and optimize operations.

Speaker Change: The March 31st two tiny tiny.

Speaker Change: Our total headcount was approximately 850 down from 862 a year ago.

Speaker Change: Despite continued cost and expense control.

Unknown Executive: We also launched new products.

Speaker Change: We also launched new products.

Unknown Executive: and Mayor of Hsouvit, Xiao Bai, thank you. Looking ahead, we expect further Martian expansion and continued loss reduction. At the same time, we will continue to invest in AI, but in a disciplined and focused way. Our partnership remains strong.

Michele Buck: Michele Buck.

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: We expect further margin expansion.

Speaker Change: The new loss reduction.

Speaker Change: But at the same <unk>.

Speaker Change: We continue to invest in hand.

Speaker Change: I didn't know disciplined and focused way.

Speaker Change: Our balance sheet remains strong.

Thomas Chong: March 31st, 2025. We have cash-in-cash-out privilege of approximately 234 million US dollars. Long-term investment of about 112 million U.S. dollars. Look in the head.

Speaker Change: As of March 31st one for Tony Hawk.

Ashwin: Yeah, Ashwin cash equivalents.

Speaker Change: 234 million U S. Adults.

Speaker Change: Long term investments of about 100000 meter into U S dollars.

Speaker Change: Looking ahead, our goal is clear.

Thomas Chong: Our goal is clear. which we give on while maintaining a healthy caste position. We will continue to invest in AI, but in a disciplined and focused way. Ensuring every dollar spent supports sustainable, long-term body creation.

Speaker Change: Reached breakeven, while maintaining a healthy cash position.

Speaker Change: We will continue to invest in hand, but.

Speaker Change: Disciplined and focused way.

Speaker Change: Ensuring every dollar spent to support sustainable long term value creation.

Unknown Executive: Thank you.

Operator: We are now happy to take your questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two.

Speaker Change: We are now talking with HMS.

Speaker Change: Yes.

Speaker Change: We will now begin the question and answer session.

Speaker Change: To ask a question you May Press Star then one on your Touchtone phone.

Speaker Change: If youre using a speakerphone please pick up your handset before pressing the key.

Speaker Change: If at any time that question has been addressed and you would like to withdraw your question. Please press Star then two.

Operator: At this time, we will pause momentarily to assemble our roster. Ladies and gentlemen, please stand by for the English translation of the question and answer session. Please note that there may be a delay before the translation begins. There may also be a delay in between questions.

Speaker Change: At this time, we will pause momentarily to assemble our roster.

Speaker Change: Okay.

Speaker Change: Ladies and gentlemen, please standby for the English translation of the question and answer session.

Speaker Change: Please note that there may be a delay before the translation begins.

Speaker Change: There may also be a delay in between questions. Please do not disconnect.

Operator: Please do not disconnect.

Speaker Change: Yeah.

Unknown Executive: We have noticed that you mentioned two directions of AI in this financial report. On the one hand, tool-based AI products. On the other hand, service robots.

Speaker Change: We have noticed that you mentioned two directions of AI in this financial report on the one hand tool based AI products on the other hand service robots from the perspective of strategic resource investments and revenue contribution in the next three years, well cheetos future development focus more on building an AI tool made.

Unknown Executive: From the perspective of strategic resource investment and revenue contribution in the next three years, will Cheetah's future development focus more on building an AI tool matrix and focusing on improving AI efficiency on the seaside? Or will more resources be invested in robots?

Speaker Change: Tricks and focusing on improving our efficiency on the C side or were more resources to be invested in robot how do you balance the differences between these two directions in terms of technical challenges commercialization rhythm and long term note.

Unknown Executive: How do you balance the differences between these two directions in terms of technical challenges, commercialization rhythm, and long-term moat? Well, I think this is a very good question. In fact, after all these years, Cheetah Mobile has been focusing on two major businesses, AI tool software on the C-side and robots. Regarding the commercialization efficiency and risks on the B-side, I actually don't think these two are contradictory. Because essentially, for all products, software capabilities are what matter in the end. Take Apple, for example. Apple is known for its strong software, and its hardware manufacturing is also very good.

Speaker Change: With regard.

Speaker Change: Sure.

Speaker Change: Well I think this is a very good question in fact after all these years Cheetah mobile has been focusing on two major businesses AI tools software on the seaside and robot.

Speaker Change: Regarding the commercialization efficiency and risks on the Beast I actually don't think these two are contradictory because essentially for all products software capabilities are what matter in the end take Apple for example, Apple is known for its strong software and hardware manufacturing is also very good but.

Unknown Executive: But ultimately, what users care about is the software experience.

Speaker Change: Ultimately what users care about is the software experience.

Unknown Executive: So I think the A-Tool matrix and robots today have a short-term and long-term relationship respectively. That is to say, with the Internet business, we can achieve rapid development. Especially now that programming technology has matured, we believe that the A.I. tool matrix will develop rapidly. This includes the transformation of some traditional software from the past, such as Kingsoft Antivirus and others, which can rejuvenate them. So I think in the short term, this year, the area where we can see rapid development is definitely the A.I. tool matrix.

Speaker Change: So I think the a to a matrix and robots today have a short term and long term relationship respectively that is today with the Internet business. We can achieve rapid development, especially now that programming technology has matured we believe that the AI tool matrix will develop rapidly.

Speaker Change: This includes the transformation of some traditional software from the past such as King South anti virus, and others, which can rejuvenate them. So I think in the short term this year the area, where we can see rapid development is definitely the AI tool matrix. However, the robot itself is a hardware entity that carries AI or you can.

Unknown Executive: However, the robot itself is a hardware entity that carries A.I., or you can think of it as a hardware entity that carries A.I. tools.

Speaker Change: Think of it as a hardware entity that carries AI tool so.

Unknown Executive: So in the long run, I think the robot is, after all, a long-term development direction. Regarding the technical challenges you mentioned earlier, I think the cutting-edge technologies of these two are actually quite similar, which is the final productization of A.I. technology in enterprises. Of course, robots are more inclined to the long chain of hardware, while A.I. tools tend to be more short, flat, and fast. In terms of the commercialization rhythm, I think the efficiency improvement of A.I. tools will be faster, which is obvious in the industry. And the development of robots is a long-term task that requires continuous improvement.

Speaker Change: So in the long run I think the robot is after all a long term development direction.

Speaker Change: Guarding the technical challenges you mentioned earlier I think the cutting edge technologies of these two are actually quite similar which is the final productive nation of eye technology and enterprises.

Speaker Change: Of course robots are more inclined to the long chain of hardware, while AI tools tend to be more short flat and fast.

Speaker Change: In terms of the commercialization rhythm I think the efficiency improvement of AI tools will be faster, which is obvious in the industry.

Speaker Change: And the development of robots is a long term task that requires continuous improvement surely the moat of robots is deeper because it involves hardware and business models as for this wave of the AI tool matrix. It depends on whether we can really change users' minds and some vertical fields.

