Youdao Inc (DAO) 2024 Q3 法說會逐字稿

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（技術難度）

From operations in the same period of last year. I am confident that we will achieve full year operational profit profitability this year.

從去年同期的經營來看。我有信心今年我們將實現全年營業利潤獲利。

Looking ahead, we are committed to the continued implementation of our large language models. We have to enhance user experience and create a greater value through digital content services, AI driven subscription services and smart devices. In our online marketing services. We aim to explore new domestic opportunities while also expanding internationally to better support client success. Lastly, financially, we remain dedicated to prudent operations and strengthening our profitability.

展望未來，我們致力於繼續實施我們的大型語言模型。我們要透過數位內容服務、人工智慧驅動的訂閱服務和智慧型裝置來提升使用者體驗，創造更大價值。在我們的線上行銷服務中。我們的目標是探索新的國內機會，同時拓展國際業務，以便更好地支持客戶的成功。最後，在財務方面，我們仍然致力於審慎經營並增強獲利能力。

With that. I will turn the call over to Su Peng to provide you with more detailed insights into our financial performance. Thank you.

就這樣。我會將電話轉接給蘇鵬，為您提供有關我們財務表現的更詳細資訊。謝謝。

Thank you, Mr. Zhou and hello everyone. Today, I will be presenting some financial highlights from the third quarter of 2024. We encourage you to read our press release issued earlier today for further details.

謝謝周先生，大家好。今天，我將介紹 2024 年第三季的一些財務亮點。我們鼓勵您閱讀我們今天早些時候發布的新聞稿以了解更多詳細資訊。

For the third quarter, total net revenue RMB1.6 billion or $224.1 million, representing a 2.2% increase from the same period of 2023. Net revenue from our learning services were RMB767.9 million or $109.4 million, representing a 19.2% decrease from the same period of 2023.

第三季淨收入總額為 16 億元人民幣（2.241 億美元），較 2023 年同期成長 2.2%。我們的學習服務淨收入為人民幣 7.679 億元（1.094 億美元），較 2023 年同期下降 19.2%。

The year over year decrease reflects our commitment to a more selective customer acquisition approach, prioritizing higher ROI- return on investments engagements. This strategy has helped enhance our overall resilience and efficiency of our business.

同比下降反映了我們致力於採取更有選擇性的客戶獲取方法，優先考慮更高的投資回報率。這項策略有助於提高我們業務的整體彈性和效率。

Net revenue from our smart devices where RMB315.3 million or $44.9 million, up 25.2% from the same period about 2023, which was primarily driven by the popularity of Youdao’s newly launched products in 2024.

我們的智慧設備淨收入為人民幣 3.153 億元（4,490 萬美元），比 2023 年同期增長 25.2%，這主要是受到有道 2024 年新推出產品的受歡迎所推動。

The net revenue from our online marketing services were RMB489.4 million or $69.7 million representing a 45.6% increase from the same period of 2023. The increase was mainly attributable to the increased demand for performance-based advertisements through the third party's internet properties, which was driven by our continuing investment in cutting edge AI technology.

我們的網路行銷服務淨收入為 489.4 百萬元（6,970 萬美元），較 2023 年同期成長 45.6%。這一增長主要歸因於我們對尖端人工智慧技術的持續投資推動了透過第三方互聯網資產對基於效果的廣告的需求增加。

For the third quarter, our total gross profit was RMB789.5 million or $112.5 million representing an 8.2% decrease from the third quarter of 2023.

第三季度，我們的總毛利為人民幣 7.895 億元（1.125 億美元），較 2023 年第三季下降 8.2%。

Gross margin for learning services was 62.1% for the third quarter of 2024, compared with 67.8% for the same period of 2023. Gross margin for smart devices was 42.8% for the third quarter of 2024, compared with 42.6% for the same period of 2023. Gross margin for online marketing services was 36.3% for the third quarter of 2024, compared with 31.9% for the same period of 2023.

