Cheetah Mobile (CMCM) Q3 2025 earnings call transcript

I would now like to turn the conference over to Helen, Investor Relations for Cheetah Mobile. Please go ahead, Helen.

Thank you, operator. Welcome to Cheetah Mobile's third quarter 2025 earnings conference call. With us today, our company's chairman and CEO, Mr. Fouchon, and our company's director and CFO, Mr. Thomas James. Willing management prepared remarks will welcome back to Q&A section. Please note that management's crave will be presented by an AI agent. Before we begin, I refer you to the State of Harvard Statement in our earnings treaties, which also applies to our conference call today, as we will make forward-looking statements. At this time, I will now turn the conference call over to our Chairman of the City-owned Mr. Fushyuk. Please go ahead.

Good day, everyone, and thank you for joining Cheetah Mobile's third quarter 2025 earnings call. I'm Fusheng, the CEO of Cheetah Mobile. I'm very happy to report that our turnaround efforts are paying off. We hit quarterly break-even ahead of expectations. In Q3, we made an operating profit night at first time in six years. We believe we are well positioned to approach break-even for the full year 2025. At the same time, our growth stayed strong in Q3, building on the momentum from the first half of the year. Q3 revenue rose 50% year-over-year, driven by both our Internet business and our AI and other businesses. Our AI and other segment grew even fast, up 151% year-over-year and 6% quarter-over-quarter, and now presenting 50% of total revenues.

So far, 2025 has been a solid year for Cheetah. Revenue in the first nine months rose around 48%. It became profitable in Q3 and took important steps in our two AI focus areas, AI robots and AI tools. We believe this progress shows our investors were right to trust our vision and work. I want to thank our shareholders for their support. I know many of you invested in Cheetah because you believe in our ability to deliver a comeback. We are working hard every day to make that happen. I remain fully committed to leading the company forward, and our results this year show that the turnaround is real.

Looking ahead, we will focus on driving growth by building new growth engines through our AI initiatives, AI robots, and AI tools. Today, I will talk about our vision and progress in these areas. Commerce will follow with more on how we are building a lean-cost structure to support long-term profitability. Both AI robots and AI tools have enormous market potential, and Cheetah Mobile has strong advantages to build new growth engines in these areas. Additionally, we hold minority investments in several companies in this space, which could extend our organic growth in the future. In Q3, our AI robotic business contributed about 15% of total revenue, growing about 100% year-over-year and 40% quarter-over-quarter. We see two drivers of this growth.

First, strong demand for our voice-enabled wheel robots in China. In Q3, for the second quarter in a row, revenue from these robots doubled year-over-year. They now make up around 5% of our total revenues, supported by both repeat orders and new wins. As of September 30, 2025, the contract backlog for these robots in China was up 32% from the previous quarter. Since then, the backlog has doubled again, reflecting sustained demand. These trends make us comfortable for a continued strong yield weight growth in our revenue from these robots in the fourth quarter. Why is demand rising?

First, more customers are open to using robots, and today, wheel robots are the most reliable and cost-effective option for large-scale deployment. But more importantly, product experience is getting better. AgentOS, our voice system powered by AI agents, gives our robots a smarter brain to understand and respond more naturally to people. That improved experience allows us to charge a premium even in a competitive market. Most of our revenue growth came from higher shipment volume. We believe Agent OS not only enhances user experience, but also strengthens our leadership in voice-enabled robots. Our voice-enabled wheel robot, which integrated with Google's Gemini 2.5 Flash, was recently featured by Google Cloud at its AI Asia Conference. We believe this is a strong sign of endorsement.

We are continuously upgrading our AI agent capability and applying it to our products. Looking forward, we think these robots can do even better overseas as we combine third-party gen AI and multimodal models with our strengths in voice AI and autonomous mobility to drive real-world applications.

Hello everybody, this is Helen from Cheetah Mobile. I think there are some tax issues. Then we're called that Cheetah Mobile. I will just erase the place to receive, always prepared remarks. Very sorry for the inconvenience.