Unknown Executive: Surely, the moat of robots is deeper because it involves hardware and business models. As for this wave of the A.I. tool matrix, it depends on whether we can really change users' minds in some vertical fields.

Unknown Executive: But overall, to put it simply, this year, the A.I. tool matrix is the area where we can generate benefits quickly.

Speaker Change: But overall to put it simply this year. The H will matrix is the area, where we can generate benefits quickly.

Speaker Change: Okay.

Unknown Executive: We've noticed that the robotics division is making the construction of a data factory a key strategic investment, aiming to accumulate a vast amount of high-quality data from the physical world for model training. However, Cheetah's robots have already amassed a large amount of scenario data during actual deployment.

Speaker Change: We've noticed that the robotics division is making the construction of a data factory, our key strategic investment aiming to accumulate a vast amount of high quality data from the physical world for model training. However, cheetahs robots have already amassed a large amount of scenario data during actual deployment could you share the company.

Unknown Executive: Could you share the company's thoughts on data asset construction and self-evolution? Do you consider providing data externally or forming a B2B service in the future? This is a very comprehensive question.

Speaker Change: Thoughts on data asset construction and self evolution do you consider providing data externally or forming a b to be serviced in the future.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: This is a very comprehensive question in the robotics industry, especially when it comes to service robots or the currently popular humanoid robots there are numerous challenges.

Unknown Executive: In the robotics industry, especially when it comes to service robots or the currently popular humanoid robots, there are numerous challenges. A crucial point is that it's difficult for us to convert the data related to human labor into robotic data. This is quite different from autonomous driving, where the data from human driving is already machine-accessible data.

Speaker Change: Crucial point is that it's difficult for us to convert the data related to human labor into robotic data. This is quite different from autonomous driving where the data from human driving its already machine accessible data. Indeed, we've seen many in the industry, including some start ups working on the construction of data factories. However.

Unknown Executive: Indeed, we've seen many in the industry, including some startups, working on the construction of data factories. However, as of today, in the robotics industry, the conversion of data factories into actual productization and commercialization is still in a very early stage. In the foreseeable three years, I won't say five years, because AI is evolving so rapidly, it won't be possible to turn it into a truly commercial product. So regarding the data we've accumulated up to now, we can't claim that it has significantly contributed to the company's productization.

Speaker Change: As of today in the robotics industry, the conversion of data factories into actual productive patient and commercialization is still in a very early stage in the foreseeable three years I won't say five years, because AI is evolving so rapidly it won't be possible to turn it into a truly commercial product.

Speaker Change: Regarding the data we've accumulated up to now we can't claim that it has significantly contributed to the companys productive patient, but we are conducting some exploratory research at the forefront on one hand, I'm very optimistic about the long term prospects of the robotics industry on the other hand I'm extremely cautious at the moment we've been investing.

Unknown Executive: But we are conducting some exploratory research at the forefront. On one hand, I'm very optimistic about the long-term prospects of the robotics industry. On the other hand, I'm extremely cautious at the moment. We've been investing in this industry for seven or eight years and have poured over 1 billion R&D into R&D. We started large-scale R&D in this area very early, from a technical paper to certain technical directions, and finally, to actual scene-based applications.

Speaker Change: Thing in this industry for seven or eight years and have poured over 1 billion R. M b into our N. D. We started large scale R&D in this area very early from a technical paper to certain technical direction and finally to actual scene based applications, there's still a long way to go. Moreover, there will be very.

Unknown Executive: There's still a long way to go. Moreover, there will be various changes in the industry landscape, including the impact of open-source technologies.

Speaker Change: Changes in the industry landscape, including the impact of open source technologies in short for Cheetah. The construction of our robotics data factory is not our priority at present.

Unknown Executive: In short, for Cheetah, the construction of a robotics data factory is not our priority at present. We'll keep an eye on it, but won't invest blindly. As for whether we'll provide data externally or offer B2B services in the future, we have no such plans for now. Because in my opinion, its practical application is still a long way off.

Speaker Change: And I on it but won't invest blindly actual weather will provide data externally or offer b to b services in the future. We have no such plans for now because in my opinion, it's practical application is still a long way off.

Unknown Executive: I've been in Silicon Valley recently and talked to many people there, including those from relevant startups. There's basically a consensus that this matter is still in a very early stage. Currently, everyone is still exploring how to build this data factory, whether it's through human remote control or using some videos for data collection.

Speaker Change: Then in Silicon Valley recently and talked to many people there, including those from relevant startup.

Speaker Change: Basically a consensus that this matter is still in a very early stage currently everyone is still exploring how to build this data factory, whether it's through human remote control or using some videos for data collection.

Unknown Executive: It's not like the situation with ChatGPT, where a clear path has emerged, and we just need to follow it to turn it into a product. I don't think we've reached that stage yet. So this question is too premature for us, and we haven't considered providing external data services.

Speaker Change: Not like the situation with CECI P T, where a clear path has emerged and we just need to follow it to turn it into a product I don't think we've reached that stage. Yet. So this question is too premature for us and we havent considered providing external data services.

Speaker Change: Okay.

Unknown Executive: Just now, the management mentioned that the company is leveraging open-source VLA models to drive the intelligent evolution of robots.

Speaker Change: Just now the management mentioned that the company is leveraging open source V. L. A model to drive the intelligent evolution of robot given the increasingly mature open source ecosystem, how does the company balance the use of open source model and the self developed approach.

Unknown Executive: Given the increasingly mature open-source ecosystem, how does the company balance the use of open-source models and the self-developed approach in actual deployments? Especially in terms of inference efficiency, security and controllability, and cost structure, how does the company allocate technologies and resources?

Speaker Change: Actual deployment.

Speaker Change: Especially in terms of inference efficiency security and controllability and cost structure, how does the company allocate technology and resources. In addition from a medium to long term perspective does the company believe that cheetahs moat in the robot business should be built on model capabilities or <unk>.

Unknown Executive: In addition, from a medium to long-term perspective, does the company believe that Cheetah's moat in the robot business should be built on model capabilities or scenario data assets? Is it possible to consider building a long-tail advantage through a data loop? These are really professional questions. Regarding your first question on how to balance the use of open source models and the self-developed approach, I think most companies are already quite clear about that. For the vast majority of companies, they don't make a strict distinction. If open-source models work better, of course they'll use open-source ones. Because for private deployment, open-source models are no different from self-developed ones, and they can save a lot of resources and costs.

Speaker Change: Nerio data asset is it possible to consider building a long tail advantage through a data link.

Speaker Change: Okay.

Speaker Change: Is that really professional question.

Speaker Change: Regarding your first question on how to balance the use of open source model and the self developed approach I think most companies are already quite clear about this.

Speaker Change: So the vast majority of companies they don't make a strict distinction is open source models, we're better of course, they'll use open source ones because for a private deployment open source models are no different from self developed ones and they can save a lot of resources and costs.