2024年第三季學習服務毛利率為62.1%，而2023年同期為67.8%。2024年第三季智慧型裝置毛利率為42.8%，而2023年同期為42.6%。2024年第三季網路行銷服務毛利率為36.3%，而2023年同期為31.9%。

The third quarter, we reduced our total operating funds to RMB$682.2 million or $ 97.2 million compared with RMB917.3 million for the same period of last year.

第三季度，我們將營運資金總額減少至 6.822 億元，即 9,720 萬美元，去年同期為 9.173 億元。

Looking at our expenses in more detail: Sales and marketing expenses declined to RMB519.6 million, compared with RMB674.2 million in the third quarter of 2023. Research and development expenses were decreased to RMB119.6 million, compared with RMB187.3 million in the third quarter of 2023.

更詳細檢視我們的支出：銷售和行銷費用下降至人民幣 5.196 億元，而 2023 年第三季為人民幣 6.742 億元。研發費用減少至人民幣1.196億元，2023年第三季為人民幣1.873億元。

Our operating income margin was 6.8% in the third quarter of 2024, compared with operating loss margin of 3.7% for the same period of last year. For the third quarter of 2024, our net income attributable to ordinary shareholders was RMB86.3 million, or $12.3 million, compared with net loss attributable to ordinary shareholders of RMB102.9 million for the same period of last year. Non-GAAP net income attributable to ordinary shareholders for the third quarter was RMB88.7 million, or $12.6 million, compared with non-GAAP net loss attributable to ordinary shareholders of RMB67.3 million for the same period of last year.

2024年第三季我們的營業利益率為6.8%，而去年同期的營業虧損率為3.7%。2024年第三季度，歸屬於普通股股東的淨利潤為人民幣8630萬元（合1230萬美元），而去年同期歸屬於普通股股東的淨虧損為人民幣1.029億元。第三季非美國通用會計準則歸屬於普通股股東的淨利為人民幣8,870萬元（合1,260萬美元），而去年同期非美國通用會計準則歸屬於普通股股東的淨虧損為人民幣6,730萬元。

Basic and diluted net income per ADS attributable to ordinary shareholders for the third quarter of 2024 were RMB0.74 or $0.11. Non-GAAP basic and diluted net income per ADS attributable to ordinary shareholders for the third quarter was RMB0.76 or $0.11. Our net cash used in operating activities was RMB85.4 million or $12.2 million for the third quarter.

2024年第三季歸屬於普通股股東的每股美國存託股基本及稀釋淨利為人民幣0.74元或0.11美元。第三季歸屬於普通股股東的非公認會計準則基本和稀釋每股美國存託股淨利潤為人民幣 0.76 元或 0.11 美元。第三季我們用於經營活動的淨現金為 8,540 萬元人民幣（1,220 萬美元）。

Looking at our balance sheet as of September 30, 2024, our contract liabilities which mainly consist consists of deferred revenue generated from our learning services, were RMB839.7 million or $119.7 million, compared with RMB1.1 billion as of December 31, 2023. At the end of the period, our cash, cash equivalents, current and non-current restricted cash, time deposits, and short-term investments totalled RMB489.4 million or $69.7 million.

截至2024年9月30日，我們的資產負債表顯示，我們的合約負債（主要包括學習服務產生的遞延收入）為人民幣8.397億元或1.197億美元，而截至2023年12月31日為人民幣11億元。期末，我們的現金、現金等價物、流動和非流動限制性現金、定期存款和短期投資總計人民幣 4.894 億元人民幣（約 6,970 萬美元）。

This concludes our prepared remarks. Thank you for your attention. We would not like to open the call to your questions. Operator, please go ahead.

我們準備好的演講到此結束。感謝您的關注。我們不想打開電話詢問您的問題。接線員，請繼續。

(Operator Instructions) Brian Gong of CITI Group.

（操作員指示） CITI Group 的 Brian Kong。

Yeah, thanks management for taking my question. I have a very good question, and we have noticed that many of our peers have been increasing investment in the cost business, right? So commencement share our strategies on this. And are we planning to increase our investment in the learning service sector in the future? Thank you.

