17 Education & Technology Group Inc (YQ) 2024 Q4 法說會逐字稿

Good evening, and good morning, ladies and gentlemen, and thank you for standing by for the 17EdTech's fourth-quarter 2024 and full year earnings conference call. (Operator Instructions)

女士們、先生們，晚上好，早上好，感謝大家參加 17EdTech 2024 年第四季和全年收益電話會議。（操作員指令）

As a reminder, today's conference call is being recorded. I will now turn the meeting over to your host for today's call, Ms. Lara Zhao, 17EdTech's Investor Relations Manager. Please proceed, Lara.

提醒一下，今天的電話會議正在錄音。現在，我將會議交給今天電話會議的主持人，17EdTech 的投資者關係經理 Lara Zhao 女士。請繼續，拉拉。

Thank you, operator. Hello, everyone, and thank you for joining us today. Our earnings release was distributed earlier today and is available on our IR website. Joining us today are Mr. Michael Du, Director and Chief Financial Officer; and myself, Investor Relations Manager.

謝謝您，接線生。大家好，感謝大家今天加入我們。我們的收益報告已於今天早些時候發布，並可在我們的 IR 網站上查閱。今天與我們一起參加的是董事兼財務長 Michael Du 先生；以及我自己，投資人關係經理。

Michael will walk you through our latest business performance and strategies, and I will discuss our financial performance in more detail. After the prepared remarks, Michael will be available to answer your questions during the Q&A session.

麥可將向您介紹我們最新的業務表現和策略，我將更詳細地討論我們的財務表現。在準備好的發言之後，麥可將在問答環節回答您的問題。

Before we begin, I'd like to remind you that this conference call contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the US Private Securities Litigation Reform Act of 1995.

在我們開始之前，我想提醒您，本次電話會議包含《1934 年證券交易法》第 21E 條和《1995 年美國私人證券訴訟改革法》所定義的前瞻性陳述。

These forward-looking statements are based upon management's current expectations and current market and operating conditions and relates to events that involve known and unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results, performance or achievements to differ materially.

這些前瞻性陳述是基於管理階層目前的預期和目前的市場及營運條件，涉及已知和未知的風險、不確定性和其他因素的事件，所有這些因素都難以預測，其中許多因素超出了公司的控制範圍。這些風險可能導致公司的實際結果、績效或成就產生重大差異。

Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the US SEC. The company does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.

有關這些和其他風險、不確定性和因素的更多資​​訊包含在公司向美國證券交易委員會提交的文件中。除適用法律要求外，本公司不承擔因新資訊、未來事件或其他情況而更新任何前瞻性聲明的義務。

I will now turn the call over to our Director and Chief Financial Officer to review some of our business development and strategic direction. Michael, please go ahead.

現在，我將把電話轉給我們的董事和財務官，來回顧我們的一些業務發展和策略方向。邁克爾，請繼續。

Thank you, Lara. Hello, everyone. Thank you all for joining us on our fourth quarter 2024 and full year earnings call. Before we begin, I would like to note that the financial information and non-GAAP numbers in this release are presented on continuing operation basis are in RMB, unless otherwise stated.

謝謝你，拉拉。大家好。感謝大家參加我們的 2024 年第四季和全年財報電話會議。在開始之前，我想指出的是，本新聞稿中的財務資訊和非公認會計準則數據均按持續經營基礎以人民幣呈現，除非另有說明。

Let me start with our latest business updates. We achieved strong results with year-over-year top line growth of 11% to RMB189.2 million for the full year, driven by strategic market expansion and new contract acquisitions.

讓我先介紹一下我們最新的業務更新。在策略市場擴張和新合約取得的推動下，我們取得了強勁業績，全年營業收入年增11%，至人民幣1.892億元。

Net revenues for the fourth quarter were RMB36.6 million, reflecting a 23% decrease from the same quarter previous year, primarily due to the reduction in net revenues from district level flagship projects as we prioritized our resources on school-based projects under subscription model, which typically will generate revenues over a longer period.

