Remark Holdings Inc (MARK) 2017 Q1 法說會逐字稿

Good day, everyone, and welcome to the Remark Holdings First Quarter Financial Results Conference Call. Today's call is being recorded.

At this time, I would like to turn the conference over to Becky Herrick of LHA. Please go ahead.

Thank you, operator. Thank you all for joining us today for the Remark Holdings First Quarter 2017 Financial Results Conference Call.

On the call today are Chairman and CEO, Shing Tao; and CFO, Doug Osrow. After the prepared remarks, we'll open the call to questions. A webcast replay of today's call will be available at www.remarkholdings.com.

Some of the statements made today may be forward-looking statements. These statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements reflect Remark Holdings' current views, and Remark Holdings expressly disclaims any obligation to update or revise any forward-looking statements after the date hereof. This disclaimer is only a summary of Remark Holdings' statutory forward-looking statements disclaimer, which is included in its filings with the SEC.

Also, please note the company uses financial measures not in accordance with generally accepted accounting principles, commonly known as GAAP, to monitor the financial performance of operations. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, reported financial results as determined in accordance with GAAP. To support the company's views of adjusted EBITDA later in this call, a reconciling table is provided at www.remarkholdings.com, and a similar reconciling table will be included in the company's Form 10-Q filed with the SEC today.

And I'd now like to turn the call over to Shing Tao. Please go ahead.

Thank you, Becky, and thank you all for joining us today. To not only survive but grow fast in the technology business, we have to catch the wave. And to catch the wave, you have to be early. We have caught the wave, where mobile and cloud computing are 2 dominant technology shifts that have created enormous opportunities over the past 7 years. Perhaps an even greater opportunity lies ahead of us with the wave of artificial intelligence, a wave which we have caught early, as many of you have known.

Remark Holdings first started off as a content company, always looking to transform itself into a technology one, where global scalability at a low cost, protected by the ability to innovate efficiently and effectively, remains the core focus.

In 3.5 short years, we are very proud on what we've built here at Remark. At the core is an artificial intelligence platform that not only continues to amass data from third-party groups like Alibaba and TenCent, but now has the ability to connect the dots to generate its own. This artificial intelligence platform we have built has won us the best breakthrough technology awarded by Alibaba amongst 600-plus top tech companies in the first quarter.

Plugging into the core are revenue-generating and cash flow positive-producing businesses, like Vegas.com, that continue to grow as a stand-alone but more importantly will grow exponentially faster once integrated with KanKan, our data and AI hub. In the meantime, the models created from Vegas.com on KanKan can also be product-sized to serve other partners and build new businesses, which will grow KanKan business even faster.

Our first quarter 2017 results demonstrate our continued top line improvement and set the stage for a strong year of growth for Remark Holdings. Our KanKan base intelligence platform is poised for significant revenue growth this year. For those of you who are new to our company, KanKan began as a social media network with massive data scale and reach. It was established by building technology that connects multiple social media networks onto a single platform. This capability has since been expanded to include additional online businesses with vast amounts of consumer data such as TripAdvisor, Yelp, Twitter and the counterparts in China. Key to the development of KanKan is the creation of a dynamic and rich data platform and the implementation of artificial intelligence and machine learning-based data analysis capabilities, which enable us to analyze and package this data to offer a series of data solutions and products. We've created a company that first started out as being focused on big data from both sides of the Pacific. However, realizing that big data alone doesn't create value, we needed to connect the dots to see the true correlations through machine learning, which is what sets our platform apart. The ability to have predictive capabilities that led -- that lead us to lead generation, risk management, capital efficiency, are all created by the platform we have built.

After nearly 3 years of research and development, KanKan recorded its first revenue during the first quarter of 2017, representing the early stages of its monetization. I'm doing this call right now during my trip to China and the growth opportunities here only make our resolve much greater. After meeting with one of the largest (inaudible) lenders in China, we made a mistake. Our mistake was that all the reports out there were wrong in terms of not just how big the market is. It's much bigger than we ever thought --

The industry is currently a $300 billion industry and projected to grow at a 25% to 30% a year growth. The reason for this is a simple demand issue. Financial institutions are out here focused on the large state-owned enterprises, otherwise known as the SOE, which leads to individual with not a lot of options on where to turn with their loans. But what keeps the lenders up at night? It comes down to the question of how do I stay in front of a possible default situation, which comes from a number of different reasons: number one, too much debt with too many different lenders; two, change in lifestyle; and three, you are not you say who you are. These are all issues in which social financial credit product addresses. While these lenders clearly all have the customer reach, they lack the technology platform that we have built to address these issues on a large scale. This is exactly what KanKan's artificial intelligence platform has set out to do, to perform large-scale tests cheaply and efficiently. Companies like BluFAX, [Geron] and the recently IPO-d company China Rapid Finance all underscore this tremendous opportunity. There's still more than 2,000 online platforms in operation and lending continues to accelerate.

