RAAS - Earnings call transcript Q2 2021 | Cloopen Group Holding Limited

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Cloopen’s Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After prepared remarks by the management team there will be a question-and-answer session. Today’s conference call is being recorded.

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

Yilin Dai

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

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

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

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

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

Changxun Sun

earnings Cloopen’s joining quarter for call you thank second and everyone today. Hello,

again. second RMBXXX.X with representing increase million and guidance are year-over-year see We in coming revenues a excited to at in performance once quarter strong XX.X% the meeting

RMBXX.X decrease. reflecting loss XX.X%. Most now a robust significant second Our rose our importantly at quarter-over-quarter remained non-GAAP margins XX.X% quarter net million to gross

remained and on of total leading doubling the for than customer quarter billion to in of high We a our more the base first industry retention businesses CC approximately In ended center States months in XXXX noticed consideration. contributed unified by steady dollar the XX% services XXX% with time Our a margin revenue recent provider year-over-year second announcement of June CC revenue XX, US$XX.X communications than an for Zoom XXXX. more FiveX, our at approximately United and three made basis. contact acquire the rate

a Cloopen's in solutions large enterprise track. is large in insurance, enterprise CC business China player provides U.S. leading a to Cloopen, While solutions strategic industry the CPaaS focused heavily automotive from to banking, right industries, is on trends other signal This providing that customers the and clear transaction CPaaS FiveX on customers

evidenced in with to fast excited This footprint expanding primarily this doubling quarter. was revenues market are be huge growing year-over-year this of our solutions CPaaS of CC provided jump going will large to by We growth sustainable opportunities by drivers our deliver driven the to business its customers. Cloopen enterprise large CPaaS targeting our business develop a forward. greater for CC revenue. will We number value customers even believe enterprise continue of key business

featured also with the as also heavily of this client's acquisition, providing value companies to solutions product development customer new security needs. data We multiple clients' different on [indiscernible] security SaaS of data provides strategy physician we scenarios, we of BXC satisfy has deployment and and [ph] add hot growing conversion, become solutions products our to with product and specialize clients the and including aiding. topic concern regarding marketing discussion help communication look we tools, operations, perspective with model assist sales can empower aim user developing marketing including throughout business marketing. at sales are that We Data low security cloud execute to general from purchasing and a of security security. as [ph] the public's aware by the of efficient management, private key its Cloopen's local data as focused well

mainly For cloud does data have services to enterprise [indiscernible] private customers large access. provide Cloopen we not web which through

So through personally desensitize [indiscernible] identifiable operators compliance methods information. conversation But cloud requirements with use messages and not [indiscernible] text and we public we or do clients collect served clients [indiscernible].

addition, our service and security and protection to the position ensuring personal to in best-in-class we encryption sector. leading control high quality our ability security data and SaaS data data data run solutions products. utilize we strictly the In long clear solidifying our contracts enhance access have our contain provide continued disclaimer In data practices,

technology with and operations services, whom Cloud's While strategic our achieved steadily progress which and such Tencent platform solid also partnership as leading have a Cloud, we have Tencent Qidian, we as is WeCom. Tencent on business enhancements, as products Tencent through SCRM in well with growing enterprises, is

Our CC Tencent products Cloud's on products platform. are joint development now available

to receiving third quarter. with begun our in for be orders energy, a customer connect are partnership a and including of UC Furthermore, products expected have with products range the wide through launched for which Cloud governance. Tencent XMoor new interface, will WeCom's officially for industries manufacturing, We Cloud service social

collaboration products, call. joining our all position be peer As market our Thank with Changxun's further concludes our That you remarks. enhanced. industry will for prepared

the Now our and quarter financials. second Elite for over we our turn Steven with to call to integration would like of further view

Steven Li

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

communications high contributing center quarter. higher We Revenues robust based with business, solutions and are cloud contact and our based collaborations delighted total revenue. about now unified businesses cloud including of quality, our our solutions margin displayed this XX.X% results with the

ended approximately dollar Our XX, solid the at net months in remains customer June XXXX. three based XXX% rate retention

remarkable stronger and results integration with more pipeline yielded EliteCRM large product including enterprise customers. Our a

for we long-term and stable and As are refine deliver consistently and create growth we confident our our enrich in our base, shareholders. value our profitability, expand products, customer to ability bolster

technological integration layer level our on by and quarter. would in with We the a communications about of completed I product in-depth and and roughly second business to million portfolio. synergies began with as infrastructure, in application existing [ph] like First, second during the level strategic our materialize more CC, to attributable The CRM industry complementing vast integration RMBXX.X EliteCRM the capabilities EliteCRM revenue to EliteCRM. solid cloud EliteCRM's acquisition manifested of strings The our figures integration talk in the quarter. the

