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01/11 03:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary presents a mixed picture. While financial performance shows strong growth in certain areas, such as EngageLab and financial risk management, there are concerns about the decline in market intelligence revenue and increased operating expenses. The Q&A section did not provide additional clarity, leaving some uncertainty. The share repurchase plan is a positive signal, but operational efficiency challenges and regulatory risks weigh negatively. Overall, the balance of positive growth and negative risks suggests a neutral stock price movement in the short term.
Revenue RMB 89.9 million, achieving a remarkable year-over-year and sequential growth. EngageLab recognized revenue grew strongly by 67% year-over-year and 24% quarter-over-quarter. Financial risk management business revenue grew by 27% year-over-year.
Gross Profit RMB 59.6 million, grew strongly by 13% year-over-year while achieving the highest gross profit for the past 10 quarters. Gross margin also improved quarter-over-quarter.
Developer Subscription Services Revenue RMB 53.7 million, recorded growth of 12% year-over-year and increased slightly quarter-over-quarter. The growth was driven by an increase in both customer number and ARPU.
Value-added Services Revenue RMB 10.7 million, increased by 30% year-over-year and 21% quarter-over-quarter. Growth was mainly due to increased advertiser spending allocation and new customers acquired in Q2, as well as the traditional Q2 online shopping festival.
Vertical Application Revenue Increased by 10% year-over-year but decreased 4% quarter-over-quarter. Financial risk management recorded a 27% growth in revenue year-over-year, driven by a 48% increase in customer numbers. Market Intelligence revenue decreased by 38% year-over-year and 23% quarter-over-quarter due to weak demand for Chinese APP data.
Operating Expenses RMB 60.8 million, representing an 11% increase year-over-year and a slight increase quarter-over-quarter. R&D expenses increased by 10% year-over-year to RMB 26 million due to higher staff costs and technical service fees. Selling and marketing expenses increased by 11% year-over-year to RMB 22.7 million due to higher sales commissions and global business expansion. G&A expenses increased by 14% year-over-year to RMB 12.2 million due to higher staff costs and loss on disposal of property and equipment.
Net Operating Cash Inflow RMB 7.9 million for the quarter ended June 30, 2025.
Deferred Revenue RMB 156.1 million, representing cash collected in advance from customers for future contract performance. This is the second consecutive quarter with deferred revenue balance exceeding RMB 150 million.
Accounts Receivable Turnover Days 54 days, an industry-leading low level, reflecting timely cash collection and low risk of bad and doubtful debt.
EngageLab: Continued global expansion with year-over-year revenue growth of 67% and quarter-over-quarter growth of 24%. Signed contracts worth RMB 11.2 million in Q2, with customers in over 45 countries. Customer base increased by 25% sequentially to 1,058.
GPTBots.ai: AI agent platform launched to provide enterprise customers with easy-to-use AI solutions, contributing to business growth.
Global Market Expansion: EngageLab expanded to 45+ countries, with new customers from 4 additional countries in Q2. Localized teams established in Thailand and Japan.
Operational Efficiency: Streamlined services and reduced headcount from 820 to 400, improving cost structure. Gross profit grew 13% year-over-year, achieving the highest level in 10 quarters.
Revenue Growth: Total Q2 revenue grew 13% year-over-year, driven by Developer Services and value-added services. Deferred revenue reached RMB 156.1 million, indicating strong future performance.
Profitability Milestone: Achieved first-ever quarterly GAAP net profit in company history, driven by strategic focus on high-margin services and operational efficiency.
Focus on SaaS Metrics: Net dollar retention for core Developer Services stood at 99%, reflecting high customer retention and upselling capabilities.
Market Intelligence Revenue Decline: Market intelligence revenue decreased by 38% year-over-year and 23% quarter-over-quarter due to weak demand for Chinese app data. This indicates a challenge in maintaining relevance and demand in this segment.
Operational Efficiency Challenges: The company had to streamline services and reduce headcount from over 820 to around 400, indicating challenges in maintaining operational efficiency and cost control.
Regulatory and Market Risks: The company operates in a highly regulated financial industry and relies on licensed financial institutions in China, which could pose risks due to regulatory changes or market dynamics.
Dependence on EngageLab: EngageLab is identified as the primary growth engine, but over-reliance on this single product could pose risks if growth slows or market conditions change.
Increased Operating Expenses: Operating expenses increased by 11% year-over-year, with R&D, sales, and marketing costs rising, which could pressure profitability if revenue growth slows.
Weak Domestic Market Intelligence Demand: The domestic market intelligence segment is underperforming, requiring major upgrades to meet market needs, which could delay recovery and impact revenue.
Q3 2025 Revenue Guidance: The company expects Q3 2025 revenue to be in the range of RMB 88 million to RMB 91 million, representing a year-over-year growth of 11% to 15% compared to Q3 2024.
EngageLab Growth Outlook: EngageLab is expected to continue its strong growth trajectory, serving customers in over 45 countries and regions. The company plans to expand localized teams in Thailand and Japan, leveraging regional depth and localized service capabilities to penetrate market demand across industries and regions.
AI Agent Platform (GPTBot.ai): The AI agent platform, GPTBot.ai, is positioned as a growth engine, leveraging AI-driven technological advancements to drive innovation across business scenarios.
Market Intelligence Product Upgrade: The company is making major upgrades to its Market Intelligence product to better meet dynamic market needs. Upon completion, the upgraded product is expected to attract more usage and customers.
Share Repurchase Plan: In this quarter, for the quarter ended June 30, 2025, we repurchased 27,000 ADS. Cumulatively, we have repurchased a total of 323,000 ADS since the start of our repurchase program.
The earnings call presents a positive outlook with strong financial metrics, such as a 15% YoY revenue growth and a significant increase in EngageLab ARR. The new share repurchase plan and high deferred revenue also signal confidence. While there are risks like regulatory challenges and weak demand in certain segments, the overall sentiment from the Q&A and strategic growth plans, including market expansion and AI platform development, are positive. The absence of market cap information suggests a neutral to positive reaction, leaning towards positive due to the strong financial and strategic indicators.
The earnings call summary presents a mixed picture. While financial performance shows strong growth in certain areas, such as EngageLab and financial risk management, there are concerns about the decline in market intelligence revenue and increased operating expenses. The Q&A section did not provide additional clarity, leaving some uncertainty. The share repurchase plan is a positive signal, but operational efficiency challenges and regulatory risks weigh negatively. Overall, the balance of positive growth and negative risks suggests a neutral stock price movement in the short term.
The earnings call highlights strong financial performance with a 38% revenue growth, positive EBITDA, and improved gross margins. The company shows promising expansion with a 127% revenue increase in EngageLab and a successful share repurchase program. Despite some market demand weaknesses and regulatory risks, optimistic guidance and strategic investments in AI and global expansion suggest positive future prospects. The Q&A section reveals cautious optimism, with a focus on balancing growth and profitability. Overall, these factors indicate a likely positive stock price movement in the short term.
The company demonstrated strong financial performance with record revenue achievements, positive adjusted EBITDA, and robust cash management. The EngageLab business and overseas expansion indicate strategic growth potential. Despite some regulatory and market demand risks, the overall sentiment remains positive due to successful financial metrics, share repurchase program, and optimistic guidance. The Q&A section reinforced confidence in future revenue trends, despite some lack of clarity. Given the positive financial outlook and strategic initiatives, a positive stock price movement is expected.
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