Good day everyone. Thank you for this growth. First, strong demand for our voice enabled wheel robots in China in Q3. For the second quarter in a row, revenue from these robots doubled year over year. They now make up around 5% of our total revenues, supported by both repeat orders and new wins. As of September 30, 2025, the contract backlog for these robots in China was up 32% from the previous quarter. Since then, the backlog has doubled again, reflecting sustained demand. These trends make us comfortable for a continued strong ULA growth in our revenue from these robots in the fourth quarter. Why is demand rising?

First, more customers are open to using robots, and today real robots are the most reliable and cost-effective option for large-scale deployment. But more importantly, product experience is getting better. AgentOS, our voice system powered by AI agents, gives our robots a smarter brain to understand and respond more naturally to people. That improved experience allows us to charge a premium even in a competitive market, but most of our revenue growth came from higher shipment volume. We believe Agent OS not only enhances user experience, but also strengthens our leadership in voice-enabled robots. Our voice-enabled real robot, which integrated with Google's Gemini 2.5 Flash, was recently featured by Google Cloud at its AI Asia conference. We believe this is a strong sign of endorsement.

We are continuously upgrading our AI agent capability and applying it to our products. Looking forward, we think these robots can do even better overseas, as we combine third-party gen AI and multimodal models with our strength in voice AI and autonomous mobility to drive real-world applications.

Second, our robotic arm business is growing steadily, supported by three key industry trends. Number one, in manufacturing, collaborative robotic arms are becoming more and more popular because they're smaller, easier to install, and more affordable. They're also safer to work with. So they help fill many unmet needs in factories, like doing tasks that need flexible movement, careful and precise work, or real-time feedback. These tasks now rely on human workers today. Number two, in commercial spaces like coffee shops and smart retail, because of advances in lightweight design and easy programming and built-in vision of feedback, we're unlocking new use cases. Our team's ability to understand real-world needs and build practical products gives us an edge. Number three, robotic arms are a core part of embodied AI.

As global demand for physical AI grows, we believe robotic arms will play a key role in bringing AI into the real world. We strengthen our robotic arm business through an acquisition demonstrating our strategy of combining organic growth with M&A. This business is a great fit for us. It is already profitable with tens of millions of RMB and annual revenue, most of it from overseas customers. By bringing this company into our group, we've expanded our product line and strengthened our presence in global markets. More importantly, we've started testing how to combine our real robots with robotic arms to create a mighty AI that can handle more complex real-world tasks. It's still in early days, but our CREG foundation in both technology and product development puts us in a strong position to grow in this space in the long run.

Moving on to AI tools. This is another area where we see long term potential. We're using AI agents to quickly build a variety of new tools for both PC and mobile, and we're also upgrading some of our existing products with AI features. For example, in one of our legacy products, Google Activirus users can now interact with their PCs through natural language to complete task-like system settings. No need for complex learning of steps. In small-scale testing of other tools like meeting summarizers, we've also seen strong user engagement and good willingness to pay. What makes this space exciting is that AI coding apps have greatly reduced the time and cost it takes to build and launch new products.

This gives us the flexibility to test many ideas quickly and focus on what works. While we're still in early stages, we believe our strength in building user-friendly, tool-based apps, especially with the help of AI agents, puts us in a good position. And since subscriptions already make up more than 60% of our Internet revenue, we're confident in our ability to monetize future products through the same model.

To close, I believe Cheetah has moved beyond the turnaround phase. Looking ahead, our focus is on building long-term value by scaling our AI robot business and capturing the upside of AI-native tools. While we're still early, both segments have real momentum and strong potential to drive growth in the years to come.

Thank you, Kusha. Hello, everyone, and thank you for joining the call. On the satellite stadium, all financial favors are presented in RMB. In the third quarter of 2025, we are pleased to reach an important milestone. We reported our first quality operating profit in the past six years. This achievement reflects the disciplined execution of our team and the continued improvement in our operational efficiency. Operating profit was R 4 million in the quarter On a non basis operating profit reached R 15 million compared with an operating loss of RMB 60 million in the same period last year and an operating loss of RMB 2 million in the previous quarter Let me walk you through the key financial results in the quarter.