是的，感謝管理層提出我的問題。我有一個很好的問題，我們注意到很多同業都在加大成本業務的投入，對吧？因此，開始分享我們對此的策略。未來我們是否計劃加大對學習服務領域的投入？謝謝。

Thank you, Brian. This is Su Peng; I will handle the question first. I think aligned with our strategy of achieving the positive we of breaking profit in the near future, we focus on strong demand services which scaling back on the low returns customer acquisition efforts during the summer. And we believe that the healthy and sustainable development is more essential for the long-term success.

謝謝你，布萊恩。這是蘇鵬；我先處理一下這個問題。我認為，與我們在不久的將來實現盈利的策略相一致，我們專注於強勁的需求服務，減少夏季期間低迴報的客戶獲取工作。我們相信，健康、永續的發展對於長期的成功更為重要。

And as you may notice without insurance, that is the strategic priority for our business. Although there are some short-term headwinds, we remain optimistic about the medium and the long-term growth. We expect the strong demand for the online learning services in the coming years. Ensuring the financial health of the business, we will facilitate the development of the learning service particularly (inaudible).

正如您可能注意到的，沒有保險，這是我們業務的策略重點。儘管短期存在一些阻力，但我們對中長期成長仍持樂觀態度。我們預計未來幾年對線上學習服務的需求將會強勁。確保企業財務健康，我們將特別促進學習服務的發展（聽不清楚）。

We believe that is our long-term strategies. We believe that the increasing our market shares in over the midterm to the long term, we primarily come from the providing the differentiated and high-quality products and services to the users and the improving their learning outcomes. We think our flagship products offers a unique combination of AI, tiered learning videos and the comprehensive learning consulting services.

我們相信這是我們的長期策略。我們認為，中長期市場份額的增加主要來自於為用戶提供差異化、高品質的產品和服務以及提高他們的學習成果。我們認為我們的旗艦產品提供了人工智慧、分層學習影片和全面學習諮詢服務的獨特組合。

Through the AI enhanced enhancements and ongoing product upgrade. We enabled the users to achieve the personalized education, improve learning efficiency and outcome. The comprehensive services including the learning diagnostics, learning path planning, paired learning video, AI create recommendations and AI collection and (inaudible) categorizations of the students' mistakes, learning consulting services, one class study experience and also the AI college admissions advisors. I think that's the kind of the full services generator and drive AI.

透過AI增強功能和持續的產品升級。我們使用戶實現個人化教育，提高學習效率和成果。綜合服務包括學習診斷、學習路徑規劃、配對學習影片、AI創建推薦和AI收集和（聽不清楚）學生錯誤分類、學習諮詢服務、一級學習體驗以及AI大學招生顧問。我認為這就是全方位服務產生器和驅動人工智慧的類型。

We will definitely do continue to invest in our products and services which has strength our user loyalty evidence in the upgrade in [intension rates] for the first quarter. The current retention rate, we just give you a little bit colour for the [ined]has already hit 70% by now. Although the retention period has not finished yet, it's almost over rest up over 5% compared with the same period of last year.

我們肯定會繼續投資我們的產品和服務，這在第一季的[強度率]升級中增強了我們的用戶忠誠度證據。目前的保留率，我們只是給你一點顏色，因為[ined]現在已經達到了 70%。雖然保留期尚未結束，但與去年同期相比，已接近超休，增幅超過5%。

Looking ahead, I think I'm confident in the development for next year. On one hand, we will continue to focus on our personalization, prerecorded video learning, severing our AI capabilities and upgrade and enhance our user learning experience. On the other hand, we will explore more offline opportunities, offering and service offers and service to our customers with. I think that's our right. And in the long term, as the last point is we, we expect to increase the investment on the products upgrade and also a customer acquisition following the strategy of the total company. Thank you.

