Cloopen Group Holding Ltd (RAAS) 2021 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to Cloopen's Third Quarter 2021 Earnings Conference Call. (Operator Instructions) Today's conference is being recorded. (Operator Instructions)

女士們、先生們，感謝你們的支持，並歡迎參加 Cloopen 的 2021 年第三季財報電話會議。 （操作員指示）今天的會議正在錄音。 （操作員說明）

I'd now like to turn the call over to [Yilin Dai], Cloopen's Investor Relations representative. Please go ahead.

我現在想將電話轉給 Cloopen 投資者關係代表 [Yilin Dai]。請繼續。

Hello, everyone, and thank you for joining Cloopen's Third Quarter 2021 Earnings Conference call. The company's financial and operating results were issued in a press release with our Newswire services earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting our IR website.

大家好，感謝您參加 Cloopen 2021 年第三季財報電話會議。該公司的財務和經營業績今天早些時候透過我們的 Newswire 服務在新聞稿中發布，並發佈在網路上。您可以造訪我們的投資者關係網站下載收益新聞稿並註冊我們的分發清單。

Participants on today's call will be Mr. Changxun Sun, our Founder and Chief Executive Officer; and Mr. Yipeng Li, Chief Financial Officer.

今天電話會議的參與者包括我們的創辦人兼執行長孫昌勳先生；李一鵬先生，財務長。

Management will begin with prepared remarks, and the call will conclude with a Q&A session. Before I hand it over to the Management, I would like to remind you of Cloopen's safe harbor statement in relation to today's call. Except for the historical information contained herein, certain matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates and projections, and therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission.

管理階層將以準備好的發言開始，電話會議將以問答環節結束。在將其交給管理層之前，我想提醒您有關今天電話會議的 Cloopen 安全港聲明。除本文所包含的歷史資訊外，本次電話會議中討論的某些事項均為前瞻性陳述。這些陳述是基於當前趨勢、估計和預測，因此，您不應過度依賴它們。前瞻性陳述涉及固有風險和不確定性。許多重要因素可能導致實際結果與任何前瞻性陳述中包含的結果有重大差異。有關潛在風險和不確定性的更多信息，請參閱該公司向美國證券交易委員會提交的文件。

With that, I'm now very pleased to turn the call over to our CEO, Mr. Changxun Sun. Please go ahead.

現在，我很高興將電話轉給我們的執行長孫昌勳先生。請繼續。

(foreign language)

（外語）

[Interpreted] Hello, everyone, and thank you for Cloopen's third quarter earnings call. We appreciate your interest. We are excited to announce that we maintained strong top line growth in the third quarter, delivering revenues of RMB276.1 million, representing a 44.3% year-over-year increase. With the rapid revenue growth, our third quarter gross margin also remained robust at 43.5%. Since our IPO, we have strategically focused on our cloud-based CC business and providing SaaS products for marketing and service scenario to our customers. We made great progress executing our strategy during the third quarter and delivered excellent results. This is reflected in our 125.4% year-over-year revenue growth in CC business as the biggest revenue contributor in our group. We also increased the number of large enterprise customers to 219, accounting for 77.4% of our total revenue during the trailing 12-month period ended September 30, 2021.

[解讀]大家好，感謝您參加 Cloopen 第三季財報電話會議。我們感謝您的關注。我們很高興地宣布，第三季我們的營收保持強勁成長，營收達到 2.761 億元，年增 44.3%。隨著營收的快速成長，我們第三季的毛利率也維持在43.5%的強勁水準。自IPO以來，我們策略性地專注於基於雲端的CC業務，並為客戶提供用於行銷和服務場景的SaaS產品。我們在第三季執行策略方面取得了巨大進展，並取得了優異的業績。這反映在我們作為集團最大收入貢獻者的 CC 業務收入年增 125.4%。我們也將大型企業客戶數量增加至 219 個，佔截至 2021 年 9 月 30 日的過去 12 個月期間總收入的 77.4%。

(foreign language)

（外語）

[Interpreted]

[解讀]

Today, I would like to discuss 2 important aspects of Cloopen's business, our CC product development strategy and our technological programs. First, let's talk about our products. In the Chinese market, it is important to differentiate the needs of large enterprises and small to medium-sized enterprises, or SMEs, with respect to sales and product service systems. Large enterprise customers require direct sales. Here, we provide private cloud-based services specific to their industry scenario. For SMEs, we offer standardized SaaS products to support their focus on directing online traffic with follow-up from original sales team to better serve each customer group, we designed 2 distinct product brands. Rong-C formerly called RongCC is specifically for large enterprise customers and our 7moor brand serves SMEs.