Loan volumes in March hit a new record amount of RMB 251 billion grant, which equates to USD 36 billion, bringing the total outstanding to RMB 921 billion, roughly USD 130 billion equivalent, which brings the growth to almost 83% in the year.

Just to be clear, we are not in the business of lending. We are in the business of providing a technology that can be used by all to lower their own risk profile and default rates. Just last week, the U.S. and China trade accord that was agreed upon allows foreign-owned financial groups to offer credit rating services in China by July 16.

China is a very different market, as you all know, and you cannot take what works in one country and apply it to the rest of the world, and in particular, here. Take a look at eBay. Take a look at Uber. Their failed China strategy and execution are well documented.

As you know, earlier this year, we began the rollout of our Social Credit Service products. And through KanKan Social Credit, we are now targeting this problem unique to China, where there are still no reliable credit checking systems, which limits financing and consumer spending opportunities. Again, we stress that our vast data repository enables us to use social data to confirm a person's identity and analyze their transaction data to verify their financial status. We are targeting the loan businesses that require quick, low-cost and nontraditional risk management models such as travel, cash, payday and shopping loan businesses, which are the fastest-growing sectors in the financial field.

KanKan is also targeted to serve traditional loan and asset management businesses that are more and more frequently using consumer, social and online behaviors in the marketing and risk management strategies.

Also, during the first quarter, we began receiving incremental sales from our data partnerships with Alibaba Cloud and TenCent. Late in 2016, Alibaba Cloud marketplace chose to promote KanKan's deep learning base image classification solution for its business customers in the cloud computing environment. KanKan's advanced facial recognition and image classification services is currently being sold as part of the solution, and we expect revenue volumes to ramp throughout the year.

Alibaba's Cloud also chose KanKan to support its new Enterprise Profile Solution with our artificial intelligence technologies. The combined offering provides Alibaba Cloud's enterprise customers with a comprehensive platform offering real-time risk insights, enterprise development analysis, investor partner and customer targeting and customized data packages by leveraging publicly available business data in China on a macro level. This enterprise profile solution is expected to be made available to customers in the second quarter with incremental revenues beginning shortly thereafter and increasing in the months ahead.

With our partner, TenCent, we are codeveloping machine learning-based predictive models from brands and customers in a wide variety of verticals. Our models train based on data from TenCent's ecosystem and KanKan's consumer profiles. They enable us to reveal deep insight in consumer behavior with our specific products or brands and create customized digital marketing solutions that provide highly effective and cost-efficient data models to our respective customer bases. In other words, the models we are developing offer sustained competitive advantages by lowering the technical threshold of precision marketing and reducing corporate marketing investments. The models are trained to precisely recognize consumer behavior in fast fashion, luxury brands and automotive sectors that are being tested by brands and partners, and we expect to see steady revenue growth in the second and third quarter of 2017.

As we mentioned on the last earnings call, we're in the process of launching what we believe to be indispensable new products that targets the explosive growth of live streaming, our pornography and violent content filter. Based on our image object recognition models and natural language processing models trained with millions of samples and various neural networks, we quickly retrained the models with smaller sets of samples to identify violent and offensive images and languages. Then we developed a product that filters and/or flags an inappropriate content within still images or live video streaming. Supporting over 2,000 channels per second, we have achieved high precision on pornography and violent content detection.

Clearly, all the recent news concerning Facebook have only validated our value proposition in which we built over -- just built over the last 6 months. As most of you have watched or read over the world news, since introducing its popular live feature, Facebook did not anticipate the potentially dark implications of a technology platform that has allowed easy access to people with bad or nefarious intentions.

Facebook originally had signed up to create a platform where fun and happy teen idols, and those we call influencers were met and [spent] with disturbing videos that involve acts of violence that were streamed in real time and kept online for varying periods of time. As a result, Facebook announced it would add 3,000 more moderators over the next year to combat the problem.

With so much content now being generated daily, 1 billion-plus minutes a day, artificial intelligence is the only really effective and efficient means of filtering. And we've created such a platform. And so KanKan has the solution to address this problematic global issue.

