TAL Education Group (TAL) 2024 Q3 法說會逐字稿

Ladies and gentlemen, good day, and thank you for standing by. Welcome to TAL Education Group's Third Quarter Fiscal Year 2024 Earnings Conference Call. (Operator Instructions) Please be informed that today's conference is being recorded. I'd now like to hand the conference over to Mr. Jackson Ding, Investor Relations Director. Thank you. Please go ahead, sir.

女士們先生們，美好的一天，謝謝你們的支持。歡迎參加好未來教育集團 2024 財年第三季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想把會議交給投資人關係總監丁克森先生。謝謝。請繼續，先生。

Thank you. And thank you all for joining us today for TAL Education Group's third quarter fiscal year 2024 earnings conference call. The earnings release was distributed earlier today and you may find a copy on the company's IR website or through the newswires.

謝謝。感謝大家今天參加好未來教育集團 2024 財年第三季財報電話會議。收益報告已於今天早些時候發布，您可以在公司的投資者關係網站或新聞專線上找到副本。

During this call, you will hear from Mr. Alex Peng, President and Chief Financial Officer; and myself, Investor Relations Director. Following the prepared remarks, Mr. Peng and I will be available to answer your questions.

在本次電話會議中，您將聽到總裁兼財務長彭鵬先生的演講；還有我自己，投資人關係總監。在準備好的演講結束後，我和彭總將回答大家的問題。

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in our public filings with the SEC. For more information about these risks and uncertainties, please refer to our filings with the SEC.

在我們繼續之前，請注意，今天的討論將包含根據1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述受到風險和不確定性的影響，可能導致實際結果存在重大差異從我們目前的預期來看。潛在風險和不確定性包括但不限於我們向 SEC 公開提交的文件中概述的風險和不確定性。有關這些風險和不確定性的更多信息，請參閱我們向 SEC 提交的文件。

Also, our earnings release and this call include discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures.

此外，我們的收益發布和本次電話會議還包括對某些非公認會計準則財務指標的討論。請參閱我們的收益報告，其中包含非公認會計準則衡量標準與最直接可比較的公認會計準則衡量標準的調節表。

I would like to turn the call over to Mr. Alex Peng. Alex, please go ahead.

我想把電話轉給彭先生。亞歷克斯，請繼續。

Thank you, Jackson. I'd also like to thank all of you for participating in today's conference call. During this call, we'll review our financial performance and business progress in the third quarter of the fiscal year 2024. After that, I will share our thoughts for the next quarter's outlook.

謝謝你，傑克遜。我還要感謝大家參加今天的電話會議。在本次電話會議中，我們將回顧 2024 財年第三季的財務業績和業務進展。之後，我將分享我們對下一季展望的想法。

Throughout this fiscal quarter, we continued to manage our core businesses while concurrently exploring additional opportunities for development. We witnessed Learning Services continuing on its development trajectory, enabling learners' growth and development with our enrichment learning programs, both online and offline. The advancement of Learning Services is underpinned by our execution on the quality of our service offerings and the capacity of our learning center network.

在整個財政季度，我們繼續管理我們的核心業務，同時探索更多的發展機會。我們見證了學習服務繼續沿著其發展軌跡，透過我們的線上和線下強化學習計畫促進學習者的成長和發展。學習服務的進步得益於我們對服務品質的執行和學習中心網路的容量。

As for Content Solutions, we remain focused on the creation, curation and dissemination of quality content tailored to the unique learning pathways of our diverse user base in an effort to empower learners with the solutions they need to excel, ensuring that each individual's journey is mapped with resources that resonate with and elevate their learning spirit. We continue to execute on our product offerings as well as go-to-market capabilities for Content Solutions in this quarter.

至於內容解決方案，我們仍然專注於根據我們多元化用戶群的獨特學習路徑量身定制的優質內容的創建、策劃和傳播，努力為學習者提供他們所需的解決方案，確保每個人的旅程都得到映射提供與他們的學習精神產生共鳴並提升他們的學習精神的資源。本季我們將繼續執行我們的產品供應以及內容解決方案的上市能力。

We've been making programmatic advancements in our technological capabilities, laying a strategic foundation for future innovations. We recognize the transformative potential of this new wave of technologies for our business operations and will harness this power to serve our customers.