第四季淨收入為人民幣3,660萬元，較去年同期下降23％，主要是由於區級旗艦項目的淨收入減少，因為我們優先將資源投入訂閱模式下的校本項目，這些項目通常會在較長時間內產生收入。

Meanwhile, our SaaS subscription business model maintained an upward trend as evidenced by three digit growth compared to the same quarter last year, bolstered by strong retention rates and multiyear subscription renewals.

同時，我們的 SaaS 訂閱業務模式保持上升趨勢，與去年同期相比實現了三位數的成長，這得益於強勁的留存率和多年訂閱續訂。

Through rigorous cost optimization and leveraging economy of scales, operating expenses decreased by 34% from the same quarter last year, resulting in a 35% reduction in net loss on a GAAP basis. As we enhance our products and services through AI for improved automation and user experiences, we've received positive feedback and market recognition.

透過嚴格的成本優化和利用規模經濟，營業費用較去年同期下降了 34%，導致以 GAAP 計算的淨虧損減少了 35%。隨著我們透過人工智慧增強我們的產品和服務，提高自動化程度和用戶體驗，我們收到了積極的回饋和市場認可。

Looking ahead, with a strong pipeline of AI enhanced products and a customer-centric road map, we are well positioned to deliver sustainable growth and industry-leading innovations in the future. Now please allow me go into more details.

展望未來，憑藉強大的人工智慧增強產品和以客戶為中心的路線圖，我們有能力在未來實現永續成長和業界領先的創新。現在請容許我進一步詳細闡述。

Our regional flagship project delivery and new contract acquisitions, during this quarter our teaching and learning SaaS business for district-level projects continued to make steady progress through successful delivery and new contract acquisitions.

我們的區域旗艦專案交付和新合約獲取，本季度我們針對區級專案的教學和學習 SaaS 業務透過成功交付和新合約獲取繼續取得穩步進展。

Major projects have successfully delivered and contributed significantly to the overall revenue. We have continued to win teaching and learning SaaS projects this quarter, further demonstrating the strong customer stickiness of our offering.

重大專案順利交付，為整體營收貢獻顯著。本季我們繼續贏得教學和學習 SaaS 項目，進一步證明了我們產品強大的客戶黏著度。

Such projects will expand our services to cover more schools with increased number of students in both the existing districts and new ones. It further demonstrates our capacity to enhance regional education quality and efficiencies through scalable, high quality solutions and plays an exemplary role for other potential clients to adopt our products.

這些計畫將擴大我們的服務範圍，涵蓋現有學區和新學區中更多學生人數增加的學校。它進一步證明了我們透過可擴展的高品質解決方案來提高區域教育品質和效率的能力，並為其他潛在客戶採用我們的產品起到了示範作用。

Our accelerated growth in school based subscription model. In the meanwhile, our school based subscription model have witnessed record growth with triple-digit growth in terms of number of students newly subscribed year-over-year. We have also identified an extensive opportunity pipeline that are expected to continue to expand our school coverage.

我們以學校為基礎的訂閱模式加速成長。同時，我們的校本訂閱模式也取得了創紀錄的成長，新訂閱學生數量較去年同期增加了三位數。我們也確定了廣泛的機會管道，預計將繼續擴大我們的學校覆蓋範圍。

As the subscription model scales, it increasingly contributes to our overall revenue, reflecting strategic importance and integral role to our overall strategy. This upward trajectory not only contributes significantly to our revenue, but also enhance customer engagement and loyalty.

隨著訂閱模式的規模不斷擴大，它對我們整體收入的貢獻也越來越大，體現了其對我們整體策略的重要性和不可或缺的作用。這種上升趨勢不僅大大提高了我們的收入，而且還提高了客戶參與度和忠誠度。

For our customers whose contracts are subject to renewal, more than 90% have decided to continue to subscribe and some even decided to subscribe with further expanding coverage. Such highly recurring subscription, together with opportunity to upsell additional value-added services, have paved a visible pathway for sustainable and healthy growth.

