RAAS - Earnings call transcript Q1 2021 | Cloopen Group Holding Limited

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Cloopen’s First Quarter 2021 Earnings Conference Call. [Operator Instructions] Today’s conference call is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the conference call over to your host today, Yilin Dai [ph], Cloopen’s Investor Relations Representative. Please go ahead.

Yilin Dai

you Cloopen’s thank earnings quarter and call. conference everyone for first joining XXXX Hello, and were are operating press financial company’s The results Newswire earlier release issued services today online. and posted via a in

distribution prepared will Li, the Executive download with Officer and will and website. and for our press You Chief Changxun call Management will list today’s Sun, begin can visiting call earnings by on Chief Steven Financial Mr. the sign Officer. and release with remarks up Mr. our be Q&A a Participants Founder IR our conclude session.

discussed it estimates the for undue this you on Except should in and forward-looking are Before trends, over I statements conference to Harbor not you to place like relation I the remind historical hand based call Cloopen’s statement in Safe on These to current matters statements. projections management, information call. would are reliance therefore, contained today’s and of certain herein, them.

risks number from and any those statements. Forward-looking materially statements forward-looking uncertainties. contained differ factors involve of could actual to A inherent in results cause important

the our risks Please ahead. information will about Exchange turn I to over the Securities potential filings Sun. more and and Commission. refer uncertainties, now call the the CEO, For Changxun company’s to please with go

Changxun Sun

and Thank time everyone. Hello, you development. for interest Cloopen’s in your

to We overall with expectations. are report exceeding pleased robust first results quarter performance XXXX

benefited increase optimized our the for XXXX million mix. Notably, than surpassing from we and of XX.X% margin XX% higher our a end reached business gross year RMBXXX.X the top were revenues Our the of quarter year-over-year. the gross XX% as range representing full first margin guidance

rate In recovered addition, retention net our to XXX.X%. dollar-based customer

acquisition products customer is clear, always has improve intelligent enterprises very their efficiency as to marketing services and and Our retention customer better with enable rates. value which to to provide so proposition been cloud-based

But this As and to our solutions is communication a States. have go the among providers public to IPO proud roadshows, are endgame. be in we the United mentioned our I forerunner China-based not

We satisfied with an ordinary being company. are not

using Our be industry. tools goal to to help is a influence the communications company transform with our SaaS-based global Chinese enterprise

we As the on our our vast or our is focus strategic cloud-based advocated leveraging contact CC. capabilities during center, of IPO,

few a of Social channel records, and have the between the boundary sales the SCRM. enterprises communication is mechanism, CRM, extended last CRM as includes to manages management and merely and comprehensive a manages communication CRM tool from and traffic CC we customer information years, SCRM, customers such Over subsequent customer processes. domain or software that as that whereas private more

as [ph]. conversion named is creating retention EliteCRM others, and improvement. extension SCRM and as communications, end-to-end establishment and the customers rates to enterprise and is satisfaction to product fleets customer traffic acquisitions, product from improve and of their named help ultimately CRM sell we Juco from income CC of product interconnections, Our functionalities tax of value can Through the the customer

strategy cases. enterprise capabilities. of With Leveraging data For teams, AI our artificial acquisition made have capabilities, AI-driven products utilize operations avenues exploring solid recently to enterprises enhancing the and cloud-based in product steadily help significant data value our identifying are while we development, and customer to we are our AI great through empowering helping ultimately also customer service new our applications facilitating use attach advancements. and place, connections and and by our intelligent we with accumulating consistently intelligence a customers product smarter in a have approach. and invest R&D importance AI-based We proposition we adopted

of its on a our them products path. adjusted product improve and we to complete in customers, the of own major our operational four We development divisions and efficiency. and each structure First, has integrated sales Based organizational effectively multiple departments. products characteristics digital products core for division, industrial center SaaS-based enterprises. standardized our SaaS-based departments large and customers. new centers the marketing small enterprise four includes: medium-sized provides division, for These contact services provides contact which industry and one, solutions which Two the

