CMCM

Good day, and welcome to the Cheetah Mobile Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Helen Jing Zhu, Investor Relations of Cheetah Mobile. Please go ahead.

Thank you, operator. Welcome to Cheetah Mobile's Fourth Quarter 2025 Earnings Conference Call. With us today are our company's Chairman and CEO, Mr. Fu Sheng; and our company's Director and CFO, Mr. Thomas Ren. Following management's prepared remarks, we will conduct the Q&A section. Please note that the management's prepared remarks are presented by AI agent. Before we begin, I refer you to the safe harbor statement in our earnings release, which also applies to our conference call today as 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. Please go ahead, Fu Sheng.

Good evening, everyone. Thank you for joining us. In 2025, we finished stabilizing the business and built a stronger foundation for Cheetah Mobile. During the year, our total revenue grew 43% year-over-year, driven by continued growth in both our Internet business and AI and Others segments. In the fourth quarter, AI and Others already accounted for half of total revenues, reflecting the increasing contribution of our new growth initiatives. More importantly, we achieved full year non-GAAP operating profitability, our first time in 6 years. Our Internet business remained resilient in 2025, generating approximately RMB 460,000 in adjusted operating profit every working day. This consistent operating cash flow forms the financial backbone of the company and allows us to invest in robotics and AI in a disciplined and sustainable way. Our second highlight is robotics, which is emerging as a key structural growth driver. For full year, robotics revenue grew approximately 31%. In the fourth quarter alone, robotics revenue reached about RMB 60 million, up 94% year-over-year and 43% quarter-over-quarter. A voice robot in China achieved 100% year-over-year growth for 3 consecutive quarters, accounting for high single digits of the fourth quarter's total revenues. This progress is driven by our strategic focus on core strength in voice robotics and the integration of AI agent technology to enhance product experience. We are now seeing our voice robot become a must-have solution in receptions, guided tours, retail environment, hospitals and service halls as they deliver proven measurable value. We recently introduced a new version of our voice robots, which comes with built-in skills like guiding, patrolling and advertising, enabling end customers to start using them right away, our robotic arm business mainly in serving overseas markets is making up high single digit of the first quarter's total revenues. We focus on long-term demand from research institutions and the R&D teams that value openness and the customization. This customer base is sticky and repeatable, supporting long-term demand, building on our proven indoor autonomous mobility technologies. We are introducing a smart wheelchair, targeting developed regions such as Western Europe and North America. This product is positioned as a premium solution for users who value safety, independence and confidence in daily mobility. We are seeing a clear shift in demand as users increasingly value safety, assistance, and intelligent features in mobility products, while scalable solutions in the market remain limited. By applying our experience in service robots we are able to meaningfully improve the user experience. During my own recent recovery, I personally used our smart wheelchair and saw a clear improvement in safety and convenience. Importantly, we can deliver these benefits without significantly increasing the costs compared to traditional high-end electric wheelchairs, making this a more practical and accessible product for users. We have entered into framework agreements with established mobility brands who will manage branding, distribution and aftersales services. Initial shipments are expected to begin in the second quarter of 2026, representing an early-stage commercial validation of this product category. Across the industry, more companies are starting to test and deploy service robots. We believe the next 1 to 2 years will be a validation phase, where ROI and reliability will matter most. You don't need a robot that looks like a human. You need a robot that works every day, delivers measurable value and it's easy to operate at scale. This is exactly where our current products are positioned. Our Internet business remains strong, generating steady cash flow, which allows us to invest in AI in a disciplined and sustainable way. For more than a decade, we have built utility applications serving hundreds of millions of users. This product DNA shapes how we approach AI, rather than competing in model development we focused on turning AI capabilities into practical tools that help users complete real tasks. During the Chinese New Year, I spend a lot of efforts experimenting with an AI agent system built on the OpenCloud framework starting from a single agent that could barely complete basic tasks, the system evolved into a multi-agent team capable of running tests continuously. In one scenario, the system generated personalized New Year messages for more than 600 colleagues and managed the entire sending workflow automatically. What we see emerging is not simply a new AI tool but a new way to organize digital work. AI agents can automate entire workflows from information gathering to processing and distribution, significantly improving productivity. Building on these learnings, we introduced EasyClaw based on OpenCloud and open source agent framework for both domestic and overseas markets. EasyClaw is our AI coworker platform that helps users create and deploy task-oriented AI agents capable of executing real-world tasks autonomously. At this stage, we focus on execution capability rather than scale. We are already seeing a continued increase in user engagement as reflected in the rapid growth of our total token usage. We are building EasyClaw into an agentic operating system that changes how users interact with software and machines. By integrating EasyClaw into our PC products, we are improving user experience and driving higher conversion and ARPU. In robotics, EasyClaw allows users to program and customize robots using natural language, lowering customization barriers. This helps us deploy faster, reduce cost and scale more easily, making our products more competitive. Some investors may ask how we compete with our training foundation models. We believe the real advantage in the agent era lies not in the model itself, but in the systems built on top of it, including task orchestration, tool usage and cost management. By leveraging open ecosystems and leading APIs, our product can evolve as models continue to improve. Finally, our global DNA remains a core competitive advantage. We continue to expand both our AI tools and robotics businesses internationally with a disciplined approach. Looking ahead to 2026, we do not provide specific financial guidance, but we see continued structural improvements. We believe our robotics business will maintain strong growth momentum as commercial validation deepens and become a more important part of our revenue mix. At the same time, AI-enabled products will gradually enhance engagement and monetization efficiency across our software ecosystem. We will increasingly apply AI internally to accelerate the development, aiming to further improve operational efficiency. As we grow, we will continue improving transparency and disclosure, credibility to data and our focus remains clear. Execute with discipline and net results compound over time. Cheetah is entering its next phase of development combining digital coworkers through AI agents and physical coworkers through service robots supported by real operating cash flow and disciplined financial management. We are building the foundation for our next stage of growth. Thank you.