對於需要續約的客戶，超過90％的客戶決定繼續訂閱，有些甚至決定訂閱進一步擴大覆蓋範圍的服務。這種高度重複的訂閱，加上追加銷售額外加值服務的機會，為永續和健康的成長鋪平了一條可見的道路。

Synergies across business lines. The synergies across regional flagship projects and school-based subscription model initiatives have driven our production innovations into a virtuous cycle of our business growth.

跨業務線的協同作用。區域旗艦專案和學校訂閱模式舉措之間的協同作用推動了我們的生產創新進入業務成長的良性循環。

Flagship district teaching and learning SaaS projects are not only influential among authorities considering projects of similar nature, but also help us build a strong use case for our school-based subscription model among our potential client base.

旗艦區域教學和學習 SaaS 專案不僅在考慮類似性質專案的當局中具有影響力，而且還幫助我們在潛在客戶群中為我們的學校訂閱模式建立強大的用例。

They further generate insights that allow us to continuously enhance our school-based SaaS offering products while customer feedbacks drive iterative product upgrades and breakthrough innovations. This integrated approach has bolstered operational agility, positioning us to seize emerging opportunities and deliver scalable solutions.

他們進一步產生了洞察力，使我們能夠不斷增強基於學校的 SaaS 產品，同時客戶回饋推動產品的迭代升級和突破性創新。這種綜合方法增強了營運靈活性，使我們能夠抓住新興機會並提供可擴展的解決方案。

For our product and service offerings, we are committed to enhance our products and service offerings to improve customer satisfaction. Our focus on innovation and capabilities to deliver premium learning products has driven to refine our teaching and learning SaaS solutions, ensuring efficiency and high quality development.

對於我們的產品和服務，我們致力於增強我們的產品和服務以提高客戶滿意度。我們專注於創新和提供優質學習產品的能力，推動我們完善教學和學習 SaaS 解決方案，確保效率和高品質發展。

During this quarter, we have advanced our offering through the following strategic improvements. Unified data ecosystem. We have advanced cross-domain data integration by leveraging granular insights into -- across educational ecosystem, including classroom interactions, assignments and assessments and evaluations. Through standardized data collection, we have built a cohesive multi-scenario data framework that maximize analytical utility.

本季度，我們透過以下策略改進提升了我們的服務。統一的數據生態系。我們利用對整個教育生態系統的細緻洞察，實現了先進的跨領域數據集成，包括課堂互動、作業、評估和評估。透過標準化的資料收集，我們建立了一個有凝聚力的多場景資料框架，以最大程度地提高分析效用。

Scaled product portfolio. Building on this foundation, our digital driven product portfolio now connects teaching application with resources centers that streamline lesson planning and capture comprehensive instructional data through the following segments.

擴大產品組合。在此基礎上，我們的數位驅動產品組合現在將教學應用程式與資源中心連接起來，透過以下部分簡化課程計劃並獲取全面的教學數據。

Smart school based workbook for capturing detailed lesson data, adaptive (inaudible) systems supporting flexible daily practice with digital a tracking capacities, precision assessment platforms tailored for high-stakes testing and benchmarking, personalized learning solutions for smart learning kids, individual practice books and comprehensive evaluation dashboards for competency based teaching and analytical provided for educators and managers across all scenarios.

基於智慧學校的工作簿用於捕獲詳細的課程數據，自適應（聽不見）系統支援靈活的日常練習，具有數位追蹤能力，為高風險測試和基準測試量身定制的精確評估平台，為智能學習兒童提供的個性化學習解決方案，個人練習冊和基於能力的教學和分析的綜合評估儀表板，適用於所有場景的教育工作者和管理者。

Enhanced data value. Automated accumulation and intelligent distribution of teaching resources data now addresses diverse learning needs while maintaining long-term data integrity. Longitudinal analysis ensure academic quality monitoring while process oriented data exploration build holistic student profiles and enables effective competency based evaluation.

增強數據價值。教學資源數據的自動累積和智慧分配現在可以滿足多樣化的學習需求，同時保持長期數據的完整性。縱向分析確保學術品質監控，而流程導向的資料探索則建立整體的學生檔案並實現有效的基於能力的評估。

By aligning data infrastructure with scalable solutions, we are now empowering educators to make evidence-based decisions while preparing students for future ready learning experiences. In this quarter, we have initiated a targeted internal pilot of our AI powered learning diagnostic agent, leveraging state of the art large language models to analyze student performance data and help teachers increase efficiency in class preparation and homework correction.