Unknown Executive: There's no need to reinvent the wheel. Even Tencent's Yuanbao uses DeepSeek, and Baidu also uses relevant open-source resources. So there aren't many companies that are so insistent on self-development. Maybe companies like Google, OpenAI, etc. might be, but for a company like ours, we definitely use open-source models. As long as there are suitable open-source models, we won't self-develop. There's no need to repeat the work. I've repeatedly emphasized the power of the open-source community in my short video programs over the past two or three years. In the AI industry, open-source is extremely powerful. It's very difficult for a single company to compete with the combined efforts of so many geeks worldwide.

Speaker Change: No need to reinvent the wheel.

Speaker Change: Even 10 centers one values as deep seek and Baidu also uses relevant open source resources.

Speaker Change: So there aren't many companies that are still insistent on self development, maybe companies like Google open AI et cetera might be but for a company like ours, we definitely use open source models.

Speaker Change: As long as they are suitable open source models, we won't self developed there's no need to repeat the word I've repeatedly emphasized the power of the open source community and my short video programs over the past two or three years in the industry open source is extremely powerful it's very difficult for a single company to compete with the <unk>.

Speaker Change: Bind efforts of so many peaks worldwide, we've been clear about this for a long time and had been acting accordingly.

Unknown Executive: We've been clear about this for a long time and have been acting accordingly.

Unknown Executive: For example, in our AI-based operating system, Regarding the three aspects of inference efficiency, security and controllability, and cost structure, many people today only consider the model's fin-sensing when talking about various VLA models or other models, but rarely mention efficiency or application scenarios. For example, if you ask it a question and it takes a long time to respond, you can tolerate it when you're sitting in front of a computer, especially when it's writing an article. But if we're using it for robot interaction and it takes five seconds to reply after you say something, the person might have already left.

Speaker Change: For example, in our AI based operating.

Speaker Change: Regarding the three aspects of inference efficiency security and control ability and cost structure. Many people today only consider the models thinking in when talking about various VLA model or other models, but rarely mention.

Speaker Change: <unk> or application scenarios for example, if you're asking the question and it takes a long time to respond you can tolerate it when you're sitting in front of a computer, especially when it's writing an article but if we are using it for robot interaction and it takes five seconds to reply. After you say something the person might have already left so among these three.

Unknown Executive: So among these three dimensions of inference efficiency, security and controllability, and cost structure, we definitely prioritize inference efficiency. When used in commercial scenarios, the response speed is of utmost importance. There's a lot of fine-tuning to be done here. Of course, security and controllability are also crucial and are a basic requirement. But I believe inference efficiency comes first. Cost structure is relatively easier to deal with as it's constantly decreasing. If you look at any AI facing the market company, if it's a real market-oriented company, it will definitely attach great importance to efficiency combined with the application scenarios.

Speaker Change: Three dimensions of infants efficiency security and control ability and cost structure, we definitely prioritize inference efficiency when used in commercial scenarios. The response speed is of utmost important.

Speaker Change: There's a lot of fine tuning to be done here of course security and control ability are also crucial and are a basic requirement, but I believe inference efficiency comes first cost structure is relatively easier to deal with as it constantly decreasing if you look at any a I facing the market company.

Speaker Change: If it's a real market oriented company it will definitely attach great importance to efficiency combined with the application scenarios in.

Unknown Executive: In our case, efficiency is definitely the top priority. So in terms of technology and resource allocation, we invest a lot in improving the reaction speed of our robots. If you actually run some models on a robot, the latency might be unacceptable to ordinary users.

Speaker Change: In our case efficiency is definitely the top priority.

Speaker Change: In terms of technology and resource allocation, we invest a lot in improving the reaction speed of our robot.

Speaker Change: If you actually run some models on a robot the latency might be unacceptable to ordinary users.

Speaker Change: Yeah.

Unknown Executive: Regarding the medium to long term perspective on whether Cheetah's moat in the robot business should be built on model capabilities or scenario data assets, I think there's no doubt that it should be built on scenario data assets. When it comes to so-called model capabilities, I have some reservations. What exactly does model training ability mean? As I said before, in the context of China and the U.S., model training ability is not a problem for many companies. There are a lot of open source papers and models available. Buying a GPU and setting up the training environment is not an extremely difficult task.

Speaker Change: Regarding the medium to long term perspective on whether cheetahs moat in the robot business should be built on model capabilities or scenario data asset I think theres no doubt that it should be built.

Speaker Change: On scenario data asset.

Speaker Change: When it comes to the so called model capabilities I have some reservations what exactly does model training ability need as I said before in the context of China and the U S model training ability is not a problem for many companies. There are a lot of open source papers and models available finally, a GPU.

Speaker Change: And setting up the trading environment is not an extremely difficult task, but very few companies in the world can actually modify the underlying logical structure of a model. So the current industry trend is becoming increasingly clear most companies advantages lie in scenario data assets rather than model capabilities. This is also why hence.

Unknown Executive: But very few companies in the world can actually modify the underlying logical structure of a model. So the current industry trend is becoming increasingly clear. Most companies' advantages lie in scenario data assets rather than model capabilities. This is also why Tencent strongly promotes Yuanbao, which has DeepSeek integrated, because only scenario data can feed back into the model. When the time is right, developing a model that suits your own scenario data is the way for most companies to survive.

Speaker Change: <unk> strongly promote you on bell, which has deep seek integrated because only scenario data can feed back into the model. When the time is right developing a model that suits your own scenario data is the way for most companies to survive take the autonomous driving field as an example, initially google's model capabilities.

Unknown Executive: Take the autonomous driving field as an example. Initially, Google's model capabilities were very strong. But today, Tesla's autopilot experience is definitely better than Google's self-driving system. That's because Tesla built its advantage on a large number of deployed terminals and real-world scenarios.

Speaker Change: Were very strong, but today tesla's autopilot experience is definitely better than Google self driving system.

Speaker Change: That's because tesla built its advantage on a large number of deployed terminals and real world scenarios.

Unknown Executive: So our strategy is very clear. We won't invest blindly in self-developed models. Instead, we'll focus on implementation, pay more attention to interacting with our users, and thus build our own scenario data. Then, this data can, in turn, enhance the capabilities of even an open-source model. In terms of computing power, algorithms, and data, without a doubt, we believe data is the core determinant. This is what we truly value.

Speaker Change: Our strategy is very clear, we won't invest blindly in self developed model instead, we'll focus on implementation pay more attention to interacting with our users and thus build our own scenario data.

Speaker Change: Then this data can in turn enhance the capabilities of even an open source model in terms of computing power algorithms and data without a doubt. We believe data is the core determinant. This is what we truly value.

Unknown Executive: Thank you.

Speaker Change: You.

Speaker Change: Okay.

Unknown Executive: What considerations does the company have regarding the commercialization path of AI tool applications? Will it consider the user's subscription system? Or will it launch enterprise SaaS products or explore directions such as 2C licensing?

Speaker Change: What considerations does the company have regarding the commercialization path of AI tool applications, well, let's consider the user subscription system or whether it launched enterprise SaaS product or explore directions, such as jussi licensing against the backdrop of the current shift of eight.

