Weibo Corporation (WB) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to Weibo Reports Third Quarter 2024 Financial Results. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Sandra Zhang. Please go ahead.

Thank you, operator. Welcome to Weibo's Third Quarter 2024 Earnings Conference Call. Joining today are our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Fei Cao. The conference call is also being broadcasted on the internet and is available through Weibo's IR website. Before the management remarks, I would like to read you the safe harbor statement in connection with today's conference call. During today's conference call, we may make forward-looking statements, statements that are not historical facts, including statements of our beliefs and expectations. 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. Weibo assumes no obligation to update the forward-looking statement in this conference call and elsewhere. Further information regarding this and other risks is included in Weibo's annual report on Form 20-F and other filings with the SEC. All the information provided in this press release is occurring as of date hereof. Weibo assumes no obligation to update such information, except as required under applicable law. Additionally, I would like to remind you that our discussion today includes certain non-GAAP measures, which exclude stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and the future prospects. Our non-GAAP financials exclude certain expenses, gains or losses and other items that are [ now ] expected to result in future cash payments or are non-recurring in nature, or are not indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures. Following management's prepared remarks, we'll open the lines for a brief Q&A session. With this, I would like to turn the call over to our CEO, Gaofei Wang.

[Foreign Language]

[Interpreted] Thank you. Hello, everyone. Welcome to Weibo's earnings conference call. Today I will share with you highlights on Weibo's product monetization in the third quarter of 2024. On the user front, in September, Weibo's MAU reached approximately 587 million, and the average daily [ user ] reach approximately 257 million. This improvement is partly due to the adjustment in the user acquisition and growth strategy this year, with the focus on attracting higher quality users with -- through optimized channel strategies. Additionally, our product operation has prioritized enhancing user engagement and retention on the platform. Combined with the [ booster ] from the Olympics, these efforts have led to an increase in overall DAU versus MAU ratio year-over-year.

[Foreign Language]

[Interpreted] On the monetization front, driven by our enhanced marketing [ competitors ] in key industries, the positive impact from Olympic hot trends, as well as the strong momentum of the value-added service, Weibo's total revenue in the third quarter reached USD 464.5 million, up 5% year-over-year, of which ad revenue reached USD 398.6 million, up 2% year-over-year, and VAS revenue reached USD 65.9 million, up 25% year-over-year. Our non-GAAP operating income reached USD 164.5 million representing a non-GAAP operating margin of 35%.

[Foreign Language]

[Interpreted] Next, let me share with you our progress made in product and monetization in the third quarter.

[Foreign Language]

[Interpreted] On the channel front, this year we continued to enhance the display of Weibo's hot trend and social content in key positions of handset devices and improve the targeted reach and content consumption experience of high-quality users in collaboration with manufacturers, aiming to enhance the engagement and retention of channel users. In the third quarter, we partnered with handset manufacturers to particularly increase user reach and the content consumption of Olympic related hot trends, and as a result, the average DAUs from the -- this channel represent double-digit growth compared to the second quarter.

[Foreign Language]

[Interpreted] On social attributes, in the third quarter, for information-based products, we continued to increase high-quality content consumption for both relationship-based and interest-based feed, aiming to improve user social interaction. On one hand, leveraging the summer vacation and Olympic related hot trend effect, we enhanced vertical interest-based content distribution and [ instant ] recommendation feedback catering to the personalized content consumption needs of various users' group. On the other hand, we boost the exposure of account and content with high quality relationship and interactions, aiming to promote user interaction and enhance social thickness. As a result, the total interaction on the front page increased by double-digit quarter-over-quarter, and meanwhile, we further improved the growth path of user generated content on Weibo by analyzing user profile, interest, frequency of content generation and the -- and other characteristics. We provided personalized guidance and tips on the content generation and encourage content sharing and help users with continuous content generation to gain traffic and accumulate fans. In the third quarter, the number of users who generate UGC increased by 8% quarter-over-quarter, while the number of relationships built among ordinary users rose double-digit quarter-over-quarter.