今天，我想討論 Cloopen 業務的兩個重要方面，我們的 CC 產品開發策略和我們的技術計劃。首先，我們來談談我們的產品。在中國市場，區分大型企業和中小企業在銷售和產品服務系統的需求非常重要。大型企業客戶需要直銷。在這裡，我們提供針對其行業場景的基於私有雲的服務。對於中小企業，我們提供標準化的SaaS產品，以支援他們專注於引導線上流量，並由原始銷售團隊跟進，以更好地服務每個客戶群，我們設計了2個不同的產品品牌。 Rong-C以前稱為RongCC，專門針對大型企業客戶，我們的7moor品牌服務中小企業。

Our revenues are mainly derived from 2 categories, marketing and service scenario, the products we offer constantly evolve to meet demand in these categories. We have made great strides in developing products for diverse marketing scenarios. Initially, we offered CPaaS solutions with channels to reach customers, including voice and messaging APIs. We then extended our offering to SaaS. First, providing SMEs with standardized products, including telemarketing services and a text-based chat-bot for late reception under our 7moor brand. We later added Rong-C products to serve large enterprise customers, including our Rong-C contact center, outbound call robot and agent assistance. With these products, we are now fully leveraging our communications and AI technologies, empowering businesses to reach a broader range of potential customers in various marketing scenario reduce costs and enhance their operating efficiency. We also acquired EliteCRM in March 2021, which reinforces our capabilities in vast pool of sales lease and sales process management during the marketing process.

我們的收入主要來自兩個類別，行銷和服務場景，我們提供的產品不斷發展以滿足這些類別的需求。我們在開發適合不同行銷場景的產品方面取得了長足的進步。最初，我們提供 CPaaS 解決方案以及接觸客戶的管道，包括語音和訊息 API。然後我們將我們的產品擴展到 SaaS。首先，為中小企業提供標準化產品，包括電話行銷服務和基於文字的聊天機器人，以我們的 7moor 品牌進行後期接待。後來我們增加了融C產品來服務大型企業客戶，包括我們的融C聯絡中心、外撥機器人和座席協助。透過這些產品，我們現在充分利用我們的通訊和人工智慧技術，幫助企業在各種行銷場景中接觸到更廣泛的潛在客戶，降低成本並提高營運效率。我們也於 2021 年 3 月收購了 EliteCRM，這增強了我們在行銷過程中的大量銷售租賃和銷售流程管理方面的能力。

Based on our data foundation, we plan to release our new 2-core marketing cloud of the SaaS product for use by both our large enterprise customers and SMEs. 2-core marketing cloud is designed to help our customers realize public to private domain traffic conversion and private domain user operation. And with the support from our middleware capabilities, businesses can gain a better understanding of their users for remarketing opportunities across private domain users, all of which drives additional marketing efficiency. By providing communication services to tens of thousands of customers, we have accumulated a large amount of industry data and user insights that can help improve primary targeted marketing accuracy for our customers, in compliance with their requirements. Supply impact and SaaS services for leads from the public domain has also given us a deep understanding of our enterprise customers. With our advantage in these 2 areas, we are well positioned to expand our offerings to include marketing SaaS products with a clear sales pathway.

基於我們的數據基礎，我們計劃發布新的2核行銷雲端SaaS產品，供我們的大型企業客戶和中小企業使用。 2核行銷雲旨在幫助我們的客戶實現公域到私域的流量轉換和私域用戶的營運。在我們的中間件功能的支持下，企業可以更了解其用戶，從而獲得跨私域用戶的再行銷機會，所有這些都可以提高行銷效率。透過為數以萬計的客戶提供傳播服務，我們累積了大量的行業數據和用戶洞察，可以幫助客戶提高初級精準行銷的精準度，滿足客戶的需求。公共領域潛在客戶的供應影響和 SaaS 服務也讓我們對企業客戶有了深入的了解。憑藉我們在這兩個領域的優勢，我們有能力擴大我們的產品範圍，包括透過清晰的銷售途徑行銷 SaaS 產品。

With respect to service scenario, we have served thousands of customers through 7moor customer service cloud and RongCC products that provide functions such as multichannel access, knowledge base, CRM and work order management. In the past, we helped our customers solve their online communication issues with their users. Now many of our customers require work order function solutions as they strive to digitize their after sales workflow management to address their evolving needs and based on existing customer service cloud products, we developed our after sales cloud with functions extending to aftersales and aftermarket, targeting to provide a closed-loop services for enterprise customers with both our customer service cloud and after sales cloud. Our product help businesses realized online workflow management by growth and empowering customer service departments and also covering other related parties, such as the downstream dealerships, service outlets and on-site engineers.

服務場景方面，我們透過7moor客服雲端及RongCC產品，提供多通路接取、知識庫、CRM、工單管理等功能，服務了數千家客戶。過去，我們幫助客戶解決與其用戶的線上溝通問題。現在我們的許多客戶都需要工單功能解決方案，因為他們努力將售後工作流程管理數位化，以滿足他們不斷變化的需求，基於現有的客戶服務雲產品，我們開發了售後雲，功能延伸到售後和售後市場，針對透過客戶服務雲端和售後雲端為企業客戶提供閉環服務。我們的產品幫助企業實現線上工作流程管理，透過成長和賦能客戶服務部門，並涵蓋其他相關方，如下游經銷商、服務網點和現場工程師。

(foreign language)

（外語）

[Interpreted]

[解讀]

Having discussed our product development strategy, now let me share with you our progress on technology front. In the third quarter, we continue to ramp up investments in R&D to sustain our core products and technology competence. We also added top-notch talent to further round out our technical team. We established an AI research Institute and AR Engineering Institute, a Big Data Department and Audio and Video Department and a Security Technology Department. Meanwhile, we successfully recruited highly regarded technical experts from leading Internet companies. And are actively collaborating with colleges and universities to develop and recruit talent. Our technology system emphasized 3 of our core capabilities. Audio and Video, Big Data and AI. In the Audio and Video segment, we plan to build our own RTN or real-time network, conforming to the most up-to-date industry architecture standards. This will significantly enhance connectivity performance within tool networks and realize high concurrency and low latency.

