YB

Ladies and gentlemen, good day, and welcome to Yuanbao Inc.'s fourth quarter and fiscal year 2025 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Stella Liu, Investor Relations and Strategy Associate Director. Please go ahead.

Thank you, operator. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect Yuanbao's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information except as required by law. During today's call, management will also discuss certain non-GAAP financial measures.

For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from Yuanbao's senior management are Mr. Rui Fang, our Chairman and Chief Executive Officer, and Mr. Huirui Wan, our Chief Financial Officer. Mr. Fang will deliver his remarks in Chinese, followed by an English translation. All figures will be in RMB unless otherwise noted. We will conclude the call with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yuanbao's investor relations website. I will now turn the call over to our Chairman and CEO, Mr. Fang. Please go ahead, sir.

大家好，欢迎参加元宝2025年第四季度及全年财报电话会。2025年四季度，我们以强劲的业绩表现为全年画上了圆满的句号，也为未来的稳健增长奠定了基础。季度总收入为人民币11.75亿元，同比增长32.2%。净利润为人民币3.37亿元，同比增长15.4%。经营利润率达28.7%。至此，元宝已连续十四个季度实现盈利。全年来看，公司总收入达到人民币43.73亿元，同比增长33.1%。经营利润人民币13.08亿元，同比增长51%。经营利润率较去年提升3.5个百分点，达到29.9%。这一显著增长充分验证了我们业务模式的可持续性，也印证了我们在规模化运营和精细化管理上的成功。截至年末，公司现金储备达人民币40.4亿元，为我们在模型与大数据能力建设、业务规模持续拓展等方面提供了坚实的资金保障。

Hello, everyone. Thank you for joining us today for our fourth quarter and full year 2025 earnings conference call. We concluded the year with strong performance in the fourth quarter of 2025, laying a solid foundation for sustained growth going forward. Our total revenues for the quarter reached RMB 1.18 billion, reflecting a year-over-year increase of 32.2%. Net income was RMB 337.4 million, up 15.4% year-over-year, with a net margin of 28.7%. With this performance, we achieved profitability for 14 consecutive quarters. For the full year, total revenues reached RMB 4.37 billion, representing a year-over-year increase of 33.1%.

Net income was RMB 1.31 billion, up 51% year-over-year, with net margin improving by 3.5 percentage points to 29.9%. This strong growth further validates the sustainability of our business model and underscores the success of our scaled operations and disciplined management. As of the end of 2025, we held RMB 4.04 billion in cash reserves, providing a solid financial foundation to support continued investments in model and big data capabilities, as well as for the continuous expansion of our business.

在运营层面，我们同样取得了显著进展。第四季度新保单数量为790万份，同比增长了34.5%。全年新保单数量达3,066万份，同比增长36.7%。这一增长得益于我们不断强化的AI能力。截至年末，公司AI团队人数已占公司总员工数的10%以上。我们的大规模网络已超过4,900个模型，对超过5,700个特征进行分析。通过模型的持续迭代及业务的数据规模的持续积累，我们能够以更高效精准地去理解和服务海量用户，构建行业领先的智能化服务生态。

From an operational perspective, we also made significant progress. In the fourth quarter, the number of new policies increased by 34.5% year-over-year to approximately RMB 7.9 million. For the full year, new policies reached approximately RMB 30.7 million, representing a year-over-year increase of 36.7%. This growth was supported by the continued strengthening of our AI capabilities. As of the end of the year, our AI team accounted for over 10% of our total workforce. Our model network included more than 4,900 models capable of analyzing over 5,700 labels. Through continuous model iteration and the ongoing accumulation of business data, we are able to understand and serve a vast user base with greater efficiency and precision, supporting an industry-leading intelligence service ecosystem.

当前商业健康险行业迈入高质量发展的新阶段。从国家金融监督管理总局为健康保险锚定高质量发展方向，到国家医保局和人社部联合发布的首版商保创新药目录，再到2026年近期的政府工作报告，明确提出健全多层次医疗保障体系，强调加快发展商业健康保险。这一系列的政策为行业的发展打开了广阔的空间。与此同时，2026年正值十五五开局之年，政府工作报告提出深化拓展人工智能+，推动重点行业领域人工智能商业化规模的应用。AI正从底层重构保险行业的服务模式与运营效率，科技能力成为行业竞争的关键，为高质量发展注入强劲动能。

The commercial health insurance industry is now entering a new phase of high quality development. A series of supportive policies have created substantial growth opportunities for the sector. From the National Financial Regulatory Administration, setting the strategic direction for high quality development in health insurance to the joint release of the Inaugural Commercial Insurance Innovative Drug Catalog by the National Healthcare Security Administration and the Ministry of Human Resources and Social Security. Moreover, the recent 2026 government work report explicitly called for improving the multi-tiered healthcare security system and accelerating the development of commercial health insurance. Meanwhile, as as the 15th Five-Year Plan period begins, the government work report proposed to deepen and expand the AI Plus strategy, promoting the commercialized and large-scale applications of AI in key industries and sectors.

AI is fundamentally reshaping the service models and operational efficiency of the insurance industry from the ground up. Technological capabilities have become a key differentiator in industry competition, providing strong momentum for high quality development.

在监管持续引导行业回归保障本源、服务实体经济和民生保障的背景下，我们既通过科技能力以更低成本、更高效率触达更广泛的人群，实现普。又以专业服务提供适配可负担的保障，实现惠。让普惠保险的生态闭环得以真正落地。我们依托自研的AI模型网络与大数据能力，在产品定制、方案推荐、理赔与服务的关键环节实现了智能化运营，持续提升需求洞察和服务效率，触达尚未被有效覆盖的人群，推动保障的普惠性与可及性。

As regulators continue to guide the industry to return to its core focus on protection and better serve the real economy and people's livelihood needs, we are leveraging our technology to reach a broader population at lower cost and with higher efficiency, advancing the accessibility of insurance. At the same time, our professional services enable us to provide tailored and affordable protection solutions, bringing the inclusive insurance ecosystem fully into practice. Leveraging our proprietary AI model that works in big data capabilities, we have implemented intelligent operations across key areas such as product customization, insurance plan recommendations, claims processing, and service. This enables us to continuously enhance our understanding of user demand and improve service efficiency, reach populations that were previously underserved, and promote broader inclusivity and accessibility of the insurance protection.

