LAIX - Earnings call transcript Q1 2021

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Operator

Hello ladies and gentlemen. Thank you for standing by for LAIX Inc.'s First Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. the to turn host, now will call your over Mr. I the Chief Financial Sun, company. Officer Bing of Please go ahead, Bing.

Bing Sun

were and and first press distribution conference results list quarter everyone release XXXX earlier Hello welcome for earnings call. to and sign The the the can download you the up LAIX's issued earnings are today company's by forward-looking Such future and to the company. to statements statements future IR not subject performance at of Today's ir.laix.com. and website our risks relating visiting discussion contain guarantees are uncertainties. will certain of performance company's

these affect undertake the obligation annual CEO, comparison Some except general earnings A and materially business Securities its is results report. LAIX's with release results certain are from of does cause Yi will differ including could purpose discussion. company this discussion for risks in I and Wang. and forward-looking of non-GAAP by only. are the of we law. turn ahead. and a over control information, required financial call Definition of as beyond the to the in today's release Commission, go are The company and included earlier could these the company's issued any those measures provide the available our table The risk Exchange now today. measures not filings financial we reconciliation to to in mentioned that actual new Please update Dr. factors

Yi Wang

to previous gross performance of meeting quarter the earnings to made expanded progress XXXX. previous have RMBXXX.X Bing. of which XX.X%; in of XX.X% further Hello you pleased to revenues outstanding guidance We're our quarter. the net in Thanks conference a in call. our financial Thank range; million, quarter joining led XXXX margin everyone. first With for lot first operations

meaningful net quarterly first of first have reporting quarter. We profitability ever, for income basis million on a the time for RMBXX.X the achieved

organizational our and margin and enhancing strides structure, improve our expansion operating been the optimizing proactively in significant making have profitability. driving We efficiency our

with powered our been the app services. results-oriented we our As our technology to launched teacher and standalone have as further user beta move products enhancing by product. a user-centric in the we learning providing AI experience courses and services, market April, In we leadership position steadily

we teacher While still far, rating the very world, received paid such very, Interestingly it with out is believe Alex, X.X like being of XX% is only in tutor even tested, teacher. of the conversational of feedback the Alex like is AI the over top reasons probably our three have kind of five which the our this them one positive we for with is though of product, overall an star robotic AI particular, users five, first one from users in rating. giving a why

experience, with potential. forward user-centric in be around the provide can other to into product goal a AI-powered products integrated as very a technology. And a massive in learning industry introduced a standalone the It or leap great the With learning is Alex innovative monetization product world.

our known cutting between per conversation when beginning session, our duplex average and is business, of the have the best and is average on which Alex edge the longest fact, time XX minutes the we In user Since a are focusing conversation system probably a technology. human. capabilities to time between it been world's over voice and therefore, improving full R&D comes

have first users one our fully PT of PT or test. English the million system used was assessment proprietary CSE CEFR. By and have The of tool can skills, their or XXXX, grammar, is tests vocabulary, huge. both to training comprehensive our test PT the is further end adaptive aligned unique few test, it learners the an a of a the of reading, automated XX skills. our March for been over and as Moreover, finished users' test evaluates platform. be to assessment our and or only to example, enabling better test placement for European SaaS Framework Common which For speaking test English have of that it national China's potential Not [ph] applied PT Reference enterprise the Language be standards listening, Ability can learners, commercial the also English but Language Standard

initiatives. Turning to our new

see last with and our Enterprise markets As [Indiscernible] is their into growth and our this and industries, our our service we plan great believe of improve we on call, think we corporate are tap efficient By acquisition new customers English products professional learning to training potential developing we and solutions leading utilizing including in content. affordable and different by help We can area. wish developing who channels effective employees' in scenarios. focus technology, systems can customized the working skills, We continue industry services. and further XXXX. market tailored for and new effective potential we we specific different AI discussed share vocabularies with to talent to customer earnings curriculum exploring courseware capture another

prospects have as business efficiency our these we overseas progress fronts. improving to pleased further We the user of addition, aligning all courses market. especially and made we for developing related In believe on we and are that support these are solid efforts to are preparation, to the acquisition -- our long-term see combined for growth

in high Before and technology. we I efficiencies over believe channels, proprietary established and the turn acquisition call quality strong products, advanced reputation, we brand to summary, Bing,

executing the while financial our We call remain to will to over efficiency. well same positioned turn now Bing demand we China on the who I a in Sun enabled CFO, continue results. are At our the We focused improving and operational discuss initiatives. sharply capture globally. growth learner language growing us our will for time, and key