Thank you, Fu Sheng. Hello, everyone, and thank you for joining us. Unless otherwise stated, all financial figures are presented in RMB. 2025 marked a year of meaningful operational recovery and improved financial discipline for Cheetah Mobile. During the year, we continued improving operating discipline and cost structure across the company. We concentrated resources on commercially validated use cases in robotic products and practical AI applications, while leveraging open source ecosystem and third-party models to improve R&D efficiency and optimize infrastructure costs. This approach allows us to accelerate iteration without significantly increasing fixed costs. For the full year 2025, total revenue grew approximately 43% year-over-year to RMB 1,150 million. Although we reported a GAAP operating loss of RMB 179 million for the year, this represented a substantial improvement compared with operating loss of RMB 437 million in 2024. On a non-GAAP basis, operating profit reached RMB 14 million compared with a non-GAAP operating loss of RMB 232 million, in the prior year, reflecting improved operating leverage. We ended the year with USD 215 million cash and cash equivalents. Turning to our segment performance. Our Internet business continued to serve as a stable cash generating platform for the company in 2025. Revenue from Internet business increased 19% year-over-year to RMB 615 million with Internet revenue, Internet value-added services revenue increased 21% year-over-year in 2025, contributing 65% of segment revenue, supported by both paying user growth and ARPU expansion. In addition, we observed that many users subscribe for periods longer than 12 months, reflecting the recurring nature of our utility applications and strengthening revenue visibility. In terms of profitability, the Internet business generated approximately RMB 115 million in adjusted operating profit in 2025, maintaining healthy margins and strong operating cash flow. As Fu Sheng mentioned earlier, the Internet business generates roughly RMB 460,000 in adjusted operating profit per working day which provides predictable cash flow to support strategic investments in new initiatives. Looking ahead, we expect the Internet business to remain stable and profitable while continuing to provide financial flexibility for the company to invest in long-term growth opportunities. Turning to our AI and Others segment. Revenue from this segment increased 85% year-over-year to RMB 535 million in 2025, as a result, this segment accounted for 46.5% of our total revenue compared with 35.9% in 2024, reflecting the growing contribution from our emerging businesses. Within the segment, the robotics business continued to scale since the second half of 2025, making up 27% of the segment's revenue and 13% of total revenue in 2025. Robotics revenue increased 31% in 2025 driven by deployment of voice robot in China and continued demand for robotic arms in overseas markets. Other businesses, namely overseas advertising agencies, service and multi-cloud management platform within this segment also contributed significantly to revenue growth, benefiting from increasing overseas expansion by Chinese enterprises. At the same time, we continued to improve operating efficiency to more selective investment and disciplined cost control. For the full year, adjusted operating loss from the AI and Others segments reduced by 42% year-over-year to RMB 274 million as we continued scaling the business while maintaining disciplined investments. Turning briefly to the first quarter performance. Total revenue reached RMB 309 million representing a 30% year-over-year increase and a 7% quarter-over-quarter increase, while Internet revenue declined slightly year-over-year, in the fourth quarter it increased quarter-over-quarter as we continue shifting toward a subscription-driven business model. In addition, user subscription revenue within the Internet segment increased 32% year-over-year and 16% quarter-over-quarter as we chose to focus on subscription business model, which supports a healthier product and user experience. Revenue from the AI and Others segment reached RMB 153 million, accounting for nearly half of total revenue in the quarter. With this segment, robotics revenues increased by 94% year-over-year and 43% quarter-over-quarter to about 19% of the fourth quarter's total revenue. Other than that, our revenues from overseas advertising agency service and multi cloud management platform also contributed to this segment's year-over-year growth. On a non-GAAP basis, the company generated operating profit of RMB 15 million in the fourth quarter compared to RMB 42 million operating losses in the same period last year. We believe the improvement we achieved in 2025 reflected structural improvements in both our cost structure and revenue mix. Looking ahead, our priorities remain clear: disciplined growth, continued improvement in operating efficiency, balanced and disciplined capital allocation with stronger financial discipline, clearer strategic focus and increasing contribution from our emerging businesses, we believe the company is entering a more stable and predictable operating phase. Thank you. We are now ready to take your questions.