本季度我们持续推进大模型平台的升级与统一化建设，AI能力日趋成熟，并进入规模化应用阶段。通过行业语料增强训练与知识库融合，模型在保险专业问答、多轮对话及条款解释等场景的表现持续优化。同时，我们完善了统一模型服务与多模型路由的机制，有效提升了系统稳定性与接入效率，降低了业务侧的AI应用开发成本。目前，大模型平台已经稳定支撑售前咨询、售后服务及服务自检等核心场景。调用规模稳定增长，对服务的基础支撑作用进一步增强。

In the fourth quarter, we continued to advance the upgrade and unified development of our large language model platform. Our AI capabilities are becoming increasingly mature and have entered a stage of large-scale deployment through domain-specific augmented training and knowledge-based integration. Model performance has continued to improve in scenarios such as insurance domain Q&A, multi-turn dialogue, and policy interpretation. Additionally, we further refined our unified model serving architecture and multi-model routing mechanism, effectively enhancing system stability and integration efficiency while reducing the cost of AI application development on the business side. Our large language model platform now reliably supports key scenarios, including pre-sales consultation, post-sales service, and service quality inspection. Model usage has continued to grow steadily, further strengthening its foundational support for our business.

与此同时，我们加快保险智能体在售前、客服、理赔辅助等场景的应用落地，业务覆盖范围持续扩大。智能体已广泛应用于产品讲解、方案推荐、客服质检及坐席辅助应答等环节，显著提升了服务效率与服务质量的稳定性。多模态能力则赋能理赔材料的分类与信息抽取，大幅提升了处理效率。此外，公司正在持续完善保险垂类智能体框架与知识库的能力，增强复杂任务处理水平，推动整体调用量与业务渗透率稳步提升。

At the same time, we accelerated the deployment of insurance agent across scenarios such as pre-sales, customer service, and claims assistance with adoption across our business continuing to expand. These agents are now widely used in areas such as product explanations, insurance plan recommendations, customer service quality inspection, and agent-assisted responses, significantly improving service efficiency and quality consistency. Our multimodal capabilities have also been applied in claims document classification and information extraction, substantially improving processing efficiency. Furthermore, we are continuously strengthening our insurance vertical agent framework and knowledge-based capabilities, enhancing agents' ability to handle complex tasks, and driving steady growth in both model usage and business penetration.

技术能力的提升，最终要落地为用户可感知的价值。在产品端，我们持续布局、覆盖和完善医疗险、重疾险、意外险等多种险种的保险产品矩阵，不断升级保障范围，以普惠的价格，撬动充足的保障。其中，我们在医疗险和重疾险方面推出的创新产品也深受市场的认可，精准满足不同用户群体的差异化保障需求。我们的产品战略始终聚焦于普与惠的两大维度。在普的方面，我们依托于AI技术实现精准触达，基于数千个网络模型，实现产品服务的个性化推荐，以更低的成本、更高的效率连接用户与保障需求，显著提升保险的可及性。我们始终围绕不同人群的保障需求持续创新，针对女性、新市民及带病群体等特定群体创新，研发新的专属产品，全力扩大保障范围，让保障覆盖到更多尚未被有效服务的人群。

Technological advancements ultimately need to translate into tangible value for our users. On the product side, we continue to expand and refine our insurance product matrix, covering a wide range of offerings, including medical insurance, critical illness insurance, and accident insurance. We also continued to upgrade the scope of our coverage, leveraging affordable pricing to deliver adequate protection. Among these offerings, the innovative products we have launched in medical insurance and critical illness insurance have been well received by the market, effectively addressing the diverse protection needs of different user segments. Our product strategy has always focused on two key dimensions, accessibility and affordability. In terms of accessibility, we leveraged AI technology to enable precise user targeting, supported by a network of thousands of models.

We delivered personalized product and service recommendations, effectively connecting users with their protection needs at lower cost and higher efficiency, significantly improving the accessibility of insurance. We continued to innovate to meet the protection needs of different populations, developing dedicated products for specific user segments such as women, new urban residents, and individuals with pre-existing conditions. This effort allowed us to expand coverage and reach more users who were previously difficult for us to serve effectively.

在惠的方面，我们持续升级保障责任，并重点打造零免赔百万医疗险等产品，以提升实际赔付体验，确保保障的高性价比。去年底，国家发布首版的商保创新药目录后，我们联合保司迅速扩展了超医保·百万医疗险产品系列的药品覆盖范围，在政策新周期下，精准回应大众对前沿疗法优质药品的迫切需求。普与惠的双重实践，共同构成了我们推动普通大众买得到、买得起、赔得满意的核心路径。

In terms of affordability, we continue to upgrade coverage benefits, launching products such as our zero-deductible million RMB medical insurance plan to deliver a strong value proposition and enhanced claims experience. At the end of last year, following the release of the inaugural Commercial Insurance Innovative Drug Catalog, we partnered with insurers to quickly expand the drug coverage of our super medical insurance, million RMB medical insurance product series, responding to public demand for access to advanced treatments and high quality medications under the new policy cycle. The combined focus on accessibility and affordability forms the core approach we follow to ensure that ordinary people obtain insurance that is both accessible and affordable, and be satisfied with insurance claims. 2025 was a pivotal year as China moved towards an AI inflection point, driven by strong momentum in science and technology innovation.

As a leading player in the InsurTech sector, we made solid progress across technological innovation in our product and service offerings. Through steady business growth, we further validated the sustainability of our business model while building a strong competitive moat through the deep application of AI technologies. As China enters its 15th Five-Year Plan period, supportive health insurance policies continue to gain traction, while advancements in technology are playing an increasingly important role in driving the continued development of inclusive insurance. Looking ahead, we will remain committed to our mission of leveraging technology to promote inclusive insurance. We will continue to delve into cutting-edge technology, cultivate new industry frontier, and further integrate large-scale AI models with insurance scenarios, enabling agents to create value across more stages of the insurance value chain.

We believe the true value of technology lies not only in improving efficiency and reducing costs, but also generally understanding and responding to the real everyday protection needs and risk scenarios that users face. Only by deeply integrating technology into industry and embedding it in people's daily life can we create sustainable commercial value alongside meaningful social value. Looking ahead, we will continue to align closely with national policy priorities and strategic priorities. Through leveraging AI as our core engine to deepen our focus on inclusive insurance, we remain committed to leading the industry forward, contributing to the development of multi-tiered healthcare security system, safeguarding public wellbeing, and supporting the advancement of the Healthy China 2030. Now I'll turn the call over to our CFO, Huirui Wan, to present our financial results for the fourth quarter and full year 2025. Thank you everyone.

Thank you, Mr. Rui Fang, and thank you everyone for joining today's earnings conference call. I will now provide an overview of our 2025 fourth quarter and full year financial results. Building on the past two quarters' momentum, we delivered a strong financial performance in the fourth quarter, bolstered by an expanding user base, deeper AI integration across our operations, and continuing improvements in operational efficiency. We strengthened both our top and bottom lines during the quarter and further improved our cash generation capacity. Our total fourth quarter revenues reached RMB 1.18 billion, representing a robust 32.2% year-over-year increase. This growth was primarily driven by significant increases in both our insurance distribution and system services businesses. Breaking down the revenue mix, revenues from insurance distribution services reached RMB 4,401.1 million, a 35.1% year-over-year increase.