The live streaming market is growing so fast in China. Twitch, which was acquired by Amazon a couple of years ago for USD 1 billion, pales in comparison in terms of growth. The reason why it first began to grow so much is partly due to the platforms allowing vendors to promote their own goods real time to consumers. Now it's expanded to interactive entertainment.

Because many of these users are from smaller cities, streaming was so crucial because mobile is the only gateway for residents in terms of entertainment and shopping. Around 47% of Chinese Internet users represent approximately 344 million people currently are taking part in live streaming. At the rate it's growing, experts forecast sector will top the entire China movie box office receipts in a few years. China Renaissance Securities and Investment Bank estimate the annual revenue from the live streaming will be more than 3x the current USD 4.3 billion in 2016. Crédit Suisse made a similar forecast as well. But with growth comes regulation, hence, our opportunity. China's Minister of Culture -- Ministry of Culture, which is responsible for the protection of traditional Chinese culture, has launched a massive inspection on online performance service providers targeting vulgarity, obscenity and wrong life values. With several successful test cases, we ran with large live broadcasting companies, our live streaming filter product was built to target this increased oversight. We are planning to deploy this service to several live broadcasting companies in the second and third quarters and expect each of them to generate hundreds of millions checks per day.

Overall, this is a very exciting time for Remark Holdings and KanKan. We expect our KanKan offerings to contribute incrementally to revenue in the second quarter and, more significantly, in the second half of the year.

On to Vegas.com. Our Vegas.com asset continues to be the leading platform for Las Vegas travel and ticket. Vegas.com continued its strong contribution to our operating results in the first quarter, demonstrating the value we have brought to the asset since our acquisition in 2015. For example, in the first quarter, from hotel to show tickets, and from advertising to mobile, conversion rates and transactions were up year-over-year across the board. Hotel conversion rate grew approximately 14%. Conversion on mobile devices grew approximately 14%. Show ticket conversion on mobile devices grew approximately 24%, and advertising revenue grew approximately 13%.

Also, we thought it'd be helpful to investors to begin providing data on transactions. Excluding cancellations, transactions originating on desktop devices increased 17%. And transactions originally on mobile devices increased 18% year-over-year in the first quarter.

In addition, of the top 20 ticket sales in Vegas.com history, 14 have occurred since the start of 2017, which is particularly significant, given that the second half of the year is typically our seasonally strongest period.

Our work to enhance the performance and content of Vegas.com continues. We're currently leveraging the best-performing aspects from our desktop platform onto our mobile platform to further enhance the user expense on the fast-growing media. Earlier this year, we determined it is in our best long-term interest to end our partnership with the Las Vegas Convention Authority, with whom we've been comanaging Las Vegas.com for 5 years. Under the existing arrangement set to end during the third quarter of this year, the Convention Authority ran the platform while Remark managed the inventory and back-end responsibility. We made our decision so we could bring LasVegas.com under full control and bring to LasVegas.com many of the same improvements that proved so effective on Vegas.com, thereby enabling us to scale our footprint, drive increased traffic and bookings and ultimately increase revenue. For example, conversion rates on LasVegas.com are roughly 1/3 to 1/4 the conversion rates at Vegas.com, representing a significant opportunity to increase sales.

Our travel and entertainment segment, adjusted EBITDA was down 31% year-over-year. But if we exclude the effect of the 625,000 LasVegas.com licensing payments, which are now charged to expense, by which we're reducing the liability prior to 2016, adjusted EBITDA for the second would have almost doubled.

Now moving to FansTang. We see continued growth in the quality of fan-based and sponsorship demand for FansTang's [soft] production as well as the premier license content. And FansTang continues to position us favorably with the Chinese millennial audience as a leading provider of the Western digital video content with a social media community of more than 145 million followers in China. For example, this past quarter, the #1 Hollywood entertainment news show this week in Hollywood, produced by FansTang, is getting 2.5 million views on average, up from last year's 2 million. We're including more movie-related topics and stars such as Kingsman 2, Guardians of the Galaxy 2 and the Fast and Furious series. The show continues to be the top 3 in the top 3 of Sohu TV's entertainment and U.S. TV content. Also, in Q1, we began adopting multichannel strategy, where (inaudible) and popular interviews will be synched on China's top social content, news apps such as Toutiao, NetEase news and Tencent News. We expect these channels can contribute millions of extra views to our program and our sponsors at little additional cost.

At the same time, we are seeing higher and higher demand for premier content such as the Billboard Music Awards in China. The event to be held on May 21 is reaching a new height in terms of license fee bids received from different media platforms. We are distributing it to TenCent Video by bringing top tier Chinese stars and key opinion leaders to amplify the influence.