講完了我們的產品發展策略，現在跟大家分享我們在技術方面的進展。第三季度，我們繼續加大研發投入，以維持我們的核心產品和技術能力。我們也引進了頂尖人才，進一步充實了我們的技術團隊。我們成立了AI研究院和AR工程院、大數據部和影音部以及安全技術部。同時，我們成功聘請了來自領先網路公司的知名技術專家。並積極與高等院校合作開發與招募人才。我們的技術體系強調我們的三項核心能力。影音、大數據和人工智慧。在音影領域，我們計劃建立自己的RTN或即時網絡，符合最新的產業架構標準。這將顯著增強工具網路內的連接效能，實現高並發和低延遲。

In terms of Big Data, we quickly constructed a complete series of commercially applicable Big Data platform solutions in line with industry technology and innovation standards. To advance our AI capability, we have established 2 research institutes and AI research institutes, led by a professor from the prestigious Nankai University and an AI Engineering Institute, led by a leading Internet, company's former chief scientist.

在大數據方面，我們快速建構了符合產業技術和創新標準的全系列可商用的大數據平台解決方案。為了提升我們的人工智慧能力，我們建立了兩個研究所和由著名南開大學教授領導的人工智慧研究院和一個由網路領先者、公司前首席科學家領導的人工智慧工程研究院。

With respect to AI, we focused on natural language processing or NLP, and intelligent decisioning and are also actively exploring computer vision or CV technologies. While enhancing our 3 core capabilities, we are also improving our R&D efficiency. We upgraded our technical architecture to only need a single deployment solution to be compatible with all types of cloud vendors and customers. Furthermore, the local development platform we build will enable accelerated customized developments. These refinements will consistently improve Cloopen's technical strength and R&D efficiencies.

在人工智慧方面，我們專注於自然語言處理或NLP、智慧決策，同時也積極探索電腦視覺或CV技術。在提升三大核心能力的同時，我們也正在提升研發效率。我們升級了技術架構，只需單一部署方案即可相容於各類雲端廠商和客戶。此外，我們建構的本地開發平台將能夠加速客製化開發。這些改進將持續提高Cloopen的技術實力和研發效率。

Going forward, Cloopen is committed to becoming a SaaS company that integrates its capabilities in Communication, Big Data and AI to better support business with marketing needs and drive their digital and intelligent transformation. As we continue to refine our products and services to empower companies across industry, we are confident in our ability to create additional value for our shareholders.

未來，Cloopen致力於成為一家融合通訊、大數據和人工智慧能力的SaaS公司，更好地支援企業的行銷需求，推動企業的數位化、智慧轉型。隨著我們不斷完善我們的產品和服務，為各行業的公司提供支持，我們對為股東創造額外價值的能力充滿信心。

That concludes Changxun Sun's prepared remarks. Now we would like to turn the call over to Steven for a closer review of our third quarter financials.

孫昌勳準備好的演講到此結束。現在我們想將電話轉給史蒂文，以便對我們第三季的財務狀況進行更仔細的審查。

Thank you, Changxun and Yilin. Hello, everyone, and thank you for joining our call today. Before going through the third quarter financials in detail, I would like to share with you the recent developments. We are excited to announce that we received our first order from the Southeast Asia market. The order comes from one of Thailand's largest commercial banks, marking an important milestone in our overseas expansion plan. With the pandemic gradually receding in this region, we expect our endeavors will progressively bear fruit in the coming quarters. We will continue to expand our customer base in this region leveraging our comprehensive proven product and services as well as abundant experience in serving companies of all sizes across industries in China.

謝謝昌勳和伊琳。大家好，感謝您今天加入我們的電話會議。在詳細介紹第三季財務數據之前，我想先與大家分享最近的進展。我們很高興地宣布，我們收到了來自東南亞市場的第一筆訂單。該訂單來自泰國最大的商業銀行之一，標誌著我們海外擴張計劃的重要里程碑。隨著該地區疫情逐漸消退，我們預計我們的努力將在未來幾季逐步取得成果。我們將利用我們全面成熟的產品和服務以及為中國各行業各種規模的公司提供服務的豐富經驗，繼續擴大我們在該地區的客戶群。

In addition, according to the Bloomberg on China's cloud communications industry, which was recently released by China Insights Consultancy or CIC, China's cloud-based communications market is expected to grow significantly from RMB49.8 billion in 2020 to RMB146.5 million in 2025 at a CAGR of 24.3%. And with a particularly strong impetus from CC and UC&C. As the only company that offers a full scope of product and services covering CC, UC&C and CPaaS among cloud-based medication solutions provider in China, we believe Cloopen has a long runway for growth given our strong momentum. Our belief is supported by CIC data, reflecting our industry-leading year-over-year growth rates in revenues for the company and our CC business for the first half of 2021. We are confident that Cloopen is well positioned to address this sizeable market and unlock its value with our continuous efforts to refine our products and services, enhance our innovation capabilities, optimize our customer mix and expand our global footprint.