透過將數據基礎設施與可擴展的解決方案相結合，我們現在可以讓教育工作者做出基於證據的決策，同時為學生未來的學習體驗做好準備。本季度，我們啟動了人工智慧學習診斷代理的有針對性的內部試點，利用最先進的大型語言模型來分析學生表現數據，幫助教師提高課堂準備和作業批改的效率。

It generates personalized explanations for common mistakes and recommended tailored teaching strategies. Initial data shows the tool's potential to streamline instruction workflow and improve learning outcomes by enabling teachers to efficiently interpret and utilize data, thereby enhancing teaching effectiveness and improve the quality of education.

它針對常見錯誤產生個人化的解釋並推薦量身定制的教學策略。初步數據顯示，該工具能夠使教師有效地解釋和利用數據，從而提高教學效率和教育質量，從而簡化教學工作流程、改善學習成果。

The integration of AI marks a significant step forward in optimizing teaching practice and learning outcomes with our offering. In terms of distribution channels, we have always intensified our focus on strategic market penetration through channel diversification and customer centric innovations.

人工智慧的整合標誌著我們在優化教學實踐和學習成果方面邁出了重要一步。在分銷管道方面，我們始終透過通路多樣化和以客戶為中心的創新，加強策略市場滲透。

By aligning product development with emerging education trends and optimizing distribution network, we have improved our customer acquisition efficiency. Moreover, our multichannel marketing initiatives and strategic partnership have further solidified our presence in high growth markets, positioning us for sustainable -- sustained development.

透過使產品開發與新興教育趨勢相結合並優化分銷網絡，我們提高了客戶獲取效率。此外，我們的多通路行銷計劃和策略合作夥伴關係進一步鞏固了我們在高成長市場的地位，為我們實現了永續發展。

Now I will turn the call over to Lara to walk you through our latest financial performance. Thank you.

現在我將把電話轉給 Lara，讓她向大家介紹我們最新的財務表現。謝謝。

Thanks, Michael, and thank you everyone for joining the call. I will now walk you through our financial and operating results. Please note that all financial data I talk about will be presented in RMB terms. I would like to remind you that the quarterly results we present here should be taken with care and reference to our potential future performance are subject to potential impacts from seasonality and one-off events as a result of the series of regulations introduced in 2021 and corresponding adjustment to our business model, organization and workforce.

謝謝，邁克爾，也謝謝大家參加電話會議。現在我將向大家介紹我們的財務和經營績效。請注意，我談到的所有財務數據都將以人民幣表示。我想提醒您，我們在此呈現的季度業績應謹慎對待，並參考我們未來的潛在業績，這些業績可能會受到2021年推出的一系列法規導致的季節性和一次性事件的影響，以及對我們的業務模式、組織和員工隊伍的相應調整。

In the fiscal year of 2024, we recorded net revenues of RMB189.2 million compared with RMB171.0 million in 2023, representing a 10.7% of increase on a year-over-year basis. Net revenue for the fourth quarter of 2024 was RMB36.6 million compared with RMB47.3 million in the fourth quarter of 2024 (sic - see press release, "2023").

2024財年，我們實現淨收入1.892億元人民幣，2023年為1.71億元人民幣，較去年同期成長10.7%。2024 年第四季淨收入為人民幣 3,660 萬元，而 2024 年第四季為人民幣 4,730 萬元（原文如此 - 請參閱新聞稿「2023 年」）。

Net loss on a GAAP basis for the fourth quarter of 2024 was RMB63.7 million compared with RMB98.4 million in the fourth quarter of 2023, representing a decrease of [RMB35.2 million] year-on-year. The adjusted net loss non-GAAP for the fourth quarter of 2024 was RMB40.1 million compared with adjusted net loss non-GAAP of RMB81.8 million in the fourth quarter of 2023, a decrease of [RMB51 million] year-on-year.