Total revenue reached RMB 287 million, about 50% year over year, driven by 151% growth in our AI and other segments. This segment accomplished for 50% of total revenue, compared with 30% in the same period last year. Our internet business remains stable, with revenue increasing 6% year-over-year in Q3. Gross profit increased by 64% year-over-year, and gross margin improved to 75%, up from 68% in the year-over-quarter. Operating profit improved to R&B 4 million compared with an operating loss of R&B 7.62 million a year ago. On a non-back basis, operating profit was R&B 15 million compared with an operating loss of R&B 60 million last year. A segment, our internet business delivered approximately RMB 21 million in adjusted operating profits in this quarter, up 55% year over year.

Adjusted operating loss for our AI and other segments narrowed by 82% year over year, at 53% quarter over quarter, to RMB 15 million in this quarter. On the balance sheet side, our financial position remains strong. As of the 30th of September 2025, the company has cash and cash equivalents of about $224 million and long-term investments of $107 million. We continue to maintain this airplane in cash flow management and capital allocation.

Looking ahead for our internet business, we will continue to deliver robust operating profits. We want to be clear that we prioritize operating profit growth over revenue growth. For our AI and other business, we also aim to further manage our costs and expenses to a more focused and efficient approach.

First, we are focusing on high potential use cases for our robotic business. This is the only way to build sustainable and profitable business models. We concentrate on AI-powered, voice-enabled wheel robots, products that have proved to deliver a highly competitive ROI, achieving alternatives for reception, museums, and exhibition scenarios.

Second, we leverage third-party and open source models and tools to enhance our robot experience. This approach allows us to accelerate product updates, thereby increasing our overall efficiency. Third, for our advertising agency service and multi-cloud management services, we are taking a more disciplined approach. We will continue to invest in AI robots and AI tools. As we believe these two areas will drive our long-term revenue growth. However, we will stay disciplined and otherwise focused in every decision. I believe Cheetah has answered a much better phase compared with a year ago. In product development, as we shared in previous calls, we encourage our employees to use AI tools, such as I coding apps to build their own AI, not only to improve productivity, but also to enhance decision-making.

Leveraging AI allows us to develop products faster and operate them with fewer people than before. Most importantly, with the AI opportunity, the business improvements we have achieved over the past year, and growing recognition from the customer market, we are seeing renewed confidence and momentum across our teams. I personally believe these changes, stronger execution, disciplined investment, improved efficiency, and an inspired team from the Foundation for Cheetah to reveal this success in this new chapter. Thank you. We are now happy to take your questions.

Thomas Wall, I'll answer this question. I think that over the years of investment, Cheetah Robotics has become increasingly clear about its own positioning. One is the voice interaction type robot, and the other is the robotic arm we just acquired. In essence, it's a collaborative robot. I think both of these markets have very broad development prospects. You just asked which ones are rigid demands and which ones are optional scenarios. Well, robotic arms, people may be more familiar with them when they hear about it, as they have relatively many applications. However, the Zhongwei robotic arm we acquired is not mainly for pure industrial scenarios. Instead, it is more applied in many service-type scenarios and a lot of new exploration scenarios.

It has its own market positioning. Currently, the market for robotic arms is growing relatively fast overseas. Moreover, with relatively little investment in our robotic arm business, we have achieved very stable growth in the overseas market and relatively good profits. I think if we talk about a rigid demand market, the market for this six-axis or seven-axis collaborative robotic arm will be a very fixed, rigid demand market. The second is voice interaction, integration. Frankly speaking, in the early days, due to the fact that AI technology was not advanced enough to truly understand language, market size of voice interaction robots remained small, and the growth was also slow in previous years. But starting from this year, yes, we've seen a huge leap in interaction capabilities brought about by GPT, like large model technologies.

So now I think voice interaction robots have started to shift from an optional scenario to a rigid demand scenario. Because in some scenarios, they can reach the interaction level and experience comparable to that of humans. So we can see that not only our company is growing this year, but also the entire market, including our competitors. This is indeed a growing market, not just the growth of our individual company.