The in caters large audio international our we business existing government expanded governance. company. and are opportunities, video based social intelligent and progress with surveillance Philippines, enthusiastic operations overseas capabilities so enterprises overseas our market The which third is and safety we deep about explore to the further production and will the and agencies applications that providing SOE such division, aiming state-owned Japan, become a continue analysis Malaysia far fourth government of truly one Having ensure the smart to learning international to our in to division. transformation as to video video technology and is and

supervisor been While realigning recently, also strengthening our Scientist. technology from Most our our our have based overseas new as appointed included Nankai recruiting with hiring University we VP, four R&D have teams new on Notably, Chief our the we customer internal to reorganizing groups director have sales team. also our and customer enhance PhD efforts teams efforts. base, a our sales organizational establishing structure

cloud. Second, to [indiscernible] cloud-based we [indiscernible] our from have brand communications upgraded

financials. developed the marketing refined to having you of quarter now products and flash first suite turn a competitive call. to And to review you and overseas our in to team, point marketing efficiency we SOE strengthen see to it from highly proud focuses more key closer effects EliteCRM progress brand operating our provide expansion. including Through to are strive efficient executive customer Thank clients full and position. We and in service, for summary, of and services product clear reflect and entry Steven considerably digital operating more reflected our products cloud, services current CFO, forward the structure as cloud. valuable the Li, our in name I addition order to look both roadmap in for financial and expansion I our our future. and strong Our multidimensional metrics. will call and cloud a in with these improved establishment have as industrial integrating our a our we over corporate on In have our new to a with SCRM discussions communications well in of for and joining smart cloud-based government organizational

Steven Li

Changxun and joining you, you Thank today. Yilin. thank us for and Hello, everyone

me the integration. with main we started at platform. existing provide is completed financial that acquisition announcement, our update let level room integrating deliver many focused on to EliteCRM product with First, products. our technologies the has Since and integrating have our of and on was been task CC the progress basically on products It integration

costs next by our step, handover As more we to to EliteCRM. handled and complete the in-depth be integration expect

we technology can AI interface, and an In so well into as terms underlying applications. of EliteCRM provide the that integration of as this technologies, technology utilize the it AI divide

technologies see are to to customers. We pleased leverage our acquire to has started already NLP that EliteCRM

We product work of been EliteCRM, EliteCRM new there few are clients, a acquisition that by the integration CC have subsidiary clients also that and the our acquisition Japan in in solid combined signed the between cloud the the are pipeline Since CRM. and in synergies acquisition with of quite is literally finance industry completed. excited have potential further evident contracts customer CRM. And from for CC almost

first our to move let’s results. financial quarter Now,

driven due which center an to of RMBXXX.X increase the by reached contact business, in increasing The was XXXX, from solutions cloud-based very increase number the performance saw XX.X%. million million revenues year-over-year revenues customers. XX.X% of Our mainly first quarter increase primarily our to in strong RMBXX.X

in the as continues RMBXXX.X of XX.X% telecommunications equipment RMBXX.X company the increased of cost million XXXX. quarter business. As costs first from and in margin I by XXXX XX% and quarter the increased due gross infrastructure of outsourcing scale to the the first first and of mentioned Gross revenues was earlier, in increased by of the quarter was profit XX.X% to cost, in its which to costs, RMBXX.X resources XXXX primarily quarter million million first XXXX, to