我們一直在技術能力方面取得有計劃的進步，為未來的創新奠定了策略基礎。我們認識到這一新技術浪潮對我們業務運營的變革潛力，並將利用這一力量為我們的客戶提供服務。

In terms of our financial performance, we reported net revenues of USD 373.5 million worth RMB 2.7 billion for the quarter, representing an increase of 60.5% and 63.7% year-on-year in U.S. dollar and RMB terms, respectively. With respect to profitability, our non-GAAP loss from operations and non-GAAP net loss attributable to TAL for the quarter were USD 10.2 million and USD 1.9 million, respectively.

財務表現方面，本季淨收入為 3.735 億美元，價值 27 億元人民幣，以美元和人民幣計算，年比分別成長 60.5% 和 63.7%。就獲利能力而言，本季我們的非 GAAP 營運虧損和歸屬於好未來的非 GAAP 淨虧損分別為 1,020 萬美元和 190 萬美元。

So with that overview, I'd like to hand the call over back to Jackson. He'll give you an update on our core business lines' operational developments and review our fiscal third quarter financial results. After that, I'll return to share more details regarding our outlook for the next quarter and then open the call for questions. Jackson, please go ahead.

有了這個概述，我想將電話轉回給傑克遜。他將為您提供我們核心業務線營運發展的最新信息，並審查我們第三季度的財務業績。之後，我將返回分享有關我們下一季展望的更多詳細信息，然後開始提問。傑克遜，請繼續。

Thank you, Alex. I'm pleased to share some details on the progress we made during the third fiscal quarter across our core business lines. Please note that all financial data for the quarter is unaudited.

謝謝你，亞歷克斯。我很高興與大家分享我們在第三財季在核心業務領域的進展的一些細節。請注意，本季度的所有財務數據均未經審計。

Now let's start with our Learning Services and Others business, which consists of among others, a broad range of learning programs for our consumers. For the third quarter of fiscal year 2024, Learning Services and Others business continued to achieve year-over-year revenue growth, driven by underlying development of multiple product lines. The largest revenue contributor within Learning Services and Others is our enrichment learning programs.

現在讓我們從我們的學習服務和其他業務開始，其中包括為我們的消費者提供廣泛的學習計劃。 2024財年第三季度，學習服務及其他業務在多產品線底層發展的推動下，持續實現營收年增。學習服務和其他領域最大的收入貢獻者是我們的密集學習計畫。

Through the design of our enrichment learning programs, we aim to nurture the full spectrum of learners' capabilities, enabling their well-rounded development that encompasses a breadth of competencies. And in our approach to enrichment learning, we place an emphasis on the cultivation of competencies, recognizing that it complements the mere acquisition of knowledge. These competencies equip learners with the necessary tools to navigate in practical real-world scenarios.

透過設計強化學習計劃，我們的目標是培養學習者的全方位能力，使他們能夠全面發展，涵蓋多種能力。在我們的強化學習方法中，我們強調能力的培養，並認識到它是對單純知識獲取的補充。這些能力為學習者提供了在實際的現實場景中導航所需的工具。

The revenue trend of Peiyou's small class enrichment programs tends to correlate with the size of its learning center network. Year-over-year, the increase in capacity has led to enrollment growth. We take a dynamic approach in managing our learning center expansion plan, evaluating several factors such as market demand in each area, user acceptance of our products, our operating capability and efficiency and exception.

培優小班強化計畫的收入趨勢往往與其學習中心網路的規模相關。與去年同期相比，容量的增加導致了入學人數的成長。我們採用動態方法來管理我們的學習中心擴建計劃，評估多個因素，例如每個領域的市場需求、使用者對我們產品的接受度、我們的營運能力以及效率和例外情況。

In alignment with our strategic objectives, our online enrichment learning business has maintained its course of operations. In light of the evolving landscape and observable developments in user behaviors and preferences within the online learning sector over the last couple of years, we continued to innovate on our product offerings and service delivery offers. Our online enrichment learning programs aim to offer a unique digital learning experience to its customer base.

為了與我們的策略目標保持一致，我們的線上強化學習業務維持了正常運作。鑑於過去幾年在線學習領域不斷變化的格局以及用戶行為和偏好的明顯發展，我們繼續在產品和服務交付方面進行創新。我們的線上強化學習計畫旨在為其客戶群提供獨特的數位學習體驗。

Regarding our overseas operations, Zinc Academy sustained continuous growth, exemplified by the addition of new learning centers during the fiscal quarter. As we progress, our strategy is to adopt a dual-focused approach that caters to our international learners by blending standardized educational frameworks with tailored local adoptions in an effort to meet diverse educational needs while maintaining a coherent global learning experience and standard.