Unknown Executive: Against the backdrop of the current shift of AI applications from proof of concept to actual commercial value, how does Cheetah plan its commercialization path? I think a very obvious characteristic of AI tools today is that there is an inevitable question whether users are willing to pay for these AI tools. Because essentially, this wave of AI tools are productivity tools. So basically, the business models that have emerged globally for this wave are all about subscription. Whether it's the model of open AI, or the model for PPT-related software, or the model for programming software like GitHub Copilot, they are all subscription-based.

Speaker Change: Applications from proof of concept to actual commercial value how does cheetah plan its commercialization path.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: I think a very obvious characteristic of AI tools. Today is that there is an inevitable question whether users are willing to pay for these AI tool because essentially this wave of AI tools, our productivity tools.

Speaker Change: So basically the business model that has emerged globally for this wave are all about subscription.

Speaker Change: The model of open AI or the model for ppt related software or the model for programming software like Github copilot, they're all subscription based and subscription model is constantly evolving into different tiers.

Unknown Executive: And the subscription model is constantly evolving into different tiers. If you use more, you pay at a higher level. Essentially, when it helps users improve their efficiency, users are willing to pay. I think this is also where AI is different from the previous wave of the Internet. This time, the business model is very simple, clear, and has a high user acceptance rate.

Speaker Change: You use more you pay at a higher level essentially when it helps users improve their efficiency users are willing to pay.

Speaker Change: This is also where AI is different from the previous wave of the Internet. This time the business model is very simple clear and has a high user acceptance.

Unknown Executive: For example, we developed a small product, BVO. Now, users are actively asking how to pay for it, and some have already paid. So for us, the user subscription model is not a consideration. It's a clear-cut choice. Maybe because Cheetah Mobile faced some setbacks in the globalization of tools in the past, we've converted many of our tools to the subscription model in the past few years. Even Kingsoft Antivirus is like this. Today, user payment is the mainstream, not advertising.

Speaker Change: For example, we developed a small product Bbl now users are actively asking how to pay for it and some have already paid so for us the user subscription model is not a consideration it's a clear cut choice.

Speaker Change: Because cheetah mobile faced some setbacks in the globalization of tools in the past we've converted many of our tools to the subscription model in the past few years, even kings of anti virus like this today user payment is the mainstream not advertising in the past few years in the Chinese software market although.

Unknown Executive: In the past few years, in the Chinese software market, although many people may not be fully aware, for our own experience, subscription-based payment has become the mainstream for Chinese tool software. Paying for the effect makes us focus more on polishing the user experience rather than on negotiating advertising deals. I think this is a very important reason why our Internet business has been growing continuously in recent quarters. We've made user-centered payment our core business model. As for whether to launch enterprise-safe products, we've actually been trying. Regarding enterprise-oriented products, in response to your question about how we plan our commercial path during the transformation of AI applications from concept to actual commercial value, I think our commercial path is becoming relatively clear.

Speaker Change: Many people may not be fully aware for our own experience subscription based payment has become the mainstream for Chinese towards software paying for the effect makes us focus more on polishing the user experience rather than on negotiating advertising deal.

Speaker Change: I think this is a very important reason why our internet business has been growing continuously in recent quarters. We've made user centric payments our core business model as to whether to launch enterprise based products. We've actually been trying regarding enterprise oriented products in response to your question about how we plan our commercial.

Speaker Change: Past during the transformation of AI applications from concept to actual commercial value I think our commercial path is becoming relatively clear in the internet business, we have products like kingdom anti virus some of our businesses in Japan and other software businesses. What we're doing is using a agent technology to transform software.

Unknown Executive: In the Internet business, we have products like Kingsoft Antivirus. Some of our businesses in Japan and other software businesses. What we're doing is using agent technology to transform software like Kingsoft Antivirus and our overseas software from simply delivering functions to delivering results. This is very important for us. The second thing is that because we've been developing tools for so many years, and I believe the concept of agents is similar to that of tools, in the past, due to immature technology, we could only provide users with a list of functions. But now, with agents, we can provide users with results.

Speaker Change: Like himself anti virus and our overseas software from simply delivering function to delivering results.

Speaker Change: This is very important for us.

Speaker Change: The second thing is that because we've been developing tools for so many years and I believe the concept of agents is similar to that of tool in.

Speaker Change: In the past due to immature technology, we could only provide users with a list of functions, but now with agents. We can provide users with resolve this allows us to utilize our entire R&D efficiency. So the second part is that we'll have a lot of new launches in the innovative content within the internet sector.

Unknown Executive: This allows us to utilize our entire R&D efficiency.

Unknown Executive: So the second part is that we'll have a lot of new launches in the innovative content within the Internet sector. And because of the efficiency improvement brought by AI tools, our R&D costs for these innovative applications will be much lower than in the past. So one aspect is to use our eye agents to transform traditional Internet businesses. The second aspect is that during this era of the big explosion of agents, we'll also make many innovative attempts. These attempts won't be made with large-scale investments, but rather in a startup-like, small team-based way.

Speaker Change: And because of the efficiency improvement brought by AI tools, our R&D costs for these innovative applications will be much lower than in the past.

Speaker Change: So one aspect is to use our eye agents to transform traditional internet businesses. The second aspect is that during this era of the big explosion of agent will also make many innovative attempt. These attempts won't be made with large scale investments, but rather in a start up like small team based way in the robotics area.

Unknown Executive: In the robotics area, our main focus is on our agent-based OS. This is what differentiates us from our competitors. We won't focus on humanoid robots or robots with overly complex mechanical structures, such as lawn mowing robots. What we're good at is robot interaction, companionship, and task-planning-based logic, with software as the core and hardware as the foundation.

Speaker Change: Our main focus is on our agent based Oh.

Speaker Change: This is what differentiate us from our competitors, we won't focus on humanoid robots of robots with overly complex mechanical structures, such as lawn mowing robot, what we're good at and robot interaction companionship and tax planning based logic with software as the core and hardware as the foundation.

Unknown Executive: I think in one or two more quarters, this path will become even clearer. Thank you.

Speaker Change: Think in one or two more quarters this path will become even clearer.

Speaker Change: You.

Speaker Change: Okay.

Speaker Change: Okay.

Unknown Executive: What progress has the company's robots made this quarter?

Speaker Change: What progress has the company's robots made this quarter could you. Please share some specific cases of actual implementation from in <unk>.

Unknown Executive: Could you please share some specific cases of actual implementation?

Unknown Executive: From an industry perspective, what significant changes have taken place in the robot industry this quarter? And how has Cheetah Mobile perceived and responded to these changes? Let me talk about the industry first.

Speaker Change: Industry perspective, what significant changes have taken place in the robot industry this quarter and how has cheetah mobile perceived and responded to these changes.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Let me talk about the industry first.

Unknown Executive: I've been not only in China, but also recently traveled a lot in the U.S., meeting many entrepreneurs. Here are my views on the industry. We've always believed that humanoid robots are still a long way from commercialization. By commercialization, I mean the kind that can form repeat purchases and become a productive force, not the commercialization in the form of exhibitions, rentals, or for educational purposes. Although these forms exist and are currently at a certain scale, the idea of humanoid robots being used on production lines, I think, is still a long way off.