Regarding business development, FansTang landed its first online agency client, Ctrip.com for a series of short video content campaign. We believe this will provide a pathway into a lucrative and rapidly growing overseas travel market in China. We expect recurring business from Ctrip and are actively reaching out to airlines and other online travel agency platforms.

Looking ahead, we are confident about renewing our current show contracts by pitching 3 main shows to video platforms including Youku, iQiyi and TenCent. The shows include fans sharing to the stars Victoria's Secret edition, summer holiday with the NBA stars featuring celebrity hosts and commentators in China, and this week at [Pop]. There are spinoffs and continuations of our 6 essential formats and our goal is to reach a new level in terms of production quality, viewership and sponsorship generation.

We are also reaching out to stars like Sebastian Stan of Captain America and Gal Gadot of Wonder Woman on behalf of our clients for branded events and campaigns in China, riding on the popularity of superhero movies in Q2 and Q3.

With that, before I turn the call to Doug, I know we reported in our press release this morning the tax sites continued to perform well. Website traffic has grown from almost 6 million in 2014 to where we expect to be over 14 million this year.

While we are pleased with the growth of these assets, particularly U.S. Tax Center at IRS.com, given the tax sites fall outside of the company's overall core strategic focus and growth plans, we believe monetizing these assets is in the best long-term interest of the company, and we will review options.

With that, I'd like to turn the call over to Doug.

Thank you, Shing. One thing I just wanted to quickly correct was the adjusted EBITDA for LasVegas.com was down $31,000 year-over-year, not 31%. So again, it was down $31,000 year-over-year, but if you take the effect of the $625,000 LasVegas.com licensing payments, we would have basically doubled the EBITDA year-over-year.

So with that, as a reminder, our financial results for the first quarter of 2017 include FansTang, which we acquired in September of 2016 and which was not part of our financial results for the first quarter of 2016.

Net revenue for the first quarter of 2017 was $15.3 million compared to $14.3 million in the same quarter last year. Total cost and expense was $20.7 million for the first quarter of 2017 compared to $19.4 million in the prior year. First quarter 2017 operating loss was $5.4 million compared to $5.2 million in the prior year. Net loss was $25,000 or 0.0 per diluted share for the first quarter of 2017 compared to $2.4 million or $0.12 per diluted share in the first quarter of last year.

Cash at December 31, 2016 (sic) [March 31, 2017], was $8.6 million compared to $6.9 million at December 31, 2016. Restricted cash at both March 31 of this year and the end of last year was $11.7 million. As such, our combined cash position at March 31, 2017 was $20.3 million compared to $18.5 million at December 31, 2016.

Turning to our 2017 outlook. We continue to expect KanKan's revenue grow to more than $5 million for the year and are again pleased that we're finally generating revenues from KanKan.

As previously discussed, we also expect to increase Vegas.com revenue and EBITDA by 15% to 20% each and are very excited about the opportunities that will come when we take back the site LasVegas.com.

And with that, I'd like to turn the call back to Shing.

Thanks, Doug. 2017 is poised to be a transformative year for Remark Holdings as we begin to slowly realize the value of our digital lifestyle brand, benefit from our diverse revenue models, drive innovation and scalability within the industries we serve and establish new and deep and existing key strategic partnerships with global leaders.

Operator, we are now ready to begin the Q&A session.

(Operator Instructions) It appears our first question comes from Darren Aftahi with Roth Capital Partners.

A couple, if I may. Shing, you gave a lot of detail on KanKan and the channels you have and the ramp throughout the year. It's great to see it's finally generating revenue. I'm just sort of curious. If you look across kind of the portfolio, where do you see the sort of nearest-term catalyst in terms of revenue generator? And then, I guess, as a derivative question, I think you talked about the violent content, pornography, AI product last quarter. Is that live in market today? And what do you see in terms of kind of the road map for that? And then is there also opportunity for that product outside of China, i.e. Facebook and the U.S. and other parts of the world?