[Foreign Language]

[Interpreted] On the content ecosystem, in the third quarter, we fully leverage the marketing advantages of Olympic related hot trend, amplifying the influence of Weibo's sports IP. Meanwhile, we strengthened content operations across entertainment, digital, automated and game verticals, seizing every opportunity to create top trending topics on the platform and strengthening Weibo's user mindset and competitive edge in hot trend marketing.

[Foreign Language]

[Interpreted] This year, the Paris Olympic Games captured extensive user attention and discussion. Weibo actively engage media accounts to generate content and lead discussion around Olympic Games, extending the hot trends from potential gold medal games to gold medals athletes and key sports events which help boost the hot trend traffic and elevate the Olympic Games impact. The Olympic related topic on Weibo surpassed 400 billion views with total user discussion over 400 million. Meanwhile, we continue to improve the monetization efficiency of hot trends. The ad revenue from the Paris Olympics set a historical high for Weibo's event-based sales, significantly surpassing that of the Tokyo Olympics. Weibo remains the primary social platform for Chinese athletes with 93% of the Chinese Olympic delegation [ open ] their Weibo account and Weibo is the only social platform with all the Chinese gold medalist have -- opening account. Athletes share their competition record and insights in videos or text and image on Weibo, and their average daily post significantly outnumber their daily post on the other platform. During the Paris Olympics, the total number of their fans doubled compared to that of during the Tokyo Olympics. Throughout the games, we witnessed not only the outstanding achievement of the Chinese team, but also the outstanding sports competition skills and the massive influence across platform of Chinese top athletes like [ Zheng Qinwen ], [indiscernible] and Fan Zhendong as well as the impressive performance of the younger athlete born in the 2000s. Over the past 4 years from the Tokyo Olympics of the -- to the Beijing Winter Olympics and now the Paris Olympics, we have continuously refined our operation strategy of event-driven hot trends and improved our operations of the athlete-fan ecosystem, achieving a year-over-year increase of active users of sport vertical and a more diverse sports content ecosystem. From a perspective of monetization, we have progressively overcome the limitation of event-based sales, achieving significant revenue growth. This achievement has reinforced our confidence in the development of Weibo's sports content ecosystem in the long run.

[Foreign Language]

[Interpreted] As the entire country cheered for the Olympics, numerous hot trends emerged in the entertainment, digital and game verticals in the third quarter, sparking extensive user discussions. For example, in the entertainment vertical, we enhanced collaborations with newly returned comedy variety shows and summer movies, leveraging Weibo's strength in driving up discussion. This helped boost the popularity and reputation of productions, like the movie Successor, and the variety show Stand-up Comedy 2024. As a result, the -- for entertainment work in this quarter, the discussion increased over 20%, both year-over-year and quarter-over-quarter. In the digital vertical, Apple and Huawei, the 2 major handset manufacturers, both launched new product on September 10th, which became the focal point of industry discussion in the third quarter. Weibo, together with 2 handset manufacturers, engaged several tech influencers to experience, review and post content around the new products, providing users with timely and professional [ appraisal ] on Weibo. On that day, for both models together, Huawei's Trifold Mate XT and Apple's iPhone 16, the related content viewership and discussion surpassed 2 billion and 1.7 million times, respectively. This further demonstrates the stability and the value we create in the business partnership with advertisers in the long run, while we build the content ecosystem together with our clients, the mobile and the mobile manufacturers.

[Foreign Language]

[Interpreted] In the third quarter, the scale and engagement of golden and orange verified accounts in game vertical continue to grow with the number of such KOLs doubled year-over-year and their average daily cost increasing by more than twofold. This growth further boosted user engagement among game verticals on Weibo and in turn, supported our partnership with China's AAA title, Black Myth: Wukong for its new game release. On launch day of August 1st, Weibo fully leveraged its cross-field strength, engaging 30 golden and orange verified accounts across various interest verticals, including media, digital, culture tourism and finance to promote and discuss the new release. Within 24 hours of the launch, this verified account generate 35,000 posts with related topics garnering over 4.5 billion views, over 8.6 million interactions and over 200 million video views on Weibo, generating substantial online buzz on the launch day. The popularity of this game even influenced the local culture tourism, which facilitates the offline local economy.

