CMCM - Earnings call transcript Q3 2020

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Operator

Good day and welcome to the Cheetah Mobile Third Quarter 2020 Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. [Operator instructions] Please note this event is being recorded. I would now like to turn the conference over to Helen Zhu, Investor Relations Director of Cheetah Mobile. ma’am. ahead, go Please

Helen Zhu

Mr. Welcome With Mobile's company's us Fu company's CEO, operator. earnings Chairman quarter conference Mr. CFO, our and call. today Sheng; Ren. to you, third Cheetah XXXX and Thomas Thank are our

a Following session. will Q&A management's we prepared remarks, conduct

release, I today earnings the as this in statements. also we we in ahead, begin, Safe time, statement our to our Mr. over Fu CEO, Please At now call turn you will conference refer Before apply like I the to to Harbor and our Sheng. which call to Sheng. would conference forward-looking Chairman Fu go

Fu Sheng

you, Helen. Thank everyone. Hello

While revenues. overseas business quarter-to-quarter [ph] decline RMBXXX our some still our Total we revenues quarter guidance, million in decreased setbacks [indiscernible] with to in unbeat the year-over-year and partners our our XXXX, stopped the total Facebook X% to revenue third mainly by due revenue a in growing face [indiscernible] challenges us. of business. Google, in XX% markets, working overseas [indiscernible] and

two several to following. to and able near as our we we offers Also taken users cooperation overseas. prime to As don’t have communicating and work a headwind, our future. to our to traffic significant this results them to were in solutions seen initial Look them them Facebook several measures channels and monetize rework us expect consistently with with giving have we the we not some international, Google to resume up resume with where we result, lost

and cut have our operations costs First, we expense. streamlined our and

million the million in narrowed to year previous loss quarter. million the and non-GAAP RMBXXX last result, from a operating As same period in RMBXXX RMBXXX

subs also in included Our certain quarter operating restructuring the expense. one-off loss

loss to expect our reducing quarter. we So in the operating fourth continue

utility our our in revenues market and whole a PC product home as stabilized. the mobile from business Second,

advertising a model. model PC transformed membership Our to subscription has from business

user in show subscription count service, During premium our content the and increase the quarter, our revenues. we continue pending which and to diversify the

a As quarter-over-quarter an daily revenues, PC from membership about has fees revenues and model, market model increased quarter-over-quarter QX, utility driven growth X% our which XX% in our product the subscription grow PC our advertising in Remember, our from improved from that product by a from demonstrated subscription QX. subscription fees business year-over-year our in PC quarter-over-quarter daily besides membership business mobile business of mobile accounted transformed result, quarter. XX% resumed XX times by to user, already market revenues home home in utility in

and the emphasize net assets quarter, in US$XX value the cash of million his details a about that would continue I shareholder in create will will XXXX. we like and of to provide we deliver disposed to the in certain future. more result deal business but gain in Third, the second part, half Thomas

round already we XX shopping Chinese highlight and product in been usage solutions. also robototic this round we AI-related a have investor [indiscernible]. on before about robotics of helped number in have increased programming developed our developed cities with eventually [indiscernible] shopping outbreak to has Mobile the to today, US$XXX robotics XX% our have user organizing of of to company, about The balance sheet a X,XXX continue uptake recent the is through financing. AI-related education malls growth. strong we and Mobile focus investor After in of financing focus [indiscernible] business retained our ambition of our Together of and reached an One malls, our new in has build China of China. [indiscernible] on expand our long-term still date teaching our support investment. of robotics build As ecosystem our Recently, in us million case. shareholders. across robot our and our we which have shareholder platform, online return, to results to China our children helped Fourth, [indiscernible]

our robot we has robot, and to hotel [indiscernible] reception users malls, the in so and we more developer fourth the increasing As robot we quickly in in have business shopping use for hotel began China quarter. model. build Meanwhile, responded the tentative customers customers

contract. build this second by and [indiscernible] our high XXXX customer. we collaboration prize Technology AI in for robot won with been Commission Our the nominated robot contract one for and the in first past used develop China the in AI service built and robot and Notably, Beijing. business to this Scientists has produced held case Beijing four prize Mobile the user