Yes. So thanks for that. So I think the beauty and the curse of KanKan is when we had built the platform, we've created a strong foundation, and that's been the data and which that allows us kind of the optionalities that go into a lot of different directions. But obviously, we need to remain focused on what makes money quickly. And to answer that, I think those are the 2 products, which we mentioned first is the Social Credit Scoring System, which we've already signed with several clients. We're in China right now. We're having very, very positive talks with some of the largest lenders here in the country. And I kind of gave kind of the stat from what the exact opportunity is with that. So we see that as being the first and foremost. The second part is the live streaming. And the live streaming business has nearly caught China by the storm. And to imagine in a couple of years' time, this business will surpass the entire Chinese -- China movie market, which happens to be the fastest-growing kind of entertainment market in the world. And so it just gives you an idea what the growth opportunity is. In China, which is -- because there's so much content being created everyday and because pornography is illegal, service providers cannot run the risk of being shut down by the government. So we see that that's a huge opportunity. We are very confident in what we've built at the company that we can scale globally. So China, obviously, is really a big enough market, but we're certainly not limiting our business development opportunities just to China. But (inaudible) in other platforms in the rest of the world. But these are the 2 areas, I think, that we're -- we really want to focus all of our energies on because being a KanKan-branded product, we're able to achieve the highest gross and EBITDA margins for it.

That's helpful. And then maybe -- go ahead.

No, I was just hoping -- I hope that answered your question on the...

No, very much so. Maybe a couple for Doug, one a clarification point. So on your other segment, can you just give us a relevant understanding of what's contributory from KanKan and then FansTang? And just so I understand that the license on the travel piece related to LasVegas.com, is that -- the $625,000, is that onetime in nature? Or is that sort of recurring per quarter?

Sure. Okay. So I'll start with KanKan. As we said, we're not going to give too much specifics out about the exact dollar amounts, but I am pleased that we generated our first dollar revenue, which put it into some perspective. This quarter, we generated 6 figures in revenue for KanKan in the first quarter. Obviously, given that we're confident that we're going to do $5 million in 2017, we expect this to be a fairly significant ramp quarter-over-quarter. But first quarter, we did have over 6 figures. Regarding FansTang, FansTang is -- it's got tremendous business opportunities, but it is a little bit of a lumpy business as you wait for contracts to come in. And one of the things that we found, as we sell the product, not just in China but also in the U.S., there are more parties that get involved. So while the contracts get larger in nature, they take longer to actually sign because you're dealing not only directly with the company, but you're also dealing with multiple agencies, both in the U.S. and in China. So that business is a little bit lumpy, but you've got some large contracts looming, and we hope to be able to close on them in the not-too-distant future. Then the last piece I think you asked about was the licensing fee. The licensing fee yearly is $2.5 million. And that's ongoing today until 2040. That's the license fee to use of URL LasVegas.com. In previous years, the last quarter, we've classified as debt given the relationship. Now given where it's booked on the balance sheet, it's no longer on the balance sheet, it's actually on the income statement as an expense. Just one thing before you chime in, Shing, is we have the ability to change that in agreement now, which is why it's now classified as an expense. We can actually talk with the other side of that equation, which is why is it's gone from debt to an expense. And with that, I knew Shing was going to chime in.

No. I actually just wanted to touch upon your question that you asked me and then -- and Doug regarding on the -- how FansTang is ramping. I mean, one of our biggest struggles is just the amount of business development opportunities there are. And we really need every person that's doing sales to be focused on what obviously has the greatest growth opportunity and that's sustainable. And so that's the constant question for us is, yes, we're always targeting these large potential media deals, but in terms of sustainability and scalability, the focus has to remain on KanKan and the various products that we're offering in terms of social cloud and live streaming. So just to -- I'm just telling that in terms of where our mind's set on that.

(Operator Instructions) Our next comes from [George Kafkarkou], private investor.

Just one question about the financial asset. Shing, on your closing remarks, you said you're looking at options, so strategic options. So I assume that means a divestiture. Is that how I should be thinking about that?

Yes. That's exactly how should you think of it. Like we have a lot of different assets and all of them are very attractive. And some may be even more attractive to others. For us, we know where our strategic direction is and so we're staying focused on it.

And George, if I could just add. One of the reasons, we wanted to wait until for the end of tax season, obviously. Tax season lingered through April before we actually took these assets to market.

Okay. Do you have a sense of how long this cycle will take? How do you guys think about that?

Shing, I'll take that. George, so far, the response has been positive. But as with any sale, typically, even though it's a pretty straightforward business, I would expect it to take anywhere from 2 to 4 months. A little bit of a wide range there. It really depends.

Okay. And will the subsequent cash generated from that, will that be used as operating CapEx? Or will you reduce debt? Or to be determined?

Combination of operating capital, but primarily just given some of our covenants with our lender, primarily for debt reduction.