在我們的海外業務方面，鋅學院持續成長，本財季新增的學習中心就是例證。隨著我們的進步，我們的策略是採用雙重重點的方法，透過將標準化教育框架與量身定制的本地採用相結合來滿足國際學習者的需求，以滿足多樣化的教育需求，同時保持一致的全球學習體驗和標準。

Let's transition to Content Solutions business, comprising of smartbooks, print books, learning devices and digital content. Content Solutions continued its year-over-year growth momentum in this quarter, driven by the developments in our product capabilities as well as go-to-market capabilities. Learning devices and primarily shares through XPATH is the leading revenue contributor within the Content Solutions business during this fiscal quarter.

讓我們轉向內容解決方案業務，包括智慧書、紙本書、學習設備和數位內容。在我們產品能力和上市能力發展的推動下，內容解決方案在本季度繼續保持同比增長勢頭。學習設備和主要透過 XPATH 分享的內容是本財季內容解決方案業務中的主要收入貢獻者。

The XPATH theater aims to offer a comprehensive learning experience for school-age users at home. XPATH is designed to combine extensive content library with interactive learning experience, powered by our application of AI technologies. We market XPATH through a range of go-to-market channels such as online live streaming and e-commerce platforms. Our ongoing efforts include the continuous expansion and management of our sales channels.

XPATH 劇院旨在為學齡使用者在家中提供全面的學習體驗。 XPATH 旨在將廣泛的內容庫與互動式學習體驗相結合，並由我們的人工智慧技術應用提供支援。我們透過線上直播和電子商務平台等一系列上市管道來行銷 XPATH。我們持續的努力包括不斷擴展和管理我們的銷售管道。

Throughout this quarter, we continue to work on our product development initiatives, iterating our existing products as well as introducing new products and features. Our investments in product and development includes software, hardware, AI and algorithms, contents and et cetera. Recently, we introduced a new product, featuring upgrades to both its hardware and software, offering users a range of configuration options. The product incorporates refinement on multiple use cases, including motion detection-based interactions, instant question-and-answer, image recognition-based learning feedback and et cetera.

在整個季度中，我們繼續致力於產品開發計劃，迭代現有產品並推出新產品和功能。我們在產品和開發方面的投資包括軟體、硬體、人工智慧和演算法、內容等。近期，我們推出了一款新產品，對硬體和軟體進行了升級，為用戶提供了一系列的配置選項。該產品融合了多種用例的改進，包括基於運動偵測的互動、即時問答、基於影像辨識的學習回饋等。

In addition to XPATH, we're also exploring new product formats to meet the diverse demand of various use cases. One of our early education enlightenment product was awarded the latest TWICE Picks Award at CES 2024.

除了XPATH之外，我們還在探索新的產品格式，以滿足各種用例的多樣化需求。我們的一款早期教育啟蒙產品在 CES 2024 上榮獲最新的 TWICE Picks Award。

With that overview, I would now like to share our key financial results for the quarter. We recorded net revenues of USD 373.5 million and RMB 2,715.7 million, an increase of 50.5% and 63.7% year-over-year in USD and RMB terms. Our revenue growth is attributable to the growth of both our Learning Services and Others business and our Content Solutions business.

有了上述概述，我現在想分享我們本季的主要財務業績。我們錄得淨收入3.735億美元和人民幣27.157億元，以美元和人民幣計算，年增50.5%和63.7%。我們的收入成長歸因於我們的學習服務和其他業務以及內容解決方案業務的成長。

Gross profit also increased in the third quarter of fiscal year 2024, rising from USD 129.7 million for the same period last year to USD 200.3 million for this quarter. Gross margin decreased to 53.6% from 55.8% for the same period last year. The year-over-year decrease in gross margin is due to a combination of factors, including the change in revenue mix from each business line as well as changing gross margin of the underlying business loss results.

2024財年第三季毛利也有所成長，從去年同期的1.297億美元增至本季的2.003億美元。毛利率從去年同期的55.8%下降至53.6%。毛利率年減是多種因素造成的，包括各業務線收入結構的變動以及基礎業務虧損結果毛利率的變動。

Selling and marketing expenses for the quarter were USD 122 million, an increase of 73.3% compared to USD 70.4 million for the fiscal third quarter last year. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 82.6% to USD 116.4 million from USD 63.8 million for the third quarter of fiscal year 2023. The growth of selling and marketing expenses is mainly driven by increased selling and marketing activities.