[Operator Instructions] The first question today comes from Thomas Chong with Jefferies.

[Foreign Language]

[Foreign Language]

Operator, can we move to the next question?

The next question comes from [ Nancy Lu ] with JPMorgan.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question. Thank you.

The next question comes from Cheng Ru Li from Guoyuan Securities.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question. Thank you.

The next question comes from [ Yongping Diao ] with Guotai Haitong.

[Foreign Language]

[Foreign Language]

Thank you, operator. Please move to the next question.

The next question comes from [ Jie Zhu ] with GF Securities.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question.

The next question comes from [ Wei Feng ] with Mizuho Securities.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question.

The next question comes from Lydia Lin with Morgan Stanley.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question.

The next question comes from Vicky Wei with Citi.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question.

The next question comes from Zeping Zhao with ICBC.

[Foreign Language]

[Foreign Language]

Yes. Thank you. Operator, please check if we have any further questions.

We have no further questions at this time, which concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you so much for joining our conference call today. And if you have any further questions, please do not hesitate to let us know. Thank you so much. Bye.

Bye-bye.

The conference has now concluded, and we thank you for attending today's presentation, and you may now disconnect your lines.

Good day, and welcome to the Cheetah Mobile Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Helen, Investor Relations for Cheetah Mobile. Please go ahead, Helen.

Thank you, operator. Welcome to Cheetah Mobile's Third Quarter 2025 Earnings Conference Call. With us today are our company's Chairman and CEO, Mr. Fu Sheng; and our company's Director and CFO, Mr. Thomas Ren. Following management's prepared remarks, we will conduct a Q&A section. Please note the management's script will be presented by an AI agent. Before we begin, I refer you to the safe harbor statement in our earnings release, which also applies to our conference call today. Management will make forward-looking statements. At this time, I will now turn the conference call over to our Chairman and CEO, Mr. Fu Sheng. Fu Sheng, please go ahead.