2024年第四季以美國通用會計準則計算的淨虧損為人民幣6,370萬元，而2023年第四季為人民幣9,840萬元，年減[人民幣3,520萬元]。2024年第四季調整後非GAAP淨虧損為人民幣4010萬元，2023年第四季調整後非GAAP淨虧損為人民幣8180萬元，年減[人民幣5100萬元]。

Gross margin for the fourth quarter of 2024 was 33.6% compared with 43.4% in the fourth quarter of 2023. The relatively lower gross margin this quarter is mainly attributable to the delivery of an RMB9 million legacy moral education project, which did not include the typical components of our teaching and learning SaaS offering, and thus had a lower margin dragging down the overall margin. This project was as a result of historical attempt and no longer a core offering for us. As of December 31, 2024, we have cash reserves of RMB359.3 million on our balance sheet.

2024 年第四季的毛利率為 33.6%，而 2023 年第四季為 43.4%。本季毛利率相對較低，主要歸因於價值 900 萬元人民幣的遺留德育項目的交付，該項目不包含我們教學和學習 SaaS 產品的典型組件，因此利潤率較低，拖累了整體利潤率。該專案是歷史嘗試的結果，不再是我們的核心產品。截至 2024 年 12 月 31 日，我們的資產負債表上的現金儲備為 3.593 億元。

Next, I will go through our fourth quarter financials in greater detail. Net revenues, net revenues for the fourth quarter of 2024 was RMB36.6 million, representing a year-over-year decrease of 22.7% from RMB47.3 million in the fourth quarter of 2023.

接下來，我將更詳細地介紹我們第四季的財務狀況。淨收入，2024年第四季淨收入為人民幣3660萬元，較2023年第四季的人民幣4730萬元年減22.7%。

This was mainly due to the reduction in net revenues from district level project as we prioritize our resources on school based projects under a subscription model. And two, a higher proportion of contracts under SaaS subscription model we signed in the fourth quarter of 2024, which requires longer periods of revenue recognition.

這主要是因為我們在訂閱模式下優先將資源投入到學校專案上，導致區級專案的淨收入減少。其次，我們在 2024 年第四季簽署的 SaaS 訂閱模式下的合約比例更高，這需要更長的收入確認期。

Cost of revenue for the fourth quarter of 2024 was RMB24.3 million representing a year-over-year decrease of 9.2% from RMB26.8 million in the fourth quarter of 2023, which was mainly due to the fewer district level project deliveries for our teaching and learning SaaS offerings as a result of the growing proportion of recurring revenue and a subscription model that requires fewer hardware and software deliveries.

2024 年第四季的收入成本為人民幣 2,430 萬元，較 2023 年第四季的人民幣 2,680 萬元同比下降 9.2%，這主要是由於經常性收入佔比的增加以及需要更少硬體和軟體交付的訂閱模式導致我們的教學和學習 SaaS 產品的區級專案級交付減少。

Gross profit for the fourth quarter of 2024 was RMB12.3 million compared with RMB20.6 million in the fourth quarter of 2023. Gross margin for the fourth quarter of 2024 was 33.6% compared with 43.6% in the fourth quarter of 2023.

2024 年第四季毛利為人民幣 1,230 萬元，而 2023 年第四季為人民幣 2,060 萬元。2024 年第四季的毛利率為 33.6%，而 2023 年第四季為 43.6%。

Operating -- total operating expenses. Total operating expenses for the fourth quarter of 2024 were RMB81.4 million, including RMB15.5 million of share-based composition expenses, representing a year-over-year decrease of 33.8% from RMB122.8 million in the fourth quarter of 2023.

營業－總營業費用。2024年第四季總營業費用為人民幣8,140萬元，其中股權結構調整費用人民幣1,550萬元，較2023年第四季的人民幣1.228億元年減33.8%。

Net loss from -- loss from operations. Loss from operations for the fourth quarter of 2024 was RMB69.1 million compared with RMB102.3 million in the fourth quarter of 2023. Loss from operations as a percentage of net revenues for the fourth quarter of 2024 was negative 188.8%, compared with negative 216.0% in the fourth quarter of 2023.