此外，根據中智諮詢（CIC）近期發布的彭博中國雲端通訊產業報告顯示，中國雲端通訊市場預計將從2020年的498億元人民幣大幅成長至2025年的1.465億元人民幣。複合年增長率為24.3%。 CC 和 UC&C 的推動尤為強勁。作為中國雲端醫療解決方案供應商中唯一一家提供涵蓋 CC、UC&C 和 CPaaS 在內的全系列產品和服務的公司，我們相信，鑑於我們的強勁勢頭，Cloopen 的成長空間還很長。我們的信念得到了 CIC 數據的支持，反映了我們公司 2021 年上半年收入和 CC 業務的同比增長率處於行業領先。我們相信 Cloopen 處於有利地位，可以應對這個龐大的市場，並且我們不斷努力完善我們的產品和服務、增強我們的創新能力、優化我們的客戶結構並擴大我們的全球足跡，從而釋放其價值。

We are pleased with our solid third quarter operating and financial performance, despite impact from the after-school tutoring sector. Excluding this impact, our dollar-based net customer retention rate remained sound above 100% for the third quarter of 2021, but lower compared with the previous quarter, primarily as a result of the discontinuation of some low-margin customers using our CPaaS messaging services. As large and medium-sized enterprise customers usually have strong payment abilities and higher user stickiness, we made strategic adjustments to optimize our customer mix during the quarter, resulting in a decrease in total active customers due to a reduced number of small-sized customers.

儘管受到課外輔導行業的影響，我們對第三季度穩健的營運和財務表現感到滿意。排除此影響，我們以美元計算的淨客戶保留率在2021 年第三季仍然保持在100% 以上，但與上一季相比有所下降，這主要是由於一些低利潤客戶停止使用我們的CPaaS 訊息服務。由於大中型企業客戶通常支付能力較強，用戶黏性度較高，本季度我們進行了策略調整，優化客戶結構，導致活躍客戶總量因小型客戶數量減少而減少。

Now, let's look at our financial results in detail. We recorded revenues of RMB276.1 million during the quarter, up 44.3% year-over-year, mainly driven by the continued growth momentum of our CC business. With an increasing number of large enterprise customers and synergies from EliteCRM, CC business generated RMB130.4 million in revenues, representing a remarkable 125.4% year-over-year increase. In addition, according to the sorry -- Cost of revenues increased by 31.8% to RMB156 million in the third quarter of 2021 from RMB118.4 million in the third quarter of 2020, which was primarily due to increased infrastructure and equipment cost, outsourcing costs and staff costs as the company continues to scale its business.

現在，讓我們詳細看看我們的財務表現。本季我們錄得營收人民幣2.761億元，年增44.3%，主要得益於CC業務的持續成長動能。隨著大企業客戶數量的不斷增加以及EliteCRM的綜效，CC業務實現收入人民幣1.304億元，較去年同期大幅成長125.4%。此外，根據抱歉——2021年第三季營收成本從2020年第三季的人民幣1.184億元增長31.8%至人民幣1.56億元，主要是由於基礎設施和設備成本、外包成本增加隨著公司不斷擴大業務規模，員工成本也隨之增加。

Gross profit increased by 64.6% to RMB120.1 million in the third quarter of 2021 from RMB72.9 million in the third quarter of 2020. Gross margin was 43.5% in the third quarter of 2021 compared with 38.1% in the third quarter of 2020. The increase of gross margin was contributed by the optimized revenue structure. In the third quarter of 2021, operating expenses were RMB237.8 million, representing a 51.5% increase from RMB157 million in the third quarter of 2020. R&D expenses increased by 66.9% to RMB75.5 million in the third quarter of 2021, compared with RMB45.3 million in the third quarter of 2020, primarily due to an increase in share-based compensation expenses of RMB5.5 million, an increase in the R&D staff expenses of RMB18.5 million, as the company recruited highly regarded experts to develop core features and functions in cloud-based CC solutions and cloud-based UC&C solutions and the increase in technology, service expenses paid to the outsourcing service providers for the development of certain noncore features and functions in cloud-based UC&C solutions.