展望未來，我想我對明年的發展充滿信心。一方面，我們將繼續專注於我們的個人化、預錄視訊學習、人工智慧能力的服務，並升級和增強我們的用戶學習體驗。另一方面，我們將探索更多離線機會、產品和服務，為我們的客戶提供服務。我認為這是我們的權利。從長遠來看，正如最後一點，我們預計將根據整個公司的策略加大對產品升級和客戶獲取的投資。謝謝。

This is Zhou Feng. Yeah, let me add one point. Yeah, for your darling.

這是周峰。是的，讓我補充一點。是的，為了你親愛的。

So marketing and customer acquisition particularly in the summer is very important for its growth and performance. So there were some challenges on this front this this summer. So on the other hand, we always believe that customer satisfaction and retention are more important and more fundamental. Yeah. So as long as our retention is leading, our satisfaction is leading, I believe we will always find ways to grow the business and grow the students.

因此，行銷和客戶獲取（尤其是在夏季）對其成長和業績非常重要。因此，今年夏天在這方面存在一些挑戰。所以另一方面，我們始終相信顧客滿意度和保留率更重要、更根本。是的。因此，只要我們的保留率領先，我們的滿意度領先，我相信我們總會找到發展業務和培養學生的方法。

If you look at the number that we just shared. So recent retention period that we've already reached 70% retention, that's very good and already competitive with the.

如果你看看我們剛剛分享的數字。最近的保留期我們已經達到了 70% 的保留率，這非常好，並且已經具有競爭力。

So I think that is the key and the key thing and we are building future growth on solid foundations. Yeah. Thank you.

所以我認為這是關鍵，我們正在為未來的成長奠定堅實的基礎。是的。謝謝。

(Operator Instructions) Brenda Zhao of CICC. Please go ahead, apologies.

（操作員指示） CICC 的 Brenda Zhu。請繼續，抱歉。

(Operator Instructions) Thomas Chong of Jefferies.

（操作員說明） Jefferies 的 Thomas Chong。

Hi, good evening. Thanks, management, for taking my question. We are pleased to see that the smart devices sector has resumed a year-on-year growth in the first quarter. Now, can we expect this growth to be sustainable? Thank you.

嗨，晚上好。謝謝管理層回答我的問題。我們很高興地看到，智慧型設備產業第一季恢復了年成長。現在，我們可以期望這種成長是可持續的嗎？謝謝。

Hi Thomas, yeah. So the revenue from smart devices reached RMB315 million in the third quarter, up 25% year over year. I believe several factors contributed to the rebound of device revenue. The first one is a positive outcomes from our strategic focus and the channel reorganization. So earlier this year, we had a review of our device business and we decided that we need to focus the team's work and we want to do fewer things and do really well.

嗨，托馬斯，是的。第三季智慧型設備收入達人民幣3.15億元，年增25%。我認為有幾個因素促成了設備收入的反彈。第一個是我們的策略重點和通路重組所取得的正面成果。因此，今年早些時候，我們對我們的設備業務進行了審查，我們決定需要集中團隊的工作，我們希望做更少的事情並做得更好。

So but since then, I think increased the focus of our operations in particular, more focused on the dictionary pen products really paid off well in Q3, the new X7 and X7 Pro are one of our most successful launches ever that the high end product X7 equipped with the new AI camera and a suite of exciting AI features like higher Mr. P AI Tutor has received the widespread acclaim from users. This positive reception turns net revenues and gross margin and the gross margin of smart devices and revenue have reached the highest levels since 2023.

因此，但從那時起，我認為特別增加了我們的營運重點，更加關注字典筆產品，在第三季度確實獲得了良好的回報，新的X7 和X7 Pro 是我們有史以來最成功的產品之一，高階產品X7搭載全新AI攝影機以及高級P先生AI家教等一系列令人興奮的AI功能，受到了用戶的廣泛好評。這種積極的反應使得淨收入和毛利率變得更加強勁，智慧設備的毛利率和收入達到了 2023 年以來的最高水準。

So during the recent Double 11, I also want to share Double 11 shopping festival audition pen has again secured the top spot in terms of sales volumes in its category on both Tmall and JD.com. That is for five consecutive years in a row. Furthermore, our newly launched dictionary pen X7 Pro achieved the highest single product sales in its category on both Tmall and JD.com.

