TAL Education Group (TAL) 2024 Q4 法說會逐字稿

Ladies and gentlemen, good day and thank you for standing by. Welcome to TAL Education Group's Fourth Quarter and 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第四季及 2024 財年獲利電話會議。 （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, operator, and thank you all for joining us today for TAL Education Group's Fourth 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. 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.

謝謝業者，也謝謝大家今天參加好未來教育集團 2024 財年第四季獲利電話會議。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。在本次電話會議中，您將聽到總裁兼財務長彭志強先生和投資者關係總監我本人的演講。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 discussions 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。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. I would like to turn the call over now to Mr. Alex Peng. Alex, please go ahead.

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。我現在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. In this call we'll discuss our financial performance and business progress for the fourth quarter and review some of the key results from the full fiscal year 2024. Following that, I'll briefly update you on our business strategy 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，我們將討論第四季度的財務業績和業務進展，並回顧 2024 年整個財年的一些主要業績。

Throughout this fiscal quarter we continued to manage our Learning Services programs to serve users who seek engaging and effective learning experiences. Our Peiyou small class and xueersi.com enrichment learning programs continue to receive positive feedback from users for the quality of their products and services.

在整個財政季度，我們繼續管理我們的學習服務計劃，為尋求有吸引力和有效學習體驗的使用者提供服務。我們的培優小班和學而思網強化學習計畫持續收到使用者對其產品和服務品質的正面回饋。

Our efforts to offer quality learning experience along with our learning center network expansion and the increased enrollment led to continued growth in our Learning Services business. For learning devices, we extended our products and services to a broader user base, enabling more users to find the suitable learning solutions for their needs. We aim to help users with their self-learning journey by leveraging the smart features and abundant resources integrated into our learning devices. With this objective in mind we launched two new versions of learning devices in this fiscal quarter with enhanced hardware and software capabilities, [xPad2 Pro] and [xPad2 Pro Max]. Both have gained early market traction and received solid user engagement feedback since their launch.

我們努力提供優質的學習體驗，加上學習中心網路的擴張和入學人數的增加，導致我們的學習服務業務持續成長。在學習設備方面，我們將產品和服務延伸到更廣泛的用戶群，讓更多用戶找到適合自己需求的學習解決方案。我們的目標是利用學習設備中整合的智慧功能和豐富的資源來幫助使用者完成自學之旅。考慮到這一目標，我們在本財季推出了兩個具有增強硬體和軟體功能的新版本學習設備：[xPad2 Pro]和[xPad2 Pro Max]。自推出以來，兩者都獲得了早期市場的關注並收到了可靠的用戶參與回饋。

Going forward, we remain committed to developing both our product capabilities and our go-to market capabilities. To that end, we continue to pursue new technologies and refine our existing research and development endeavors. In a recent national collaborative initiative dedicated to comprehensively assessing large language model's mathematical abilities, our MathGPT large language model, recently ranked #1 in national rankings. From basic arithmetic to advanced series of mathematics, the MathGPT LLM delivers responses to a students learning experience.

展望未來，我們仍然致力於發展我們的產品能力和進入市場的能力。為此，我們繼續追求新技術並完善現有的研發工作。在最近一項致力於全面評估大語言模型數學能力的國家合作計劃中，我們的 MathGPT 大語言模型最近在全國排名中名列第一。從基礎算術到高級數學系列，MathGPT LLM 為學生的學習體驗提供了回應。

In terms of our financial performance, we recorded net revenues of USD 429.6 million or RMB 3.08 billion for the quarter, representing an increase of 59.7% and 66.9% year-over-year in U.S. dollar and RMB terms. With respect to profitability, our non-GAAP income from operations and non-GAAP net income attributable to TAL for the quarter were USD 9.4 million and USD 48 million respectively. For the full fiscal year of 2024, we reported net revenues of USD 1.5 billion or RMB 10.7 billion, representing 46.2% and 53.7% year-over-year growth in U.S. dollar and RMB terms respectively.

財務業績方面，本季淨收入為 4.296 億美元或 30.8 億元人民幣，以美元和人民幣計算年增 59.7% 和 66.9%。就獲利能力而言，本季我們的非公認會計原則營運收入和歸屬於好未來的非公認會計原則淨利潤分別為 940 萬美元和 4,800 萬美元。 2024 年全年，我們的淨收入為 15 億美元或 107 億元人民幣，以美元和人民幣計算分別年增 46.2% 和 53.7%。

Our non-GAAP income from operations and non-GAAP net income attributable to TAL for the quarter were $19.7 million and USD 85.3 million respectively. We also reported positive non-GAAP net profit during the whole year, which was USD 84.8 million.

本季我們的非 GAAP 營運收入和歸屬於好未來的非 GAAP 淨利潤分別為 1,970 萬美元和 8,530 萬美元。我們也公佈了全年非 GAAP 淨利潤為正值 8,480 萬美元。

With that, I will now hand over the call back to Jackson. He'll provide an update on the operational advancements within our core business lines and discuss our financial performance for the fourth fiscal quarter. Jackson, back to you.