本季銷售和行銷費用為 1.22 億美元，較去年第三財季的 7,040 萬美元成長 73.3%。非公認會計準則銷售和行銷費用（不包括股權激勵費用）從 2023 財年第三季的 6,380 萬美元增長 82.6% 至 1.164 億美元。銷售和行銷費用的成長主要由銷售增加推動和行銷活動。

General and administrative expenses increased by 19% to USD 110.7 million from USD 93 million in the third quarter of fiscal year 2023. Non-GAAP general and administrative expenses, which excludes share-based compensation costs, increased by 29.3% year-over-year to USD 96.7 million from USD 74.8 million for the same period of fiscal year 2023. Total share-based compensation expenses allocated to related operating costs and expenses decreased by 22.4% to USD 22 million in the third quarter of fiscal year 2024 from USD 28.3 million in the same period of fiscal year 2023.

一般及管理費用從 2023 財年第三季的 9,300 萬美元成長 19% 至 1.107 億美元。非 GAAP 一般及管理費用（不包括股權激勵成本）年增 29.3%從2023 財年同期的7,480 萬美元減少到9,670 萬美元。分配給相關營運成本和費用的股份補償費用總額從2,830 萬美元減少到2024 年第三季的2,200 萬美元，下降了22.4% 2023財年同期。

Loss of operations was USD 32.2 million in the third quarter of fiscal year 2024 compared to a loss of operations of USD 32.9 million in the third quarter of fiscal year 2023. Non-GAAP loss from operations, which excluded share-based compensation expenses, was USD 10.2 million compared to non-GAAP loss from operations of USD 4.5 million in the same period of the prior year.

2024 財年第三季的營運虧損為 3,220 萬美元，而 2023 財年第三季的營運虧損為 3,290 萬美元。非 GAAP 營運虧損（不含股權激勵費用）為1,020 萬美元，而去年同期非GAAP 營運虧損為450 萬美元。

Net loss attributable to TAL was USD 23.9 million in the third quarter of fiscal year 2024 compared to net loss attributable to TAL of USD 51.6 million in the third quarter of fiscal year 2023. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was USD 1.9 million compared to a non-GAAP net loss attributable to TAL of USD 23.2 million in the third quarter of fiscal year 2023.

2024 財年第三季好未來應佔淨虧損為2,390 萬美元，而2023 財年第三季好未來應佔淨虧損為5,160 萬美元。非公認會計原則應佔好未來淨虧損，其中不包括股份-基於薪資支出的淨利潤為 190 萬美元，而 2023 財年第三季好未來的非公認會計原則淨虧損為 2,320 萬美元。

Moving on to our balance sheet. As of November 30, 2023, we had USD 2,193.4 million of cash and cash equivalents, USD 974.2 million of short-term investments and USD 329 million in current and noncurrent restricted cash. Our deferred revenue balance was USD 507.7 million as of the end of the third fiscal quarter compared to USD 237.4 million as of February 28, 2023.

繼續我們的資產負債表。截至2023年11月30日，我們擁有現金和現金等價物21.934億美元，短期投資9.742億美元，流動和非流動限制性現金3.29億美元。截至第三財季末，我們的遞延收入餘額為 5.077 億美元，而截至 2023 年 2 月 28 日為 2.374 億美元。

Now turning to our cash flow statement. Net cash provided by operating activities for the third quarter of fiscal year 2024 was USD 247.1 million. In April 2023, the company's Board of Directors authorized to extend its share repurchase program launched in April 2021 by 12 months. Pursuant to the extended share repurchase program, the company may purchase up to approximately USD 737.4 million in proceeds of its common shares through April 30, 2024.

現在轉向我們的現金流量表。 2024財年第三季經營活動提供的現金淨額為2.471億美元。 2023年4月，公司董事會授權將2021年4月啟動的股票回購計畫延長12個月。根據延長的股票回購計劃，公司可在 2024 年 4 月 30 日之前購買最多約 7.374 億美元的普通股收益。

When we last spoke as of August 31, 2023, the company has repurchased approximately 13.4 million common shares at an aggregate consideration of approximately USD 233.6 million under the share repurchase program. We did not make any additional purchase in this fiscal quarter 3.