Looking be currently and which RMBXXX decrease revenues to business, disposed was and Thomas assets will million. quarter-over-quarter The million details. we more quarter to of the expect to total provide XXXX, fourth between RMBXXX due

Moving product business and particular our were in resume primarily of subscription our service drivers sequential driving forward, utility PC revenues, in will growth PC in business, revenue by QX.

operating the cut year-over-year loss on expense both and our other continue basis. and On and we'll hand, quarter-over-quarter narrow our to cost

CFO, challenge to AI through the over build our to we'll Thomas to of Ren third hand results. CFO, I'd a new emphasize call Before China not that first outside that, With face, challenges enable that I financial the future turn that call outplay time now China the encounters Mobile. we it environment, Mobile like want don’t will we favorable details is the while to we to us our the believe for quarter our our go

Thomas Ren

Thank Thank all you, Fu for us and good today. joining day, you, everyone.

our RMB otherwise, financial in unless all Now, note amounts money that you Please results. are through stated terms. I'll walk

in amended its quarters, As LiveMe we stated plan XX, September incentive share on previous XXXX.

impact year-over-year of million our a deconsolidation of decline quarter, the sequential in results, LiveMe. of Total started comparisons the To better end the excluding of As we XXXX. quarter majority have fourth LiveMe's since the present results, power a financial and our also will and provide exceeding RMBXXX representing were of LiveMe year-over-year financial no the we revenue to the XX% deconsolidate a decrease guidance, X%. high hold result, longer of voting in

from of in decrease was in market LiveMe, the segment, the decreased year-over-year revenue mobile our total services the PC quarter stabilizing, representing revenue XX% of utility products total deconsolidation primarily XXXX. the RMBXXX Excluding X% quarter. in and already XX% related year-over-year revenues contributing by quarter. the February from This in to the are due products Google with in of quarter-over-quarter total mobile collaboration and revenues of revenue in of representing in XX% the quarter our XX% RMBXXX our and our million our utility impact XX% By quarter. by suspension quarter. our were home to the revenues total to the revenues decreased business Revenues games business since of

company disposed certain and a the in quarter contributed total XXXX, assets XXXX, XX% market. third the of and As the gaming as whole related business of overseas to disposed XX, assets had such, our business revenues September the generated business approximately and operating In the losses.

to quarter we games a expect the business for XXXX, fourth from As result, significantly. of revenues mobile shrink the

view However, reflects million account change. total we PC for revenues our and preliminary vast note, RMBXXX and products fourth utilities home the between and Please mobile our revenues subject our to is from RMBXXX for remain we majority in current our total stable to expect revenues forecast of quarter and and currently this and expect million. be guidance, market to revenue

use excludes expenses, cost present help in basis goodwill following quarter of results resulting stock-based third impairment. discussion expenses The non-GAAP to will will of this on of our and a results of the operating effect of the compensation be context items. and XXXX non-cash us our measures to which Turning non-GAAP performance better in

and past RMBXXX In US our third to For with the costs release. to financially total our and million. our earnings of streamline expenses cut to refer X% decreased by information please XX% and the presented several operations In expenses. GAAP, in we quarter continue year-over-year XXXX, accordance quarters, quarter-over-quarter cost and

costs our total LiveMe, by and impact decreased year-over-year. the expenses Excluding XX%

the the quarter. Operating of from expanded the the gross in to year million XX% result, reduced loss a the and previous million million period RMBXXX third year. in the in same quarter As to in RMBXXX in period last RMBXXX margin XX% from XXXX same quarter last

disposal gaming Mobile grew previous helped our our our shareholder to overseas to quarter, During the RMBXXX we boosted disposed assets million to RMBXXX the Cheetah and earnings income and the million quarter. of value. the related from in XXXX, of us quarter some market. attributable business to third in shareholders This net In business create

Importantly, balance sheet remains strong. our

XXXX long-term equity As and we USDXXX cash and million. investments XX, had cash restrictive of September investments of million of equivalents, USDXXX cash short-term and

ready Our to concludes us take the future. strong now gives in we remarks. the balance sheet confidence continue invest to questions. our AI-related for we're Operator, prepared our to business This

Operator

from now begin to Jefferies. today question [Operator you. Please ahead. comes Thomas Tang We'll question-and-answer first instructions] Our go Thank with session.