所以在最近的雙11期間，我也想分享一下，雙11購物節試聽筆在天貓和京東都再次坐穩了同品類銷量第一的位置。這是連續五年。此外，我們新推出的字典筆X7 Pro在天貓和京東均取得同品類單品銷售量最高的成績。

So these accomplishments, I think reflect our continued dominance in the market with that outstanding performance. So revenues of smart devices, we expect them to continue to perform in the fourth quarter, continue to grow in the fourth quarter.

因此，我認為這些成就反映了我們憑藉出色的表現在市場上持續佔據主導地位。因此，我們預計智慧型設備的營收將在第四季度繼續表現，並在第四季度繼續成長。

The second factor is kind of enhanced team capabilities. The team I think it's much more, it's more important than the product or the strategy. So our device team has seen ups and downs in particular, we faced so much pressure since last year, leading to all of the reflections, replanning and changes in our (inaudible).

第二個因素是團隊能力的增強。我認為團隊比產品或策略更重要。所以我們的設備團隊特別有起有落，從去年開始我們面臨很大的壓力，導致我們所有的反思、重新規劃和改變。（聽不清楚）。

So I'm pleased to see that in such a challenging environment, our team has shown remarkable resilience. They asked the right tough questions and executed on the new focusing strategy. So I think the team executed really well across functions including product design, R&D, supply chain, sales and marketing.

所以我很高興看到，在如此充滿挑戰的環境下，我們的團隊展現了非凡的韌性。他們提出了正確的棘手問題並執行了新的聚焦策略。因此，我認為該團隊在產品設計、研發、供應鏈、銷售和行銷等職能方面執行得非常好。

So leading to a significant recovery of the business. I believe any team that was able to go through [D] and reemerge stronger is more likely to succeed in the future.

從而導致業務顯著復甦。我相信任何能夠經歷[D]並重新變得更強的團隊在未來更有可能取得成功。

So looking ahead from a product pipeline perspective, we expect to launch a new product in Q4 with more new products scheduled in Q1 as well. So in terms of product strategy for dictionary pens, we emphasized cost effectiveness for products including our A&S series, high quality and differentiation for high end products, that is the X series and the whole product line will employ more large language model features to greatly enhance user experiences.

因此，從產品管道的角度來看，我們預計在第四季度推出新產品，並計劃在第一季推出更多新產品。所以在字典筆的產品策略上，我們強調包括A&S系列在內的產品的性價比，高端產品也就是X系列的高品質和差異化，整個產品線會採用更多的大語言模型特徵來大幅提升產品的性能。

We are more convinced that LLM has a lot more to offer for education products for years to come. So the team will be busy integrating more of such features into the products in the coming quarters. So we are on the right track. I believe to more leading products, better financial health and profitability for the device segment. Thank you.

我們更加相信，法學碩士在未來幾年可以為教育產品提供更多的東西。因此，團隊將在未來幾季忙於將更多此類功能整合到產品中。所以我們走在正確的軌道上。我相信設備領域會有更多的領先產品、更好的財務狀況和獲利能力。謝謝。

(Operator Instructions) Brenda Zhao of CICC.

（操作員指示） CICC 的 Brenda Zhu。

Good evening, Zhou Feng and Su Peng. Thanks for taking my questions.

晚上好，週峰和蘇鵬。感謝您回答我的問題。

I noticed your online marketing service continued to see strong growth momentum. However, as the business had a high base in the fourth quarter of last year, where should we anticipate the future growth potential of this advertising business? Thank you.

我注意到你們的線上行銷服務持續呈現強勁的成長勢頭。然而，由於該業務去年第四季的基數較高，我們應該預期該廣告業務未來的成長潛力在哪裡？謝謝。

Thank you. The net revenue from online marketing services has recorded rapid growth for eight quarters, primarily driven by advancement in AI including ongoing algorithm optimization and enhanced data applications. Additionally, our team's execution is steadily improved.