[Foreign Language]

[Interpreted] Moving on to monetization. In the third quarter, our ad revenue reached USD 398.6 million, up 2% year-over-year, demonstrating Weibo's ability to capture clients' marketing budget around mega events and IP-related hot trends. With the Olympic and intensive release of dramas and variety shows during the summer break, we focused on effectively integrating Weibo's hot trend resources in the third quarter. By aligning organic hot trends on Weibo with client's market [ hype ], we strive to attract and accommodate client's promotion budget as much as possible.

[Foreign Language]

[Interpreted] IP-based hot trends. The biggest hot trend on Weibo in the third quarter was the Paris Olympic Games. Leveraging our experience with the Tokyo Olympic Games and the Beijing Winter Olympic Games, Weibo could better support the Olympic related sponsors to enhance their brand value and amplify marketing [ hype ] with our ad offerings. To elaborate, we focused on integrating the sports and athlete endorsement hot trends with marketing objectives of the sponsors. This unique event-driven marketing model has been widely embraced by clients. This year, we observed a shift in user engagement around the Olympics on Weibo with users focusing more on athlete stories on and off the field than just the event outcome. This shift is actually partly due to Weibo's proactive approach in anticipating users' interest and cultivating ecosystem around sports. Over the past 2 years, we have consistently leveraged sports events to create hot trends around sports stars and thus deepen engagement of athlete and their fans. For this year's Olympics, we set a clear direction for hot trends operation in advance, working closely with Media Big V in sports and cross-vertical Big Vs. By highlighting events and athletes, we not only amplified the influence of Olympic related hot trends, but also broaden the scope of discussion. This approach enabled us to expand our client base beyond the traditional event sponsored to any client who wish to leverage Olympic buzz for brand exposure. Compared with the Tokyo Olympics, we are pleased to see a significant increase in both the number of clients and the total revenues from the Paris Olympics. Notably, driven by the Olympic events, our ad revenue from the food and beverage sector delivered strong year-over-year growth, making it one of the primary contributors to ad growth this quarter.

[Foreign Language]

[Interpreted] In terms of client-based hot trend marketing, we increasingly focus on their new product launch efforts. In [ series ] such as product launch events, announcement of celebrity endorsement and offline fashion showcase, Weibo leverage content operation, innovative ad products and repeated targeting of key audience to boost the popularity and richness of content related to clients' new product during the release cycles. Thanks to these efforts, we reinforced clients' mindset of choosing Weibo as the go-to platform for product launch marketing. In the third quarter, Weibo covered nearly 50% of the new model launch in the automotive industry with new product campaigns contributing approximately 70% of ad revenue from this sector. As a result, we booked solid year-over-year revenue growth in the automotive industry. As for the handset industry, however, revenue modestly declined year-over-year due to client's product launch pipeline in the third quarter. We expect to see the handset return to growth trajectory in the fourth quarter with the event for new phone release schedule. Over the past few years, Weibo has notably expanded its volume share from both the handset and automotive industries. Tapping into industry trends, we have beef up our content ecosystem around high-end photography for handsets and electric vehicles and also strengthened our hot trend marketing capabilities. For example, this year, we entered a strategic content marketing partnership with Vivo to continuously tell Vivo's brand story around photography, helping the brand gain traction in the high-end market, following the successful campaign for the Vivo [ X100 ] as a photography panels. In the fourth quarter last year, we introduced a campaign for the X100 series in the second quarter this year, branding it as a Concert Go Better, by aligning with the concert and variety show IP. Then for the launch of the X200 series in October, we collaborated with the media and influencer to highlight Vivo's technological innovation, especially the telephoto lens features, which generated significant user interest and discussion. This approach led to record-breaking engagement for the product launch with first day sales across all channels surpassing RMB 2 billion, doubling the record of the previous model.