This growth was primarily fueled by a higher number of policies purchased on our platform, underpinned by more precise consumer targeting and enhanced marketing capability. Revenues from system services totaled RMB 774.1 million, up 31.1% year-over-year. This growth was driven by ongoing improvements to our AI integrated full consumer service cycle engine, which further enhanced our marketing solutions and precise analytics services for insurance carriers. In addition, the increase reflected an extended provision of system services to both existing and newly acquired insurance carrier partners. Turning to our expenses. Total operating costs and expenses increased by 30.2% year-over-year to RMB 780.4 million. Operations and support expenses decreased by 13.7% year-over-year to RMB 36.7 million, mainly due to our improved operating efficiency and effective cost control measures.

Selling and marketing expenses rose by 47.7% year-over-year to RMB 552.3 million as we continue to invest in our marketing capabilities to attract new consumers and retain existing ones. General and administrative expenses decreased by 22.5% year-over-year to RMB 79.6 million, primarily due to product-related bonuses accrued in the fourth quarter of 2024, with no similar accruals in 4Q 2025. R&D expenses grew by 39.1% year-over-year to RMB 111.7 million, reflecting our intensified R&D efforts and the expansion of our R&D team aimed at reinforcing our leadership as a technology-driven online insurance distributor. Our strong top-line growth and improved operational leverage drove continued profitability improvement.

In the fourth quarter of 2025, net income increased by 15.4% year-over-year to RMB 337.4 million, with net income margin remaining healthy at 28.7%. Non-GAAP adjusted net income rose by 13.2% to RMB 354.5 million, with a non-GAAP net income margin of 30.2%. Now I would like to briefly walk you through the highlights of our full year results. For 2025, our total revenues increased by 33.1% year-over-year to RMB 4.37 billion. Specifically, revenues from insurance distribution services reached RMB 1.45 billion, up 33.8% year-over-year, while revenues from system services totaled RMB 2.92 billion growing by 33.2%.

Moving to expenses, total operating costs and expenses increased by 25.2% year-over-year to RMB 3.04 billion. Breaking this down, operations and support expenses remain largely stable at RMB 167.5 million. Selling and marketing expenses rose by 23.9% year-over-year to RMB 2.22 billion. G&A expenses increased by 20.2% year-over-year to RMB 286.8 million. R&D expenses increased by 58% year-over-year to RMB 365.1 million. In terms of profitability, net income increased by 51% year-over-year to RMB 1.31 billion, with a net income margin of 29.9%. Non-GAAP adjusted net income rose by 48.6% to RMB 1.3 billion, with a non-GAAP net income margin of 31.6%.

Our cash position remained solid, reaching RMB 4.04 billion at the end of the year, up 72.9% year-over-year and 7.7% from the end of third quarter. Operating cash flow inflow was RMB 290.7 million for the fourth quarter and RMB 1.5 billion in 2025. To conclude, our results for the fourth quarter and full year of 2025 underscore the resilience and scalability of our business model. As we move forward, we will continue to focus on scaling operations, driving high quality growth, enhancing operational efficiency, and maintaining a strong liquidity position. These priorities will empower us to invest with confidence to sustain our momentum in building long-term value for our shareholders. Thank you. I would now like to open the call to Q&A. Operator, please go ahead.

Thank you. We will now begin the question-and-answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. We will now take our first question from the line of Amy Chen from Citi. Please ask your question. Amy, your line is now open.

Hi, this is Amy Chen from Citi, and thank you for the opportunity to ask a question. Congrats to the management on a robust set of full year results. My question is firstly on the top line and bottom line growth guidance for the year of 2026. We also noted that your selling and marketing efficiency actually improved quite a lot in the year of 2025. We're wondering about the sustainability of such improvement going on into 2026 and onwards.

Amy.

We didn't give specific earnings guidance on 2026, but we expect to maintain our revenue and net profit growth momentum in 2026. Despite intensifying industry competition, we have sustained both revenue growth and margins for 14 quarters, demonstrating ongoing improvements to our tech-driven operational efficiency. This has created a self-reinforcing flywheel effect where scale expansion and cost optimization fuel each other, moving us beyond reliance on market tailwinds.

We will now take our next question from the line of Yue Xu from China Securities. Please ask your question. Yue, your line is now open.

Okay。好了，然后我主要想问一下那个，关于这个分红的那个规划，就是2026年咱们有一些具体的分红计划或者是节奏可以，跟大家分享。Regarding the dividend plans, do you have a specific plan or timeline for dividends in the coming year? Thank you for the question. Thank you for the chance of the question.

多谢。我们其实一直在持续评估，通过多元化的运营和资本市场策略，包括分红策略，来实现股东回报的最大化跟最佳策略。那当然，股东回报是我们长期战略的核心组成部分，我们也正在稳健地评估跟推进这一进程，为长期可持续发展给予坚实的一个基础。但目前没有给出一个明确的股东回报时间表。

We continue to evaluate the best strategies to maximize shareholder returns through various operational initiatives and capital markets opportunities, including potential dividend policies. Shareholder returns form a core pillar of our long-term strategy, and we are steadily advancing this process to support long-term sustainable development. We didn't give a specific timeline on the dividend payout plan.

We will now take our next question from Thomas Wang of Goldman Sachs. Please go ahead, Thomas. Your line is now open.

感谢管理层给我这个提问机会。恭喜今天这个很好的业绩，看我们增速实际上也很快。然后想问一下，就是我们在2026年一个销售的展望，和这个就是销售这边费用的一个展望。好，谢谢。My question is really on 2026 outlook on sales and also on marketing cost.

谢谢 Thomas。我们预计随着保险产品不断地迭代创新，消费者需求将持续保持一个健康的增长，用户体验价值也将得到显著的提升。这将有助于逐步改善我们整体的用户留存，并推动行业整体面向变好。对于 2026 年，我们预计在平衡增长与盈利的基础上，依然将整体的销售与市场费用占收入比例维持一个稳健，或者是仅小幅增长的水平。

We expect customer demand to remain healthy as we continue to innovate and iterate insurance products, significantly enhancing user value and experience. This should help improve user retention and support stronger industry fundamentals. Looking ahead up to 2026, as we balance growth and profitability, we aim to maintain sales and marketing expenses as a percentage of revenue broadly stable, with only a modest potential re-increase.

Thank you. We will now take our next question from Xintao Chen of CICC. Please go ahead. Xintao, your line is now open.

管理层晚上好，感谢给我提问的机会。首先也祝贺公司取得了一个很好的业绩。那我想请教一下管理层，在四季度和2025年全年的增长当中，这个新用户和老用户的贡献分别是多少？和公司目前的这个保单的续保率大概是一个什么样的水平？和未来公司应该打算如何去提高这个客户的留存率？谢谢。So my question is, in the fourth and full year 2025 growth, what's the contribution breakdown between new users and existing users?