So I think this market is moving towards a rigid demand market. Of course, its current market size is not particularly large, but I believe that with the continuous improvement of the experience, sometimes it's like this. When the experience is not good enough, it remains a non-rigid demand market. When the experience exceeds the user's usage threshold, it becomes a rigid demand market. Yes, like voice-activated phone dialing has been around for many years, but it was not until the emergence of GPT-like technologies and AI-based voice assistants like Alexa that it really started to become a rigid demand. So we are very optimistic about the overall development next year and in the future.

So this year, we believe that both our robotic arms and voice interaction robots will grow. And regarding the market space, I'd like to add that due to the enhanced capabilities of large language models, in the past, it was difficult to make voice robots work well across languages. For example, it was hard to develop a Chinese-based voice robot and then adapt it to English. The workload was relatively large, and the adaptation difficulty for different languages in various regions was quite high. But now, with large language models, they are essentially natural translators being fluent in multiple languages.

So I think our voice interaction robots will have a better market space overseas next year. In terms of current customer acceptance, generally speaking, it has improved a lot compared to the past. And I still firmly believe that the product experience is the core driving force for growth. That is, as we continuously improve the experience, the customer acceptance will also keep increasing. Okay, thank you.

Regarding the outlook on whether the company can sustain profitability in the medium and long term, I think it will still be affected by many external factors, including the market environment, the speed of product iteration, user experience, and user feedback. However, regarding how the company internally balances continued investment, maintaining profitability, and cost control space, our internal strategies for the two business lines are relatively clear.

First, we ensure that the Internet business can provide a stable profit base. Second, in A and other businesses, we aim to control losses and increase efficiency. Assuming different from other new businesses, we strive to narrow losses. To elaborate in the Internet business as it is our cash flow business and our goal we not only aim to maintain profitability but also to enhance our profit ability through refined operations Specifically from two dimensions one is more refined cost management We will continuously optimize various costs including servers bandwidth and operating expenses through technological upgrades and improvements in process efficiency ensuring that every penny of our investment generates the maximum value and that the operating profit margin remains at a healthy level The second aspect is continuous product optimization and AI empowerment.

We will integrate AI technology into our existing Internet products to improve user experience, distribution efficiency, and personalized service levels. Through this better user experience, we hope to convert it into higher user stickiness and payment willingness, thus driving healthy revenue growth. So for the Internet business, generally speaking, we increase revenue while reducing costs, walking on these two legs to continue to stably generate profits.

As for the second business line of AI and other businesses, let's first look at the robot business strategy, which is also quite clear. One is to focus, and the other is to improve efficiency. In terms of product form, we will focus on high-potential product forms, concentrating resources on products like voice robots that can run through a viable model.

We have seen that in scenarios such as reception halls and museums, it has proven its value. We will also focus on expanding into the store-related track to ensure that the investment can bring tangible returns. In terms of the technological path, we will flexibly combine open source models, third-party models, and various open source tools, leveraging existing mature resources to reduce our R&D and computing costs.

This enables us to iterate and improve the product experience and capabilities more quickly and cost-effectively. In addition to the robot business and AI and other businesses, we also have cloud services and advertising agency businesses. For these B2B businesses that require refined operations, we will focus on aspects such as contract quality, delivery efficiency, and the value brought to customers.

Through these means, we hope to steadily increase the growth profit margin and net profit margin of these businesses. Also, as mentioned in our presentation, our company actually encouraged all employees to use I-assisted tools in various internal businesses. We hope that in the future, this can also improve the effectiveness of each business line and reduce R&D costs.

I'd like to add that first, there is definitely still room for further optimization in the cost structure. I think the most effective way to optimize it today does not come from management methods, but from technological means. As Thomas mentioned, we are truly implementing all employee programming. Everyone writes code, even Thomas. Of course, this is not to have him contribute to our product, but to use this method to improve our work efficiency through AI. This has been infiltrated in all aspects.