現在，我將把電話轉回給傑克森。他將提供我們核心業務線內營運進展的最新信息，並討論我們第四財季的財務業績。傑克遜，回到你身邊。

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

謝謝你，亞歷克斯。我很高興分享我們第四季度在核心業務領域取得的進展的一些細節。請注意，本季度的所有財務數據均未經審計。

Let me start with our Learning Services and other business, which comprises a broad range of learning programs for consumers amongst other things. In the fourth quarter of fiscal year 2024, we extended Learning Services and others year-over-year growth momentum through continued investments across our various product lines. Our online and offline enrichment learning programs continue to serve as a primary revenue generator for Learning Services. Through our systematic teaching design, up-to-date learning content and interactive classroom design, we help users develop multifaceted capabilities and apply what they've learned into real-life situations.

讓我從我們的學習服務和其他業務開始，其中包括為消費者提供廣泛的學習計劃。 2024 財年第四季度，我們透過對各產品線的持續投資，擴大了學習服務和其他業務的同比增長勢頭。我們的線上和線下強化學習計畫繼續作為學習服務的主要收入來源。透過系統性的教學設計、最新的學習內容和互動的課堂設計，我們幫助使用者培養多方面的能力，並將所學應用到現實生活中。

Our enrichment learning programs enable students to build their own thoughts from diverse perspectives, fostering comprehensive development with engaging and effective learning experience.

我們的密集學習計畫使學生能夠從不同的角度建立自己的思想，透過有吸引力和有效的學習體驗促進全面發展。

Our offline Peiyou small class programs maintained its trajectory of year-over-year growth in this period. This was attributable to, amongst other factors, our learning center network expansion. Our decision to add learning centers during the quarter was supported by an assessment of market demand as well as our operational capabilities and efficiency. Notably, efficiency indicators such as retention rate have been relatively stable as we expanded our capacity and enrolled more learners. We see a visible growth path for offline small class enrichment learning. In alignment with our strategic objectives our online enrichment learning business has maintained its course of operations.

線下培優小班計畫在此期間保持了同比增長的軌跡。除其他因素外，這歸因於我們學習中心網絡的擴張。我們在本季度增加學習中心的決定得到了對市場需求以及我們的營運能力和效率的評估的支持。值得注意的是，隨著我們擴大容量並招收更多學習者，保留率等效率指標相對穩定。我們看到了線下小班強化學習的可見成長路徑。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保持了其營運過程。

To enhance teaching effectiveness we tailored our online programs to differentiate them from offline offerings and applied smart interactive features to motivate users and enhance their engagement. These programs are designed not only to align with online learning habits, but also fully leverage online education's unique advantages, bringing scarce high quality educational resources to a broader audience. Looking ahead, we'll continue to innovate and iterate our products and services to meet evolving new user demand for digital learning experiences.

為了提高教學效果，我們客製化了線上課程，使其與線下課程區分開來，並應用智慧互動功能來激勵用戶並提高他們的參與度。這些項目的設計不僅符合線上學習習慣，而且充分發揮線上教育的獨特優勢，為更廣泛的受眾帶來稀缺的優質教育資源。展望未來，我們將繼續創新和迭代我們的產品和服務，以滿足不斷變化的新用戶對數位學習體驗的需求。

Next is our Content Solutions business, which encompasses smart books, print books, learning devices and digital content. Our product portfolio and go-to market capabilities drove continued year-over-year growth momentum during this fiscal quarter. As in previous quarters, Xueersi xPads stood out as a key contributor to our Content Solutions business revenue growth. Revenue generated from our learning devices and continued on its path of growth in fiscal fourth quarter, thanks to our launch of a couple newer products in our xPad series, xPad2 Pro and xPad2 Pro Max. The latest xPads feature enhanced hardware and software capabilities, abundant embedded learning resources and AI functions from a self-developed large language model MathGPT. For example, customers can use our in AI-enabled learning tools for math problem solving. Chinese or English essay review, step-by-step answer explanation and much more.

接下來是我們的內容解決方案業務，包括智慧圖書、紙本圖書、學習設備和數位內容。我們的產品組合和進入市場的能力推動了本財季持續的年成長動能。與前幾季一樣，學而思 xPad 脫穎而出，成為我們內容解決方案業務收入成長的關鍵貢獻者。由於我們在 xPad 系列 xPad2 Pro 和 xPad2 Pro Max 中推出了一些新產品，我們的學習設備產生的收入在第四財季持續成長。最新的xPad具有增強的軟硬體功能、豐富的嵌入式學習資源以及來自自主開發的大語言模型MathGPT的AI功能。例如，客戶可以使用我們的人工智慧學習工具來解決數學問題。中文或英文論文複習、逐步答案解釋等等。

Together, these upgrades provide an improved human machine interaction experience and more precise and efficient learning solutions while delivering consistent user engagement level. Meanwhile, we focus on managing our sales channels and optimizing our marketing strategies. While we're closely monitoring the efficiency of our online channels, we also started to explore opportunities in offline channels to expand our products market. With that overview, I would now like to share our key financial results for the quarter. We recorded net revenues of USD 429.6 million or RMB 3.08 billion, an increase of 59.7% and 66.9% year-over-year in U.S. dollar and RMB terms respectively. The increase was attributable to the growth in both our Learning Services business and our Content Solutions business.