What's the company's current customer policy renewal rates? How do you plan to improve customer retention in the future? Thank you.

多谢Xintao。那我们未在季报中披露具体的用户结构明细，但考虑到我们仍在获客上投入较大资源，且公司所在的普惠健康显示了新兴的增量市场，市场在政策支持下其实也在持续地增长，那因此我们目前大多数用户仍为新用户。那本财年至今，我们的客户续保率与上一财年相比未发生一个显著的变化，但我们的留存策略主要包括以下三个方面：第一，产品创新。那持续推动产品创新，提升赔付率和提升用户的获得感，最终帮助消费者更好地认识到商业保险的价值。第二，用户教育。通过内容营销，转变消费者的观念，引导他们从将保险视为成本转向去视为保障。由于短险通常属于即时消费，那这与社交媒体及公有流量平台的契合度非常高，这为我们带来了天然的转化效率优势。第三就是行业趋势。从长期趋势来看，随着产品价值提升，赔付率自然会呈现上升的一个趋势。虽然这可能导致整体的盈利率做一些调整，但会被留存率整体的提升而抵消。所以我们觉得用户的终身价值，LTV将还是会有一个非常稳定，并且更加良好的一个提升。

We did not provide a detailed breakdown of user composition in our quarterly report. However, given our continued significant investment in customer acquisition and the fact that inclusive health insurance remains an emerging and policy-supported growth market, the majority of our current users are still new users. Year to date, our customer renewal rates have not changed significantly compared with the prior fiscal year. Our retention strategy focus on three key areas. First, product innovation, we continue to drive product innovation to improve payout ratios and user value perception, ultimately helping consumers better recognize the value of commercial insurance. Second, user education. Through content-driven marketing, we aim to shift the consumer mindset from viewing insurance as just a cost to recognizing it as essential protection.

As short-term insurance products resemble instant consumption purchases, they align perfectly with social media and public traffic platforms, which gives us a natural edge in conversion efficiency. Third, industry trends. Looking at the long-term trend as product value improves, claim ratios will naturally trend upward. While this may lead to some commission pressure, it will be offset by higher retention rates. As a result, we expect user lifetime value to remain stable or potentially rise meaningfully.

Thank you. We will now take our next question from Xiaoyue Ding of CITIC Securities. Please go ahead Xiaoyue, your line is now open.

好的，管理层晚上好。恭喜公司强劲的业绩。也谢谢管理层接受我的提问。那我有一个是关于政策方面的问题想请教一下，就是从近期召开的两会来看，两会中也进一步提出了要加快发展商业健康保险，推行长期护理保险制度等等。所以想请问一下，从政策环境来看，对于公司后续的发展会带来哪些催化？然后下面我自己翻译一下。My question is the two sessions highlighted the importance of speeding up the development of commercial health insurance and implementing a long-term care insurance system. So from a policy perspective, what drivers can we expect in the future? Thanks.

感谢这个问题。那我们认为这一政策环境对公司是有非常直接的利好。刚才方总也提到了。那首先我们观察到报告的核心观点，包括推出商业健康险创新药目录，加快发展商业健康保险，以及鼓励普惠保险体系建设等方面，其实这就肯定了商业保险在多元化就医支付中的核心组成地位，强调了普惠发展的重要性。去年底，国家首版的医保创新药目录发布后，我们联合保司迅速扩展了超医保·百万医疗险产品系列的药品覆盖范围，在政策新周期下，精准回应大众对前沿疗法、优质药品的迫切需求。政策中也提到鼓励普惠保险体系建设，支持针对失能失智者等困难群体的关爱帮扶。那我们元宝做到了始终围绕不同人群的保障需求，持续创新，针对女性、新市民、带病人群等特定群体，创新开发专属的产品，全力扩大保障范围，让保障覆盖到更多尚未被有效服务的人群。这些都是强有力的催化剂，那将推动我们通过线上渠道扩大商业保险的覆盖范围，并通过产品创新持续提升消费者的价值。我们的AI能力使我们能够将不断变化的复杂政策导向，转化为精准的保险主动触达用户这样的一个商业逻辑，这使我们具备充分优势，能够将这些政策红利转化为切实的、长期的业务增长。

This policy serves as a direct and significant catalyst for us, as Mr. Fang also mentioned it earlier. First, the report highlights key initiatives such as launching the Commercial Insurance Innovative Drug Catalog, accelerating the development of commercial health insurance, and encouraging the development of an inclusive insurance system. These priorities reaffirm the role of commercial insurance as a core component of China's diversified medical payment system, and emphasize the importance of inclusive development. At the end of last year, following the release of the inaugural Commercial Insurance Innovative Drug Catalog, we partnered with insurers to rapidly expand the drug coverage of our Super Medical Insurance Million-RMB Medical Insurance product series, responding to public demand for access to advanced treatments and high quality medical medications under the new policy cycle.

The policy also encourages the development of an inclusive insurance system and highlights support for vulnerable groups such as individuals with disabilities or cognitive impairments. We consistently innovate to meet the protection needs of different populations, developing dedicated products for specific user segments such as women, new urban residents, and individuals with pre-existing conditions. These efforts allowed us to expand coverage and reach more users who were previously underserved. This policy direction serves as strong catalyst for expanding the reach of commercial insurance through online channels, while continued product innovations enhance the value delivered to customers. Our AI capabilities allows us to translate complex and evolving policy shifts into the precise insurance fits its customer commercial logic. We are well-positioned to convert this policy tailwind into tangible long-term business growth.

Thank you. We will now take our next question from Yingying Xu from Zheshang Securities. Please go ahead, Yingying. Your line is now open.

感谢管理层给我这次提问的机会。我想请公司评估一下当前AI agent发展对公司商业模式的一个影响，是否会对公司业务护城河产生冲击。Could you assess the current development of AI agent and their impact on the company's business model? Do you foresee any potential threats to the company's competitive moat? Thank you.

这是一个很好的问题。我们觉得关键在于使用场景是否成立。当前保险销售主要发生在用户休闲消遣的即时消费场景中，而目前AI agent所在的知识问答平台场景下，用户心态其实主要是主动寻求解决方案，是用户寻找信息而非消费。那么短视频等内容平台用户主动复答的场景下的转化逻辑及效率仍需要一个慎重的思考和验证。核心我们觉得问题在于用户在日常生活中投入大量的时间在哪些内容平台，是会消失，还是会将这些用户的时间转化为智能体的交付。从我们目前所能看到的，在SEO和GEO的环境中，或者是SEO转化到GEO的环境中，消费者是主动搜索，这与被动心态为主的发现式环境，就信息的媒体还是有一个比较大的差异的。

AI agents are definitely a promising direction, but the key questions lies in the specific usage scenarios. Most insurance sales today happen in instant consumption context, moments when users are engaged with leisure content. In contrast, on knowledge work, you have platforms where AI agents typically operate. Users are in an active problem-solving mindset rather than a consumption mindset, and differs from content platforms where information is pushed to consumers. The core question is whether the content platforms where users currently spend a significant amount of their daily time will disappear or evolve into places where users spend time interacting with intelligent agents. We see a clear distinction between search-driven environments such as SEO or GEO, where consumers are actively looking for answers and discovery-based environments where consumers' engagement tends to be more passive.