Speaker Change: And not only in China, but also recently traveled a lot in the U S meeting many entrepreneurs hero my views on the industry.

Speaker Change: <unk> always believed that humanoid robots are still a long way from commercialization by commercialization I mean, the kind that can form repeat purchases and become a productive force not the commercialization in the form of exhibitions rental or for educational purposes.

Speaker Change: Although these forms exist and are currently at a certain scale the idea of humanoid robots being used on production lines. I think is still a long way off in my opinion, it will take more than five years to achieve real commercial implementation. That's my view at the industry level. Besides the hype around humanoid robots I'd noticed that there is a rise of rope.

Unknown Executive: In my opinion, it will take more than five years to achieve real commercial implementation. That's my view at the industry level.

Unknown Executive: Besides the hype around humanoid robots, I've noticed that there's a rise of robots for various specialized scenarios, including those from startups. These robots are designed for very specific tasks and don't necessarily look human-like. This is a clear change in the industry.

Speaker Change: Box for various specialized scenarios, including notes from startup.

Speaker Change: These robots are designed for very specific tasks and don't necessarily look human like this is a clear change in the industry.

Unknown Executive: Now, let me talk about our own progress. I think our progress can be summarized in the following aspects. First, we've clearly sorted out our development ideas for robots. As I mentioned just now, in the field of robots, what we're best at is not complex hardware mechanical structures. Companies like Yaskawa are indeed very strong in that aspect, and I admit it. What we focus on is the integrated interaction experience of perception and action. That is, we ensure that the wheeled movement of the robot from point A to point B is stable and reliable. This has been verified by our customers in Japan, South Korea, and Europe over the past two years.

Speaker Change: Now, let me talk about our own progress.

Speaker Change: I think our progress can be summarized in the following aspects.

Speaker Change: First we've clearly sorted out our development ideas for robots as I mentioned, just now in the field of robots what were best at is not complex hardware mechanical structure.

Speaker Change: Companies like <unk> are indeed, very strong in that aspect and I admit it what we focus on is the integrated interaction experience of perception and action that is we ensure that the wheeled movement of the robot from point a to point B is stable and reliable. This has been verified by our customers in Japan, South Korea, and Europe over the past two.

Unknown Executive: Also, we aim to give full play to the real-time interaction ability, such as in scenarios like reception, explanation, promotion, and delivery. With the support of large language models, I believe this kind of scenario can fully thrive.

Speaker Change: Yes.

Speaker Change: Also we aim to give full play to the real time interaction ability such as in scenarios like reception explanation promotion and deliberate with the support of large language models. I believe this kind of scenario can fully thrive regarding specific cases of actual implementation in many corporate exhibition halls in urban service centers in there.

Unknown Executive: Regarding specific cases of actual implementation, in many corporate exhibition halls and urban service centers in Beijing, for example, our robots have started to be used as tour guides. I even shot a short video yesterday. With the support of large language models, the robots' interaction ability, their understanding of what you say, and their task planning ability have been significantly improved compared to before. I think the era when the robot can become an excellent tour guide has arrived. Moreover, with large language models, it naturally becomes a translator. In the past, we had a lot of headaches dealing with multilingual capabilities, like English, Chinese, and Japanese.

Speaker Change: Jean for example, our robots have started to be used as a tour guide.

Speaker Change: Even shot of short video yesterday with the support of large language models, the robot interaction ability their understanding of what you say and their task planning ability has been significantly improved compared to before.

Speaker Change: Thank the ERO and the robot can become an excellent tour guide has arrived Moreover, with large language models. It naturally becomes the translator in the past we had a lot of headaches dealing with multilingual capabilities like English Chinese and Japanese.

Unknown Executive: Before, for our exported robots, we didn't even dare to turn on the voice function because we had to go through a series of complex operations by connecting to Google services to enable a foreign language ability, and the effect was not good. But now, we've started to launch multilingual interactive robots overseas.

Speaker Change: Before for our exported robot, we didn't even dare to turn on the voice function because we had to go through a series of complex operations by connecting to Google's services to enable a foreign language ability and the effect was not good but now we started to launch multilingual interactive robots overseas if.

Unknown Executive: If you really ask me what our advantages are in making robots, I think our biggest advantage doesn't come from our so-called technological documentation or the years of technological accumulation. Instead, it's that we now have hundreds of domestic and overseas agents. Through these commercial channels, we can quickly obtain users' opinions on things, and we know how to quickly find our customers to actually test to run our products and really bring them to the market. Due to these advantages, we can perceive that, for example, starting this year, with the improvement of large language model capabilities, the market for explanation-related services is clearly changing.

Speaker Change: If you really ask me what our advantages are in making robot I think our biggest advantage doesn't come from our so called technological documentation or the years of technological accumulation. Instead, it's that we now have hundreds of domestic and overseas agents.

Speaker Change: Through these commercial channels, we can quickly obtained users opinions dumping and we know how to quickly find our customers to actually test run our products and really bring them to the market due to these advantages. We can perceive that for example, starting this year with the improvement of large language model capability the market for explanation related.

Speaker Change: Services is clearly changing this year, we're focusing on the Chinese language version first and the multilingual capabilities for overseas market are still in progress and maybe a bit slower.

Unknown Executive: This year, we're focusing on the Chinese language version first, and the multilingual capabilities for overseas markets are still in progress and may be a bit slower.

Unknown Executive: But in Q2 this year, the repurchase rate and the degree of completion of our indicators for domestic interaction-based scenarios are the best in recent years. I can clearly feel that the voice interaction-based market is emerging.

Speaker Change: In Q2, this year the repurchase rate and the degree of completion of our indicators for domestic interaction based scenarios are the best in recent years I can clearly feel that the voice interaction based market is emerging.

Unknown Executive: What's our next step?

Unknown Executive: Next, we may launch some special robot products related to companionship, targeting scenarios like elderly care. You can wait and see. Thank you.

Speaker Change: With our next step, yes, we may launch them special robot products related to companion chip targeting scenarios like elderly care you can wait and see thank you.

Unknown Executive: Regarding AgentOS, could you please share further customer feedback? This includes user stickiness, customer satisfaction, and whether there have been customized deployments or active inquiries.

Speaker Change: Regarding age until Ed could you please share further customer feedback.

Speaker Change: This includes user stickiness customer satisfaction, and whether there had been customized deployment or active inquiry.

Unknown Executive: Additionally, how does the company internally evaluate the commercialization rhythm of AgentOS? These are very detailed and crucial points. No matter how grand the concept is, ultimately, it comes down to whether users are willing to pay for it. So far, we've conducted some user satisfaction surveys. Generally, users have reported that when it comes to real-life conversations, especially in noisy and crowded environments, the responsiveness has significantly improved compared to the previous generation.