Bing Sun

Thank you, Yi.

with and RMBXXX.X the to million, for in RMBXXX.X from RMBXXX.X expenditures. primarily RMBXXX.X key XX.X% RMBXXX.X RMBXXX.X for expenses change previous the from the IT same million were control service quarter Total primarily Gross a from for and XXXX. acquisition million quarter, decrease salary change stringent million from the increase as last Net decrease of to quarter loss for operation decrease same previous RMBXX.X the to personnel matrix in the decrease million, loss was Sales improvement for advertising million and RMBXX.X RMBXX.X million XX.X% for RMBXX.X and benefits of RMBXX.X from was year. quarter expenses million shareholders decrease year. X.X% RMBXX.X revenue million for as the fee. previous million, in of of income company's quarter by with stringent the in XX.XX% decrease with previous The XX.X% primarily million secondly to for XXXX revenue RMBX.XX R&D loss RMBXX.X same year. per caused management. were year. and quarter-over-quarter last same development XX.X% in and compared a million employees the quarter-over-quarter quarter to the were G&A XX.X% percentage expenditures, of diluted compared the of RMBXX.X the to user income the Sales of ordinary a revenue RMBXXX.X improvement previous X.X% compared in a G&A efficiency. same of the adjusted gross RMBXX.X compared last million RMBXXX.X of the from was from on million million marketing from for financial same quarter decrease for the of marketing loss from net quarter, last an as share decrease with and a quarter XX.X% a XXXX a Gross user year. from compared and decrease quarter for million the a quarter year. year. last attributable RMBXXX of the management. for XX% The were quarter Research Let's cost net for XX.X% million loss ordinary for X.X% RMBXX.X And XX.X% a last quarter same shareholders for same billings for same decrease for the and now due the of for and the quarter was the year. and the last of last expenses expenses due last The to and XX.X% of a cost expenses XX.X% and The net XXXX the the quarter the was quarter the stringent quarter previous in expenditures. million, last share at XXXX decrease million same previous quarter, for a and a was acquisition decreased decrease previous first for an revenues efficiency quarter XX.X% a with RMBXXX.X the Basic efficiency a RMBXXX.X year. XX.X% quarter, and profit from to and the and the due user RMBXXX.X RMBX.XX company's the first RMBXX.X million loss the look decrease for Adjusted quarter to a attributable previous ordinary operating to year. Net primarily for were were million last control a in quarter previous net the operations margin XX.X% last the control year. last from percentage the for for year. last RMBXXX.X and for million a salaries the for with leasehold the XX% acquisition XX.X% and in from for the due decrease in same diluted quarter cost The million XX% decrease RMBXX.X loss XX.X% quarter, was expenses with same of a and quarter impairment previous the quarter was changes primarily net our improvement quarter quarter to the staff the the quarter. net income net basic net XXX.X% was was decrease Net year. compared compared from due for income and quarter previous first due primarily our was RMBXX.X year. for the million, for net a of from the improvement were million, first expenses year. RMBX.XX million net quarter million and for loss the RMBXX.X from of million previous quarter a Cost last the same quarter, operations operating the previous XX.XX% and decrease X.X% full-time the quarter for personnel previous per the same million, RMBXX compared revenue adjusted from savings quarter million for same quarter for attributable welfare in first changes for an previous ordinary The and percentage RMBXX.X the XX.X% was with decrease RMBXXX.X the decreased to and

cash as our terms and sheet, March XXXX, cash, with totaled cash, equivalents, restricted investments balance XXst, short-term In XXst, XXXX. as of of million compared RMBXXX.X million December of the RMBXXX.X company's

three RMBXX.X of deferred revenue XXst, activities with in million XXXX. were XXst, compared and revenue period of respectively. company's XXXX, the million long-term RMBXX.X million million the RMBXXX.X As used and XXXX, RMBXXX.X as XXXX for operating March and ended cash March XXst, Net December months deferred totaled

months XXXX, cash is flows that of company's ability from company for discretionary cash company's will with fund to believes to also to control liquidity capital company's sufficient by optimizing least obtain liabilities the costs. next based deficit equity exceeded and The The user total by related and expenditure. the implementation current it operations million, RMBXXX.X ability or traffic future is was its strategy million. acquisition capital manage retention, its various current efficiently to RMBXXX.X measures. XXst, shareholders' March working meet reduce assets investors. Currently, enhance engagement the further of the based preserve company reducing at abovementioned XX user its on The As to liquidity the the has liquidity financing and on debt while