[Foreign Language]

[Interpreted] Moving to the frequent new product launches, we also step up our hot trend marketing efforts for footwear and apparel clients, such as expanding our coverage of hot trends in scenarios of fashion shows and celebrity endorsement. In the third quarter, we also strengthened content operation for sports and outdoor products, leveraging multiple celebrity endorsement and the launch of new outdoor jackets. As a result, the footwear and apparel sector delivered double-digit year-over-year growth this quarter with revenue contribution from new product launch reaching record high in the past 2 years. For instance, Weibo has established a deep strategic marketing partnership with Bosideng over the past 2 years, helping the brand secure its position as the leading down jacket brand. In September, Bosideng announced actor [ Shuying ] as its new brand ambassador. We maximized this endorsement by creating trending topics, engaging fans in brand promotion and aligning the launch with the mid-autumn festival and national holiday travel trends. By linking Bosideng's outdoor jacket features with travel series, we emphasize the brand's unique selling points such as the 3-in-1 design and functional versatility. The campaign led to a notable sales increase for Bosideng's outdoor jacket line in the third quarter on the e-commerce platform.

[Foreign Language]

[Interpreted] Despite tailwinds from Olympics and summer break, for the overall ad market, as shown by the Q3 consumer data, we continue to face a relatively sluggish consumer environment and thus subdued client marketing demand. Although Weibo achieved both year-over-year and quarter-over-quarter growth in ad revenue driven by summer season and Olympic effect, growth in certain industries still fell short of our expectations. That said, we are encouraged by the stimulus policy measures introduced by the government in September, and we hope to see this policy gradually take effect and stimulate the macroeconomy, consumer spending and related sectors. In light of such market environment, we will continue to focus on reinforcing Weibo's competitive strength in hot trend marketing and content marketing by concentrating our content and product resources. Weibo's unique value proposition of hot trend and content marketing is also the key to sustain our high operating efficiency. On top of that, we are also committed to optimizing our brand and performance ad offerings so as to improve our competitiveness and expand our market share in these areas.

[Foreign Language]

[Interpreted] With that, let me turn the call over to Fei Cao for financial review.