Thank you. We will now take our next question from Jiqi Sun from Shenwan Hongyuan Securities. Pleasego ahead, Jiqi. Your line is now open.

嘿，感谢各位领导，晚上好，我是来自申万宏源证券的孙继起，感谢给我这次提问机会。再次恭喜公司二零二五年取得了非常强劲的业绩表现。我还想追问一下关于AI方面的问题啊，想请教管理层如何理解AI应用的持续迭代大潮对于公司业务的影响。Thank you for taking my question. This is Jackie Sun from Shenwan Hongyuan Securities. Congratulations on the results of fiscal year 2025. I have one question for the management team.

How do you perceive the impact of the ongoing wave of AI application iterations on the company's business? Thank you.

整体看来，AI智能在保险行业的应用正在快速从探索阶段进入规模化落地阶段，就是大模型。不同类型机构的应用重点其实也有所不同。元宝我们成立其实第一天起，在AI方面的核心优势主要体现在三个方面。首先是保险的垂直能力。在成立第一天，我们就搭建了较为完善的保险知识体系和产品结构化能力，使得AI能够更好地理解保险产品和用户需求。第二是数据积累。通过大量的业务数据，不断提高深度、优化推荐和服务的能力。第三是我们的智能体能力。我们正在积极部署智能体模式，将辨别式AI，就discriminative AI，和生成式AI，就是大模型类的AI，深度嵌入从销售咨询到客户服务的全流程中，那这包括智能保险规划应用，以及为我们客户团队提供AI辅助支持工具等。未来我们认为保险AI会从工具型应用逐步发展为智能服务体系，例如AI保险顾问和长期客户风险管理助手。元宝未来的方向是构建AI驱动的保险服务平台，让AI成为链接用户和保险产品的重要入口。

Broadly speaking, AI in insurance is rapidly moving from the exploration phase to large-scale implementation in terms of large language model with different types of institutions focusing on different areas. Yuanbao's core competitive edge in AI has been anchored by three key areas from day one. First is our deep vertical expertise. We have built a comprehensive insurance knowledge system and structured product capabilities which enable our AI to better understand both insurance products and user needs. Second is our data capabilities. We leverage massive amounts of business data and continuously iterate and optimize our user understanding and recommendation and service engine. Third is our agentic capabilities. We are actively deploying an agentic approach to embed both discriminative AI and generative AI across the entire life cycle from sales consulting to customer service. This includes applications such as intelligent insurance planning and AI-powered supportive tools for our customer service team.

Looking ahead, we believe insurance AI will evolve from tool-based applications into a full-cycle intelligent service ecosystem, taking on roles like AI insurance advisors and long-term customer risk management assistance. Yuanbao's strategic direction is to build an AI-driven insurance service platform, positioning AI as the primary gateway connecting users with insurance products.

Thank you. That concludes the question and answer session. I'd like to turn the conference back to the management for any additional or closing comments.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly or Piacente Financial Communications. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a great day.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.

Ladies and gentlemen, good day, and welcome to Yuanbao Inc.'s Third Quarter 2025 Earnings Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. [ Stella Li ], Investor Relations and Strategy Associate Director. Please go ahead.

Thank you, operator. Please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and discussion. A general discussion of the risk factors that could affect Yuanbao's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures. For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today. Joining us today on the call from Yuanbao's senior management are Mr. Rui Fang, our Chairman and Chief Executive Officer; and Mr. Huirui Wan, our Chief Financial Officer. Mr. Fang will deliver his remarks in Chinese, followed by an English translation. We will conclude the call with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yuanbao's Investor Relations website. I will now turn the call over to our Chairman and CEO. Mr. Fang, please go ahead, sir.