截至我們上次談話時，截至 2023 年 8 月 31 日，該公司已根據股票回購計畫回購了約 1,340 萬股普通股，總代價約為 2.336 億美元。我們在本財季 3 中沒有進行任何額外採購。

That concludes the financial section. I'll now hand the call back to Mr. Alex Peng to briefly update you on our business outlook. Alex, please go ahead.

財務部分到此結束。現在我將把電話轉給彭先生，向您簡要介紹我們的業務前景。亞歷克斯，請繼續。

Thanks, Jackson. As I mentioned earlier, despite a slight quarter-over-quarter revenue decrease, we made material progress with fiscal third quarter. Now I'd like to share some of my thoughts on our company's outlook of the fiscal fourth quarter. Concerning our Learning Services and Other business, we will continue investing in learning services to bring our users' quality learning experience, both online and offline. The overseas market remains one of our new areas for development.

謝謝，傑克遜。正如我之前提到的，儘管收入環比略有下降，但我們在第三財季取得了實質進展。現在我想分享我對公司第四季前景的一些想法。關於我們的學習服務和其他業務，我們將繼續投資學習服務，為使用者帶來優質的線上和線下學習體驗。海外市場仍然是我們新的發展領域之一。

Looking ahead, we'll keep extending our services to more customers with dynamic product formats while leveraging our online and offline capabilities. In terms of Content Solutions, we target to iterate the functionality of our learning devices by harnessing AI technologies. This effort aims to transform these products, offering users a learning experience that integrates technology with learning content.

展望未來，我們將繼續利用我們的線上和線下能力，以動態的產品形式向更多客戶提供服務。在內容解決方案方面，我們的目標是利用人工智慧技術迭代學習設備的功能。這項工作旨在改造這些產品，為使用者提供將技術與學習內容結合的學習體驗。

Founded in 2003, we're known as a learning technology company that focuses on the essence of education, explores the science of learning and assists individuals in approaching learning more scientifically. Over the past years, whenever new technology emerges such as television, computers, the Internet, they've been applied to education. We are currently exploring the possibilities of educational transformation in the AI era, attempting to integrate AI with our existing products. We remain open to collaboration and sharing our findings with the hope of contributing some valuable insights to the global education community.

我們成立於2003年，是一家專注於教育本質、探索學習科學、幫助個人更科學地學習的學習科技公司。這些年來，每當電視、電腦、網路等新科技出現時，它們都被應用於教育領域。我們目前正在探索AI時代教育變革的可能性，並嘗試將AI與我們現有的產品結合。我們對合作和分享我們的發現持開放態度，希望為全球教育界貢獻一些有價值的見解。

So that concludes my prepared remarks. Operator, we're now ready to open the call for questions.

我準備好的發言就到此結束。接線員，我們現在準備開始提問。

(Operator Instructions) Our first question comes from the line of Timothy Zhao from Goldman Sachs.

（操作員指示）我們的第一個問題來自高盛的Timothy Zhao。

Congrats on the strong quarter. My question is regarding capacity expansion. Just wondering if management can share any color regarding the capacity expansion for the past quarter. And into the longer-term, what is your longer-term growth plan of the offline learning center capacity extension?

恭喜季度表現強勁。我的問題是關於產能擴張的。只是想知道管理層是否可以分享有關上季度產能擴張的任何資訊。長遠來看，您對離線學習中心擴容的長期成長計畫是什麼？

This is Jackson. I'll take this one. So you asked about capacity expansion in this last quarter. As we mentioned, the revenue from Peiyou's small class business tends to correlate with its capacity expansion plan. So in the last quarter, our capacity expansion was in line with our revenue development.

這是傑克遜。我要這個。所以您詢問了上個季度的產能擴張情況。正如我們所提到的，培優小班業務的收入往往與其產能擴張計畫有關。因此，在上個季度，我們的產能擴張與我們的收入發展是一致的。

You also asked about long-term development plan. Here's how we would look at it. We take a pretty dynamic approach in managing our offline learning center network. When we think about expansion plan for our offline learning centers, we consider several factors, for example, market demand in a particular area, for example, customer acceptance of our product, our own operating capability, operating efficiencies and et cetera. So it's a pretty dynamic and balanced approach when we think about capacity management.