毛利由2020年第三季的人民幣7,290萬元增加至2021年第三季的人民幣1.201億元，成長64.6%。2021年第三季的毛利率為43.5%，而2020年第三季的毛利率為38.1%毛利率的成長得益於收入結構的最佳化。 2021年第三季營業費用為人民幣2.378億元，較2020年第三季的人民幣1.57億元成長51.5%。研發費用2021年第三季為人民幣7,550萬元，較2020年第三季成長66.9% 。2020年第三季增加人民幣4,530萬元，主要是由於公司聘請知名專家進行研發，導致股權激勵費用增加人民幣550萬元，研發人員費用增加人民幣1,850萬元。基於雲端的CC解決方案和基於雲端的UC&C解決方案的核心特性和功能，以及為開發基於雲端的UC&C解決方案中的某些非核心特性和功能而支付給外包服務提供者的技術、服務費用的增加。

Sales and marketing expenses increased by 42.3% to RMB82.6 million in the third quarter of 2021 from RMB58.1 million in the third quarter of 2020, primarily due to an increase in share-based compensation expenses of RMB7.5 million and increase in staff expenses of RMB12.6 million, as the company continues to scale its business and reach a wider customer base. G&A expenses increased by 48.4% to RMB79.6 million in the third quarter of 2021 from RMB53.7 million in the third quarter of 2020, primarily due to an increase in personnel cost, as the company continues to build his team, an increase in social insurance premiums as the company had enjoyed a social insurance premiums deduction in 2020 according to the government relief policies during the COVID-19 outbreak and an increase in the provision for doubtful accounts resulting from increase in accounts receivables. Net loss for the third quarter of 2021 was RMB112.2 million compared with RMB93.9 million in the third quarter of 2020. Net loss margin is sharply narrowed by around 10% year-over-year.

銷售和行銷費用從 2020 年第三季的人民幣 5,810 萬元增加至 2021 年第三季的人民幣 8,260 萬元，成長 42.3%，主要是由於股權激勵費用增加人民幣 750 萬元以及隨著公司不斷擴大業務規模並涵蓋更廣泛的客戶群，員工費用為人民幣1,260萬元。 G&A 費用從 2020 年第三季的 5,370 萬元增加到 2021 年第三季的 7,960 萬元，成長 48.4%，主要是由於公司繼續建設團隊、人員成本增加，導致人員成本增加。社會保險費因公司在COVID-19疫情期間根據政府救助政策享有了2020年社會保險費扣除，且應收帳款增加導致呆帳撥備增加。 2021年第三季淨虧損為人民幣1.122億元，2020年第三季淨虧損為9,390萬元。淨虧損率年比大幅收窄10%左右。

For the fourth quarter of 2021, Cloopen currently expects revenues to be between RMB328 million and RMB333 million, representing an increase of 26.8% to 28.7% year-over-year. The above outlook is based on the current market conditions and reflects the company's current preliminary estimates of market and operating conditions and customer demand, all of which are subject to substantial uncertainty.

目前，Cloopen預計2021年第四季營收將在3.28億元至3.33億元之間，年增26.8%至28.7%。上述展望基於當前市場狀況，反映了公司目前對市場和經營狀況以及客戶需求的初步估計，所有這些都存在很大的不確定性。

With that, I would like to open up the call to questions. Operator, please.

至此，我想開始提問。接線員，請說。

(Operator Instructions) First question comes from Tina Hou of Goldman Sachs.

（操作員說明）第一個問題來自高盛的Tina Hou。

(foreign language) So I will translate in English. So my first question is regarding the CC business, because we saw pretty strong growth in the third quarter. So just wondering, compared to the second quarter of this year, what has -- is there any new development or competition changes in 3Q versus 2Q? And then the second question is regarding the 4Q revenue guidance. If we take 4Q '21 guidance, minus 3Q '21 revenue, then the incremental revenue is about RMB54 million. When we compare this to the 4Q '20 and 4Q '19 numbers, it's actually a little bit lower than the previous 2 years, so wondering what's causing this? And then the third question is please break down the gross margin by the 3 different segments?

（外語）所以我會翻譯成英文。所以我的第一個問題是關於 CC 業務，因為我們在第三季看到了相當強勁的成長。所以我想知道，與今年第二季相比，第三季與第二季相比有什麼新的發展或競爭變化嗎？第二個問題是關於第四季的收入指引。如果我們以 21 年第 4 季的指引減去 21 年第 3 季的收入，那麼增量收入約為人民幣 5,400 萬元。當我們將其與 20 年第 4 季和 19 年第 4 季的數字進行比較時，它實際上比前兩年要低一些，所以想知道是什麼原因造成的？第三個問題是，請以3個不同的細分市場細分毛利率？

Okay. For the first question regarding the competitive environment for our CC business, we actually continue to enjoy bigger and bigger competitive advantage, especially for our RongCC or Rong-C business lines, focused on the large enterprise customers. Our RongCC business actually increased by over 400% compared to third quarter of last year, especially in the finance industry, we think we are now the -- a very clear frontrunner in the finance industry, we actually had several very big wins in the third quarter. The finance industry right now accounted for almost 70% of our total revenue from RongCC business. So as what I mentioned during the call, based on the CIC report, the revenue increase of our CC business is the top in the business. So I think along -- when we continue to dig deeper into the industries we focused on, especially the finance industry, we will have more expertise and know-how in those industries, and we'll have a bigger actually competitive advantage compared to our competitors.