We just released a financial report video today, which was entirely made by AI. It used to require 3D rendering for such technology. So we think we are relatively early on this path and have indeed seen results, but I think there is still further room. Thank you. Cost is one aspect, and on the other hand, it will greatly accelerate our R&D efficiency.

Regarding what you just asked, such as the balance between profitability and business investment, we think our internal R&D efficiency will be much higher than before, and the R&D cost of new products will be much lower than before. This gives us more opportunities to experiment, because in this new era of I, to be honest, No one really knows exactly what will work. But for us, our experimental cost is much lower than before.

I think Cheetah Mobile will no longer experience an era like in the past when a large amount of R&D expenses were invested in a single product. So there's definitely room for optimization. At the next stage, we don't think that focusing on profit as the core is our main pursuit for now. because if we see good AI opportunities, including the robot market, which has been continuously proven by the market to be growing rapidly, we may also increase some investment.

Of course, we will balance this relationship well, ensuring both the safe and sustainable development of the company and seizing new opportunities. I think this is our overall business strategy, seeking innovation and stability. This is probably our current goal, so we don't have a specific so-called digital profit target for now because we think there are still many opportunities, and this is our current view. Thank you.

The robotic arm business we acquired has now become part of us. We invested in this company very early, so there was a great deal of communication regarding its overall business strategy at that time. I think the reason we acquired it was essentially that this B2B business is very pragmatic. It doesn't pursue scale, but rather pursues profit. From the very beginning, it has been seeking customers who can bring real profit instead of simply chasing scale and continuously raising funds.

So it has several characteristics. The first is that its revenue mainly comes from overseas. It was one of the earliest Chinese robotic arm companies to go global. Second, because it targets overseas customers, it has accumulated a certain amount in terms of overseas channels and communities. This kind of accumulation actually takes time to solidify. Building reputation and brand overseas can't be achieved simply by cutting prices.

Third, due to choosing such high-quality customers, it attaches great importance to quality. The quality is truly refined bit by bit. After all, the robotic arm is essentially a hardware-based product, and there are so many details to be polished. The improvement of quality requires a lot of effort, not just a simple design drawing. That's why it can ensure a very good profit margin and continuous growth. Speaking of core competitive advantages, the first one is a customer-centric corporate culture. The second is that due to its early start, it has established overseas channels and user reputation. As long as we continue to strengthen in this direction and combine the latest technologies to achieve rapid iteration, I think these should be the advantages.

Anyway, I've always thought that embodied intelligence is a rather broad concept. I believe that anything combined with camera-based movement can be called embodied intelligence. There isn't a particularly clear-cut definition. We've always been paying sufficient attention to this area and taking action. But as you probably know my view, I've always thought that there's still a long way to go for purely humanoid robots to achieve commercial implementation. However, the application form of combining wheels and robotic arms, I believe, will unite commercial implementation opportunities earlier than humanoid robots. But regarding today's large language models or today's AI, I don't think the software technology has reached the point where the product form I just mentioned can truly achieve large-scale commercial implementation.

So our current strategy is to separate the two. If you look around, the robotic arms, with the support of some open-source communities, are doing quite well. For our robotic arms, I hope we can explore more landing solutions with our customers by adding vision-based solutions to the arm.

Regarding the wheeled robots I just mentioned, as for the combination of the two, I think it still depends on the scenarios. There are a great many small technical details involved, which I won't go into here, as it would take a long time to elaborate. For example, when installing the arm on the robot, there are issues such as load, bearing capacity, battery life, and the space stretching problem in different scenarios. These aren't simple to solve with just a good-looking plan. Our robots will surely be a key strategic focal point for us next year. We'll definitely invest a great deal of energy in this. But as for the specific product form, we're still in the process of internal exploration.

There isn't a particularly clear-cut product form of the so-called wheel plus arm combination. There are internal experimental projects, but currently there's no plan to launch them onto the market.

Well, currently in the overseas market, there are only a few major large language models to choose from, like Google, OpenAN, several others. The reason we integrated with Google is that in terms of the end-to-end performance from voice input to the final answer output, Google is indeed globally leading at present. This is a very important reason for our cooperation.