這些升級共同提供了改進的人機互動體驗和更精確、更有效率的學習解決方案，同時提供一致的使用者參與程度。同時，我們專注於管理我們的銷售管道並優化我們的行銷策略。在我們密切關注線上通路效率的同時，我們也開始探索線下通路的機會來擴大我們的產品市場。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4.296億美元或人民幣30.8億元，以美元和人民幣計算分別年增59.7%和66.9%。這一增長歸因於我們的學習服務業務和內容解決方案業務的成長。

Cost of revenues increased by 58.4% to USD 202.2 million from USD 127.7 million in the fourth quarter of fiscal year 2023. Non-GAAP cost of revenues, which included -- which excluded share-based compensation expenses, increased by 59.8% to USD 199.6 million from USD 124.9 million in the fourth quarter of fiscal year 2023.

營收成本從 2023 財年第四季的 1.277 億美元成長了 58.4%，達到 2.022 億美元。收入為1.249 億美元。

Gross profit also increased in the fourth quarter of fiscal 2024, rising by 60.9% from USD 141.3 million for the same period last year to USD 227.3 million for this quarter. Gross margin increased to 52.9% from 52.5% for the same period last year. Selling and marketing expenses for the quarter were USD 125.9 million, representing an increase of 69% from USD 74.5 million for the same period last year. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, increased by 80.1% to USD 120.4 million from USD 66.9 million for the same period last year. The uptick in selling and marketing expenses was primarily driven by increased selling and marketing activities.

2024財年第四季毛利也有所成長，從去年同期的1.413億美元成長60.9%至本季的2.273億美元。毛利率由去年同期的52.5%增至52.9%。該季度銷售和行銷費用為 1.259 億美元，較去年同期的 7,450 萬美元成長 69%。非公認會計準則銷售和行銷費用（不包括股權激勵費用）從去年同期的 6,690 萬美元增長 80.1% 至 1.204 億美元。銷售和行銷費用的增加主要是由於銷售和行銷活動的增加所致。

Selling and marketing expenses as a percentage of total net revenues increased from 27.7% to 29.3% year-over-year. General and administrative expenses increased by 4.5% to USD 117.2 million from USD 112.2 million in the same period of last year. Non-GAAP general and administrative expenses, which excludes share-based compensation costs, increased by 8.9% year-over-year to USD 104.9 million from USD 96.3 million for the same period of last year.

銷售和行銷費用佔總淨收入的百分比從 27.7% 年增至 29.3%。一般及管理費用從去年同期的 1.122 億美元成長 4.5% 至 1.172 億美元。非公認會計準則一般及管理費用（不含股權激勵費用）年增 8.9%，從去年同期的 9,630 萬美元增至 1.049 億美元。

Non-GAAP general and administrative expenses as a percentage of total net revenues decreased from 35.8% to 24.4% year-over-year. Total share-based compensation expense allocated to the related operating costs and expenses decreased by 22.1% to USD 20.5 million in the fourth quarter of fiscal year 2024 from USD 26.3 million in the same period of last year.

非 GAAP 一般及管理費用佔總淨收入的百分比從 35.8% 年減至 24.4%。 2024財年第四季度，分配給相關營運成本和費用的股權激勵費用總額從去年同期的2,630萬美元下降22.1%至2,050萬美元。

Loss from operations was USD 11.1 million in the fourth quarter of fiscal year 2024 compared to a loss from operations of USD 44.4 million in the same period of last year. Non-GAAP income from operations, which excluded share-based compensation expenses, was USD 9.4 million compared to non-GAAP loss from operations of USD 18.1 million in the same period last year. Net income attributable to TAL was $27.5 million in the fourth quarter of fiscal year 2024 compared to net loss attributable to TAL of USD 39.4 million in the same period of last year. Non-GAAP net income attributable to TAL was -- which excludes share-based compensation expenses, was USD 48.0 million compared to non-GAAP net loss attributable to TAL of USD 13.1 million in the same period of last year.

2024 財年第四季營運虧損為 1,110 萬美元，而去年同期營運虧損為 4,440 萬美元。非 GAAP 營運收入（不含股權激勵費用）為 940 萬美元，去年同期非 GAAP 營運虧損為 1,810 萬美元。 2024財年第四季好未來歸屬淨利為2,750萬美元，去年同期歸屬好未來淨虧損為3,940萬美元。不以美國通用會計準則計算，好未來歸屬淨利潤為 4,800 萬美元，而去年同期歸屬於好未來的非美國通用會計準則淨虧損為 1,310 萬美元。

Moving on to our balance sheet. As of February 29, 2024, we had USD 2,208.7 million of cash and cash equivalents, USD 1,094.6 million in short-term investments and USD 248.7 million in current and noncurrent restricted cash. Our deferred revenue balance was USD 428.3 million as of the end of the fourth fiscal quarter.