好的。對於第一個問題，關於我們CC業務的競爭環境，我們實際上繼續享有越來越大的競爭優勢，尤其是我們的RongCC或Rong-C業務線，專注於大型企業客戶。 Our RongCC business actually increased by over 400% compared to third quarter of last year, especially in the finance industry, we think we are now the -- a very clear frontrunner in the finance industry, we actually had several very big wins in the third四分之一.目前，金融業占我們RongCC業務總收入的近70%。所以正如我在電話中提到的，根據CIC的報告，我們CC業務的收入增幅是業界最高的。所以我認為，當我們繼續深入挖掘我們所關注的行業，特別是金融業時，我們將在這些行業擁有更多的專業知識和技術，並且與我們相比，我們將擁有更大的實際競爭優勢。競爭對手。

The second question is regarding the guidelines for the fourth quarter of this year, in terms of the revenue increase compared to third quarter and compare that with the revenue increase for last year and the year before. Actually, the reason why when we look at the total revenue increase for the coming quarter compared to third quarter is a little bit lower compared to the previous years, it's mainly due to the revenue not increase very much or maybe a little bit decrease of our CPaaS business. If you look at our third quarter financial results, the revenue for CPaaS business actually decreased a little bit compared to third quarter of last year. As we continue to shift our strategic resources to higher margin business such as CC and UC&C business, the revenue will probably -- for the CPaaS business will probably remain very flat or even decrease a little bit. So that's the major reason why our revenue for the last quarter of this year compared to the third quarter not increased that much. But for the CC and UC&C business, we are very confident, the very fast increasing trend will continue.

第二個問題是關於今年第四季的指導，從第三季的營收成長來看，與去年和前年的營收成長進行比較。事實上，當我們看未來一個季度的總收入增幅與第三季度相比，之所以比往年低一些，主要是因為我們的收入增幅不大，或者可能略有下降。 CPaaS業務。如果你看一下我們第三季的財務業績，CPaaS業務的收入實際上比去年第三季有所下降。隨著我們繼續將策略資源轉向利潤率更高的業務，例如 CC 和 UC&C 業務，CPaaS 業務的收入可能會保持非常平穩，甚至略有下降。所以這就是我們今年最後一個季度的收入與第三季相比沒有增加那麼多的主要原因。但對於CC和UC&C業務，我們非常有信心，非常快速的成長趨勢將會持續下去。

The third question is the gross margin for each of our business. The gross margin for our CPaaS business for the third quarter is 28%. It's roughly the same compared to before. And the gross margin for the CC business is 56% is also roughly the same compared to before. The gross margin for UC&C business for the third quarter is 41%. This is a little bit lower compared to previous quarters. This was mainly due to some of the revenues for UC&C for our CV business in the third quarter involves some of the hardware. So that drives our gross margin for UC&C business down a little bit. But this is more like a onetime thing. So we believe the gross margin for the UC&C business will bounce back in the coming quarters.

第三個問題是我們每項業務的毛利率。第三季我們的CPaaS業務毛利率為28%。和以前相比，也差不多了。而CC業務的毛利率為56%，與先前相比也大致持平。第三季UC&C業務毛利率為41%。與前幾季相比，這一數字略有下降。這主要是由於第三季UC&C CV業務的部分收入涉及部分硬體。因此，這導致我們 UC&C 業務的毛利率略有下降。但這更像是一次性的事情。因此，我們相信 UC&C 業務的毛利率將在未來幾季反彈。

(foreign language)

（外語）

[Interpreted] During the past few months, we see a trend in both domestic and overseas CC vendors that they are all adding the CC product comprehensively. All extending the functions of the traditional CC in mainly 2 categories. The first one is marketing, and the second is after sales and services. These 2 categories are just what we mentioned earlier in the earnings call. We also increased a lot in our R&D investments and established our own version of the marketing and after sales CC product, which is Rong-C and 7moor cloud.

【解讀】這幾個月來，我們看到無論是國內外的CC廠商都有一個趨勢，他們都在全面增加CC產品。都主要在2類方面擴充了傳統CC的功能。第一個是行銷，第二個是售後服務。這兩個類別正是我們先前在財報電話會議中提到的。我們也加大了研發投入，建立了自己版本的行銷和售後CC產品，那就是融C和7moor雲端。

The next question will be from (inaudible) of Bernstein.

下一個問題將來自伯恩斯坦（聽不清楚）。

(foreign language) I have 2 questions. The first is regarding the contact center revenue. I would like to understand what's the split between the 7moor business, the RongCC business and also the EliteCRM that was integrated? And maybe you could help us understand what are the growth rates for these 3 sub-businesses? And the second question is regarding your cooperation with Tencent that you mentioned, could you help us understand a little bit more how the corporation will work? Also because in the recent 3Q earnings, Tencent talks a lot about developing their own CRM business. And I would like to understand whether your products will compete with them or will cooperate with them?