Of course, Google also welcomes it very much. We've participated in some of their summits and such. I think due to the rapid evolution of large language model capabilities, the voice interaction ability has also advanced by leaps and bounds. As I mentioned earlier, for RRC's robots before the year, before last and last year, we didn't even turn on the voice function. Because to truly achieve an interaction ability that meets user experience, there are a great many things to do, whether it's multilingual support or other technical aspects.

But now, with the multi-capabilities of large language models like Google's, especially the end-to-end performance from voice to the answer, it provides us with a very good basic platform for improving voice interaction ability. So I've always believed that starting from next year, there will be an explosion in the development of robots and various AI applications. Because I think the capabilities of large language models have truly reached a level suitable for commercial use.

In the future, we will definitely maintain an open attitude. We'll consider using any good models available globally. As we define ourselves as an AI application company, whether it's software applications or robot applications. As I also said just now, I think such cooperation will be very beneficial for our global market expansion. Our multilingual capabilities have improved significantly compared to before, and we will soon start to expand globally.

Thank you.

Currently, we first focus on integrating AI into our existing products. This can be divided into two parts. One is to use AI-based programming tools internally to improve our production efficiency. This significantly reduces the cost and shortens the iteration cycle when we truly start to experiment with AI products. On the other hand, we take a more practical approach by integrating AI into our original products. Take Kingsoft antivirus, for example. It has a history of over 20 years. It used to solve computer problems for users through buttons.

Now, if users have minor computer issues, like my mouse isn't working, what should I do? Or my computer won't go into sleep mode, what can I do? They can directly ask. Instead of just getting a text prompt, the product will directly diagnose the problem on the user's computer and even write code to solve it. This feature has already been launched, and user experience has been quite good.

So by integrating AI into our original products, on one hand, we can improve user retention and word of mouth for our original products. On the other hand, it allows our team to have a better understanding of what kind of agent is acceptable to users, which helps us prepare for creating a blockbuster. After all, creating a blockbuster ultimately depends on the team's AMD capabilities in the AI era. This provides an opportunity for the team to practice.

Just like TeamSoft Antivirus, we've also incorporated a lot of AI elements into products like PDF software and desktop wallpapers. To sum up what I said earlier, for our AI tool products, first, we integrate AI into our existing products, which already have hundreds of millions of users. We use AI to enhance the experience and efficiency of these original products, thus attracting more users.

At the same time, through this process, we train our team to think more in an AI-centric way, hoping to create blockbusters in new product directions. Regarding creating blockbusters, as you asked, we also adopt a small team approach. For example, in the past, an APP development team might have been around 10 people. Now, we let teams of two or three people conduct some experiments. We divide them into several groups, and there are currently some internal experiments underway. We hope that through continuous attempts, we might find a higher possibility of creating a blockbuster. Thank you.

Yes, regarding our Internet business in the fourth quarter, from the perspective of revenue and profit, we expect the Internet business to basically maintain a level comparable to that of the third quarter in the fourth quarter. Of course, this also means that compared with the same period last year, we expect the Internet revenue to decline to a certain extent year on year in the fourth quarter. This is mainly because advertising-related products continue to be under pressure from the macroeconomic environment, and their performance fails to meet expectations.

However, the internal structural optimization trend of the Internet business is very clear. In sharp contrast to the weak advertising revenue, our user-paid revenue is expected to continue to maintain strong growth. In Q4, it is expected to grow by more than 10% year-on-year. The driving force behind this growth also reflects the fundamental change in the revenue composition. In the just past third quarter, user paid revenue already accounted for approximately 70% of our total Internet revenue, providing core support for the stability and profitability of our Internet business. Although the Internet business may decline year-on-year in the fourth quarter, I would like to emphasize that there has been a relatively significant shift in the business structure of our various mobile businesses.

The proportion of revenue from other businesses reached nearly 50% in the third quarter. Overall, we expect that the overall total revenue in the fourth quarter of 2025 will still achieve year-on-year growth, indicating that our project-driven strategic transformation is effectively offsetting the market volatility of traditional businesses and becoming our new growth expectation.