謝謝。線上行銷服務的淨收入已連續八個季度實現快速成長，這主要得益於人工智慧的進步，包括持續的演算法優化和增強的數據應用。此外，我們團隊的執行力也穩定提升。

Looking ahead, I believe that there is a significant growth potential for both domestic and international advertising in the medium to long term. In the domestic market we anticipate the substantial opportunities in following sectors. First, the online entertainment industry such as gaming and social media. In this summer vacation, we drove the gaming ad revenues to a historical high in Q3. In in addition, enhanced data analysis and optimized algorithm models have improved marketization rates by over 90%.

展望未來，我相信從中長期來看，國內和國際廣告都有巨大的成長潛力。在國內市場，我們預期以下產業將有巨大機會。首先是遊戲和社交媒體等線上娛樂產業。今年暑假，我們第三季遊戲廣告收入創歷史新高。此外，增強的數據分析和優化的演算法模型使市場化率提高了90%以上。

Second, AI tools, since the development of the domestic large language models. In the later half of the last year, major tech companies had a significantly increased marketing budget for their AI tools. A trend we captured onto a drive rapid growth. During the last several quarters, future demand for a two advertising is excited for this future.

第二，AI工具，國內大語言模式的發展。去年下半年，各大科技公司大幅增加了人工智慧工具的行銷預算。我們捕捉到的這一趨勢推動了快速成長。在過去的幾個季度中，對兩個廣告的未來需求令人興奮。

Third, the automotive industry, the consumption stimulating policies are anticipated to benefit the automotive and the related services sectors like in likely driving an increase in advertising demand in the international market. We became a pre agent for TikTok in the first half of this year. Recently, we have established the initial intention for cooperation with several global techs (inaudible).

第三，汽車產業，消費刺激政策預計將有利於汽車及相關服務業，如可能推動國際市場廣告需求的增加。今年上半年我們成為了TikTok的預代理。近期，我們與多家全球科技公司達成了初步合作意向（聽不清楚）。

This formal partnership expanded in the near future, being in a solid condition for our future global expansion. In the meantime, growth in our advertising business also face a certain short-term challenges. For example, as you mentioned, ad revenue set a very high base in the fourth quarter of the last year. And the e-commerce advertising has not been so robust during the recent Double 11 shopping festival.

這種正式的合作關係在不久的將來得到了擴展，為我們未來的全球擴張奠定了堅實的基礎。同時，我們的廣告業務成長也面臨一定的短期挑戰。例如，正如您所提到的，廣告收入在去年第四季設定了非常高的基數。而最近的雙11購物節期間，電商廣告的表現就沒那麼強勁了。

In addition, recent update on our international market factors have added uncertainty to oversee advertising. However, from a financial health perspective, the probability of the advertising is expected to maintain a third level in the fourth quarter, the focus aligns with our broader aesthetic objective for the year and remain a key metric under the current conditions.

此外，我們最近對國際市場因素的更新也增加了廣告監管的不確定性。然而，從財務健康的角度來看，廣告的機率預計將在第四季度維持在第三水平，重點與我們今年更廣泛的美學目標一致，並且在當前條件下仍然是一個關鍵指標。

Thank you.

謝謝。

(Operator Instructions) Bozon of (inaudible) Securities. Please go ahead.

（操作員指示）Bozon（聽不清楚）證券。請繼續。

Thanks for taking my question. This is Janbu. My question is, is about what is the management outlook for the source culture?

感謝您提出我的問題。這是詹布。我的問題是，源文化的經營前景如何？

Thank you Janbu. And this is we, as we mentioned before, we have focused on the digital content services, online marketing services and AI driven subscription services this year with a particular emphasis on advancing generative AI to achieve full year possibility in the near future. For the past three quarters of this year, we have seen significant improvements from our financial side.