Thomas Tang

as about of the share the is questions. management about the course XXXX segments as landscape? different taking well your my Thanks you. outlook. about Thank question trends business view for competitive Can management My

Fu Sheng

answer. Okay, of go the first to part Sheng’s let first me Fu

this by advertising we're from we we’re we our product year, now rely us completed from Store pivoting mentioned of know such market year on. we after adjustments, but advertisement Cheetah utilities XXXX Google, removed now we our that was Mobile advertising domestic we coming the the most on and you model significantly. industry the in after partners Play especially lot market, is from were pieces as domestic revenues I a rely our the removed to Google model our subscription for On overseas previously, before already Google. thought that difficult on And utilities focusing view, but market, we indeed performed So, year a from just influenced after efforts products, to

vertical use So and phones. stabilizing of user a talked improved just we PC can think is the as see a now with base will increase. it our our we along slight front I as PC on have disappear, and not significantly mobile the now with And we now market

business, next think some So our for year can increases. utility regain we

the the it business shopping our depends AI for especially on mall offline. robotics, Okay,

but So offline it COVID-XX and we’re from in the mall. bit think due also whole now the the a little situation to I was the traffic shopping COVID-XX, recovering affected

still view, next a in is Thomas. leading mall home that globally. should there the focusing China part And market. growth the is Yes, our question, to be China in think hope model. my do our market in business utility I'm economic chance to on greater now of professional job great we your strategy focusing our for the AI but a answers from for and I a business think year, So not in our on Yes, view, point great shopping sure

Thomas Tang

Thank you.

Fu Sheng

you. Thank

Operator

question from next Please Citi. ahead. with Vicky comes go The Wei

Vicky Wei

for AI My business investment. about investment, is So the question taking management, AI questions. thanks my

not business cash you. foreseeable balances think the the needed in that what company management investment the So for anticipate company’s for implies And given significant does AI does business? Thank future, revenue mid-term? the AI what of the from the in the

Fu Sheng

few highlight from a AI front. me let Yes, points

first So, both revenue. previously our revenue XB and AI the XC in the concerns business AI

Translator, Cheetah of interpretation named is product a have to due AI But to used the based don't which COVID-XX, situation we travel product, the people for So, device. abroad.

So, I AI sales. like this now. our to us to this it due of we QX COVID-XX in seen business XB the suspended situation, a our it service of meet for product the And acceptance but think cannot I After We the we think also customers for having impacted rebounds bit recovery greater market some QX in a travel almost COVID-XX some so little restrictions, touch the now robotic in is services. have for quarter. low the our

as AI of acceptance industry growing our the expenses. speak. So, investment we in the R&D and Yes is consists mostly for

some now investment. in investment just functions QX. expenses some we in stock developed, QX, after one-time continued as not may be So Yes, were is mentioned such there so restructuring

or cost some as shopping hotel year. I we explore industry don't be our the model On and And balance mall also need such monetization on think and also sheet AI we may can model. sufficient improvement we may as we I recovering own as mentioned, the a more and estimation, worry exploring we quickly, in the our bottom growth both our about other also AI and a per when with and line, cash And so Yes, So we support front we see could also, the loss improved expected to our business you on our shopping for trend our level mentioned, expect hand, mid-term on expenses is the much carding have hotels more our investment. operating as and too and investment. QX, in our also including the investment along think this lot. market next greater

business the new think be our great to I robotics growth So vision make engine. to is of service our

Vicky Wei

you. Thank

Operator

Thank you.

to As there further management at this no back I'd remarks. are to conference questions for time, closing hand like our the

Helen Zhu

joining you Thank us today. for all

you so please contact questions, us. hesitate further Bye. any Thank much. do have you to If not

Operator

conference presentation. you for This is now concluded. attending Thank today’s

disconnect. now may You

Cheetah Mobile (CMCM) 24 Nov 202020 Q3 Earnings call transcript