Good day, everyone, and thank you for joining Cheetah Mobile's Third Quarter 2025 Earnings Call. I'm Fu Sheng, the CEO of Cheetah Mobile. I'm very happy to report that our turnaround efforts are paying off. We hit quarterly breakeven ahead of expectations. In Q3, we made an operating profit -- first time in 6 years. We believe we are well positioned to approach breakeven for the full year 2025. At the same time, our growth stayed strong in Q3, building on the momentum from the first half of the year. Q3 revenue rose 50% year-over-year, driven by both our Internet business and our AI and other businesses. Our AI and other segment grew even fast, up 151% year-over-year and 6% quarter-over-quarter and now presenting 50% of total revenues. So far, 2025 has been a solid year for Cheetah. Revenue in the first 9 months rose around 48%. We became profitable in Q3 and took important steps in our two AI focus areas, AI robots and AI tools. We believe this progress shows our investors were right to trust our vision and work. I want to thank our shareholders for their support. I know many of you invested in Cheetah because you believed in our ability to deliver a comeback. We are working hard every day to make that happen. I remain fully committed to leading the company forward and our results this year show that the turnaround is real. Looking ahead, we will focus on driving growth by building new growth engines through our AI initiatives, AI robots and AI tools. Today, I will talk about our vision and progress in these areas. Thomas will follow with more on how we are building a lean cost structure to support long-term profitability. Both AI robots and AI tools have enormous market potential, and Cheetah Mobile has strong advantages to build new growth engines in these areas. Additionally, we hold minority investments in several companies in this space, which could extend our organic growth in the future. In Q3, our AI robotic business contributed about 15% of total revenue, growing about 100% year-over-year and 40% quarter-over-quarter. We see two drivers of this growth. First, strong demand for our voice-enabled wheel robots in China. In Q3, for the second quarter in a row, revenue from these robots doubled year-over-year. They now make up around 5% of our total revenues, supported by both repeat orders and new wins. As of September 30, 2025, the contract backlog for these robots in China was up 32% from the previous quarter. Since then, the backlog has doubled again, reflecting sustained demand. These trends make us comfortable for a continued strong [ UA ] growth in our revenue from these robots in the fourth quarter. Why is demand rising? First, more customers are open to using robots. And today, wheel robots are the most reliable and cost-effective option for large-scale deployment. But more importantly, product experience is getting better. AgentOS, our voice system powered by AI agents, gives our robots a smarter brain to understand and respond more naturally to people. That improved experience allows us to charge a premium even in a competitive market, but most of our revenue growth came from higher shipment volume. We believe AgentOS not only enhances user experience but also strengthens our leadership in voice-enabled robots. Our voice-enabled wheel robot, which integrated with Google's Gemini 2.5 Flash was recently featured by Google Cloud at its AI Asia Conference. We believe this is a strong sign of endorsement. We are continuously upgrading our AI agent capability and applying it to our products. Looking forward, we think these robots can do even better overseas as we combine third-party genAI and multimodal models with our strength in voice AI and autonomous mobility to drive real-world applications. Second, our robotic... [Technical Difficulty]

Sorry for the interruption, everybody. This is the conference operator. Looks like we've lost the main speaker connection. I will place hold music in the call, and we will get them connected again. Please standby. Thank you for holding, everyone. This is the operator. I've reconnected the main speaker line. Please proceed with your call.

Hello, everybody, this is Helen from Cheetah Mobile. I think there are some tech issues then our call disconnected. I will just replay our CEO's prepared remarks. Very sorry for the inconvenience.