淨虧損－營業虧損。2024 年第四季營業虧損為人民幣 6,910 萬元，而 2023 年第四季為人民幣 1.023 億元。2024 年第四季營業虧損佔淨收入的百分比為負 188.8%，而 2023 年第四季為負 216.0%。

Net loss for the fourth quarter of 2024 was RMB63.7 million, compared with net loss of RMB98.4 million in the fourth quarter of 2023. Net loss as a percentage of net revenues was negative 174.2% in the fourth quarter of 2024, compared with negative 207.9% in the fourth quarter of 2023.

2024年第四季淨虧損為人民幣6,370萬元，2023年第四季淨虧損為人民幣9,840萬元。2024 年第四季淨虧損佔淨收入的百分比為負 174.2%，而 2023 年第四季為負 207.9%。

Adjusted net loss non-GAAP for the fourth quarter of 2024 was RMB40.1 million compared with adjusted net loss non-GAAP of RMB81.8 million in the fourth quarter of 2023. Adjusted net loss non-GAAP as a percentage of net revenues was negative 109.5% in the fourth quarter of 2024 compared with negative 172.8% of adjusted net loss non-GAAP as a percentage of net revenues in the fourth quarter of 2023.

2024 年第四季調整後非公認會計準則淨虧損為人民幣 4,010 萬元，而 2023 年第四季調整後非公認會計準則淨虧損為人民幣 8,180 萬元。2024 年第四季調整後非 GAAP 淨虧損佔淨收入的百分比為-109.5%，而 2023 年第四季調整後非 GAAP 淨虧損佔淨收入的百分比為-172.8%。

Please refer to the table captioned, reconciliation of non-GAAP measures to the most comparable GAAP measures at the end of this press release for reconciliation of net loss under US GAAP to the adjusted net loss non-GAAP.

請參閱本新聞稿末尾標題為“非公認會計準則指標與最具可比性的公認會計準則指標的調節表”，以了解美國公認會計準則下的淨虧損與調整後的非公認會計準則淨虧損的調節表。

Cash and cash equivalents, restricted cash and term deposits were RMB359.3 million, equals USD49.2 million as of December 31, 2024, compared with RMB476.7 million as of December 31, 2023. Business -- as we look to the future, we remain steadfast in our commitment to advancing educational digitalization and in writing and learning experiences.

截至 2024 年 12 月 31 日，現金及現金等價物、限制性現金及定期存款為人民幣 3.593 億元，相當於 4,920 萬美元，而截至 2023 年 12 月 31 日為人民幣 4.767 億元。商業－展望未來，我們始終堅定不移地致力於推動教育數位化以及寫作和學習體驗。

We will strengthen our core business operations while exploring new opportunities through dual focus on innovation and sustained growth. By prioritizing AI-driven solutions, we aim to redefine personalized education and empower learners, teachers, and educators with valuable insights.

我們將加強核心業務運營，同時透過雙重專注於創新和持續成長來探索新的機會。透過優先考慮人工智慧驅動的解決方案，我們旨在重新定義個人化教育，並為學習者、教師和教育工作者提供寶貴的見解。

With that, that concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q&A session. Thank you.

我們的準備好的演講到此結束。謝謝。接線員，我們現在可以開始問答環節。謝謝。

(Operator Instructions) Dear speakers, there are no questions at this time. I would now like to hand the conference over to the management team for any closing remarks.

（操作員指示）尊敬的發言者，目前沒有問題。現在，我想將會議交給管理團隊，以便他們作結束語。

Thank you, operator. In closing, on behalf of 17EdTech's management team, we'd like to thank you for your participation on today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call.

謝謝您，接線生。最後，我謹代表 17EdTech 管理團隊感謝您參加今天的電話會議。如果您需要任何更多信息，請隨時直接與我們聯繫。感謝您今天加入我們。通話到此結束。

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

今天的電話會議到此結束。感謝您的參與。現在你們都可以斷開連結了。祝你今天過得愉快。