[Interpreted] Hello, everyone. Thank you for joining our third quarter 2025 earnings conference call. This quarter, we continued our trajectory of high-quality growth with several core performance indicators hitting new record highs. In the third quarter, total revenues grew 33.6% year-over-year to RMB 1.16 billion. Net income surged 51.3% year-over-year to RMB 370 million. This marks our 13th consecutive quarter of profitability. As of the end of September, our cash reserves stood at RMB 3.75 billion, providing a solid financial foundation for our continued technological innovation, capital deployment and strategic expansion. These strong results are a direct testament to our disciplined execution and continuous operational refinement. In the third quarter, we issued 8 million new policies with a 41.8% year-over-year increase. This momentum was powered by our enhanced AI and data capabilities, which have improved the precision of our consumer targeting and deepened our understanding of consumer needs. This insight feed direct feedback into our product innovation and scientific pricing processes, helping us build a distinct competitive edge. On the product service front, we remain committed to using technology to lower the barriers to insurance access. To date, we have built a multidimensional product matrix spanning medical, critical illness and accident insurance while continuously rolling out innovative inclusive solutions for diverse user protection needs. Recently, we collaborated with our partnered insurance carriers to launch a short-term and critical illness insurance product. Its core value proposition is high coverage at an affordable price point by adopting a parallel lump sum payment plus multiple reimbursement model. We extend protection from the moment of diagnosis through ongoing treatment, effectively creating a closed loop of protection. This single quality provides both peace of mind during recovery and worry-free medical care, combining onetime lump sum compensation with multiple reimbursements for medical expenses. It represents a novel approach to inclusive innovation in critical illness insurance. By integrating insurance features and employing tiered reimbursement, we have optimized our cost structure to lower prices while expanding coverage. This significantly improves value for consumers and aligns with the market demand for balancing accessible coverage with affordability. Turning to the industry landscape. Commercial health insurance has become a vital component of China's multi-tiered health care protection system. The relationship between social health insurance and commercial health insurance is evolving into a new stage of coordination and complementarity. Inclusive health insurance will play a pivotal role in addressing the challenges posed by an aging population and alleviating the pressure on the public health care system while unlocking a massive incremental market for commercial health insurance. The core driver lies in satisfying the health protection needs of hundreds of millions of underserved families. We believe that the key to unlocking this potential is to establish an Internet-enabled service model that delivers cost-effective protection and optimized user experience and operational efficiency. This is how we translate the stated demand of this vast market into tangible growth momentum. On the intelligence front, our AI technology and data infrastructure are now deeply integrated into our core operational workflows by embedding our proprietary large language model into critical functions, including risk identification, customer acquisition, product design and claims processing. We have built a systematic AI-driven competitive mode that enhances operational efficiency and elevates the overall service capabilities. First, our LLMs are driving an end-to-end intelligent upgrade in R&D. By integrating LLMs and associated tool chains into the R&D workflow, we have achieved comprehensive efficiency gains across documentation and coding. For technical documentation, the LLM has generated over 1,000 documents, including tools such as model context protocol provides one-stop assistance from requirement, the competition and code writing to unit test generation and automated validation. As a result, AI-generated code accounted for nearly 50% of new code developed in the third quarter. Second, our LLMs are empowering our customer service system with intelligent summarization, assisted insights and multimodal analysis. We have integrated LLM capabilities into customer service scenarios, focusing on call summarization and agent assistant functions. Embedded within the customer service workspace, these capabilities automatically generate service ticket summarizes, extract key information post call and produce consumer intent labels, action locks and recommended next steps. On the multimodal front, AI technology is employed to assist in consumer identity verification, while real-time voice analysis captures consumer sentiment dynamics, enabling agents to complete documentation and follow-ups more efficiently. Furthermore, our LLMs are driving the intelligent evolution of modeling and feature mining within our full consumer service cycle engine. By incorporating LLM-assisted modeling and automated feature extraction technologies into this engine, we have been able to automate and deepen the complex feature engineering process. For instance, by leveraging LLMs to interpret pseudonymized or autonomous consumer behavior data, interaction content, transaction information and product information, the system extracts valuable features. This approach reduces the reliance on manual feature design, allowing the large model to automatically generate and filter critical information, significantly enhancing both modeling efficiency and performance. To summarize, the insurance technology and commercial health insurance sectors are benefiting from the dual tailwinds of policy support and rapid technological advancement. Under the national strategic guidance of building a multi-tiered health care protection system, the relationship between social health insurance and commercial health insurance has entered a new stage of synergy and complementary strength. Simultaneously, AI technology is fundamentally reshaping the operational logic of the insurance industry. Yuanbao is capitalizing on the significant growth opportunities in the inclusive health insurance market. On the product side, we are filling market gaps with innovative inclusive insurance offerings that lower the barriers to protection access. On the technology side, we are making forward-looking investments, embedding AI deep into our product design, operational workflows and decision-making system. AI has become an integral part of our management framework and a core driver of organizational upgrade. As our models iterate and business data accumulate, we can serve a massive user base with greater precision and efficiency, building an industry-leading intelligent service ecosystem. Looking ahead, with AI as our driving force, we will continue to upgrade our service model towards greater personalization and proactive care while exploring new growth opportunities through the deep integration of AI and the ongoing accumulation of business data. we are committed to building a more resilient business model, reinforcing our long-term competitive edge and creating enduring value for all stakeholders. Now I will turn the call over to our CFO, Huirui Wan, to present our financial results. Thank you, everyone.

Thank you, Mr. Fang, and thank you, everyone, for joining today's earnings conference call. I'm pleased to walk you through another quarter of solid financial results characterized by healthy revenue expansion, optimized operational efficiency, improved profitability and a strong and growing cash position. Our total revenues for the third quarter reached RMB 1.16 billion, representing a robust 33.6% year-over-year increase. This strong growth has primarily driven by sustained momentum across both our insurance distribution and system service revenue businesses. Turning to our revenue mix. Revenue from insurance distribution services reached RMB 373.3 million, marking a year-over-year increase of 27.9%. This robust growth was primarily driven by a higher number of policies purchased on our platform, underpinned by more precise consumer targeting and enhanced marketing capabilities. System services revenues reached RMB 783.5 million, a 36.9% increase compared with the same period last year. This growth was propelled by ongoing improvements to our AI integrated full consumer service cycle engine, which further enhanced our marketing solutions and precise analytics services for insurance carriers. In addition, the increase reflected an expanded scope of system service offerings provided to both new and existing insurance carrier partners. Moving to expenses. Our total operating expenses increased by 31.2% year-over-year to RMB 803.4 million. Operations and support expenses were RMB 45.1 million, remaining broadly stable compared with the same period last year. Selling and marketing expenses rose by 23.9% year-over-year to RMB 569.6 million as we continue to invest in our marketing capabilities to attract new consumers and retain existing ones. G&A expenses increased by 97.8% year-over-year to RMB 93.1 million, primarily due to higher personnel costs, including salary, bonus and benefits. R&D expenses increased by 56.8% year-over-year to RMB 95.6 million, reflecting our intensified R&D efforts and the expansion of our R&D team. These investments are essential in reinforcing our leadership position as a technology-driven online insurance distributor. As a result of our strong top line growth and continued operating discipline, our profitability improved meaningfully this quarter. Net income increased by 51.3% year-over-year to RMB 370.4 million, with the net income margin expanding to 32% from 28.2% in the same period last year. Non-GAAP adjusted net income rose by 51.7% to RMB 390 million, representing a non-GAAP net income margin of 33.7%, up from 29.7% a year ago. We maintained healthy cash flow generation during the quarter, further solidifying our cash position. Operating cash flow was RMB 326.1 million, and we ended the quarter with a strong total liquidity balance of RMB 3.75 billion, which increased 82.3% year-over-year to 9.7% since the end of second quarter this year. This robust liquidity provides us with ample financial flexibility to fund the business growth and pursue strategic investments. To conclude, our third quarter results once again validate the strength and scalability of our business model. Looking forward, we will maintain a prudent focus on high-quality growth, operational efficiency and a solid liquidity position, empowering us to continue investing with conviction and to drive sustainable growth. Thank you, and I would like to open the call to Q&A. Operator, please go ahead.

[Operator Instructions] We will now take our first question from the line of Amy Chen from Citi.

This is Amy Chen from Citi. First, I want to congratulate the management on another robust quarter, both on revenue and earnings side. I have 2 questions. The first one being on selling and marketing expenses. So we noted that as a percentage of revenue, actually, the efficiency of selling and marketing expenses has improved both year-over-year and quarter-on-quarter. I'm wondering what was the driver behind this improvement? And does this has anything to do with seasonality? And is it sustainable going forward? And the second one would be on...

We have lost Amy's line there. Maybe we can go on to the next question. We will now take our next question from Yue Xu from CSC.

Congrats on your solid results and a strong execution quarter. So my first question relates to the recent tax regulation change effective in October. So with a nearly 15% cap on ad spend deduction, have we seen some material impact on the overall bidding intensity across platforms? And how should we think about the future revenue growth going forward? So -- and the second one is we have noticed some peers also expanding into public traffic acquisition? And how should we think about the margin or the cost -- the customer acquisition cost going forward?