繼續我們的資產負債表。截至2024年2月29日，我們擁有現金及現金等價物22.087億美元，短期投資10.946億美元，流動及非流動限制性現金2.487億美元。截至第四財季末，我們的遞延收入餘額為 4.283 億美元。

Now turning to our cash flow statement. Net cash used in operating activities for the fourth quarter of fiscal year 2024 was USD 23.7 million.

現在轉向我們的現金流量表。 2024財年第四季經營活動使用的現金淨額為2,370萬美元。

Now let's switch gears and move on to full fiscal year 2024 financial results. Let me briefly review some key financials as follows. Fiscal year net revenue increased to USD 1,490.4 million or RMB 10.7 billion, representing a 46.2% and 53.7% year-over-year increase in U.S. dollar and RMB terms respectively. Gross profit increased by 38.2% to USD 806.1 million.

現在讓我們換個話題，看看 2024 財年的完整財務表現。讓我簡單回顧一下一些關鍵財務數據如下。財年淨收入增至14.904億美元或107億元人民幣，以美元和人民幣計算分別較去年同期成長46.2%和53.7%。毛利成長38.2%至8.061億美元。

Loss from operations was USD 69.2 million in the fiscal year 2024 compared to loss of operations of $90.7 million in the prior year. Non-GAAP income from operations, which excluded share-based compensation expenses, was $19.7 million for the fiscal year 2024 compared to non-GAAP income from operations of $17.8 million for the fiscal year 2023. Net loss attributable to TAL was USD 3.6 million in the fiscal year 2024 compared to net loss attributable to TAL of $135.6 million in the previous fiscal year. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses was USD 85.3 million compared to non-GAAP net loss attributable to TAL of USD 27 million in fiscal year 2023. That concludes the financial highlights section.

2024 財年的營運損失為 6,920 萬美元，而上一年的營運損失為 9,070 萬美元。 2024 財年的非 GAAP 營運收入（不含股權激勵費用）為 1,970 萬美元，而 2023 財年的非 GAAP 營運收入為 1,780 萬美元。好未來的淨虧損為1.356 億美元。不計股權激勵費用的非美國通用會計準則歸屬於好未來的淨利潤為 8,530 萬美元，而 2023 財年歸屬於好未來的非美國通用會計準則淨虧損為 2,700 萬美元。

In April 2023, the company's Board of Directors authorized a 12-month extension of the company's share repurchase program launched in April 2021. Pursuant to the extended share repurchase program, the company may purchase up to approximately USD 737.4 million of its common shares through April 30, 2024. As of August 31, 2023, the company had repurchased 13.4 million common shares and an aggregate consideration of approximately USD 233.6 million under the share repurchase program. We did not make any additional purchases in the fourth quarter of fiscal year 2024. In April 2024, TAL's Board of Directors has authorized to expand its share repurchase program by 12 months.

2023 年 4 月，公司董事會授權將公司於 2021 年 4 月啟動的股票回購計劃延長 12 個月。 根據延長的股票回購計劃，公司可在 4 月份之前購買最多約 7.374 億美元的普通股。 2024年8月30日。我們在2024財年第四季沒有進行任何額外購買。

That concludes the financial section. I'll now hand the call back to Alex 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亞歷克斯，向您簡要介紹我們的業務前景。亞歷克斯，請繼續。

Thanks, Jackson. As highlighted throughout this call, during fiscal year 2024 for Learning Services, we expanded our learning center footprints, develop additional learning programs catering to various user group's specific needs and also manage our operational efficiencies. So as a result, the business experienced year-over-year growth in the last few quarters. Our Content Solutions also made progress through offering high-quality learning devices and engaging in conversations with our target customers through various go-to-market channels. We believe fiscal 2024 laid a foundation for our future development. So now I would like to share some insights on the company's strategy and objectives for fiscal year 2025.

謝謝，傑克遜。正如本次電話會議中所強調的，在 2024 財年的學習服務中，我們擴大了學習中心的覆蓋範圍，開發了額外的學習計劃來滿足不同用戶群的特定需求，並管理我們的營運效率。因此，該業務在過去幾個季度經歷了同比增長。我們的內容解決方案還透過提供高品質的學習設備以及透過各種上市管道與目標客戶進行對話而取得了進展。我們相信2024財年為我們未來的發展奠定了基礎。現在我想分享一些關於公司2025財年策略和目標的見解。

First of all, we remain focused on further refining our mature businesses. We will continue to uphold high-quality standards for our offline and online learning products and services. Our goal is to make our learning experience engaging and effective by applying technology and improving teaching content and student interaction. Among our mature businesses, we expect our various Learning Services programs to continue to serve as our largest revenue contributor in the new fiscal year. We'll also continue to innovate and explore during fiscal year 2025. To keep up with our customers' ever-evolving needs, we'll explore and design differentiated products and services. We'll also continue to invest in artificial intelligence to optimize our model, improving its response speed and accuracy and working to integrate artificial intelligence with our existing products and services. We keep a close eye on industry trends and how education is transforming in the AI era, staying keenly attuned to how we can interact with other players and identify potential areas where we can seize new opportunities.