Good day, everyone. And of this growth, first, strong demand for our voice-enabled wheel robots in China. In Q3, for the second quarter in a row, revenue from these robots doubled year-over-year. They now make up around 5% of our total revenues, supported by both repeat orders and new wins. As of September 30, 2025, the contract backlog for these robots in China was up 32% from the previous quarter. Since then, the backlog has doubled again, reflecting sustained demand. These trends make us comfortable for a continued strong [ UA ] growth in our revenue from these robots in the fourth quarter. Why is demand rising? First, more customers are open to using robots. And today, wheel robots are the most reliable and cost-effective option for large-scale deployment. But more importantly, product experience is getting better. AgentOS, our voice system powered by AI agents, gives our robots a smarter brain to understand and respond more naturally to people. That improved experience allows us to charge a premium even in a competitive market, but most of our revenue growth came from higher shipment volume. We believe AgentOS not only enhances user experience but also strengthens our leadership in voice-enabled robots. Our voice-enabled wheel robot, which integrated with Google's Gemini 2.5 Flash was recently featured by Google Cloud at its AI Asia Conference. We believe this is a strong sign of endorsement. We are continuously upgrading our AI agent capability and applying it to our products. Looking forward, we think these robots can do even better overseas as we combine third-party genAI and multimodal models with our strength in voice AI and autonomous mobility to drive real-world applications. Second, our robotic arm business is growing steadily supported by three key industry trends. Number one, in manufacturing, collaborative robotic arms are becoming more and more popular because they're smaller, easier to install and more affordable, they're also safer to work with. So they help fill many unmet needs in factories like doing tasks that need flexible movement, careful and precise work or real-time feedback. These tasks now rely on human workers today. Number two, in commercial spaces like coffee shops and smart retail, because of advances in lightweight design and easy programming and building vision of feedback, we are unlocking new use cases. Our team's ability to understand real-world needs and build practical products gives us an edge. Number three, robotic arms are a core part of embodied AI. As global demand for physical AI grows, we believe robotic arms will play a key role in bringing AI into the real world. We strengthened our robotic arm business through an acquisition, demonstrating our strategy of combining organic growth with M&A. This business is a great fit for us. It is already profitable with tens of millions of RMB in annual revenue, most of it from overseas customers. By bringing this company into our group, we've expanded our product line and strengthened our presence in global markets. More importantly, we started testing how to combine our wheel robots with robotic arms to create embodied AI that can handle more complex real-world tasks. It's still in early days, but our solid foundation in both technology and product development puts us in a strong position to grow in this space in the long run. Moving on to AI tools. This is another area where we see long-term potential. We're using AI agents to quickly build a variety of new tools for both PC and mobile, and we're also upgrading some of our existing products with AI features. For example, in one of our legacy products, Duba Antivirus users can now interact with their PCs through natural language to complete tasks like system settings. No need for complex manual steps. And small-scale testing of other tools like meeting summarizers, we've also seen strong user engagement and good willingness to pay. What makes this space exciting is that AI coding apps have greatly reduced the time and cost it takes to build and launch new products. This gives us the flexibility to test many ideas quickly and focus on what works. While we're still in the early stages, we believe our strength in building user-friendly tool-based apps, especially with the help of AI agents, puts us in a good position. And since subscriptions already make up more than 60% of our Internet revenue, we're confident in our ability to monetize future products through the same model. To close, I believe Cheetah has moved beyond the turnaround phase. Looking ahead, our focus is on building long-term value by scaling our AI robot business and capturing the upside of AI-native tools. While we're still early, both segments have real momentum and strong potential to drive growth in the years to come.

Thank you, Fu Sheng. Hello, everyone, and thank you for joining the call. Unless otherwise stated, all financial figures are presented in RMB. In the third quarter of 2025, we are pleased to reach an important milestone. We reported our first quarterly operating profit in the past 6 years. This achievement reflects the disciplined execution of our teams and the continued improvement in our operational efficiency. Operating profit was RMB 4 million in the quarter. On a non-GAAP basis, operating profit reached RMB 15 million compared with an operating loss of RMB 60 million in the same period last year and an operating loss of RMB 2 million in the previous quarter. Let me walk you through the key financial results in the quarter. Total revenue reached RMB 287 million, up 50% year-over-year, driven by 151% growth in our AI and other segment. This segment accounted for 50% of total revenue compared with 30% in the same period last year. Our Internet business remained stable with revenue increasing 6% year-over-year in Q3. Gross profit increased by 64% year-over-year and gross margin improved to 75%, up from 68% in the year-ago quarter. Operating profit improved to RMB 4 million compared with an operating loss of RMB 72 million a year ago. On a non-GAAP basis, operating profit was RMB 15 million compared with an operating loss of RMB 60 million last year. By segment, our Internet business delivered approximately RMB 21 million in adjusted operating profit in this quarter, up 55% year-over-year. Adjusted operating loss for our AI and other segment narrowed by 82% year-over-year and 53% quarter-over-quarter to [ RMB 15 million ] in this quarter. On the balance sheet side. Our financial position remains strong. As of the 30th of September 2025, the company has cash and cash equivalents of about USD 224 million and long-term investments of USD 107 million. We continue to maintain discipline in cash flow management and capital allocation. Looking ahead for our Internet business, we will continue to deliver robust operating profits. We want to be clear that we prioritize operating profit growth over revenue growth. For our AI and other business, we also aim to further manage our cost and expenses to a more focused and efficient approach. First, we are focusing on high potential use cases for our robotics business, that is the only way to build sustainable and profitable business models. We concentrate on AI-powered, voice-enabled wheel robots, products that have proved to deliver a highly competitive ROI, [ a cheaper ] alternative for reception, museum and exhibition scenarios. Second, we leverage third-party and open source models and tools to enhance our robotic experience. This approach allows us to accelerate product updates, thereby increasing our overall efficiency. Third, for our advertising agency service and multi-cloud management services, we are taking a more disciplined approach, strengthening contract control [indiscernible] and customer value to better manage our costs and expenses. Overall, at the corporate level, we will continue to invest in AI robots and AI tools as we believe these two areas will drive our long-term revenue growth. However, we will stay disciplined and ROI focused in every decision. I believe Cheetah has entered a much better phase compared with a year ago. In product development, as we shared in the previous calls, we encourage our employees to use AI tools such as [ coding ] apps to build their own AI, not only to improve productivity, but also to enhance decision-making. Leveraging AI allow us to develop products faster and operate them with fewer people than before. Most importantly, with the AI opportunity, the business improvements we have achieved over the past year and growing recognition from the capital market, we are seeing renewed confidence and momentum across our teams. I personally believe these changes, stronger execution, disciplined investments, improved efficiency and an inspired team form the foundation for Cheetah to rebuild its success in this new chapter. Thank you. We are now happy to take your questions.