from significantly and owned and from due increases to share-based acquisition to RMBXX.X customer the first core in management the Now, quarter let’s expenses. ordinary of certain of in which COVID-XX interest company’s functions RMBXXX.X our RMBX.X quarter in founders representing in the paid first increase base. in advertising of features XXXX to expenses Certain expenses and to features liabilities an business and RMBXX.X CC decrease compensation restricted quarter Sales R&D in in compensation increase technology to in value million of in quarter and expenses XXXX primarily an for was of solutions, look million first RMBXX.X by outbreak. XXXX restriction RMBXXX quarter cloud-based in primarily expenses in granted increase expenses compared a the a third-party from in and the RMBX.X accounts the RMBXXX first directors. solutions. driven majority of to of in expenses first XX.X% increased on employees the quarter to of impact increased that in XXXX in the of first in an an an share in by and Basic compared its spending in the RMBXX.X debt first UC&C Net RMBXX.X to collection million service RMBXX.X relating of XXXX million active for activities primarily million, from cloud-based was RMBXX.X warrant and XX.X% reduced of subsidiary partially of shares resulting of XXXX, as on increase development of per campaigns share-based non-cash million from the the million, increase RMBXX.X The the including in a share-based in non-core loss our XX.X% and increase share compensation of million XXXX XXXX. with compensation In million first due of million the staff functions gain and disposal was increase from of the the change expense cloud-based by offset reach share increased and of million in loss RMBXX.X share-based wider development marketing XXXX. agreements subsidiaries, expense in to primarily the expense increase quarter outsourcing scale items quarter XXXX. in with quarter and quarter continues of under of an by decrease RMBXXX in providers quarter diluted in a of of fair for net for bad first million XXXX first UC&C RMBXXX.X the due the shares expenses increase RMB expenses RMBXX.XX the service of eligible increase RMBXX.X solutions staff million amount. million of employees was were million, options issued receivable online first million at R&D company G&A of to operating million, increase to marketing the

and RMBXXX million to would between second RMBXXX above the XXXX, market increase would the are please. the year-over-year be to million, With which market a currently of Cloopen and reflects outlook to of to that, conditions the open to which current up current XX.X%. expects call on demand, and Operator, operating based customer XX.X% For and substantial the estimates company’s I quarter of The to uncertainty. all preliminary questions. revenues subject conditions represent is like

Operator

Huanji with Instructions] comes [Operator from go first CICC. Li The Please question ahead.

Huanji Li

questions. Thanks management for taking my

the as some telecom terms collaboration the could partnership? Tencent color and of carriers, in So, more us domestic Thank you such ecosystem, you. on give with

Changxun Sun

including product Tencent’s sectors retail Cloopen all Tencent family. industries cloud, finance, of are promoting products All energy has and industrial and power And manufacturing of own cloud Cloopen entered many products. a

Tencent is or have our and Also, to develop new with customers. signing Tencent’s already of Tencent customers help We there enterprise WeChat signed version are with pipeline. we customers more tens serve better and have collaborated in of

with regarding messages strategic RTS XG signed development our products. collaboration contracts also promoting of have CD and provinces mobile in telecom several We also operators

big IOS exploring We the are collaborations with have also SOEs strategic companies. opportunities to and

Huanji Li

Thank you.

Operator

question Daley The Citi. from ahead. with Please next go comes Li

Daley Li

of color presentation. Currently, management. as [indiscernible] get your for could or new customer some first or the how when and and Hi, share the Thank by do trend Could the you will cloud-based dollar orders your questions about data have CC differentiate the cloud ourselves products two you I some I is trends? on CC question. my please terms for you such we Tmall share how you. general recently products? the cloud-based Okay, quarter or translate business. from market CC competition Thanks cloud growth facilities in addition for retention revenue and

Steven Li

first the CEO will our answer and question. will then second the I answer question

room very and China. over on your increased think first mentioned actually large fast in our our business, for CC in we the is we before, I XX% customers So, question, [indiscernible], and customers because focusing increasing [indiscernible] in CC regarding in very enterprise comparison, enterprise industry first strong mentioned of In room CC, are quarter XXXX, to like performance. room compared is faster this customers CC by our so large

cross-selling large So, opportunities and be there will for many up-selling more many, enterprise customers.

a result, think increasing business think I first XXXX if think, over faster [indiscernible] the this for the remember XX%, So, quarter as increasing than CC the future. the of trend in XX% I but actually is CC expect is I around room XX%, will I we is correctly, [Indiscernible] XX%. continue and room actually

for is retention back operator disappearing. is churn mentioned impact we the the the as first over actually rate retention As XXX% rate, or the rate, rate the COVID-XX to net quarter retention COVID-XX, of

actually number the just the dollar For are retention revenue net for rate [indiscernible], of all mentioned. [indiscernible] is these so revenues, the – is [indiscernible] from I roughly subscription

with around has with right customer of us. think customers the us, in remains I XX% for of While [indiscernible] number is terms now of remained

room almost by For large enterprise because will or with we large stay large a us. never of so dealing XX% CC room XX% mainly enterprise lose is enterprise with customers, CC, customer customers