首先，我們仍然專注於進一步完善我們的成熟業務。我們將繼續堅持離線和線上學習產品和服務的高品質標準。我們的目標是透過應用技術、改進教學內容和學生互動，使我們的學習體驗變得有吸引力和有效。在我們成熟的業務中，我們預計各種學習服務計劃將繼續成為新財年最大的收入貢獻者。我們也將在 2025 財年繼續創新和探索。我們也將繼續投資人工智慧來優化我們的模型，提高其響應速度和準確性，並努力將人工智慧與我們現有的產品和服務整合。我們密切關注行業趨勢以及人工智慧時代教育的變革，密切關注如何與其他參與者互動，並識別我們可以抓住新機會的潛在領域。

We remain open to explore collaboration and share our findings with the hope of contributing some valuable insights to the global education community. Finally, we'll focus on refining the details of our operations to enhance overall efficiency and profitability. We believe our dedication to providing learning services and products will create value for our users and our society while driving our business forward. We'll also closely monitor our efficiency metrics in all business factors and make timely adjustments to optimize each stock in our operations, including content generation, product R&D, sales and marketing and more.

我們仍然願意探索合作並分享我們的發現，希望為全球教育界貢獻一些有價值的見解。最後，我們將專注於完善營運細節，以提高整體效率和獲利能力。我們相信，我們致力於提供學習服務和產品將為我們的用戶和社會創造價值，同時推動我們的業務向前發展。我們還將密切監控所有業務因素的效率指標，並及時調整以優化我們營運中的每個庫存，包括內容生成、產品研發、銷售和行銷等。

So that concludes my prepared remarks. Operator, I think 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，我想我們現在可以開始提問了。

(Operator Instructions) Our first question comes from the line of Candis Chan from Daiwa.

（操作員說明） 我們的第一個問題來自 Daiwa 的 Candis Chan。

And also congratulations on the very strong set of results. After achieving a robust 46% revenue growth for this year, can you share some colors on the revenue growth target for the new fiscal year? And also, what would be the key investment focus for this year?

也要祝賀我們取得如此強勁的成績。今年實現了 46% 的強勁營收成長後，您能否分享一下新財年的營收成長目標？另外，今年的投資重點是什麼？

Thanks, Candis. This is Alex. Let me take this one. So I think at a very high level, I would say, growth is really the output of investment input. I think this investment input is going to span from product and services innovation, technology, channel and network, and last but not least, our people and our organization. So at a very high level, I think I will just sort of answer both of your questions in one go. And if I would unpack it a little bit further, I think obviously we'll remain focused on further revitalizing and refining our mature businesses. I would really expect our various learning services programs to continue to serve as our largest revenue contributor in the new fiscal year and continue to show robust growth. We'll obviously continue to innovate to explore and design differentiated products and services that really fits with all segments of our customers and all learning scenarios and to provide them with was an integrated experience and an integrated learning journey. We'll obviously continue to invest in artificial intelligence. I think I mentioned earlier on the call, it's an area that we pay a huge amount of attention to. And we believe that that AI era and its transformative impact on education is just starting. We'll continue to refine the details of our operations to enhance overall efficiency and profitability. And this really, I think it goes across the entire chain of operation. You go from content generation to product R&D to sales and marketing. So Candis, I hope that answers your question.

謝謝，坎迪斯。這是亞歷克斯。讓我拿走這個。所以我認為，在很高的層面上，我想說，成長其實是投資投入的產出。我認為這種投資投入將涵蓋產品和服務創新、技術、管道和網絡，以及最後但並非最不重要的，我們的員工和我們的組織。因此，在很高的水平上，我想我會一次性回答你們的兩個問題。如果我進一步解釋一下，我認為顯然我們將繼續專注於進一步振興和完善我們的成熟業務。我真的希望我們的各種學習服務計劃在新財年繼續成為我們最大的收入貢獻者，並繼續表現出強勁的成長。我們顯然會繼續創新，探索和設計真正適合各個細分客戶和所有學習場景的差異化產品和服務，為他們提供一體化的體驗和一體化的學習旅程。顯然我們將繼續投資人工智慧。我想我之前在電話會議上提到過，這是我們非常關注的領域。我們相信人工智慧時代及其對教育的變革性影響才剛開始。我們將繼續完善營運細節，以提高整體效率和獲利能力。我認為這確實貫穿了整個營運鏈。您從內容生成到產品研發再到銷售和行銷。坎迪斯，我希望這能回答你的問題。

Our next question comes from the line of Linda Huang from Macquarie.

