CMCM - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Cheetah Mobile Fourth Quarter and Full Year 2020 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. 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

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

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

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

Fu Sheng

[ph] committed began Helen. business Mobile our long-term and billion beyond revenue advertising our hold. challenging, Thank everyone. domestic Meanwhile, and macro shareholders the our and with stayed long in Hello focused RMBXXX determination, and environment In remained RMBX.X improved focus Mobile our earned million to in on to XXXX, we for run. Cheetah remains take attributable terrified revenue you, -- build Cheetah sustainable income markets. in to AI-related streams business the Whilst efficiency, net we to robotics operational

highlights. operating the are Here

cost we First, cut and expense. our

same loss previous operating last a the result, the this XXXX, XXXX. since year QX the in to As non-GAAP and million quarter. fourth operating was period continue RMBXXX RMBXX in from million narrow loss In RMBXXX non-GAAP of quarter million reduced

year an continued that our still $XXX in $XXX cash we profits fourth in the million XXXX. loss about previous million at earned to our and of operating Cheetah of business optimization. internet Mobile despite in million last holds to operating in dividends same in our of million operating paid million period operating the quarter Specifically, non-GAAP profit hand, XXXX compared shareholders RMBXX quarter, the RMBXX thanks RMBXX to

our continue Looking to ahead, and cut operating efficiency. costs expense will and we improve

advertising we streams top in in experience, user priority utility user our user membership our XXXX Second, our diversified satisfaction, our our beyond include market. through service as within and revenue home products, offering will protection privacy

the ad-free goal Our mouth. is an we a encourage subscribe on rate initiative to us In -- advertising utility Such for market, allow reliance our initiative -- more users retention deliver individual helped continue users experience. user word experience. to to and of the products to improve such through superior domestic reduce and attract

the our result, grow continue we both And a to experience, subscription efforts continue user coming internet metrics expect the grow stabilize gradually revenue As paying in tent enhancing and in to quarter-over-quarter counts on our and to expect and business quarters. revenue growth membership this service our supported by user in resume the to future XXXX. key from we

while, robots we been of this well-controlled. selected case, AI our by shopping hasn't Third, AI on user recovered. focusing are operation malls. our And number Chinese in COVID-XX in deploying optimized business our for they China has economy

customers robots product help promote AI-related shops serve operators brands and better mall Our and their their and shopping help service. can

direction right still the AI we our business of in its we stage, are is believe While early our business. on

long-term. through the quarter costs rebuild go highlights, like to our CFO, Thomas call now XXXX, In With turn shareholder I financial a model will models strong would reserves, our that, as for to temporal to details Before we monetization cash to of continue our to in return. our business the experiment financial cut cash, call growth confidence expense turn I to and Thomas results. I AI our the and our for will more emphasize the for fourth Ren and

Thomas Ren

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

RMBXXX the of that The due was of results. million XXXX, financial within the to are amounts in revenues revenue money In decline our through unless you walk stated quarter RMB It XX%. were primarily of represented terms. all a decrease suspension will year-over-year our I our and Mobile February Please AdMob, its that fourth year-over-year Now, Play note our and guidance. collaborations otherwise, as On with Google XXXX, Google which since business new assets. been attract negatively and certain from XXXX, Google. Google Cheetah announced accounts the XXst, the February company's of revenue as to Store, disabled, had the generate well disposal Google ability AdManager affected gaming-related total users

markets the to second the the overseas of company we certain have disposed market. shift In markets. from focus chosen overseas in markets, environment half the XXXX, business assets Given unfavorable the to our in domestic gaming-related and overseas

revenue that and the we business the diminishing decrease business and the game in business. game of a is expect two One primarily Internet pieces. portion product business, Mobile's market Cheetah mobile to and mobile our Post includes As of such a both contribution PC on remaining disposals, from in utility which the domestic platforms mobile result, future. foreseeable its comprises

two reporting above The the this lines business. our profits and other other by revenues is quarter. operating started AI Therefore, business from we and

majority decline to future, Revenues mainly from by others the the products, vast million were business. came year-over-year from have diminishing game company's in reporting AI-related and decreased fourth from consumer-facing were a company's be XX% million business generated to a retrospectively RMBXX period. in products products. of segment. nearly quarter from XXXX remaining above of for by the information due business In previous mentioned to quarter fourth mobile of the of from revenues expect representing XXXX, the a in internet the Revenues we of segment utility year-over-year the We XX% this from the current internet revenues quarter, the due its the the factors. AI XX%, with In account revised while to period RMBXXX utility the comparable our to decrease