Thank you, Gaofei, and hello, everyone. Welcome to Weibo's Third Quarter 2024 Earnings Conference Call. Let's start with user metrics. In September 2024, Weibo's MAUs reached 587 million and average DAUs reached 257 million, reflecting a pullback from the Olympics peak as we enter back-to-school season. Additionally, in 2024, Weibo has proactively adjusted our user strategy to put more emphasis on the acquisition and engagement of high-quality users, which resulted in improved DAU versus MAU ratio and strong social interactions this quarter. Turning to financials. As a reminder, my prepared remarks will focus on non-GAAP results. All monetary amounts are in U.S. dollar terms and all comparisons are on a year-over-year basis, unless otherwise noted. Now, let me walk you through our financial highlights for the third quarter 2024. Weibo's third quarter 2024 net revenues were $464.5 million, an increase of 5% or [ 3% ] on a constant currency basis, exceeding our own and [ street ] expectations. Operating income was $164.5 million, representing operating margin of 35%. Net income attributable to Weibo reached $139.2 million, representing a net margin of 30%. Diluted EPS was USD 0.53. Let me give you more color on third quarter 2024 revenue performance. Weibo's advertising and marketing revenues for the third quarter 2024 was $398.6 million, an increase of 2%, or flattish on a constant currency basis. Mobile ad revenues were $374.2 million, contributing approximately 94% of total ad revenue. In terms of growth, FMCG, internet services and automobile were the largest contributors to growth. Among the FMCG sector, we are encouraged to see strong momentum of food and beverage and apparel industry, driven by robust ad demand during the Summer Olympics. That said, the overall FMCG growth were still [ dragged ] by the underperformance of cosmetics and personal care industry. The automotive sector continued to deliver solid growth, benefiting from the sector shift from traditional to electronic vehicles as well as our competitiveness in sales capability and cultivation of content ecosystem in this vertical. The ad product, promoted feed ad was the largest, followed by social display and topic and search. Ad revenues from Alibaba for the third quarter was [ $21.5 million ], a decrease of [ 1% ]. Alibaba co-promoted the decrease this quarter following strong momentum in the first half of 2024. The decrease was primarily due to low seasonality in Q3 with e-commerce platform increasingly concentrate ad budget towards shopping festival. Before turning to VAS segment, let me share some preliminary color on the trends entering the fourth quarter of 2024. On the upside, our [ authorities ] have unveiled a string of [ stimulus ] measures since late September to reignite macroeconomy with a ramp-up in similar package and the Double 11 Shopping Festival ahead. We hope to see inflection point of consumption sentiment. That said, we do not expect a V-shaped recovery given that it takes time for similar [ plan ] to translate into [ confidence ] and product launch pipeline for advertisers and then to meaningful top line recovery. Despite uncertainties and [indiscernible] recovery in certain sectors, we are turning cautiously optimistic on the overall advertising market. We will build up our sales execution and highlight unique value proposition in the market in the hope of enhancing monetization efficiency and capturing incremental ad volume. Turning to VAS. VAS revenue was $65.9 million in the first quarter, an increase of 25%, primarily driven by revenue growth of membership and game-related services through membership service. Weibo benefited from improved ARPU for membership services since we rolled out, creating VIP feature to cater to the needs of [ daily ] users. Turning to cost and expenses. Total cost and expenses for the third quarter were [ $299.9 million ], an increase of [ 8% ], primarily due to higher marketing spend and personnel-related expenses. Operating income in the third quarter was [ $164.5 million ], representing an operating margin of [ 35% ] compared to 27% in the same period last year. Turning to income tax. As a GAAP measure, income tax expense for the third quarter was $32.2 million compared to $25.4 million last year. The increase was primarily due to withholding tax accrued related to earnings to be related to Weibo Hong Kong Limited from its wholly-owned subsidiary in China. Net income attributable to Weibo's shareholders in the third quarter was $139.2 million, an increase of 2%. Net margin was 30% compared to 31% in the same period last year. Turning to our balance sheet and cash flow items. As of September 30, 2024, Weibo's cash, cash equivalents and short-term investments totaled $2.2 billion. In the third quarter, cash provided by operating activities was $124.2 million. Capital expenditures totaled $11.8 million, and depreciation and amortization expenses amounted to $14.4 million. With that, let me now turn the call over to the operator for the Q&A session.

[Operator Instructions] We will now take the first question from the line of Felix Liu from UBS.

[Foreign Language] Let me translate myself. First, let me congratulations on the strong Q3 despite the challenging macro condition in the quarter. My question is on the fourth quarter advertisement outlook. In the light of the recent series of macro stimulus, how does management see the policies impacting your advertisement outlook in Q4? And could management share more details by industry verticals for Q4?