您也問到了長期發展計畫。我們將這樣看待它。我們採用非常動態的方法來管理我們的離線學習中心網路。當我們考慮線下學習中心的擴張計畫時，我們會考慮幾個因素，例如特定領域的市場需求，例如客戶對我們產品的接受程度，我們本身的營運能力、營運效率等等。因此，當我們考慮容量管理時，這是一種非常動態且平衡的方法。

Moving forward, when we think about the footprint of offline learning center network, it should more or less align with the overall pace of Peiyou's small class, with the overall growth pace of revenue coming from Peiyou's small class business. And efforts will be made to manage operating indicators while we expand our learning centers. I hope that answers your question, Timothy.

展望未來，當我們考慮線下學習中心網路的足跡時，它應該或多或少與培優小班的整體節奏保持一致，整體收入的成長節奏來自培優小班業務。我們將在擴大學習中心的同時，努力管理營運指標。我希望這能回答你的問題，蒂莫西。

Our next question comes from the line of Eddy Wang from Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Eddy Wang。

And also congratulations on the good results. So my question is regarding the smart device. So can you share with us your latest plan of the smart device business? And what are the considerations for the specific functions and the future development of the second generation of the smart devices?

也對取得的好成績表示祝賀。所以我的問題是關於智慧型設備的。那麼您能跟我們分享一下您在智慧型裝置業務方面的最新計劃嗎？第二代智慧型設備的具體功能和未來發展又有何考量？

This is Alex. Let me take this one on. So first, maybe let me take a step back and just share a little bit broadly speaking how we look at these devices. I think we're looking at these devices as an integration of high-caliber content, advanced AI technology and high-quality hardware. These 3 together will actually build a very compelling learning experience for students at home, where they will learn on their own at their own pace according to their own individual learning journey. I think that's kind of broadly speaking how we look at these, right?

這是亞歷克斯。讓我來接這個。首先，也許讓我退後一步，大致分享我們如何看待這些設備。我認為我們將這些設備視為高品質內容、先進人工智慧技術和高品質硬體的整合。這三者實際上將為在家中的學生創造非常引人注目的學習體驗，他們將根據自己的個人學習旅程，並按照自己的進度自行學習。我認為從廣義上講，這就是我們看待這些問題的方式，對吧？

So with that, basically, the 3 components, content, technology, AI technology and hardware, they go hand in hand. And we're really looking at strategically and programmatically advance our offering across all of those 3 dimensions. So with the launch of our latest flagship product, you actually see the advancement across all these 3 while we continue to update and upgrade experiences for -- across all our devices.

因此，基本上，內容、技術、人工智慧技術和硬體這三個組成部分是齊頭並進的。我們確實正在考慮策略性地、有計劃地在所有這三個維度上推進我們的產品。因此，隨著我們最新旗艦產品的推出，您實際上會看到這三個產品的進步，同時我們將繼續更新和升級所有設備的體驗。

Just as an example, the flagship device we launched in December has a larger screen. It has more advanced eyesight protective technology for the screen. It introduces intelligence functions such as AI dialog, figurative translation. It incorporates the capabilities from MapGPT. And really its aim is to facilitate a much more smooth and personalized learning experience for users at home.

舉個例子，我們12月推出的旗艦設備有更大的螢幕。擁有更先進的螢幕視力保護技術。引入AI對話、比喻翻譯等智慧功能。它結合了 MapGPT 的功能。它的真正目標是為家庭用戶提供更流暢和個人化的學習體驗。

I'll also speak on our go-to-market side. As you know and as I shared in prior calls, our primary sales channels are online, including both live streaming and e-commerce. We're obviously very proactively working on the existing channels, the efficiency and the reach of these channels, while exploring additional distribution models.

我還將談論我們的市場推廣方面。如您所知，正如我在之前的電話中分享的那樣，我們的主要銷售管道是在線，包括直播和電子商務。顯然，我們非常積極地致力於現有通路、這些通路的效率和覆蓋範圍，同時探索其他分銷模式。

We see really our sales channel is not just a way to distribute our product, but it's also a way to engaging a dialog with our potential and existing customers on their learning journey, getting their feedback, getting how they're using these devices to help us continuously improve and enhance the features. So I hope that helps answer your question.