Okay. [Foreign Language]

Changxun Sun

We about advantages over have think we our six competitors. that

we CPaaS line, first we have product we also resources. customers have can with telecom is that our means provide The one that – which

they our resource. telecom to is full must R&D strong operators also they the competitors those And we suite with very second team. mobile that other don’t However, have so product, a have provide contract

AI competitors. we sales third is have We our think larger capability. strong very the And better one, than and our team

we and we of advantage, are think CC covered enterprises have large over medium we a and [indiscernible] have the think in in our for of customers. EliteCRM fourth but staff. we can CRM And that We recently we businesses we overseas competitors currently Japan, also And the one fifth range our to all that provide China. and is have last while for Philippines, have have is we a already they the small to customers, The Malaysia we cannot. our functions focus also team sales room enterprise XXX competitors, advantage acquired just customers,

word, one can to in we and than more pure think a player I provide our CC industry. customers

Daley Li

very much. Okay, much. very you Thank you thank

Operator

from ahead. next with Please China Instructions] [indiscernible] [Operator The question Securities. go comes

Unidentified Analyst

myself to quickly. I I am translate three have going questions.

current dollar-based market with other with the much rate, look cloud-based in what Language] the is positive and trend look Also, if the fourth quarter and second in is have long-term we reach growth a we very to The we in us question of for first question seen stage? mid how that the and to our long-term? the market, about cloud-based in one product? CRM the X the solutions how And at trend the years CRM and about of is should CC and [Foreign this are as SaaS can my of mid X the expansion my the more at differences share What business. it vendors is a third rate next can CC potential few expected competitiveness in what retention about compared decrease the past is And size what bit you years they is strategy progress long-term does? marketing to the

Steven Li

Okay.

I the – new QX, in think CC over rate first increase for our had prospectus industry for by of with report revenue question, So IPO. remember to our over XXXX, around that correctly I CC the growth XX%. year And report, of will XX%, with the actually size, a RMBXX I market by the we think market XX%. terms in In if during increased overall billion the our

next other XX%, CC, the than between CC X have XX% to think mentioned as like Sun vertical industry X AI also I well will earlier, we because our to above years, solutions. the for average, Mr. business So somewhere expect we increase

CRM, SCRM. We have

a overseas We the the other will many become have many, market, our overseas can’t. one of to CC features also competitors basic key our we also X – we why solution and next to years the think X the which many for for solution, drivers are other that’s product think business. years the Yes, offer so addition market in can product with we we modules, total so

in that’s rate. in to XX% will very question the So is why we X of your CC years the confident based next third our general, the range increase X years. dollar to net regarding are for revenue And XX% retention

and – the to our our know, I percentage had as percentage our But last level. outbreak been good last year. has business the you think has disappearing very the not for the for to that’s this COVID-XX impacting due COVID-XX XXXX probably – was come outbreak, big thing a normal back have, as very we year been COVID-XX

dollar-based know, the QX in XXX% percentage you is our will just by this we better for As over get expect that rate and to retention the fact net continue future.

Changxun Sun

from is extension rationale retention. and and their reasonable. The actually is to this And natural help customer acquisition with CRM to CC our enterprise products their customer to

have We following aspects. advantage competitive in the

is The we than have customers. XX,XXX first one existing more

second can sales contact products, and Also, solution CRM such our have company. established as pure one provide comprehensive is team, BXB and The CRM The a there center respectively to our kinds systems. are etcetera. that doing competitors are We BXC a currently capabilities we than AI a we one CRM customers. sales there is have system are one two targeting stand of that professional customers customers main systems of kinds last or different for

such CRM products BXC one systems [indiscernible]. consumer doing first for which second as BXB and The SOE does CRM they doing are is for enterprises, as the such systems is they are enterprises,

medicine. major with enterprises cycle We We BXC or and customers as choose cosmetic position long have actually targeting different have the such comparing customer whose players. end base trade other finance

advantage. position cycle position because of the chose those BXC we optimize to one our acquiring add enterprises that like the top deal. customers have have long to many customer’s whose We become there that competitive to cycle are we end the would the activities operating long from customer confident can are We why final regarding players

enterprises long to position we BXC So, with choose cycle. decided

Unidentified Analyst

Thank Okay. you.