Operator, please open the call for...

[Operator Instructions] And our first question today comes from Thomas Chong from Jefferies.

[Foreign Language]

[Foreign Language]

Our next question comes from Vicky Wei at Citi.

[Foreign Language]

[Foreign Language]

Our next question comes from [ Lydia Lin ] at Morgan Stanley.

[Foreign Language]

[Foreign Language]

Our next question comes from [ Zhang Heng ] with Everbright Securities.

[Foreign Language]

[Foreign Language]

Our next question today comes from [ Alicia Soh ] with JPMorgan.

[Foreign Language]

[Foreign Language]

Our next question comes from Zeping Zhao with ICBC International.

[Foreign Language]

[Foreign Language]

Our next question today comes from Joanna Ma with CMBI.

[Foreign Language]

[Foreign Language]

Our next question comes from [ Jing Wan ] with CICC.

[Foreign Language]

[Foreign Language]

Our next question comes from [indiscernible] from [ CYN ] Securities.

[Foreign Language]

[Foreign Language]

Our next question comes from [ Yongping Diao ] with Guotai Haitong.

[Foreign Language]

[Foreign Language]

And our final question today comes from [indiscernible] Securities.

[Foreign Language]

[Foreign Language]

Okay. Operator, please check if we have any further questions. If not, we will end the call.

Yes, ma'am. We have no further questions in queue at this time. [Operator Instructions] I'm showing no questions, ma'am. You may proceed with any closing remarks.

Okay. And then we can end the call. Thank you so much for joining our earnings conference call today. Thank you so much.

Thank you, and thanks, everyone, for connecting to today's call. You may now disconnect your lines, and have a wonderful day.

Good day, and welcome to the Cheetah Mobile Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ms. Helen Zhu, Investor Relations of Cheetah Mobile. Please go ahead.

Thank you, operator. Welcome to Cheetah Mobile's Second Quarter 2025 Earnings Conference Call. With us today are our Chairman and CEO, Mr. Fu Sheng; and our Director and CFO, Mr. Thomas Ren. Following management's prepared remarks, we will conduct the Q&A section. Please note that the management's trade will be presented by an AI agent. Before we begin, I refer you to the safe harbor statement in our earnings release, which also applies to our conference call today as 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. Please go ahead.