our Next, recorded strong We million, beating financial year-over-year, XXX.X% mainly this contributed XX% metrics by RMBXXX.X our CC our XX.X% increase revenues. totally around all the our let’s at the productions driven second quarter, year-over-year for which was quarter. impressive at a significantly increase. with results revenues performance look The business, were and to

of Our our thriving, customers. has CC and enterprise diverse to been number business enterprise increasing especially customers, large thanks

have active We XX, as XXXX June which medium companies. most sized of of XX,XXX and and are small customers approximately

end second quarter. enterprise steadily the growing of large is at with However, our roster customers the XXX customers of

enhancing due concentration low, Cost of a is revenues the increased rate resource our RMBXXX.X overall of basis, very primarily in to quarter stability. by increased year-over-year telecommunications to on customer second XXXX XX.X% Our million margin outsourcing million year-over-year as costs, gross costs, and the the XX.X% continues to quarter. and stable, profit the during to company by, XX.X% costs, business. the RMBXXX.X scale at stock its increased remained Gross

in quarter to share-based the RMBXX increase and RMBXXX.X and increase in R&D continues in an and quarter expenses with the quarter second for premiums the quarter employees primarily for the in second of of in million insurance XXXX, of XXXX, deduction increase to UC&C the an representing restricted XXXX, features for the second solutions. the RMBXX.X with (ph) social compared increase compensation and staff million, premiums issued compared increase the XXXX policies development to as core Now in loss G&A an expenses including expenses providers RMBXX.X quarter RMBXX.X as to RMBXXX.X and the increase business staff expenses RMBX.X million certain million, an to to shares compensation RMBXX.X with of increase quarter items increased marketing second and to million service of share-based increase expenses expenses RMBXX.X the in to in according during of XXXX XX.X% in RMBXX.X XX.X% and from XXXX, XXXX, due to from solutions million, from XX.X% in to RMBX.X XXXX an million driven compensation million base. RMBXX.X primarily second company the R&D in the XX.X% due benefited due RMBXX.X Selling XXXX, million increased of relief million, wider Net and of scale to RMBXX.X in to million customer company ordinary service the million by and of reach of eligible expenses an quarter second cloud-based of in by the expenses second were functions in share-based primarily quarter outbreak. non-core functions of of operation quarter second increases cloud-based moving XXXX. the a options cloud-based employees XXXX in a on million. development to insurance of was CC RMBXX.X non-cash by second of in share-based business million million million acquisition, in solutions RMBXXX.X relating expenses increases operating expenses, from long-term investments of in management granted in of increases outsourcing compensation technology of by and for social in expenses an impairment increased primarily in government's directors share of features the second the UC&C loss COVID-XX paid quarter its the

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

Operator

Citi. from Instructions] comes Mark question ahead. first [Operator Please go with Li The

Mark Li

advantage clients also Could I Mark is also EliteCRM you comp the and the quite performance business if like about and share that growth strong on this exclude QX And Li of what the industry? you. CC of you organic we in for Citi. to could has new growth? UC&C from you the Tmall been strong. could want Congratulations ask quarter, that the share about getting this results. the contribution Hi, Thank are be

Steven Li

Steven. Okay, is this

revenue increase like much before, For between to and increasing mentioned Xmoor. UC&C compared we UC&C the faster is Xmoor

XX% this increasing Xmoor, I quarter, think think than increase quarter. for Xmoor around XX% for second and roughly is for so for investment this quarter I as the the much XXX% UC&C for to the bigger

also revenue revenue is the million second EliteCRM. this UC&C and question, actually reminder, generated one for $XX from for included Just about your

quarter to out this the our business increase I if for or CEO. pass from will second the take example new the XX%. for the CC of some for Well, of we quarter, revenue our So this question then number the is for still over EliteCRM customers added as

Mark Li

Sure, and congrats thank you again. management very much

Changxun Sun

brief. it translate will in I

enriching continuously products two in and functional sales relies Our factors, marketing mainly models. superior growth team, and our our CC is another and on one is

to Our improve efficiency acquisition is target for retention and its clients. rates and the customer

So, and We we all take including on this banking, customers from specific in provide are services, QX can financial conversion currently names reveal The next time. and to customers other convenient efficient marketing. the mainly not brokers and situations. new question. sales acquisition and go the very customer at are The

Operator

Thank you. with Please ahead. The Mira go CICC. Lee from comes next question

Mira Lee

I'm going to translate myself quickly.

first one regarding quarter. second see future growth future a We The of business. strong the is in business

update information the fluctuations business? experienced of my education sector, recently. you could the SCRM progress And So regarding more is which second CRM about has online question and some

first impact And number of the our we decreased has of that active on customers business? third the the education compared question the noticed quarter. slightly is what industry to online is, So the

the my the about last in So more? gross could products, of of information could three your give you you you Thank as share such us is, margin terms and customers of more question And two segments? UC&C number CPaaS, breakdown by