（外語）我有兩個問題。首先是關於聯絡中心的收入。我想了解一下7moor業務、RongCC業務以及整合後的EliteCRM之間有什麼區別？也許您可以幫助我們了解這 3 個子業務的成長率是多少？第二個問題是關於您提到的與騰訊的合作，您能否幫助我們更多地了解該公司將如何運作？也因為在最近的3Q財報中，騰訊大肆談論發展自己的CRM業務。我想了解你們的產品會和他們競爭還是合作？

Okay. For the first question, within our CC business, the RongCC revenue, like I mentioned, during -- when I answered the first question actually, the revenue increased by over 400%. But that, of course, includes the revenue from EliteCRM. The EliteCRM contributed about RMB12 million revenue for the third quarter. So even take those revenue from EliteCRM out, the revenue increase for the entire CC business is still about 100%. And as for 7moor, the revenue increase for 7moor for this quarter is around 35% year-over-year. Yes. So that's the answer to the first question.

好的。對於第一個問題，在我們的CC業務中，RongCC的收入，就像我提到的，在我實際上回答第一個問題的時候，收入成長了400%以上。但這當然包括來自 EliteCRM 的收入。 EliteCRM第三季貢獻收入約人民幣1,200萬元。所以即使去掉EliteCRM的收入，整個CC業務的收入增幅還是約100%。而對於7moor來說，本季7moor的營收年增在35%左右。是的。這就是第一個問題的答案。

As for the second question, we are not competing with Tencent. As you know, Tencent is one of our strategic investors. We work very closely with Tencent. We actually just signed a strategic framework agreement with Tencent during October. And under this agreement, we will work with Tencent Cloud to either Tencent cloud can actually sell our products and services to the final customers or we can work with Tencent Cloud together and combine our products together and offer one solution to the end customers. And we can also offer Tencent the product service solution with Tencent. So in short, we are not competing with Tencent, but rather work with Tencent to deliver our products and services to the final customers.

至於第二個問題，我們不是跟騰訊競爭。如您所知，騰訊是我們的策略投資者之一。我們與騰訊合作非常密切。實際上我們十月剛剛和騰訊簽署了戰略框架協議。根據該協議，我們將與騰訊雲合作，要么騰訊雲可以實際向最終客戶銷售我們的產品和服務，要么我們可以與騰訊雲合作，將我們的產品組合在一起，為最終客戶提供一個解決方案。我們也可以向騰訊提供產品服務解決方案。所以簡而言之，我們不是與騰訊競爭，而是與騰訊合作，將我們的產品和服務交付給最終客戶。

(foreign language)

（外語）

[Interpreted] There are mainly 2 categories of CRM. And first one is the CRM managed sales lease, and another is the CRM managing the sales process. Tencent actually don't have its own CRM product. But one of its important portfolio, (inaudible) is a B2B CRM company, which mainly does the sales process management. And CRM is mainly doing the management of sales leads, which we said that we -- our CRM product is used to manage the public domain traffic -- traffic and the sales lead, but not a direct competitor to (inaudible) and Tencent.

【解讀】CRM主要有2類。第一個是 CRM 管理的銷售租賃，另一個是 CRM 管理銷售流程。騰訊其實沒有自己的CRM產品。但其重要的投資組合之一（聽不清楚）是一家 B2B CRM 公司，主要進行銷售流程管理。而CRM主要是做銷售線索的管理，我們說我們－我們的CRM產品是用來管理公域流量－流量和銷售線索的，但不是（聽不清楚）和騰訊的直接競爭對手。

(Operator Instructions) The next question come from (inaudible) with CICC.

（操作員指示）下一個問題來自（聽不清楚）CICC。

So I have 3 questions. The first one is about -- so also I will ask this in Chinese. The first one is (foreign language) And then I will ask it in English. So congratulations on the strong growth of CC solution. We noticed that entered into the framework cooperation agreement with Tencent Cloud in October. Can you give us more color on the future cooperation. And the second one is, we noticed that the number of active customers and dollar-based net customer retention rates decreased slightly compared to second in the quarter. So could you share more information about the number of customers by products. The third question is about the newly obtained order in Thailand. Before this, has deployed overseas expansion plan in Japan, Malaysia and other regions. So how to compete with overseas competitors in terms of product, customer acquisition channels and so on.

所以我有3個問題。第一個是關於──所以我也會用中文問這個。第一個是（外語）然後我會用英語問。祝賀 CC 解決方案的強勁成長。我們注意到，10月與騰訊雲簽訂了框架合作協議。您能為我們未來的合作提供更多的色彩嗎？第二個是，我們注意到活躍客戶數量和以美元計算的淨客戶保留率與第二季相比略有下降。您能否分享更多有關按產品劃分的客戶數量的資訊。第三個問題是關於泰國新獲得的訂單。此前，已在日本、馬來西亞等地區部署海外擴張計畫。那麼如何在產品、獲客通路等方面與海外競爭對手競爭。

Yes. Okay. For the first question, as for the relationship or our cooperation with Tencent, like I mentioned, Tencent is one of our strategic investors. So we had a lot of synergies with Tencent from our UC&C business, Tencent continues to offer us opportunities in industries such as industrial, manufacturing, energy, governments and for our CC business, like I mentioned, in the last question, we signed a strategic framework agreement with Tencent in October. And within this agreement, we have different ways to work with Tencent. Tencent can either sell our products directly to the end customers or we can combine our products and Tencent's products together and offer a one solution to the end customers or we can offer our technology and service products to Tencent and Tencent will then sell to the end customers. Right now, there are over 10 million of contract value, either signed or in the process of being signed, including the governments or in the insurance industry, in the finance industry, in the manufacturing industry, in the e-commerce industry and so on.