我們的下一個問題來自麥格理的 Linda Huang。

So my question is regarding for the learning center expansion. I remember that in the previous conference call, our learning center number is 250 to 300. So can you share with us more color regarding for your learning center expansion at the end of the previous quarter? And then for FY '25, how do you gauge the market demand and expansion plan?

所以我的問題是關於學習中心的擴展。我記得在之前的電話會議中，我們的學習中心數量是250到300。那麼對於 25 財年，您如何衡量市場需求和擴張計畫？

Thanks, Linda. This is Alex. Let me take this one as well. So first of all, we expanded for capacity in the past quarter, which was in line with our expectation. And with retention rate being relatively stable as we expanded our capacity into more students, I think we increasingly feel good about that line of growth for the future. Now just to share a bit more color on how we look at this for the upcoming year, I think this is a theme that I've addressed in the past couple of years. Look, enrichment learning, it's got a new product market set. And we always would adopt a balanced approach, we'll look at the demand, we look at the geographical density of that demand. We'll look at user response to our products and services, whether it's positive. And obviously, there are metrics such as user retention, which will tell us whether it's hitting our expectation. We'll also obviously be very mindful of the operational metrics such as classroom utilization rate and teacher utilization rate. And these are all the things that we consider together, right? So I would say, when I look at our Peiyou enrichment learning programs, they're really designed to help users develop a multifaceted set of capabilities. They need to apply what they learn into real-life situations. They need to develop their own thoughts from different perspectives and really foster a full person development approach. So so far I think we've observed really positive user feedback related to this enhancement in the capabilities mentioned above. And we believe our dedication, quality and effectiveness will continue to drive our sustained growth. So for the next year, I think we're seeing signs, very good signs of visible growth path. We'll continue to expand our learning center network to meet user demand in the upcoming year. I think we'll stick to a dynamic and balanced approach, right, really taking market demand in a particular area in particular and particular city or district, how customers are responding to our products and services, our own operating capabilities, especially our teams on the ground, the frontline capabilities that they're building and enhancing and also those operational metrics, efficiency metrics that I mentioned about, we'll take all of those into consideration. So I think just to summarize it, we expect to further expand our network, and we'll continue to manage this in a dynamic and balanced approach. So, Linda, I hope that answers your question.

謝謝，琳達。這是亞歷克斯。讓我也拿這個吧。首先，我們在上個季度擴大了產能，這符合我們的預期。隨著我們將容量擴大到更多的學生，保留率相對穩定，我認為我們對未來的成長線越來越滿意。現在，我想更多地分享我們對來年的看法，我認為這是我在過去幾年中討論過的主題。看，強化學習，它有一個新產品市場集。我們總是會採取平衡的方法，我們會專注於需求，我們會專注於該需求的地理密度。我們將查看用戶對我們的產品和服務的反應，無論其是否積極。顯然，還有諸如用戶保留率之類的指標，這將告訴我們它是否達到了我們的預期。顯然，我們也會非常關注教室利用率和教師利用率等營運指標。這些都是我們一起考慮的事情，對嗎？所以我想說，當我看到我們的培優強化學習計畫時，它們確實是為了幫助使用者培養多方面的能力而設計的。他們需要將所學到的知識應用到現實生活中。他們需要從不同的角度發展自己的思想，真正培養全人發展的方法。到目前為止，我認為我們已經觀察到與上述功能增強相關的非常積極的用戶回饋。我們相信，我們的奉獻精神、品質和效率將繼續推動我們的持續成長。因此，對於明年，我認為我們會看到跡象，非常好的跡象，表明成長路徑可見。我們將繼續擴大我們的學習中心網絡，以滿足來年的用戶需求。我覺得我們會堅持動態平衡的方式，對吧，真正了解特定地區特定城市、地區的市場需求，客戶對我們的產品和服務的反應如何，我們自己的營運能力，特別是我們的團隊地面、他們正在建立和增強的前線能力以及我提到的那些營運指標、效率指標，我們將考慮所有這些。因此，我認為總結一下，我們希望進一步擴大我們的網絡，並且我們將繼續以動態和平衡的方式進行管理。所以，琳達，我希望這能回答你的問題。

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 fourth quarter results. You just talked about our offline strategy, offline expansion strategy. May I just shift the focus to online. How do you think of your strategy with the online investment learning? Do you plan to -- similar to your commitment to offline expansion, do you plan to increase your investment in the online enrichment learning segment?