Thank you, Yue. This is Huirui Wan. I'll take on the Q&A. On your first question regarding ad trend and tax regulation. So far, we haven't seen any material impact or changes to our ongoing business. We've been following it very closely as well. However, if this becomes a market-wide standard, it will affect the entire industry, including advertisers as well as platforms by driving up ad cost for everyone as advertising costs rise across the industry, we do believe that players with stronger profitability and operational efficiency and cost controls are better positioned to stand out and achieve sustainable earnings leading to potentially market consolidation or stronger growth. On your second question regarding competition in the public domain, yes, we've seen our partners increase investment in external traffic, which validates the success of our business model and technological capabilities while also underscoring the substantial growth potential of the health insurance market. Meanwhile, the increase of external traffic by our partners serve as valuable market education, raising consumer awareness for commercial insurance because a large portion of the population still remains uninsured by commercial health plan, indicating that the industry ceiling is still far from being reached. Today, commercial health insurance has become an integral component of China's multi-tier medical security system, as Mr. Fang mentioned, and the relationship between social health insurance and commercial health insurance is entering a new stage of synergy and complementary strength. So in our view, the deciding factor in maintaining a competitive edge ultimately comes down to operational efficiency. Now with our optimized engine, we continue to grow and achieve attractive economics even at our current scale, and we will continuously train and optimize our engine, which is key to driving efficiency and maintaining our competitive edge. Thank you.

We will now take our next question from Amy from Citi.

This is Amy from Citi. I have 2 questions. My first question is regarding marketing efficiency. We noted that your selling and marketing expenses as a percentage of total revenue actually improved both year-on-year and quarter-on-quarter. I'm wondering is there any seasonality in this? Or what was the core driver behind this improvement? And going forward, is this level of efficiency sustainable? The second question is regarding shareholders' returns. Given our improved top line growth as well as earnings, what are management's thoughts on perhaps dividends or share buybacks at this point?

Thank you, Amy. So in terms of our marketing expenses, there is some seasonality depending on our acquisition strategy because sometimes we may want to avoid strong acquisition period such as [ still relevant ], but we also continuously dynamically adjust our strategy based on growth targets and ROI targets. So we've been adjusting our marketing approach in real time and different approaches lead to effective outcomes, including potential shifts in age profile, spending power, consumption habits of our consumer base. Now what we are seeing here are obviously improvements in our overall efficiency continuously over the last 13 quarters. But going forward, we believe we want to, as mentioned before, have a very balanced growth profile in tandem with our operational efficiency going forward. And your second question regarding shareholder return. We continue to evaluate best strategies in providing the best shareholder return through various operational and capital markets opportunities. And like you said, dividends is certainly one of them that we are considering.

We will now take our next question from Yuan Liao from CITIC.

For the strong quarter results. I have 2 questions. The first question is about AI and with the rapid development of the generative AI and AI agent. So how do you see this impacting your products and business models? And could management share your strategic road map regarding future algorithm or product innovation? And second question is about your target market. So how do you view the current market penetration rate within Yuanbao's target demographic? And what potential do you see for the future ARPU growth?

Thank you, Yuan. So the first question, so we integrate AI capability in various aspects of our operation. As you know, on the front end, for traffic acquisition, we have built a very strong engine with 1,000 models and labels for each consumer, relying primarily on recommendation algorithms, which are tree-based models or GBMs. As for generative AI, we deploy them across our user acquisition journey as well as internally as by Mr. Fang on our LLM capabilities and our earnings highlights. The evolution of our AI agents and AI capabilities will play a crucial role here in both helping with generating innovation and potentially new earnings as well as continued improvements across our business. So on the one hand, it will help us continue to elevate consumer experience. On the other hand, it will allow us to continuously capture data insights, creating a feedback loop in addition to what we have already to further refine our model performance. On your second question regarding industry penetration, so looking at the industry landscape, commercial health insurance has become a vital component of China's multi-tiered health care protection system. The relationship between social health insurance and commercial health insurance is evolving into a new stage of coordination and complementarity, as Mr. Fang mentioned. So we do believe health insurance -- commercial health insurance will play a pivotal role in addressing the challenges posed by aging population and alleviating the pressures on the public health care system. So as global economies grow and innovative drug catalogs for commercial health insurance are established, we believe the demand for protection life will rise continuously and very naturally. So Yuanbao's online inclusive model is actually very ideally and perfectly suited to reach these demographics that are underserved by commercial health insurance. In addition, for users who have already purchased short-term policies, they are far from reaching their protection ceiling. We see tremendous headroom for upselling and cross-selling additional products such as critical illness, accident, et cetera. And there's huge potential in user purchasing policies for family members. And regarding premiums, we don't see it alone as a key driver. Instead, our focus is on leveraging AI and big data for very precise risk assessment as well as understanding the pain points and needs of the consumers. So we believe this will enable a very defined pricing, leading to a healthy and sustainable ROI. So it's, I think, a pretty long-winded way of saying that we have a lot of internal models to calculate the current penetration headroom, and we do believe we are very, very far from reaching any level of higher penetration, but additional data analysis we can discuss further.

We will now take our next question from [indiscernible] from Huafu Securities.

Congratulations on the strong results. I have 2 questions. First, regarding revenue growth. Could you break down the third quarter growth between new user acquisition and higher premium per user? And looking forward, what do you see as the key driver for sustainable growth over the next 3 years? And my third question is about AI. Can you quantify the KPI improvements you are seeing in conventional efficiency? And will exporting these AI capabilities create new revenue streams or pricing power for the company in the future? That's all from me.

Thank you, Xia. On your first question regarding revenue growth. So our revenue growth is driven by multiple factors. Now for the next 2 to 3 years, we see 3 key drivers. Number one is market tailwind. As people become more insurance conscious, the penetration rate and growth in health insurance sector is down to continue to increase. Second is cross-selling and product innovations to tailor to consumer needs because as we understand and analyze more user behavior data, we can recommend and innovate more suitable products. Third is our data advantage. With our growing data scale, we're constantly refining our models to better understand and to have better efficiency and accuracy. This is how we plan to ensure sustainable and healthy ROI. But in terms of the actual breakdown, it's a combination of multiple factors that really drives our revenue as well as our profitability. On your second question regarding AI. So as you know, our business started off by having a very strong AI-based or machine learning team that built out our engine. So AI capabilities and data infrastructure has been very deeply integrated across the entire user acquisition process chain. But now embedding our large language model capabilities across key functions, including risk identification, customer acquisition, product design and claim processing, we've systematically built an AI-driven competitive mode that will continuously enhance operational efficiency and elevate our service quality. And second, through our current engine, we're able to uncover more consumer needs in real time and week by week, month by month and co-develop products with insurers that better meet today's market as Mr. Fang mentioned, a new critical illness product. So together with our insurance carrier partners, we launched a short-term critical illness product. The core highlight is unlocking millions in coverage at an inclusive price point by adopting a parallel lump sum payment plus multiple reimbursement model. And so in summary, our AI capabilities have enabled us to, #1, on the product front, address coverage gaps through the launch of innovative inclusive insurance products to create and offering more value to our consumers, thereby lowering barriers to insurance services. And #2, on the technology front, establish a proactive deployment across all business processes, embedding AI deeply into product development workflow and decision-making systems to make it an integral part of our operational management framework. Whether this is going to create new revenue streams or unlock pricing upside, certainly, from existing business model, we do believe that will help us allow us to continue to grow very effectively and efficiently. But new revenue streams in existing business, we think it will help us expand our potential product offerings. But in terms of diversification, that's also something that we're actively looking at.