better operating following the on present to items. of us a impairment. Turning of of without and use in excludes to The measures context will of expenses results effect costs non-cash compensation non-GAAP the our stock-based our and be XXXX fourth quarter of expenses, the basis, will results this non-GAAP help which discussion goodwill performance

information streamline cut and please presented quarter U.S. costs year-over-year with GAAP, our past expenses. XXXX, we earnings by costs our expenses in and release. operations fourth financial the accordance In XX% XX% our and of refer to In continue and quarter-over-quarter. total the several quarters, For decreased to

the million loss in the our the RMBXX an same XXXX, last million increased narrowed in costs profit As RMBXXX in fourth and quarter loss the in operating the a business due operating operating from year from million significantly of period the an quarter million and to RMBXX was result, quarter. million period in the cutting. our million Notably, of internet of RMBXXX RMBXX year previous to operating profit for the expenses same last RMBXX in and quarter previous

In and As our and full XX%. of the marketing total by decreasing by our sales XXXX, expenses decreased particularly time Cheetah will about operating had December XXXX, costs expenses, XXst, and from of we continue cut about XXXX. XX% personnel-related end In XXX to expenses. XXXX, employees,

the Turning items, the to of non-operating value fair our during investees quarter increased. some of

reported a Cheetah we RMBXX result, of fourth attributable income shareholders million quarter. the a Mobile's to in net As

balance our strong. Importantly, remains sheet

million. As long-term of $XXX cash December million and the XXst, investments of XXXX, investments and we had and short-term $XXX cash equivalents, equity cash of restricted

to to Our concludes rejuvenate preliminary now note, to strong our revenue invest continue be our to Thank guidance, business current us we gives currently balance Operator, prepared AI-related This first views for the confidence total And the the quarter million. and and RMBXXX revenues forecast million we RMBXXX long-term expect to take you. reflects company. is sheet subject change. this growth and for questions. to remarks. ready our Please between are in

Operator

you. Thank

ahead. [Operator question-and-answer Instructions] Wei the We will comes Our session. begin now Vicky from question Please today Citi. go first with

Vicky Wei

Thanks taking is question management. and my My robots. the evening about AI the advertising for market question. Good

of in So, first three the post witnessed Cheetah XXXX? fourth what would key the behavioral AI the of what changes quarter? advertising vertical any terms the my question top does does in robots? was AI current going color advertising market into progress Speech] management management think the And second Mobile's And adoptions of is, habits about be quarter sentiment for great. adoptions Any pandemic, [Foreign robots of

Thomas Ren

you, Thank Vicki.

Sheng So, question. answer about answer and I your question second your Fu will advertising the general first will market

can for led advertising in China, a as the to it turn the market COVID-XX macro already of market, in advertising trend control So, is a to recovery China. well. that in which economy see pandemic now recovery We seems under strong

the are sectors developing last strong growth FMCG, a specifically will auto, a year. your and on now the want we momentum also and we entertainment like gaming, few us, So, our remarks, that education, draw in prepared few user mentioned are see we and be maintain sectors for for the sectors also can subscription the reliance we I I those travel model. think advertising, from But focusing from recovery as attention to

domestic our So, contributed see more we this expect utility your Hope user for can question. answers contribution revenue product. from we --

question Sheng about to I AI. the to turn will your So, Fu answer

Fu Sheng

[Foreign Language] this translate will I part.

are COVID-XX reduce of the technologies, AI lot their cost robotics invest also the we our to the pandemic, on it noticed after benefits few continue So, AI the and we customers, that acceptance OrionStar accelerating from a us robotics. the level including past for there years, indeed investee, to business of

more So, we the can becoming than to acceptance feel that AI before. the robotics is home much market

Okay.

translate will part. I this So,

our mall, is see our mall shopping mall example, recovering. robotics traffic the in more shopping is with shopping with robotics and interaction So can along the more in mall for We in shopping the increasing.

or robotics used brands where about find already restaurants certain toilet brand cetera. and our So, coffee on et some customers to to various of asking certain

So, to our more of we more shopping in are inquiry mall the such used robotics. seeing kind and customers to that

restaurants Another example by in again. investee robotics is our OrionStar promoted

in OrionStar from common on a this a already one waiter. already and OrionStar XXXX, robotics. lower rental to less run of is hundred entered into end the restaurants waiter's restaurant And few substitute which the is The the towards RMBX,XXX. months collecting service enough than of cost restaurant they is cost monthly robotics. So, And is promoted delivery efficiency actually than couple the OrionStar already restaurant just

could I also pandemic COVID-XX we to and communication market. think gradually is the the a can investment market. by the technology, reduced the And after affected also also fewer especially with we cost that our into our see face-to-face already service AI by level accepted continuing the and also service be untouched So,

it's can So, We benefit we market right timing. the think from acceptance.