我們確實看到，我們的銷售管道不僅僅是分銷我們產品的一種方式，而且還是一種在學習之旅中與我們的潛在客戶和現有客戶進行對話、獲取他們的反饋、了解他們如何使用這些設備來提供幫助的方式我們不斷改進和增強功能。所以我希望這有助於回答你的問題。

Our next question comes from the line of Felix Liu from UBS.

我們的下一個問題來自瑞銀集團的 Felix Liu。

Congratulations on the strong quarter. My question is on AI, which you mentioned for your -- one of the key pillars of your future strategy. Could you elaborate a bit more on how do you plan to apply AI to your existing businesses? You mentioned a few of the applications in your second-gen hardware. Do you see any other applications? And how do you plan to monetize such AI adoption? And also on your investment in AI, do you think we should expect an increase in AI investment or current level is already sufficient?

恭喜季度表現強勁。我的問題是關於人工智慧，你提到人工智慧是你未來策略的關鍵支柱之一。您能否詳細說明您計劃如何將人工智慧應用到現有業務中？您提到了第二代硬體中的一些應用程式。您還看到其他應用程式嗎？您計劃如何透過人工智慧的採用來貨幣化？還有關於您對人工智慧的投資，您認為我們應該期待人工智慧投資的增加還是目前的水平已經足夠了？

This is Alex. Again, I think Jackson mentioned CES earlier. I was there and I met with many colleagues from across the globe. I think there is really a consensus that this generation of generative AI is bringing a truly transformative moment to education, that we're able to provide high-quality learning experience, individualized pathways and affordable cost at the same time. But I think there is also an increasing realization that this is a long journey. It's not going to happen in just a few months, a few quarters or just a year.

這是亞歷克斯。我想傑克森之前還提到過 CES。我在那裡遇到了來自世界各地的許多同事。我認為，人們確實達成了共識，即這一代生成式人工智慧正在為教育帶來真正的變革時刻，我們能夠同時提供高品質的學習體驗、個人化的途徑和負擔得起的成本。但我認為人們也越來越認識到這是一個漫長的旅程。這不會在短短幾個月、幾個季度或一年內發生。

So I think we're really in this for the long haul. And we're looking at where AI comes in, I think, across broadly speaking 3 dimensions. I think there's obviously huge opportunities to increase the efficiencies of all of our work. We do have a lot of knowledge workers in the company. I think there's this huge opportunity, and it's one of the most present opportunity that we're working on. I think AI provides a very different type of interaction along the learning journey.

所以我認為我們確實是在長期努力。我認為，我們正在研究人工智慧在廣義的 3 個維度上的作用。我認為顯然有巨大的機會來提高我們所有工作的效率。我們公司確實有很多知識型員工。我認為這是一個巨大的機會，也是我們正在努力的最緊迫的機會之一。我認為人工智慧在學習過程中提供了一種非常不同的互動類型。

As I mentioned earlier, in our smart devices I think we're already seeing the early forms of this type of interaction, where the device is able to be much more helpful along the learning journey. It's much more in tune in terms of where the students are, to understand the paths and challenges faced by individual students along their journey. I think thirdly, obviously, there's also exploration for AI-native use cases in education. So I think the effort will be along all these 3 dimensions.

正如我之前提到的，在我們的智慧型裝置中，我認為我們已經看到了這種類型互動的早期形式，該設備能夠在學習過程中提供更多幫助。就學生所處的位置而言，它更加協調，可以了解個別學生在旅程中所面臨的道路和挑戰。我認為第三，顯然，教育領域也對人工智慧原生用例進行了探索。所以我認為努力將沿著所有這三個維度進行。

Then again, I think if you look at in the past few quarters, I think we're able to really bring the synergy between a foundation model, our education knowhow, so domain knowledge and know-how, and put it into a device. So this really serves as a valuable reference point. AI in this context, honestly, it not only operates independently, but also contributes to the development of lots of existing business lines.

話又說回來，我認為如果你看看過去幾個季度，我認為我們能夠真正實現基礎模型、我們的教育知識、領域知識和技術之間的協同作用，並將其放入設備中。所以這確實是一個很有價值的參考點。人工智慧在這個背景下，老實說，它不僅獨立運行，而且還促進了許多現有業務線的發展。

So we're really actively engaging the product design, operational improvement. And we're taking in a lot of user feedback from both internal employees and as well as our customers from -- across the market and we'll be continuously on that journey pushing it forward. I hope that answers your question.