Changxun Sun

very second believe begun We RMBXX more between industrial synergy is in division in SCRM that on main customers apparent. the company revenue clarity to was emerge CRM of The million and contributed the business later integration smooth has and The this and digital become strong currently. will products over quarter.

still of and which are our business the industrial and SCRM new is doing Our its division, initial before marketing services in we Xmoor division. both SCRM digital Cloopen named phase, and in

and version SCRM third in revenue quarter. some to has quarter we true on to automotive its target in have its is banks, these already For and began and [ph] insurance, established quarter. establish the Xmoor, in will UC&C first it the industries, first second three demo focus And this

Steven Li

up? there a follow Was

Mira Lee

of second the for And CICC analyst…? question

Steven Li

Okay. questions. Yes, other the I'll three answer

now, regarding the yet. education sector, really impact the is policies question the our second of the not As The of what's for is recent impact business? there

half business the CC we second will expect our our for normal. of be operating But during probably been have So minor some CC business impacts year. there as the for we

focus we account certain education on of during sector revenues for mentioned don't lot we The X% revenues. about a of on We call, rely As the our total different from industries. industries.

minor this. expect be So impact some will there we would about

been have industries. doing other in We very good

for target of the as beginning year is our same So the still the this year.

is The the our customers. in terms regarding third total decrease of active question small

CPaaS CC for While business those actually is the is XX%. very second compared margin And actually small the mentioned some customers during will the and who around for continue into our trend like each for this the is XX%, past gross QX a the are for into our the XXXX in XX%. decrease out small our revenue not of very of really future. for contributor, margin enterprise small last quarters lines. are is several worse is resources And gross question very terms the company for regarding number of reason UC&C roughly business gross customers. to call, have because for business been And increasing for But higher who we customers, XXXX. the this quarters we of gross business about the The of the the large the quarter is we for of expect major margin the XX% took previous lot margin ROI, investing very

Mira Lee

Okay, thank you.

Operator

Okay, from go Sachs. ahead. Goldman comes Instructions] you. Tina with [Operator next Hou Please question thank The

Tina Hou

[Foreign Language]

Steven Li

Okay, will last look. answer questions first and question, take let Yes. need we to three me think for I your a the I

tailor the reason I increase the the question based our it's and solutions, regarding UC&C are now And customers security licensing -- of most for the customers recurring of business. a enterprise about revenue, the the enterprise really due to the data with business like compared CC now, revenue of to preferred regarding Yes, So and is solutions the more half terms a due product CC revenue. especially main policies governments. first issued private to the large much to the mentioned in considering right is half. cloud cloud-based to made, the or large as especially the the UC&C our be still honest, of by have public recent And

So -- for protect will solutions the us, the same large we and for get come that time, most will of with up the revenue as at to cloud customers meet think their to our recurring enterprise we as to continue are public security to I from demands suitable model. data much possible

regarding is The the second timetable. breakeven question

we right this cloud I As the been market company to for one since business, have the is conditions -- number market priority of [ph] -- for based our mentioning share. and stage IPO our think get now considering still more China's meditation of the the development

most terms breakeven are in improvement we of the concerned productivity. So is of I point, think of our the

efficiency can -- that's for by the our think the products, have financial -- our I the operating very quarter, evidenced our you second results significantly. and improving see probably been productivity

probably where mentioned timetable during call, than a point we sooner terms result, point get clear we breakeven our what a the will a to we in can't the give on but basis. come very quarterly of breakeven as So can expect we

the need I Oh add of what a second third products prospective, sales percentage also revenue company mean to invest more The the to G&A know third to G&A there the continue team our lot expenses reasons certain is, why to in our functions. all, general question features and decreased the to to -- I order as regarding surpluses of the gets invest more in quarter. two is expenses, total to RMB we, a terms for as well think customers continue these a in in you of to as the terms of in get on continue are sales question? will marketing expand and level we we first

some or next the I related And we'll in one-time are think acquisition happening this another IPOs I is three the related the quarter. our minority be are of very not either of there to reason years. holdings to to for terms stable some costs, in two think

decreased are very think And last the quarter. why this of answer the the total very question. two G&A I expenses percentage revenues Yilin for So those question, will last the reasons

Yilin Dai

reasons. Yes, the number mainly shares outstanding two is of and increase because of

EPS The shares on a time calculated based is is of a because weighted outstanding one up on first average basis.

shares lifted calculated XX so million, we shares led XXX of in in February be the just before, on lifted in not new the number second our higher also it our a the So shares because will second to EPS common million quarter. huge got so million February, on and should be issued into preferred are number preferred X, the we shares shares and day in And diluted we around that turned a it outstanding shares little XXX increase of fully quarter. than in are

Operator

answer question? that the to the Did conclude

Tina Hou

Yes.

Operator

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

Yilin Dai

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

Cloopen Group Holding Limited (RAASY) 11 Aug 212021 Q2 Earnings call transcript