As I've mentioned before, for our AI-related work, we mainly focus on integrating AI into our existing products. Take Kingsoft antivirus as an example. After so many years, we've transformed it into a tool that can automatically solve problems based on your computer situation, just like a real computer repairman. It can only handle software issues, though. For hardware problems, it will just inform you that the hardware might be faulty. So far, the feedback has been quite good. Both its usage rate and user satisfaction are relatively high. To be specific in terms of user satisfaction, the level achieved by AI-assisted problem solving is almost on par with that of manual assistance.

There's still a slight gap, but it's getting very close. And previously, manual problem solving was a paid-only service. Another example is our wallpaper-related product. In the past, users could only download pre-made wallpapers from the Internet, but now we can use AI to help users generate wallpapers. The effect is also very good. However, it should be noted that these functions are still subject to certain limitations. For instance, generating a wallpaper still incurs a relatively high cost in terms of video tokens, costing a few yuan. But overall, user feedback has been positive. These are the directions we're working on.

As for the types of tools we'll focus on in the future, we believe it will be in the direction of improving users' productivity, or more precisely, the efficiency of using a computer. Take Kingsoft Antivirus, which was originally a security software for virus killing. Now, it helps users solve problems encountered during computer use. Previously, users might have to seek help from others, but now, with the AI assistant, these problems can be solved, thus improving the efficiency of using a computer. Similarly, for our PDF-like software, it can help users improve efficiency in aspects such as document generation and even reading. Generally speaking, we are moving in the direction of enhancing the efficiency of using a computer as a production tool.

This is the direction of our efforts. Thank you.

Well, thank you very much for your question. If Cheetah can enter a stage of long-term and stable profitability, we will definitely start to consider and plan how to give back to shareholders and enhance market confidence. A potential direction could be that after achieving continuous profitability, we might consider setting aside a portion of the profits for a shareholder return plan. However, at this moment, since we've just started to make a profit this quarter, we haven't conducted a systematic and detailed study on things like dividends or share repurchases within the company.

I think it would be a more responsible approach to shareholders to observe and verify the stability of our financial performance for a while longer. In addition, as we've mentioned several times before, our core strategic goal is to become a high-growth company. We believe that robots are the core of Cheetah's long-term future value and also the focus of investors.

Our robotic business is still in an investment stage and hasn't achieved profitability yet. Moreover, we don't rule out the possibility of encountering excellent investment or cooperation opportunities, similar to some well-known cases in the future, or making R&B investments in new products related to AI and robots. All these require us to have sufficient funds to support future innovation and growth. Therefore, when balancing high-growth investments and shareholder returns, we will adopt a relatively cautious attitude.

We will ensure that we have sufficient resources to drive the development of the core robotic business. When the time is right, we will put the shareholder return plan on the formal agenda. Thank you.

I'll answer the questions regarding Hong Kong listing. We've always been actively researching and paying attention to the possibility of listing in Hong Kong. However, at the current stage, Cheetah does face some challenges in reality. On one hand, our current market value hasn't met the relevant requirements. On the other hand, due to our Class A and Class B voting rights structure, according to the regulations of the Hong Kong Stock Exchange for a secondary listing in Hong Kong, there are even higher requirements in terms of market value and profit. Therefore, the key to achieving this goal is to make greater breakthroughs in our market I will turn the call over to management for a separate listing.

Regarding your question about whether we will spin off the robotic business for a separate listing, currently, since we just completed the acquisition in China last quarter, at present, we are focusing on promoting the integration of the robotic business to give play to the synergistic effects between robots and Gigabyte. In the meantime, we haven't considered a separate listing for the time being. At the same time, regarding the capital operation, the platform of Cheetah's listing on the New York Stock Exchange is a good supplement for the internationalization of the Cheetah brand and the expansion of overseas businesses. So, for now, we haven't considered any new moves in the U. S. market. However, we have noticed that especially this year, the Hong Kong market has been getting increasingly hot and has shown great potential as an important financing channel.

It may also bring more capital inflows to the company. Therefore, we will continue to evaluate various possibilities to optimize our capital structure.