恭喜第四季的強勁業績。您剛才談到了我們的線下策略，線下擴張策略。我可以把注意力轉移到網路上嗎？您如何看待在線投資學習的策略？您是否計劃—類似於您對線下擴張的承諾，您是否計劃增加對線上強化學習領域的投資？

Felix, thanks for the question, and this is Jackson. I'll take this one. When we look at the online enrichment learning business or the industry really, we see this as a dynamic market landscape, especially over the last couple of years we see user experience has gradually evolved in this particular landscape. Now before I get into the future, maybe let me just talk a little bit about kind of what happened in this quarter with our online enrichment business. In this past fiscal Q4, our online enrichment learning business maintained its course of operations. We also refined our operational efficiency while at the same time explore new SKUs as well. Online enrichment learning remains a strategic area for us, not only because of the market opportunity itself but also because we see it as a unique opportunity to leverage interactive online features to provide an engaging and effective and a digital learning experience to a broader audience, right? You asked about investment plan. I would say it's less about increased or decreased investments. It's more about making sure that we deploy the resources needed to provide our customers with high-quality learning experience. So looking forward, we -- online enrichment learning remains a strategic area for us. We'll focus on delivering quality products and services to our customers while leveraging the benefits of our learning, and we'll continue to bring scarce, high-quality educational resources to a broader audience, while enhancing user value and social benefits. I hope that answers your question, Felix.

菲利克斯，謝謝你的提問，我是傑克森。我要這個。當我們真正審視線上強化學習業務或產業時，我們將其視為一個動態的市場格局，特別是在過去幾年中，我們看到使用者體驗在這個特定的格局中逐漸發展。現在，在我展望未來之前，也許讓我先談談本季我們的線上豐富業務所發生的事情。在剛過去的第四財季，我們的線上強化學習業務維持了正常運作。我們也提高了營運效率，同時探索新的 SKU。線上強化學習仍然是我們的策略領域，不僅因為市場機會本身，還因為我們將其視為利用互動式線上功能為更廣泛的受眾提供引人入勝、有效的數位學習體驗的獨特機會，對吧？你問的是投資計畫。我想說這與增加或減少投資無關。更重要的是確保我們部署所需的資源來為客戶提供高品質的學習體驗。因此，展望未來，線上強化學習仍是我們的策略領域。我們將專注於為客戶提供優質的產品和服務，發揮學習的效益，持續為更廣泛的受眾帶來稀缺的優質教育資源，同時提升用戶價值和社會效益。我希望這能回答你的問題，菲利克斯。

Our next question comes from the line of Timothy Zhao from Goldman Sachs.

我們的下一個問題來自高盛的趙蒂莫西。

Congrats on the very strong results. So my question is on the Content Solutions business line. Just wondering, could management share some colors on the sales and the user engagement of the latest hardware that you launched over the quarter? And what is the I think your plan to further make the business line more sustainable into the longer term?

祝賀取得了非常強勁的成果。我的問題是關於內容解決方案業務線的。只是想知道，管理層能否分享一些有關您在本季度推出的最新硬體的銷售和用戶參與度的信息？我認為您進一步使業務線更長期可持續性的計劃是什麼？

Thanks, Timothy, this is Alex. Let me take this one. So first of all, just to address this past quarter, as you mentioned and I alluded to earlier on the call, we launched 2 new products in this quarter xPad2 Pro and xPad2 Pro Max. So in this quarter, I really look at growth being driven by increasing volume and higher ASP. But in reality, there is another set of metrics which I keep a very close eye to, which is that engagement. So in general, we look at the average weekly usage time. It remains relatively stable despite the ever larger user base, and that's critical. And I think another interesting thing that we are observing is new set of products that we launched in the quarter because they came with enhancements in the hardware and enhancement in artificial intelligence learning tools we're really seeing an uptick in the usage of those tools. And I think that's showing early signs that these tools actually become great companions for students as they learn on their own in their homes, according to their own style and learning profile. So going forward, I really look at sort of 2 main directions. I think obviously the first one is to continue to improve our products. We just launched the hardware, new hardware. This is coming on about 10 months since we first launched [xPad1]. But actually, the software and the content continue to be upgraded on these devices. And I think what really drives us, the North Star is that engagement, learning engagement and learning impact, right? So we look at further improvement on the hardware design, additional high-quality content and those artificial intelligence learning tools to continue to enhance the learning engagements, the human machine interaction and provide a much more effective and impactful learning journey for our customers. And if I may add, I think this journey has just begun. I think there's a huge amount of additional potential as we make further investment into artificial intelligence, our large language model, it's going to become better and better for the future. The other main direction I will look at is obviously we need to continue to build our brand, our share as a brand as a very strong and well-known brand, but we're new to hardware. So we'll continue to drive brand building and also to expand our sales channels. We'll obviously continue to motor closely the efficiency of our online sales channels, which really goes from live streaming to the mainstream e-commerce platforms. But we'll also start to explore opportunities in more offline channels. We believe these channels will actually bring opportunity for more customers to engage in a conversation with us, right, to look at what are the possible impact that this device could bring to their kids. And I think we'll also be able to reach a larger set of customer segments in the future. So Timothy, I hope that answers your question.