Speaker Change: Additionally, how does the company internally evaluate the commercialization rhythm of agent to Alaska.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: He's a very detailed and crucial point no matter how grand the concept is ultimately it comes down to whether you.

Speaker Change: Just are willing to pay for it so far we've conducted some user satisfaction survey generally users have reported that when it comes to real life conversation, especially in noisy and crowded environment. The responsiveness has significantly improved compared to the previous generation I don't have the specific satisfaction data at hand.

Unknown Executive: I don't have the specific satisfaction data at hand. Maybe we'll release some articles about it in the future.

Speaker Change: Maybe we'll release some articles about it in the future regarding customize deployment, it's like what Henry Ford said, if you ask customers what they want they won't ask for a car, but a faster horse in the past due to the limitations of previous ASR automatic speech recognition technology, which involve.

Unknown Executive: Regarding customized deployments, it's like what Henry Ford said. If you ask customers what they want, they won't ask for a car, but a faster horse. In the past, due to the limitations of previous ASR, automatic speech recognition technology, which involves converting speech to text and then processing it with NLP, natural language processing, it couldn't meet users' requirements. As a result, users thought these products were useless. We all know that when people bought smart speakers in the past, they could only use them to play songs, and the speakers would become unresponsive with a bit more complex instructions.

Speaker Change: Converting speech to text and then processing it with NLP natural language processing it couldn't meet users' requirement.

Speaker Change: As a result users thought these products were useless.

Speaker Change: We all know that when people bought smart speakers in the past they could only use them to play songs and the speakers would become unresponsive with a bit more complex instructions.

Unknown Executive: However, after the emergence of GPT, people realized that it could understand such complex text, which triggered the development of various applications. So, with our AgentOS, through multiple sensors such as vision sensors, microphones, and even some radars, its ability to understand user intentions has improved significantly. I believe this is what can truly open up the market for users.

Speaker Change: I'll ever after the emergence of Gpt's people realized that it could understand such complex attacks, which triggered the development of various application.

Speaker Change: So with our age until S through multiple sensors, such as vision sensor microphone and even some radar it's ability to understand user intention has improved significantly.

Speaker Change: I believe this is what can truly open up the market for users.

Unknown Executive: We've already received some requests for customized deployments and inquiries, but we won't disclose the specific details for now. We started with domestic operations. First, we're training our agents and providing authorization and training for the secondary development platform so that they can develop their own applications on it.

Speaker Change: We've already received some requests for customized deployments and inquiry, but we won't disclose the specific details for now we started with domestic operations.

Speaker Change: We're training, our agents and providing authorization and training for the secondary development platform. So that they can develop their own applications on it.

Unknown Executive: As for evaluating the commercialization rhythm of AgentOS, we mainly focus on the sales progress of our voice interaction-based robots. It's currently Q2, and we're looking at whether we can achieve our goals in Q3. This is a very critical point in evaluating the commercialization rhythm. Overall, at this stage, the key is whether we can integrate user needs with our products more efficiently, enabling our products, like our robot tour guides, to be ready for service at any time, and our robot salespersons to perform well. If we can achieve this, I think it will mark the beginning of rapid commercial development.

Speaker Change: Actual reevaluating the commercialization rhythm of agent told US we mainly focus on the sales progress of our voice interaction based robot. It's currently Q2 and we're looking at whether we can achieve our goals. In Q3. This is a very critical point in evaluating the commercialization rhythm overall at this stage. The key is whether we can.

Speaker Change: Integrate user needs with our products more efficiently, enabling our products like our robot tour guide to be ready for service at any time and a robot sales persons to perform well if we can achieve this I think it will mark the beginning of rapid commercial development and quite confident about this I believe the basic framework has been <unk>.

Unknown Executive: I'm quite confident about this. I believe the basic framework has been established.

Unknown Executive: Thank you.

Speaker Change: Stablish. Thank you.

Speaker Change: Okay.

Unknown Executive: Cheetah currently holds over $200 million in cash. I'm wondering if the company is considering making acquisitions to further address the shortcomings in the AI application chain.

Speaker Change: <unk> currently holds over $200 million in cash I'm wondering if the company is considering making acquisition to further address the shortcomings in the AI application chain.

Speaker Change: Okay.

Speaker Change: Okay.

Unknown Executive: Thank you, Mr. Slash, Ms. Cheng Lu, for your question. We appreciate your attention to our cash reserve scale and the focus on our strategic investment direction. Indeed, having over $200 million in cash provides us with considerable strategic flexibility. In recent years, Cheetah's investment department has been closely monitoring and actively evaluating areas related to artificial intelligence, including AI large models, vertical AI applications, and the upstream and downstream of the robot technology industry. We believe that external cooperation or integration is an important way to accelerate the construction of our capabilities and popularize key chains, and it is also crucial for promoting Cheetah's long-term competitiveness in the AI field.

Speaker Change: Thank you Mr. Slashes Chang Lu for your question. We appreciate your attention to our cash reserve scale and our focus on our strategic investment direction.

Speaker Change: Indeed, having over $200 million in cash provides us with considerable strategic flexibility in recent years Cheetos investment Department has been closely monitoring and actively evaluating areas related to artificial intelligence, including.

Speaker Change: <unk> large model vertical AI application and the upstream and downstream of the robot technology industry.

Speaker Change: We believe that external cooperation or integration is an important way to accelerate the construction of our capabilities and popularize keychain and it is also crucial for promoting chinas long term competitiveness in the AI field.

Unknown Executive: Regarding the acquisition strategy specifically, our core considerations mainly lie in two aspects. One is the alignment with Cheetah's strategy, and the other is the potential to enhance the overall value creation for Cheetah's shareholders. For potential target companies, we generally conduct a systematic evaluation from the following aspects. Firstly, the synergy between their technology and business and our company. Secondly, the strategic value they can bring to us. Thirdly, the compatibility of their team with Cheetah's culture and values. And finally, the fourth aspect is the financial valuation and its rationality. If a potential target fully meets our standards and both parties can highly agree on strategic operations, we will consider acquisition as a major strategic option to accelerate the construction of our capabilities in key links of the AI or robot industry chain.

Speaker Change: Regarding the acquisition strategy, specifically, our core considerations, mainly lie in two aspects.

Speaker Change: One is the alignment with cheetahs strategy and the other is the potential to enhance the overall value creation for Chinas shareholders.

Speaker Change: For potential target companies, we generally conduct a systematic evaluation from the following aspects.

Speaker Change: Firstly, the synergy between their technology and business and our company secondly, the strategic value they can bring to us.

Speaker Change: Thirdly, the compatibility of their team with cheetos culture and values.

Speaker Change: And finally, the fourth aspect is the financial valuation and its rationality.

Speaker Change: If a potential target fully meets our standards and both parties can highly agree on strategic operation, We will consider acquisition as a major strategic option to accelerate the construction of our capabilities in key links of the AI or robot industry chain.

Unknown Executive: Of course, during the evaluation process, they're quite flexible and maintain an open attitude. Depending on the different targets, development stages, and cooperation depth requirements, we may also participate in the construction of the entire ecosystem through forms such as minority equity investments, strategic partnerships, or joint ventures.