into Now, outlook. turn let's our

XXXX; XX.X% between the the quarter would million, of and second RMBXXX.X from to decrease be net a the currently RMBXXX approximately first million For of which million decrease to of revenue XXXX, expects concludes for which X.X% represent million RMBXXX to a the our change. quarter to prepared year. preliminary approximately is situation of quarter last the same on to This subject company's forecast market the XX.X% conditions, XX.X% This from for and current reflects remarks. current RMBXXX.X business view and company

ahead. questions. open go now will to We the please call Operator,

Operator

Morgan the Instructions] line Thank question first Sheng with from comes Stanley. of Elsie you. Your [Operator

is open. line Your

Elsie Sheng

I questions. Thank you, have you. management. Thank two

have is the a that below first noticed K-XX And expect for -- advertisement for business? years' on on regarding do regarding we trend? developed English a that K-XX? also your regulation how environment, The some K-XX Remember does tutoring kids to still how for Thank you. maintain their margin foresee you growing old, the trend wondering on regulation And strict you profitability year Do also six that year? secondly and also English products you on the a basis? full impact the

Yi Wang

-- the we Thank Elsie. one. regulation you first question very recently. the were have Yes, very changes I'll for the monitoring closely answer we been

consists impacted. still First adult of majority not as you which our business the revenue the or is of all, know of

who the to all, the monitoring also mean and actually traffic regulation adult business prep, we from our -- real and bulk communicative adult of on changes test users but themselves. the the focus parents kid's with around are first of we skills, -- the does closely of a capabilities Secondly, from come internal not traffic are not entirely the but our acquisition, regard business, cross-sell I still from kids not

on impact we the our as increasing internal limited. rate would have So, steadily advertising well. be limitation referral And been

diversify our acquisition to mean a as capabilities. So, user

adapt our regulation of So, some these changes. things we are control the have that in to to

portfolio part investing and regulated regulation of serve to areas question, So, our Bing second way we the our let as your answer are not in to the diversify of are another I'll other continue [Indiscernible] consistently that by user. changes, some

Bing Sun

second take Yes, question the of care I'll Yi.

As pleased on just first we the are to we the basis profitability for Dr. ever. said Yi very announce the that quarterly time achieved

Our again a ability XXXX for his to main cost stabilize, leverage operational in that businesses is of future. continued testament expect the control. and in focus our and initiatives the first once XX% our our will more expense This Yi we total contribute quarter part by on With execute operating as the firm XX.X% more quarter-over-quarter of we to improving led year-over-year. starting new and to business hope mentioned to and decreasing commitment our

be details will discuss are these We more happy substantiated. to they in once initiatives more

Going improving remain forward, enhancing and bottom-line. on operational our focus will our efficiency

Elsie Sheng

Okay. Thank you very much.

Operator

[Indiscernible] Capital of Your Jenny Lee from [ph] from next comes line question the Management. Chinese

is open. line Your

Unidentified Analyst

I'm first this the should in driven if how Congrats expect is time to sustainable? trend profitability management. Hi on bottom-line for we And coming the And the your history. wondering you. in quarters? Thank

Bing Sun

the for Jenny question. Thanks

we respond. sustainable might it we ability, improving continue market I previous make for PT think for can growth have BXB we can hand, on bottom-line ability We the first the growth growth whether mentioned, into our on whether the implement example, just will I in in they're and initiative just our using keep effectively continue expansion, I time whether like focus just And so and can said, and structure hand operation we capability like showed mentioned, just other stay I our that one the to quickly first on to on expand quarter. and and has market past forth. oversea our and rate and Yi the so mentioned test the our positive, healthy my on to our increase like this cost leverage, depends and

So--

Unidentified Analyst

you. Thank Okay.

Operator

to further turn remarks. like company now questions, back no closing to are As the the there I call over would for

Bing Sun

Thank joining you once for again us.

or have Relations further Relations. provided our to through LAIX's contact TPG and Investor please on you free questions, If contact the feel information website Investor

Operator

today's conference call. concludes This

you. now may You line. Thank disconnect your

Bing Sun

Thank you.

LAIX (LAIXY) 27 May 212021 Q1 Earnings call transcript