Thomas Ren

that's So, question Hope it Vicky? Fu the your response. all answers Sheng's

Vicky Wei

much. Thank you so

Thomas Ren

you. Thank

Operator

today our [Operator Chan question from comes ahead. go Jefferies. Instructions] Melody Please next And with

Melody Chan

taking questions. evening. I two my Thanks for Good have question.

some all share across increase required can The are And the the on increased its m second sectors? approval privacy control use deals app so to is, Apple first question recently XXXX my to different users have then is developers data. from outlook and

will Language] impact advertising this business? So, [Foreign

Fu Sheng

will translate this so [Foreign part. Okay, Language] I

So, look overseas the in mentioned market for our so I was talking Sheng Fu now, year. forward good the last business, as just challenge met we think own about outlook we

software. in the trend talking -- recovery the see connect for only market domestic not coming and our So, also content the also cannot the it believe in to some strategy revenue from Fu growth the return coming only to not segment, then only year internet year. -- for functions, whole community utility the do more stabilize about is advertising for regain and this our -- not and seems us see from we fact, features, can coming user to in for can Yes, our that now our clock year. some need and subscription and growth business, we we our prior regain can is with the connected utility the internet so, we we for was market Sheng the internet us, under mobile product home severe to and some we this to can domestic And model be we industry our are the the functional is level competition and which in also year,

industry, turning so it's AI and Okay, the point. said for I the now robotics I think

on not can to Although, it's think competition bad for them technology some it's are you win not the indicator a not to or of financing certain AI only publish whole round generally either thing AI it's great, not smooth or or as the business, new IPO. company, some or you some not -- just about some they the standard. some I doing and assay, robotic industry. But for prize for see And

robotics core core customers' now So, can has the need, costs for parameters, feature hotel think a user's in the I some that long by and some think the be to governance all the been your at depends as I [ph] the also elaborate can but their been product various -- to the that products, stage tool. CP -- it your the the either to efficient previously, as now and robotic reduce turning customers' experience, for an use we highly restaurant it on energy I a see Yes, the or or product. actual nominal, and to exhibition, improve meet as think AI -- to use more or efficient has it the product -- that's converted but -- should competition

grow So, I this industry think very I'm quite fast. Yes. will confident that

For by our basically disposed either policy your gaming products. utility our already on mentioned, mainly and we apps minimum the effect overseas platforms Apple, new PC products second question I about that the the certain Android think very utility already gaming we products, -- our overseas because products, on also for or or as

to XXth now us. is the -- important I and recent some whole low becoming want it So, requires advertisement government advertisement Yes. impact at or for about -- phone for violating information, fraud apps minimum developers, the the itself, I emphasize is will be market this users' for controlled domestic privacy information, future, for and think matter there overseas user strict the more market, Apple more Yes, disruptive the mobile it no, on industry, no the -- more either more gala all Yes, CCTV, is privacy in manufacturers. March or policy a by the user outlook that focus becoming the more or the the the government. by more very by the and advertisement because it's focused also on to or quality also

or year before, issue. the year also we user so or low were facing we realized and advertisement already Google last that when challenge the either in the from Facebook So, experience quality some

already advertisement to in to we reliance -- reduce and start advertising. So, XXXX, already our we our to also reduce

subscription So, we developed model. user the

is think -- mentioned I was just our on there and Mobile product the involved. no CCTV improves user Gala, the Cheetah -- so experience the we it in

our relation a big products. great I our think a relation it for -- utility or our has model on is change business

also a to the I emphasize half want gaming secondly, So, for our thank because about And XXXX. we certain terminated bit supplement -- the you. or and year were we by business related last second little I also XXXX of already Google about disposed want in outlook for products that to because first the

So, generally, is year for always confident I think will because for revenue. But full still we think are the full year since outlook, see we that our season I advertising. for QX, QX decreased trend slack

our think So, revenue we can QX. expect recovery crisis since from I some

So, that's information. supplementary Thank you. my

Thomas Ren

you. Thank

Operator

Thank you. And there are no further questions.

to time, this at management final to like So, I'd turn it team over our back remarks. for

Helen Zhu

for all joining today. you Thank us

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

Operator

This presentation. call. for We you thank attending all you. today's concludes conference today's Thank

You your may disconnect now lines.

Cheetah Mobile (CMCM) 23 Mar 212020 Q4 Earnings call transcript