We will now take our next question from Yingying Xu from Southwest Securities.

My name is. I am the Chief Financial Analyst at Southwest Securities. First of all, I would like to congratulate Yuanbao on another strong quarter. I have 2 questions for the management team. My first question is about revenue growth. Looking ahead to 2026, I am curious to know what you see as the main drivers of Yuanbao's continued revenue growth. Is it [ stressing ] marketing spend? Or is it improving the efficiency of your AI models? Is it expanding cross-selling or maybe achieving higher commission rates with [indiscernible]? Also, how do you expect these factors to change over the next 3 years? My second question is about competition and the brand. Compared to ecosystem players like Ping An Good Doctor or An's Insurance, Yuanbao is an independent platform. I would like to know what is your strategy to strengthen Yuanbao's brand? How will you improve customers' loyalty? And how do you plan to increase renewal rates over the next 1, 2, 3 years?

Thank you. To answer your first question, now in terms of growth, we conduct a very holistic assessment across multiple dimensions, including traffic acquisition at scale, model efficiency cross-selling and tailored to very specific market conditions. So by continuously mining data and refining our modeling capabilities, we aim to maintain very sustainable profitability even as our business continues to scale. So that's something that we've been very consistent about over the last couple of quarters. Now regarding model efficiency, we're very strictly focused on assessing and ensuring that our customer acquisition costs remain stable or trend flat at the minimum as we continue to expand and grow at a very fast scale. And looking ahead, we'll continuously bolster our engine by adding and optimizing models. Our goal is to enhance predictive precision without disrupting our existing infrastructure. And we haven't provided guidance for 2026. But I guess for the remainder of full year 2025, we do believe that we'll grow at least 30% on a revenue basis and continue to maintain a very similar and healthy profit level. Now for your second question regarding existing ecosystem players versus how we plan to strengthen our brand moat and enhance customer stickiness. First, we operate on an AI-driven engine model where insurance distribution is powered by technology. We acquire users across the full spectrum of traffic channels without relying heavily on any one, allowing the potential for a stable and scalable source of new consumers, serving as the foundation of our future consumer base. Second, as an independent third-party insurance distributor, what sets us apart from ecosystem-based players is our capability to -- for daily collaborative iteration across diverse teams, including big data, AI, marketing, operations, customer service, et cetera. Our edge is not derived solely from core model or algorithm, rather it stems from a holistic iterative feedback mechanism that requires significant time accumulation to build over the last few years on a day-to-day basis. This involves very, very much a large part of cross-functional collaboration. So the AI team handles modeling and fine-tuning while data team manages data governance, feature mining, business team, et cetera. So this integrated system polished through daily multi-departmental collaboration, we do believe has brought us to where we are currently over the last few years. And we want to continue that operational know-how and operational excellence going forward to build our capabilities.

We will now take our next question from Xintao Chen from CICC.

Congratulations on the strong performance in the third quarter. And I have 2 questions for the management. The first is the efficiency of Yuanbao's model stands out against peers. So what's the key drivers behind this? Going forward, is there further room for improvement in net income margin and ROI? And the second one is regarding the competitive landscape. So how does the management view the competitive landscape of the industry over the coming years?

Thank you, Xintao. So our ROI stems from the full digitization and automation of our insurance full cycle engine or acquisition process which lead to a comprehensive efficiency uplift across the entire user life cycle. Now this spans every single step of the process from adding pressure user registration, purchase, cross-selling, after-sales services and claim assistance. So by leveraging our AI engine to analyze massive user behavioral data, we continue to optimize conversion efficiency at every step. And that's what we want to continuously iterate to enhance our engine. Now going forward, we do see potential for upside in efficiency. But what we have to balance, as mentioned, is we do believe the market has a very large room for additional penetration and growth. So we want to balance growth with profitability such that we are growing at least faster than how fast the market is growing to capture that market share. On your second question regarding competition and so today, we haven't observed any material changes to the landscape. This is primarily because the ad bidding process is both real-time and partial, placing us on a level playing field with all the advertisers across platforms, including those in gaming, e-commerce, et cetera. The platform bidding mechanism is very industry or player neutral. So with our optimized engine, we continue to grow and achieve what we believe is attractive economics as we continue to scale. So we want to make sure that we continuously train and optimize our engine. Furthermore, our competitive edge is not derived from just a few core models or algorithms. And instead it stems from a comprehensive iterative feedback loop that has built by us from one single model or one label starting from day 1. So it hinges on a very deep collaboration across multiple specialized teams and being able to be very adaptive to the changing external environment. And given the vast market potential, we were confident that our sustained iterative capabilities will allow us to maintain our existing position and leadership even as changes in the external environment.

We received an online question here from Thomas Wang of Goldman Sachs. His question is, please provide updates on the following topics: sales momentum per policy premium and product mix and the trend in commission rate and take rate.

Thank you. So in the third quarter, our total revenue mainly driven by revenue from insurance distribution services growing at 27.9%. Revenue from system services grew a bit faster at 36.9%. Now in the third quarter, our average premium for short-term policies remained generally consistent with historical levels, so tracking within normal ranges, both year-over-year and quarter-on-quarter. Now with the trend in commission rate or as for take rate, it can be roughly estimated by dividing revenue by premium. And looking at the full year picture, we expect our take rate to remain relatively stable to historical levels. Now to emphasize, while take rate is a very important metric, it's just one of several key factors we evaluate in our broader marketing market -- broader strategy to optimize really our ROI. So we focus on balancing all of the key drivers, including take rate. But this also includes price per policy, cross-selling efficiency, customer acquisition costs and other operational metrics, not just take rate at all.

That concludes the question-and-answer session. I'd now like to turn the conference back to management for any additional or closing comments.

Thank you once again for joining us today. If you have any further questions, please feel free to contact us directly or Piacente Financial Communications. Our contact information for IR in both China and the U.S. can be found in today's press release. Have a great day.

For your participation in today's conference, this does conclude the program. You may now disconnect your lines. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]