Yilin Dai

Thank you. question. This is our your answers to

Operator

next go Thank comes from question Sachs. Please Tina you. Hou ahead. The Goldman with

Tina Hou

questions. have I So, four

Difficulty] is The first and question segments? CPaaS CPaaS. gross regarding And management UC CC could one the margin [Technical second then by is

So we now still much mentioned IPO, would probably very on business, focus we growth. have but not during then CPaaS that too strong it

quarter number thoughts the have guidance, slowed And third the regarding we the is do regarding the quarter CRM, on percentage. that? last the So, into any first the quarter one is CPaaS? updated revenue first much did has the How And in question the was second we then when then growth because integrate results? down from revenue

wondering what So, that is Thank main slowdown? or the main growth driver for you. reason

Steven Li

those Okay, answer questions. yes, will I

the think margins for XX%. question, for the around So, our gross is CPaaS first I for QX

business bit a higher than gross think and the margin it gross So, UC&C XX%. I between year the for the is the XX% for is CC for business. business is XX% little And to CC margin last

While the gross QX your is COVID-XX due year actually of for around I QX I this was XX%. XXXX the of QX is outbreak. XX%. the COVID-XX the quarter margin for the impacted Actually, that year, the for last think by to question, reason understand gross is The quarter is probably margins of mostly for XXXX first the

a good not in may numbers for COVID-XX. indicator the a are is be for in reported revenues of some quarters, of there revenue related are of recognized So, that company. different different the example, due gross scenarios quarter contracts But the Like this the a to the to some or XXXX. probably business margin first costs overall margin for very – the gross good quarter is for

increased for be our only or So But less for quarters little year margin whole we QX of for gross this – is for fully for our gross our will margin but gross bit expect margins line XX%. the with year And XX%. XXXX a expectations. than remaining overall original has the of in the XXXX

strategy business same been strategic to compared the CPaaS the the don’t focus has or have out business, question, CPaaS to second your For seek before. company’s you or

rather will revenue to CC our the total in business one had several business solution who big be major why one in was reason we mentioned mainly the CPaaS CPaaS have forward the for that the future demands strategic offerings combinations the total big significantly, CEO, very clients in As or the going for Sun of will due focus and the Mr. very still And increased QX our CC solution. of our QX. become CPaaS of the

we strategic changed but the not result, will that’s very large We – CPaaS strategic a those customers. as have big, revenue business. focus we reason for So, QX overall for our think why regarding business pretty our serve the increased that

finalized Your March. is completed We at CRM. the end or of question acquisition – actually regarding the third

So, starting be business. for from recorded there But QX from will were QX. our for no expect the revenues we acquisition included almost CC revenues in QX, this XXX%

prefer for very of So was great I the XXXX last I a due prefer increased of earlier, COVID-XX – the QX, Part to reason QX is, lot. question, revenue probably we mentioned by the thing as outbreak. impacted the mostly

rate overall that’s down compare of are far, of up at fluctuations year revenue the entire that in But this of we very beginning so slowed quarter, revenue for can – achieve confident So, the still previous year. the increased set the of XXXX, we this we growth the QX the revenue if bit. terms QX, year little increase you a why the versus

Tina Hou

very you much Thank management.

Operator

will question-and-answer no our the like would conclude back remarks. At questions, to for Yilin, over to Investor Relations this session. Showing turn conference any time, closing further this I

Yilin Dai

day you night. good with for Good call. Once and We again today’s to again, you everyone speaking soon. joining thank forward look

Operator

The concluded. conference today’s attending for you has now Thank presentation.

You disconnect. may now

Cloopen Group Holding Limited (RAASY) 10 Jun 212021 Q1 Earnings call transcript