因此，我們確實積極參與產品設計和營運改進。我們正在從內部員工以及整個市場的客戶那裡獲取大量用戶回饋，我們將繼續在這個過程中推動它向前發展。我希望這能回答你的問題。

Our next question comes from the line of Caini Wang from CICC.

我們的下一個問題來自中金公司的王彩妮。

Congrats on the strong results again. And my question is regarding the cash using plans. We can see that our main business is really going well and we are accumulating more cash on our balance. So I'm just wondering what is our subsequent plan, our buyback plans or any other cash plans.

再次恭喜我們取得了優異的成績。我的問題是關於現金使用計劃。我們可以看到我們的主要業務確實進展順利，我們的餘額正在累積更多的現金。所以我只是想知道我們的後續計劃、回購計劃或任何其他現金計劃是什麼。

And this is Jackson. I'll take this one. Maybe let me address the buyback plan part first. And I think I may have mentioned this earlier. Under the current extended share repurchase program, we have repurchased approximately 13.4 million common shares at an aggregate consideration of approximately USD 233.6 million. And as for this fiscal quarter 3, we did not make any additional repurchases.

這是傑克遜。我要這個。也許讓我先談談回購計畫部分。我想我可能之前已經提到過這一點。根據目前的延期股票回購計劃，我們已回購約 1,340 萬股普通股，總代價約為 2.336 億美元。至於本財季第三季度，我們並沒有進行任何額外的回購。

Now if we take a step back and look at kind of broadly how we think about use of cash, we take pretty comprehensive considerations of both short-term and long-term investor -- short- and long-term shareholder return when we think about our use of cash. There are multiple potential uses of cash in the future, including investing into our core businesses via our Learning Services and Others business or Content Solutions business or other, also developing new initiatives as well as generating shareholder returns. I hope that answers your question, Caini.

現在，如果我們退後一步，廣泛地看看我們如何看待現金的使用，當我們考慮股東回報時，我們會相當全面地考慮短期和長期投資者——短期和長期股東回報我們對現金的使用。未來現金有多種潛在用途，包括透過我們的學習服務和其他業務或內容解決方案業務等投資於我們的核心業務，也開發新計劃以及產生股東回報。我希望這能回答你的問題，Caini。

Our next question comes from the line of Yiwen Zhang from China Renaissance.

我們的下一個問題來自華興資本的張藝文。

First congrats on another strong quarter. So in printout [remark] logs, you mentioned that the new products of the online enrichment business is launching this year. So can you discuss of how this has progressed there?

首先要恭喜又一個強勁的季度。所以在印刷的[備註]日誌中，您提到今年在線豐富業務的新產品即將推出。能否討論一下這方面的進展如何？

Yiwen, this is Jackson. I'll take this one. Yes. So as we talked about earlier that the online -- the online enrichment space is an involving landscape and there have been observable user behavior developments and preferences in the last couple of years. So as a result, we have been observing such developments and acting on innovating our product formats and our service delivery models.

伊文，這是傑克森。我要這個。是的。正如我們之前談到的，線上豐富空間是一個複雜的領域，並且在過去幾年中出現了可觀察到的使用者行為發展和偏好。因此，我們一直在觀察此類發展，並採取行動創新我們的產品格式和服務交付模式。

When we think about these new products, we aim to deliver innovative and interactive online learning experiences through such new products. And we're focused on delivering products that create user value and societal benefits. So the -- we'll continue to explore and innovate on these products and we'll continue to observe how our customer preferences develop over time. I hope that answers your question, Yiwen.

當我們考慮這些新產品時，我們的目標是透過這些新產品提供創新和互動的線上學習體驗。我們專注於提供能夠創造用戶價值和社會效益的產品。因此，我們將繼續對這些產品進行探索和創新，並將繼續觀察客戶偏好如何隨著時間的推移而發展。我希望這能回答你的問題，伊文。

So we have reached the end of the question-and-answer session. I'll now turn the conference back to the management team for closing comments.

我們的問答環節已經結束了。現在我將把會議轉回給管理團隊以徵求結束意見。

Yes, operator. Thanks again, everyone, for joining the call today. As we approach Chinese New Year, just wish everybody a happy year of the dragon. And we'll see you next quarter. Bye-bye.

是的，接線生。再次感謝大家今天加入電話會議。值此農曆新年來臨之際，祝大家龍年快樂。我們下個季度再見。再見。

Thank you. That concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。