Speaker Change: During the evaluation process.

Speaker Change: Flexible and maintain an open attitude.

Speaker Change: Hunting on different target development stages, and cooperation depths requirement. We may also participate in the construction of the entire ecosystem through forums, such as minority equity investments strategic partnerships or joint ventures in.

Unknown Executive: In summary, the core principle of how we use our cash reserve is to maximize the long-term value for our shareholders. In strategic key areas such as AI and robots, we will continue to actively seek and rigorously evaluate opportunities that can bring competitive advantages and value enhancement, including strategic acquisitions that meet our standards.

Speaker Change: In summary, the core principle of how we use our cash reserve is to maximize the long term value for our shareholders.

Speaker Change: Strategic key areas, such as AI and robotics, we will continue to actively seek and rigorously evaluate opportunities that can bring competitive advantages and value enhancement, including strategic acquisitions that meet our standards.

Unknown Executive: Will the company achieve overall break even in the second half of 2025? I would like to know further that on the revenue side, will future profitability rely more on the restorative growth of the internet business or the new driving force of the AI business? At the same time, we've noticed that the Internet business revenue has grown well in the past few quarters. What are the main driving factors behind this? Do these factors have sustainability?

Speaker Change: Will the company achieve overall break even in the second half of 2025 I would like to note further that on the revenue side will future profitability rely more on the.

Speaker Change: Our restorative growth of the Internet business or the new driving force of the AI business.

Speaker Change: At the same time, we've noticed that the internet business revenue has grown well in the past few quarters what are the main driving factors behind this.

Speaker Change: These factors have sustainability for the next few quarters can the management give some directional judgments regarding the revenue growth rate and profit margin level of the Internet segment. In addition, since the AI business is currently in the investment stage does the company have an internal plan for achieving break even at certain stages.

Thomas Chong: For the next few quarters, can the management give some directional judgments regarding the revenue growth rate and profit margin level of the Internet segment? In addition, since the AI business is currently in the investment stage, does the company have an internal plan for achieving break, even at certain stages?

Speaker Change: Okay.

Thomas Chong: Okay, let Thomas answer this question. Thank you. Your questions focus on several aspects, including our break-even situation, growth drivers, and business outlook.

Speaker Change: Okay, let Thomas answered. This question. Thank you your questions focused on several aspects, including our breakeven situation growth drivers and business outlook I'll answer them separately regarding the company.

Thomas Chong: I'll answer them separately. Regarding the company's outlook for overall breaks, even in the second half of the year, achieving profitability in the second half is a major internal goal for us, but we do face some challenges. Whether we can reach this goal largely depends on the progress of our core businesses, especially the speed of business development, as well as the overall market environment. Of course, our management and team will go all out. We will also update our expectations to the market in a timely manner according to the progress.

Speaker Change: <unk> outlook for overall break even in the second half of the year achieving profitability in the second half is a major internal goal for us, but we do face some challenges.

Speaker Change: Whether we can reach this goal largely depends on the progress of our core businesses, especially at a speed of business development as well as the overall market environment of course, our management and team will go all out we will also update our expectations to the market in a timely manner. According to the progress.

Thomas Chong: Regarding the future drivers of profitability and the analysis of the internet business, I think the main drivers for the company's future profitability will surely come from the driving force of our AI and other businesses. The Internet business is an important foundation for us, and it is expected to maintain stable growth. Some of the driving factors for the growth of the Internet business in recent years, as the Vice President mentioned earlier, is that we have completely transformed from the traditional advertising model to the user payment model over the past few years. By returning to the value of the product after years of refinement, by adhering to the user-first concept, we have enhanced our product strength, which has brought stable user growth as well as stable long-term partners and customer acquisition channels.

Speaker Change: Regarding the future drivers of profitability and the analysis of the Internet business I think the main drivers for the company's future profitability will surely come from the driving force of our AI and other businesses the.

Speaker Change: The Internet business is an important foundation for us and it is expected to maintain stable growth some of the driving factors for the growth of the Internet business in recent years as the Vice President mentioned earlier is that we have completely transformed from the traditional advertising model to the user payment model over the past few years.

Speaker Change: By returning to the value of the product after years of refinement by adhering to the user first concept, we have enhanced our product strength, which has brought stable user growth as well as stable long term partners and customer acquisition channel I believe these driving factors are sustainable the subsequent growth of the <unk>.

Thomas Chong: I believe these driving factors are sustainable. The subsequent growth of the Internet segment mainly depends on whether we can expand more partners based on the existing channels and partnerships. Also, as the Vice President mentioned, we will use II technology to upgrade our traditional PC and mobile end tool products to enhance the competitiveness of our products.

Speaker Change: Generics segment, mainly depends on whether we can expand more partners based on the existing channels and partnerships.

Speaker Change: Also as the Vice President mentioned, we will use <unk> technology to upgrade our traditional PC and mobile and tool products to enhance the competitiveness of our product.

Thomas Chong: Regarding the growth rate and profit margin level of the Internet segment, generally, we don't usually make specific forecasts in the short term. But in the short term, the growth rate and profit margin improvement mainly depend on what I mentioned earlier, that is, the expansion of new partners or channels in the next few quarters, as well as the development and implementation effect of new AI-related features that empower our traditional tools. We will actively promote these aspects.

Speaker Change: Regarding the growth rate and profit margin level of the Internet segment generally we don't usually make specific forecasts in the short term, but in the short term the growth rate and profit margin improvement mainly depend on what I mentioned earlier that is the expansion of new partners or channels in the next few quarters as well as the development.

Speaker Change: Element and implementation effects of new AI related features that empower our traditional tools we.

Speaker Change: We will actively promote these aspects.

Thomas Chong: Finally, regarding the investment and planning of AI, as mentioned before, our business focus is on how to refine our products for scenarios that are more in demand by users and have more commercial prospects. The AI business, especially the robot business, is the core growth engine for our future. Currently, it is still in a crucial strategic investment stage. We have set clear phased goals internally. Our key task is to concentrate our R&D resources and strive to roll out products suitable for various user usage scenarios, aiming to achieve the goals as soon as possible. The losses of the AI and other business segments significantly narrowed in Q1.

Speaker Change: Finally regarding the investment and planning of AI as mentioned before our business focus is on how to refine our products for scenarios that are more in demand by users and have more commercial prospect the AI business, especially the robot business is the core growth engine for our future currently.

Speaker Change: It is still in a crucial strategic investment stage.

Speaker Change: We have set clear phase goals internally.

Speaker Change: Key task is to concentrate our R&D resources and strive to roll out products suitable for various user usage scenarios aiming to achieve the goals as soon as possible.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: The losses of the AI and other business segments significantly narrowed in Q1, what were the main areas where investment was scaled back does this mean that early expert.

Thomas Chong: What were the main areas where investment was scaled back? Does this mean that early exploratory projects have been phased out and a transition towards an ROI-oriented approach has begun?