Thank you, everyone, for joining us today. In the second quarter, we delivered our best results since Q1 2021. Revenue grew 58% year-over-year driven by a 39% year-over-year increase in Internet business and an 86% year-over-year increase in AI and other segments. Our operating loss decreased 86% year-over-year, while non-GAAP operating loss was down 97% from last year, almost breakeven. In the first half of 2025, our revenue grew by 47% year-over-year. We believe we can maintain fast growth in the second half of 2025, driven by about 100% year-over-year revenue growth in our AI and other segments, along with a stable Internet business. This shows our turnaround is working and gaining momentum. What is even more important is how we work today. We have made AIA core part of our process working in an AI native way. Our R&D teams are small and flexible using AI every day to design, test and build products, much like open source developers. This helps us move faster and use fewer resources ensures AI allows 1 person to do what once took a whole team. We have been investing in AI since 2016 and at the intersection of AI and robotics today, we now have advantages and experience that are hard to replicate. For example, depo our AI tool that turns video, audio and documents into summaries and my maps times with only 3 full-time employees. Our core Internet business remains solid, thanks to our shift from advertising to a subscription model, which has improved user engagement and retention Today, subscriptions make up about 60% of our Internet revenues. This healthy base gives us the room to invest in new AI products out staying financially disciplined. We are enhancing existing apps like Duba Anti-virus Wallpaper apps and PDF tools with AI agents. For example, in Duba Anti-virus, we are testing a new AI feature that helps users fix PC issues, especially long tail problems, it couldn't solve before and early feedback is encouraging. While we are still in the launch and improvement base for most AU utilities. We believe Chase has a natural advantage of utility applications. At the end of the day, the core value of AI utilities is to help people work more efficiently and productivity. If we can deliver on that, we believe users will be willing to use our products. On the service robotics side, we made solid progress. Revenues from service robots continue to contribute to growth in the AI and other segment. In late July, we completed the acquisition of new factor on of a few robotic on companies that is already profitable and earn small service revenue overseas, combining new factory strengths with Cheetah's distribution network and 100-plus global partners give us a clear advantage to scale globally. In fact [indiscernible] are already being used at scale in real-world scenarios. From assembly picking, painting and expensing tasks in factories to grabbing beverages, making coffee and beers and commercial applications, strawberry harvesting in agricultural setting and even in universities for robot research. We now have a broad range of robots and our piloting wheel robots with arms that can handle more physical tasks in more places. We believe the true breakthrough in robotics is not just in using the most advanced lab technology about finding technologies that match real-world use cases, which can scale and generate earnings for the company. While the future of robotics is exciting. Our years of experience tell us that real commercial adoption depends on delivering sustainable ROI that customers can clearly see. Our strategy is to stay optimistic, yet patient, moving forward steadily. We will continue to identify scalable use cases and grow the business gradually. That said, we want to caution investors that it is not something that will reach math deployment in the coming quarters. The service robotics market is still developing, but AI agents are making robots smarter and easier to use. Since adding agent OS, our next-generation voice system powered by AI agents. Earlier this year, our voice enabled robot revenue in China grew by about 100% in Q2 both driven by recurring demand from our existing channel partners alongside expansion into new high-quality customers in health care, education, health care and cultural institutions, such as the national center for the performing arts. In addition, this growth does not rely on 1 of large orders that comes from steady and repeat demand, especially in use cases like for guiding and reception, which shows it is sustainable. Few companies have both our global experience in consumer engine products and use of real-world robotics operations. This unique combination allows us to apply AI agent technology across both software and hardware, creating synergies that are hard to replicate, supporting our goal to become a leading service robot company in the coming years. Looking ahead, our core Internet business remains healthy and profitable. We will keep investing in AI tools and robotics with discipline, and we are on track to reach profitability in the near term. Our strong cash position and zero debt give us the flexibility to grow while keeping our finances strong. transformation is just getting started, but it is already producing results. We are building 2 growth engines, AI-powered utility apps and AI robots that work together as synergistic forces, combining software and hardware to create a stronger moat, expand our market reach and open new growth opportunities. At the same time, our solid Internet business and strong cash resource provides a stable base with over 7 years of R&D in AI focused strategy and a culture of innovation, we are confident about the world ahead.