謝謝，蒂莫西，這是亞歷克斯。讓我拿走這個。首先，為了解決上個季度的問題，正如您所提到的和我之前在電話會議中提到的，我們在本季度推出了 2 款新產品 xPad2 Pro 和 xPad2 Pro Max。因此，在本季度，我確實認為成長是由銷量增加和平均售價提高所推動的。但實際上，我非常密切注意另一組指標，那就是參與度。所以一般來說，我們會關注平均每週的使用時間。儘管用戶群不斷擴大，但它仍然保持相對穩定，這一點至關重要。我認為我們觀察到的另一件有趣的事情是我們在本季推出的一系列新產品，因為它們增強了硬體和人工智慧學習工具，我們確實看到這些工具的使用有所增加。我認為這顯示出早期跡象，表明這些工具實際上成為學生的好夥伴，因為他們可以根據自己的風格和學習概況在家中自學。因此，展望未來，我確實關注兩個主要方向。我認為顯然第一個就是繼續改進我們的產品。我們剛剛推出了硬件，新硬體。自從我們首次推出 [xPad1] 以來，距此已經過去了大約 10 個月。但實際上，這些設備上的軟體和內容仍在不斷升級。我認為真正驅動我們的北極星是參與、學習參與和學習影響，對嗎？因此，我們著眼於進一步改進硬體設計、額外的高品質內容和人工智慧學習工具，以繼續增強學習參與度、人機交互，並為我們的客戶提供更有效、更有影響力的學習之旅。如果我可以補充一下，我認為這段旅程才剛開始。我認為，隨著我們對人工智慧和我們的大型語言模型的進一步投資，它還有巨大的額外潛力，它的未來將會變得越來越好。我要考慮的另一個主要方向顯然是我們需要繼續建立我們的品牌，我們作為一個非常強大和知名品牌的品牌份額，但我們對硬體還是新手。因此，我們將繼續推動品牌建立並擴大我們的銷售管道。顯然，我們將繼續密切關注我們的線上銷售管道的效率，這實際上是從直播到主流電子商務平台。但我們也會開始探索更多線下管道的機會。我們相信這些管道實際上會為更多的客戶帶來與我們對話的機會，對吧，看看這個設備可能會給他們的孩子帶來什麼影響。我認為我們將來還能夠涵蓋更多的客戶群。蒂莫西，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。

Actually my question is the company still has a big amount of cash in hand. And so how are we considering our cash usage? And do we have any plans on further improving the shareholder returns?

其實我的問題是公司手頭上還有大量現金。那我們要如何考慮我們的現金使用情況呢？我們有沒有進一步提高股東回報的計畫？

Caini, thanks for the question. And this is Jackson. I'll take this one. Look, like you said, we -- the company has almost USD 3.6 billion in cash and cash equivalents, short-term investments and restricted cash as of February 29, 2024. When we think about potential use of cash, there are several factors we think about and we try to balance, right? One is we try to kind of balance between short-term and long-term development. The second is that we try to do balance, to reinvest into the business and generate shareholder returns. As of now, a few areas of cash usage that are on our mind are, one, is that we'll maintain a kind of steady investment pace into our core business segments to deliver high-quality products and create value for customers in their learning journey. And second is we'll fund new business initiatives that are still -- some of them I talked about on the call or during our previous conversations. We want to spawn these new business initiatives that are still in exploratory phases. And we'll continue to explore new opportunities as the industry evolves. And lastly, we always seek diversified means to generate shareholder returns, one of which could be stock repurchase. I talked about the buyback program that the board authorized, which was extended for another year and allow us to purchase up to 500 -- roughly USD 504 million in considerations. So that's kind of how we think about cash usage for now. I hope that answers your question, Caini.

凱尼，謝謝你的提問。這是傑克遜。我要這個。就像你說的，截至 2024 年 2 月 29 日，我們公司擁有近 36 億美元的現金和現金等價物、短期投資和限制性現金。一想，我們努力平衡吧？一是我們試圖在短期和長期發展之間找到平衡。第二是我們努力做到平衡，對業務進行再投資並產生股東回報。截至目前，我們考慮的現金使用的幾個領域是，一是我們將保持對核心業務部門的穩定投資步伐，以提供高品質的產品並為客戶的學習創造價值旅行。其次，我們將為仍然存在的新業務計劃提供資金——其中一些我在電話會議或之前的談話中談到過。我們希望催生這些仍處於探索階段的新業務措施。隨著產業的發展，我們將繼續探索新的機會。最後，我們始終尋求多元化的方式來產生股東回報，其中之一就是股票回購。我談到了董事會批准的回購計劃，該計劃又延長了一年，允許我們購買最多 500 個股票——大約 5.04 億美元的對價。這就是我們目前對現金使用的看法。我希望這能回答你的問題，Caini。

We have now reached the end of the question-and-answer session. I'd now like to turn the conference back to the management team for closing comments.

我們現在問答環節已經結束。我現在想將會議轉回管理團隊以徵求結束意見。

So this is Alex again. Thanks, everybody, for participating in today's call, and we'll see you next quarter. Thanks, and bye-bye.

這又是亞歷克斯。感謝大家參加今天的電話會議，我們下季再見。謝謝，再見。

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

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。