Speaker Change: Territory projects have been phased out and they transition towards <unk>. Our ROI oriented approach has begun against the backdrop of the current shifts of IAA investment from proof of concept to actual commercial value how has cheetah adjusted investment strategy.

Thomas Chong: Against the backdrop of the current shift of IA investment, from proof of concept to actual commercial value, how has Cheetah adjusted its investment strategy? Let me explain a bit. The significant narrowing of losses in the AI and other business segments isn't just due to one factor. On one hand, some of our explorations have indeed reached a certain stage. For example, we've realized that large-scale model training doesn't hold much significance for a company of our size. So we've saved a significant amount of computing costs by no longer starting from pre-training. Although we're still doing things like fine-tuning after pre-training, we've stopped the pre-training process for two models, one with 141 parameters, and a medium-large MO model.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Let me explain a bit the.

Speaker Change: The significant narrowing of losses in the AI and other business segments isn't just due to one factor on one hand, some of our explorations have indeed reached a certain stage. For example, we've realized that large scale model training doesn't hold much significance for a company of our size.

Speaker Change: So we saved a significant amount of computing costs by no longer starting from pre training, although we're still doing things like fine tuning after pre training we've stopped the pre training process for two models, one with 141 parameters and a medium large Moe model once our team had grasped the entire technical chain and.

Thomas Chong: Once our team had grasped the entire technical chain and its capabilities, we ceased this training. We believe that in the future, there won't be many model providers. Only a very few companies will succeed with models. Maybe OpenAI is one of them, but in the future, most companies will be application-based rather than model-focused. The key is to do a good job in applications. Whoever can excel in applications has the potential to become a giant. And perhaps in the future, after having successful applications, one can then consider modifying the model. For now, the focus is on applications.

Speaker Change: Its capabilities, we see this training we believe that in the future there won't be many model providers only a very few companies will succeed with models.

Speaker Change: Maybe opening is one of them, but in the future most companies will be application based rather than model focus. The key is to do a good job in applications whoever can excel and applications has the potential to become a giant and perhaps in the future. After having successful applications. One can then consider modifying the model.

Speaker Change: For now the focus is on application.

Thomas Chong: On the other hand, our R&D has become more efficient. This is an important reason for the significant reduction in losses.

Speaker Change: On the other hand, our R&D has become more efficient.

Speaker Change: It is an important reason for the significant reduction in losses.

Thomas Chong: As for what you mentioned about some exploratory projects being phased out, for instance, we had some projects related to large-scale systems for the geospatial domain. But later, we found they weren't suitable for us, so we made quick and decisive adjustments. In fact, almost the entire company is now transitioning towards an ROI-oriented approach, whether it's the internet business, the advertising business, or some new products we're developing for robots. As I mentioned in previous answers regarding robots, simply emphasizing technological advancement doesn't carry much meaning. The one who can find a scenario and scale up first has the opportunity to win in this round of competition rather than relying solely on a few advanced technical points.

Speaker Change: That's cool what you mentioned about some exploratory projects being faced out for instance, we have some projects related to large scale systems for the geospatial domains, but later, we found they weren't suitable for us. So we made quick and decisive adjustments in fact, almost the entire company is now transitioning towards an R O I oriented.

Speaker Change: Approach, whether it's the internet business, the advertising business or some new products, we're developing for robot.

Speaker Change: As I mentioned in previous answers regarding robots simply emphasizing technological advancement doesn't carry much meaning the ones, who can find a scenario and scale up first has the opportunity to win in this round of competition rather than relying solely on a few advanced technical point technical points don't confer a first mover advantage.

Thomas Chong: Technical points don't confer a first mover advantage. The real advantage lies in the scenarios, the users attracted, and the resulting growth. Technical points themselves don't have an ecological edge, so we have indeed shifted towards an ROI-oriented model.

Speaker Change: The real advantage lies in our scenarios users attracted and the resulting growth technical points themselves don't have an ecological edge. So we have indeed shifted towards an ROI oriented model.

Thomas Chong: However, it doesn't mean that all exploratory projects will be eliminated. We still need many of them. We believe that this wave of A-agents represents a major upheaval in rewriting applications. No company can clearly predict how it will unfold. At this time, we need to not only transform our existing businesses, like the internet and robot businesses, with AI technology, but also carry out exploratory projects. Nevertheless, the ROI orientation for these exploratory projects is very clear. We'll strongly emphasize it. As I also mentioned, since the user subscription payment model is a very clear-cut business model, it's easy to understand.

Speaker Change: Or it doesn't mean that all exploratory projects will be eliminated we still need many of them. We believe that this wave of a agents represents a major upheaval in rewriting application no company can clearly predict how it will unfold at this time, we need to not only transform our existing businesses.

Speaker Change: Like the Internet and robot businesses with AI technology, but also carry out exploratory projects.

Speaker Change: Nevertheless, the R O I orientation for these exploratory projects is very clear we will.

Speaker Change: Strongly emphasize it.

Speaker Change: As I also mentioned since the user subscription payment model is a very clear cut business model. It's easy to understand in short. This is the overall operating concept of Cheetah that is use AI to transform old products and improve the energy efficiency ratio for robots also use a I to enhance.

Thomas Chong: In short, this is the overall operating concept of Cheetah. That is, use AI to transform old products and improve the energy efficiency ratio. For robots, also use AI to enhance capabilities such as interaction and task planning, rather than competing in terms of mechanical structure complexity. We'll enhance the productization of the overall AI experience across all lines. For AI agents, we'll continue to adopt a startup-like approach with small teams making rapid attempts, but with ROI as the assessment criterion. So, in the context of the transformation from concept validation to commercial value, our investment strategy, both for internal and external investments, highly values practical implementation.

Speaker Change: <unk>, such as interaction and tax planning rather than competing in terms of mechanical structure complexity will enhance the productivity of the overall I experience across all lines for AI agents will continue to adopt a start up like approach with small teams, making rapid attend but with R. O I as the assessment criterion.

Speaker Change: So in the context of the transformation from concept validation through commercial value our investment strategy, both for internal and external investments highly values practical implementation, whether it's an internally incubated projects or an externally I project. The key point for us is whether it can generate real world commercial return.

Thomas Chong: Whether it's an internally incubated project or an externally eyed project, the key point for us is whether it can generate real-world commercial returns from the market.

Speaker Change: From the market.

Unknown Executive: Thank you for your questions.

Speaker Change: <unk> for your question.

Speaker Change: Okay.

Speaker Change: Okay.

Unknown Executive: In the current context, where the capabilities of large models at home and abroad are gradually converging, what are Cheetah's competitive advantages in the AI application layer? And how does it guard against the risks of being replicated or marginalized by platform-based products in the future?

Unknown Executive: In the current context, where the capabilities of large models at home and abroad are gradually converging why don't cheat as competitive advantages in the AI application layer and how does it guard against the risks of being replicated or marginalized by.

Unknown Executive: Platform based product in the future.

Speaker Change: Okay.

Speaker Change: Okay.