Thank you, Fu Sheng. Hello, everyone, and thank you for joining the call. Unless otherwise stated, all financial figures are presented in RMB. In the second quarter of 2025, we continue to make meaningful progress narrowing our losses and improving probability as we remain focused on execution, efficiency and financial discipline. In fact, on a non-GAAP basis, we almost reached a breakeven point on the operating level in Q2. Let me walk you through the key financial results in the quarter. Total revenue reached RMB 295 million, up 58% year-over-year and 14% quarter-over-quarter, marking a strong acceleration. Gross profit increased by 85% year-over-year and 19% quarter-over-quarter to RMB 22 million. Gross margin improved to 76%, up from 65% in the year ago quarter and 73% in the previous quarter. Operating loss narrowed to RMB 11 million, an 86% year-over-year decreased a 58% quarter-over-quarter decrease. On a non-GAAP basis, our operating loss declined $2 million, down 97% year-over-year and 6% quarter-over-quarter. Net loss attributable to Cheetah shareholders decreased by 82% year-over-year and 32% quarter-over-quarter to RMB 23 million. Loan net loss attributable to Cheetah Mobile shareholders now by 87% year-over-year at 35% quarter-over-quarter to RMB 14 billion. These probability improvements reflect our ongoing efforts to sharpen the focus, improve efficiency and optimize our cost structure, particularly as we string from early-stage experimentation to ROI focused execution in our AI initiatives in our PI Autobolics business, we have exited certain compute sensitive directions, such as playing our own foundation models, a strategic shift that significantly reduced infrastructure spend. At the same time, we have streamlined our R&D process by levering AI tools and refocused resources on AI utility applications that generate user value. For example, R&D expenses accounted for 24% of our AI and other segment revenue in the quarter, down from 39% in the year ago quarter and 28% in the previous quarter. These efforts have materially improved the operating profit of our AI and other segments where adjusted operating losses decreased 63% year-over-year. and 32% quarter-over-quarter. Looking ahead, we remain confident in our ability to achieve profitability with a clear and disciplined strategy. We see 2 key drivers for this path. First, our Internet business continues to deliver steady profits and serves as a solid financial foundation in Q2. Adjusted operating margin for this segment was 14%, up from 12% in the year ago quarter. Our transition from an ad centric model for user subscription-driven model is showing good momentum. We believe this momentum is sustainable, supported by loyal user cohorts and diversified distribution channels. Second, in RA and Other segment. We are building for long-term probability by growth in both our consumer-facing AI tools and enterprise-facing robotics for our robotics business we are prioritizing salable use cases with clear user demand and engagement, emphasizing our core competence. In powered voice interaction, including natural conversation capabilities similar to our LOM based ages and we best indoor mobility, which we believe offers the most reliable and cost-effective solution for scalable robot deployment, continuously improving our robust intelligence and product experience through agents maintaining a lean and at team structure. A recent milestone was our acquisition of new factor, 1 of the few profitable robotic arm companies globally, new factory brings a proven track record of profitable growth, clear market position and consistent value creation only aligned with our vision to scale differentiated robotic solutions over time. On the AI tools front, people an AI tool that suberizes video, audio, PDS and other documents is to concise takeaways and mind maps, has shown encouraging early user adoption, validating product market fit. Our balance sheet remains strong as of the 30th of June 2025, we have 282 billion in cash. and cash equivalents and USD 110 million in long-term investments. We generated RMB 362 million in operating cash flow during the quarter. This financial strength gives us the flexibility to continue investing in high potential growth opportunities while maintaining capital discipline. We will also remain open to strategic and can accelerate capability building in targeted verticals. To summarize, this was another quarter of measurable progress on our path to breakeven. We are encouraged by early signs of sustainable profitability supported by: one, our profitable and resilient Internet business; two, a disciplined ROI focused eye strategy; and three, strong capital flexibility to invest in long-term growth. Thank you. We are now happy to take your questions.

[Operator Instructions] The first question today will come from Thomas Chong of Jefferies.

[Foreign Language]

[Foreign Language]

Thank you. Operator, please move to the next question.

Our next question will come from Vicky Wei of Citi.

[Foreign Language]

[Foreign Language]

Thank you, operator. Please move to the next question.

Our next question is from Nancy Liu of JPMorgan.

[Foreign Language]

[Foreign Language]

Operator, please move to the next question. Thank you.

Our next question today will come from Brenda Zhao of CICC.

[Foreign Language]

[Foreign Language]

Our next question today will come from [indiscernible].

[Foreign Language]

[Foreign Language]

Operator, please move to the next question. Thank you.

Our next question today will come from [indiscernible].

[Foreign Language]

[Foreign Language]

Thank you. Operator, please move to the next question.

The next question today will come from [indiscernible] Huang of Everbright Securities.

[Foreign Language]

[Foreign Language]

Thank you. Operator, please move to the next question.

Our next question today will come from [indiscernible].

[Foreign Language]

[Foreign Language]

Thank you. Operator, please move to the next question.

Our next question today will come from [indiscernible] Haitong Securities.

[Foreign Language]

[Foreign Language]

Thank you. Operator, please move to the next question.

Our next question today will come from Joanna Ma of CMBI.

[Foreign Language]

[Foreign Language]

Thank you. Operator, please move to the next question.

Our next question will come from Jack Yang of Mizuho.

[Foreign Language]

[Foreign Language]

Operator, can you please check if we have any further questions?

Certainly. [Operator Instructions] At this time, I am not showing any additional questions in the question queue.

Okay. And then we can just end up the call.

Thank you.

Thank you so much for joining our conference call today. So if you have any further questions, please just let us know. You can send us email or just give a call. Thank you so much.

The conference has now concluded. We do thank you for attending today's presentation. And you may now disconnect your lines, and have a nice day.