是的。好的。關於第一個問題，關於我們與騰訊的關係或合作，就像我提到的，騰訊是我們的策略投資者之一。因此，我們在UC&C 業務方面與騰訊有很多協同效應，騰訊繼續為我們提供工業、製造、能源、政府等行業的機會，對於我們的CC 業務，就像我在上一個問題中提到的，我們簽署了戰略合作協議10月與騰訊簽署框架協議。在這份協議範圍內，我們與騰訊有不同的合作方式。騰訊可以直接向最終客戶銷售我們的產品，或者我們可以將我們的產品與騰訊的產品結合在一起，為最終客戶提供單一解決方案，或者我們可以向騰訊提供我們的技術和服務產品，然後騰訊將銷售給最終客戶。目前已簽約或正在簽約的合約金額超過1000萬，包括政府或保險業、金融業、製造業、電力商業等。

For the second question, as for the active customers for the different product lines of our business, by the end of third quarter, the active customer number is over 12,000 for the trailing 12 months. CPaaS business has about 6,000 active customers. CC business has also about 6,000 active customers and UC&C business has over 100 active customers. We actually mentioned this during the call, the major reason why the number of customers and also the net -- the dollar-based retention rate is down a little bit compared to previous quarters is mainly due to why the impact from the education sector; and 2, we cut off some very small enterprises on purpose so that our ROI or our gross margin will be better off.

第二個問題，從我們業務各產品線的活躍客戶來看，截至三季末，過去12個月的活躍客戶數量超過12,000家。 CPaaS業務約有6,000名活躍客戶。 CC業務還擁有約6,000個活躍客戶，UC&C業務擁有超過100個活躍客戶。我們實際上在電話會議中提到了這一點，客戶數量以及以美元計算的淨保留率與前幾季相比略有下降的主要原因主要是由於教育行業的影響； 2，我們故意砍掉一些非常小的企業，這樣我們的投資報酬率或毛利率會更好。

The last question is regarding our overseas expansion. Yes, right now, we have operations in Japan, in Malaysia, also in Philippines. As for our competitive advantage in the overseas markets, right now, we noticed that the competition in Southeast Asia market is not as intense as the China market. So our products actually has the advantage compared to other products offered by the other competitors in terms of customer experience in terms of everything. And also, we worked very closely with the telecom operators in the Southeast Asia to look for potential opportunities. We mainly sell our standard products in the Southeast Asia market. And also, we actually enjoy a great advantage in terms of pricing compared to the products offered by those local or other overseas companies in the Southeast Asian market and still have a better gross margin compared to the Chinese market. So those are the advantages we have when we compete in the southeast or in the overseas markets.

最後一個問題是關於我們的海外擴張。是的，現在我們在日本、馬來西亞和菲律賓都有業務。至於我們在海外市場的競爭優勢，目前我們注意到東南亞市場的競爭並不像中國市場那麼激烈。因此，與其他競爭對手提供的其他產品相比，我們的產品實際上在客戶體驗方面具有優勢。此外，我們與東南亞的電信業者密切合作，尋找潛在的機會。我們的標準產品主要銷往東南亞市場。而且，與本地或其他海外公司在東南亞市場提供的產品相比，我們實際上在定價方面享有很大優勢，並且與中國市場相比仍然具有更好的毛利率。所以這些都是我們在東南部或海外市場競爭時所擁有的優勢。

(foreign language)

（外語）

[Interpreted] We also have another advantage over other vendors in Southeast Asia market. The first one is our price is very competitive. Not many local vendors are playing in this market in Southeast Asia. Most of them are -- most of the services are covered by Euro and U.S. companies and their license and services are both very expensive. So our price is very competitive compared to theirs. And the second advantage is that we are looking for those enterprises, those Chinese enterprises, which are also doing overseas businesses that we can provide our products to those companies.

【解讀】在東南亞市場，我們相對於其他廠商還有另一個優勢。第一個是我們的價格非常有競爭力。參與東南亞這個市場的本地供應商並不多。其中大多數 - 大部分服務由歐洲和美國公司提供，他們的許可證和服務都非常昂貴。所以我們的價格與他們相比非常有競爭力。第二個優勢是我們正在尋找那些也在海外開展業務的中國企業，我們可以向這些公司提供我們的產品。

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

謝謝。沒有顯示任何進一步的問題。我們的問答環節到此結束。現在，我想將會議轉回投資者關係部伊林進行閉幕致詞。

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

再次感謝大家參加今天的電話會議。我們期待很快再次與您交談。早安，晚安。

This concludes our earnings conference call. You may now disconnect your line. Thank you.

我們的財報電話會議到此結束。現在您可以斷開線路。謝謝。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]