謝謝詹布。這就是我們，正如我們之前提到的，今年我們專注於數位內容服務、線上行銷服務和人工智慧驅動的訂閱服務，特別強調推動生成式人工智慧，以在不久的將來實現全年的可能性。今年過去三個季度，我們的財務方面取得了顯著改善。

The revenue for the first three quarters of this year reached RMB4.3 billion, representing an increase of around 10% year over year. We achieved a positive cumulative income from operations around RMB65 million compared with around RMB $543 million from operations in the same period of last year. Very significant improvement.

今年前三季營收達43億元，年增10%左右。我們實現了約人民幣 6,500 萬元的累計正營運收入，而去年同期的營運收入約為人民幣 5.43 億元。非常顯著的改善。

The strong financial performance fully demonstrates that our strategy around AI technology plus education is on the right path and we are very confident that we will achieve the profitable objective of this year.

強勁的財務表現充分證明我們的人工智慧技術+教育策略走在正確的道路上，我們非常有信心實現今年的獲利目標。

Looking forward, we will continue to facilitate the integration of generative AI technology around our business to enhance competitiveness first learning services. The robust demand for online learning service is expected to well into the coming years and we are confident in the medium to long term growth, potential of our learning services.

展望未來，我們將繼續促進生成式人工智慧技術與我們業務的整合，以增強學習服務的競爭力。預計線上學習服務的強勁需求將持續到未來幾年，我們對學習服務的中長期成長和潛力充滿信心。

I was upset will hinge on our ability to deliver high quality services and then learning outcome at scale. As mentioned in previous questions, high school businessmen remain our top priority. The demand for high school business is robust which is likely to sustain in the coming years, we will be building the best instructor team and incorporating AI function in our learning services for years. The strong AI technology advantages give us confidence in the strength and competitive advantages in the high school business.

我感到不安將取決於我們提供高品質服務以及大規模學習成果的能力。正如前面的問題所提到的，高中商人仍然是我們的首要任務。對高中業務的需求強勁，並且在未來幾年可能會持續下去，我們將建立最好的教師團隊，並將人工智慧功能融入我們的學習服務中。強大的AI技術優勢讓我們對高中業務的實力和競爭優勢充滿信心。

In the 10 of AI driven subscription services, we are committed to advancing our current offering while exploring new avenues to enhance user experience in learning, work and daily life.

在 10 項人工智慧驅動的訂閱服務中，我們致力於推動現有產品，同時探索新的途徑來增強用戶在學習、工作和日常生活中的體驗。

For the fourth quarter, we still expect the total sales in AI driven subscription services to maintain rapid year over year growth. Second, online marketing services, we have witnessed rapid growth and continue to improve ability of online marketing services for eight consecutive quarters.

對於第四季度，我們仍然預計人工智慧驅動的訂閱服務總銷售額將保持同比快速成長。二是網路行銷服務，我們的網路行銷服務能力連續八個季度快速成長並持續提升。

In the near term, the [Thai] business serves as a cash flow and crucial profit centre. Over the long term, we will continue to explore strategic growth area both in the domestic and the international market (inaudible). We will provide updates on significant developments as they arrive.

短期內，[泰國]業務將成為現金流和重要的利潤中心。長遠來看，我們將繼續探索國內和國際市場的策略性成長領域（聽不清楚）。我們將在重大進展到來時提供最新消息。

Third, smart devices, we treat AI integrated smart devices as one of the most exciting, exciting opportunity of recent years. While smartphone and the tablets continue to dominate many usage scenarios, the market for traditional smart devices is shrinking. However, the integration of AI into smart devices paved the way for innovation including the creation of devices either smaller than smartphones or larger than tablet to meet user demand.

第三，智慧型設備，我們把AI整合的智慧型設備視為近年來最令人興奮、令人興奮的機會之一。儘管智慧型手機和平板電腦繼續主導許多使用場景，但傳統智慧型裝置的市場正在萎縮。然而，人工智慧與智慧型裝置的集成為創新鋪平了道路，包括創建比智慧型手機更小的設備或比平板電腦更大的設備來滿足用戶需求。

In addition, (inaudible) and unlock new opportunity for smart devices as discussed in today to prepare the remark, our dictionary pen X7 series have become the first learning device in the industry to support offline a translation with accuracy, surpassing online mutual machine translation.