Okay. Very good. Just a couple of questions on KanKan, and then I can jump back into the queue. So it seems that you mentioned in your remarks, Shing, if I noticed properly, focus on Social Credit and obviously what seems to be taking all of us by surprise is the live streaming. But you also mentioned revenue from Ali Cloud and TenCent activities. So it's fair to say that KanKan revenue this year will come from 3 buckets, meaning the product, Social Credit, the product porn filtering and violence filtering and Ali Cloud and TenCent. Is it those 3 categories KanKan revenue will come from this year?

Yes. I mean, the revenue will come from those categories outside of the 2 buckets of live streaming and Social Credit. As we created this artificial intelligence platform, what we won as the best breakthrough technology award through Alibaba is the fact that we've created an open source artificial intelligence platform for the everyday kind of company, right? So we've been able to offer these features to a company that's not financed by $100 million, $200 million of venture capital. So we're making sure it's available to everyone. Ali has included many of the features that we offer as part of their cloud services, and then we get, obviously, a cut of that.

All right. Okay. So obviously, AI is very much the rage. Now everyday, we hear about -- more about AI and that's the way of the future. And I expect that, at Remark, we were early in the AI game. So there are 2 questions I have on that and my last 2 questions. One is we don't seem to be capturing much visibility about our offering at KanKan, so I'd like you to talk about that, if you could. And secondly, specifically, why did Ali Cloud and TenCent choose us as opposed to other AI offerings, which is a very significant achievement, obviously. So could you talk to those 2 things, please?

Yes. The first one, can you just clarify that question a little bit in terms of visibility (inaudible) press release?

No, no, sorry. Not press release. I guess, I follow artificial intelligence for many years, as you know, and I can find lots of commentary about a lot of companies, but we don't seem to get much visibility amongst commentary -- commentators, narrators of this business, people who write about artificial intelligence. So my sense is that our focus is just to knock down the sales and let the revenue do the talking for us. But I'm wondering if there's any kind of PR consideration that we're making to try and make what we have more visible in terms of column increase or (inaudible) coverage.

Yes. Yes, I think, for us, it has always been the culture of the company to show substance first, right? I mean, we can talk about relationships and all that stuff, but ultimately, our technology has to work and that's what we spent the last 3 years in building. When we say we're early to artificial intelligence, this didn't happen overnight, right? It was the first parts of the 3 years where it takes 2 things to create effective artificial intelligence. One is capital, and number two is data. And it took us 18 months to be able to capture of all the data. And luck was on our side in the sense where the processing power has become even more powerful and cheaper. And so it allowed a company of our size to really innovate with a lot less capital. Frankly, if we started going on the route of artificial intelligence 3 years ago, we probably would have spent a lot of money and had nothing to show for it. But so -- and that's the thing. If you look at how technology is, and you know it very well, as cloud computing is obviously very effective, but everyone was talking about big data, but there was no way to actually create value of that big data. And having the artificial intelligence platform that's been created finally allows us to correlate the data, make sense of it and now create some predictive analytics from it. So it took us a while to get to this point, and frankly, we would like our results to speak for itself. We've been talking about this technology. We're just awarded the best breakthrough technology as I mentioned through Alibaba. And now it just becomes a process of blocking and tackling and selling our products because I think from a technology perspective, we definitely hit our milestones and then surpass that. And that really goes to answering your second question with Alibaba and TenCent, why they chose us. Companies like Ali, TenCent, Baidu, Google, Facebook, they all, obviously, are very well capitalized, super smart. But the one thing -- there are 2 things that separate us. One is they are all the masters of their own domain, while we kind of see ourselves as being able to aggregate big data across all platforms. And as you see, Alibaba was therefore -- Alibaba and TenCent, their focus is in China. Google and Facebook and Amazon, their focus is in the U.S. We see ourselves as the bridge both sides of the Pacific. So I think these 2 attributes really distinguish ourselves versus other potential competitors. I don't know of other group that has the same type of data partnership that we do with these 2 very large companies.

Yes, it's fantastic. Okay. If I could just close, can you -- are you in a position to provide any update on the [Unicorn Sharecare]?

Not that I'm allowed to. We haven't been allowed to say anything publicly yet. I'm just -- I just kind of follow at the lead of the Sharecare management. But the only thing I can say is that we are certainly very -- continuing to be very positive on our shareholding in Sharecare.

(Operator Instructions) And at this time, I would like to turn the conference back over to Shing for any additional or closing remarks.

Thanks for joining us today. We look forward to speaking again in August for our second quarter results call. Goodbye.

That does conclude today's conference. Thank you for your participation.