另外，（聽不清楚）正如今天準備發言所討論的，為智慧型設備解鎖新機遇，我們的字典筆X7系列已成為業界首款支援離線翻譯的學習設備，準確度超越線上互機翻譯。

As we are further attacking the potential of the integration of edge based LLM into our smart devices to better serve users in the long run. Our exact our extensive experience in reasons, supply chain management and the sales channels provide a strong foundation for sustainable growth in our smart device segment.

我們正在進一步挖掘將基於邊緣的法學碩士整合到我們的智慧設備中的潛力，以便從長遠來看更好地為用戶服務。我們在原因、供應鏈管理和銷售管道方面的豐富經驗為我們智慧設備領域的可持續成長奠定了堅實的基礎。

Additionally, our planning for next year is we are looking forward to share more insights in next earnings call.

此外，我們明年的計劃是期待在下一次財報電話會議上分享更多見解。

Thank you.

謝謝。

Yeah, let me add a little bit more information. Yeah, this is Zhou Feng.

是的，讓我添加更多資訊。是的，這就是周峰。

If you look at our financial performance this year and last year, you can see that we improved the overall financials a lot this year. We are growing the business and operationally profitable for two or three quarters this year so far and on the right track for people and the full year. In addition to that, we have created new products and high growth revenue streams like new online courses, RTA ads, international [kol] ads, AI driven subscription services, that's a highlight and also high-end dictionary pens the X7 series.

如果你看看我們今年和去年的財務表現，你會發現我們今年整體財務狀況有了很大改善。到目前為止，我們今年的業務和營運利潤已有兩到三個季度成長，並且對人員和全年而言都走在正確的軌道上。除此之外，我們還創造了新產品和高成長的收入來源，如新的線上課程、RTA廣告、國際kol廣告、人工智慧驅動的訂閱服務，這是X7系列的一大亮點，也是高端字典筆。

These will drive our growth in the immediate future, and we will have more to discuss in future course. Yeah, putting this together it means our focusing strategy this year and also our bet on large language model applications. Since last year, these two strategies have really been working. AI plus education is an exciting opportunity and is already having a great positive impact on the business. So Youdao is aiming to lead in AI plus education in China. Yeah, thank you.

這些將推動我們在不久的將來的成長，我們將在未來的課程中討論更多內容。是的，把這些放在一起就意味著我們今年的重點策略，也是我們對大型語言模型應用的押注。自去年以來，這兩項策略確實發揮了作用。人工智慧+教育是一個令人興奮的機會，並且已經對業務產生了巨大的積極影響。有道的目標是引領中國人工智慧+教育。是的，謝謝。

Thank you, sir. That concludes our question-and-answer session. I would now like to turn the conference back to Jeffrey Wang for any additional or closing comments. Please go ahead.

謝謝您，先生。我們的問答環節到此結束。現在我想將會議轉回傑弗裡·王（Jeffrey Wang）徵求任何補充或結束意見。請繼續。

Thank you once again for joining us today. If you have any further questions, please feel free to contact us at Youdao directly or reach out to Piacente Financial Communications in China or the US. Have a great day.

再次感謝您今天加入我們。如果您還有任何疑問，請隨時直接透過有道聯絡我們，或聯絡中國或美國的Piacente Financial Communications。祝你有美好的一天。

Thank you. So, ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.

謝謝。那麼，女士們、先生們，今天的會議到此結束。感謝您加入我們。現在您可以斷開線路。

Portions of this transcript marked (technical difficulty) indicate audio problems. The missing text will be supplied if a replay becomes available.

此文字記錄中標記為（技術難度）的部分錶示存在音訊問題。如果可以重播，將提供缺少的文字。