[Interpreted] All right. Thank you very much for the question. So in Q3, judging from the consumption-related order indexes and also indicators, you've seen a slight decrease trend. So this is due to the lack of demand due to the weak economy of China. So as a result, we do not see a very good performance in this consumer market area. So in Q3, the ad revenue increase was primarily due to the hot trends topic, for instance, the Olympics and also some of the summer holiday dramas. Okay. And also, in Q4, still we have seen a lot of uncertainties. First of all, the overall trend is still pretty optimism. And also, we do need -- also, we do see the government implementing the policies to boost the internal and domestic demand. But still, there is a difficulty for us to see a recovery of the ad revenues from the luxury products industry and also the real estate. And also, we can see -- okay, and also, we can see that for the government, we have been seeing some of the policies, for instance, the -- also new and also some of the subsidy policies, for instance, national subsidy policies at the current stage targeting the 3C products and consumer electronics. So we've been seeing a very good boost in these industries immediately due to this particular policy of subsidy. So, because in these industries and the verticals in Q3, they were experiencing the pressures, but still in Q4, we are expecting to see a year-on-year double digit growth. And also, this kind of a national subsidy policy will still last until next year or even the year after next, further expanding from 3C and consumer electronics industry and vertical to the other areas like the decoration and indoor design, et cetera. So we do see a very good increase of the demand of those advertisers on the e-commerce platforms and we're going to -- actually, we saw a very good effect taking place in the Double 11 Shopping Festival. Okay. And in terms of the verticals, actually, we've been mentioning that in my prepared remarks already. But still, I think that has everything to do with the strategies that Weibo is taking now. For instance, in Q3, we're pretty much focusing on the hot trend related marketing strategies. For instance, the Paris Olympics. Comparing with the Tokyo Olympics, we've been seeing a very good double growth or even several times of growth in terms of ad revenue and number of customers in this Paris Olympics. And also, we've been seeing a very good double-digit growth in the verticals like the food and beverage, apparels and automotives as well, because Weibo has already become a must-have platform, and we do have a very strong characteristics in offering the hot trend-based marketing activities. And also in terms of those advertisers that are doing marketing, we've been seeing a shift of their budget allocation from the traditional TVC channels to the social medias because in the past, most of the budgets for advertisements were pretty much allocated on the TVCs or the video-based websites. But now due to better discussion capabilities and also interactivity on the social media like Weibo, we've been seeing a very good traction of those budgets for advertisements in Q3, and we had a very good growth because of that in Q3. Okay. And also, apart from the hot trend-based marketing, also, we are pretty much focused on the new product marketing strategies and campaigns. And this has already become a very good ground base for the Weibo's advertisement business. So in the past, this was pretty much sharing colors on automotive industry and headset industry. But now we've been seeing a very good budget or -- I mean, the revenue contribution from apparels and luxury products industries. And also, now you can see for the automotive industry, most of the revenues were driven due to the new product marketing from this sector. And also, this is going to become our focal point in the future, and this is the main strategies that Weibo is taking to further enlarge our gap versus the competitors and also consolidate our leadership positioning. Okay. That is the end of this answer.

We will now take the next question from the line of Timothy Zhao from Goldman Sachs.

[Foreign Language] My question is regarding the VAS services segment as we have seen very good growth for this segment over the past few quarters. Could management share what are the drivers behind? And what is our expectations for the upcoming fourth quarter and in the future in terms of our monetization strategy in VAS?

[Foreign Language] [Interpreted] Thanks for this question. So Weibo's VAS, value-added business or services, maintained a double-digit growth for 2 consecutive quarters this year, primarily due to the continuous growth of the membership business revenue. And on one hand, as we have already shared in the prepared remarks, as you can see that our channel strategy is pretty much focused on the acquisition and also the activity of the high-quality users. And this is our focus in 2024. And this has enabled our platform to retain a high proportion of high-value users. And also, this particular user group has a very strong and also even stronger demand for value-added services. Okay. And also, around focusing on these high-value users, also we have been doing some of the R&Ds of the new products according to their needs. For instance, the launch of [ SVIP ], which has further upgraded the social rights and also interests. And also, we can see that starting from Q2, we began to promote the identity authentication rights and interests of the social media-based members. And also, this has helped us to enhance the conversion efficiency of the other social rights and also interests. Okay. And also at the same time, in terms of the [ V+ ] added value services that provided to those key accounts, the Big Vs, this year, also, we have been seeing a very good growth and rapid growth. And this has helped us to really enrich the content ecosystem for finance, education and also the other sectors as well. This is not that helpful per se to the revenue growth, but still this is very helpful for us to construct a much better and integrated ecosystem. And also, we expect that in Q4, the value-added services revenue will still keep a very high growth rate.

We will now take the next question from the line of Miranda Zhuang from Bank of America Securities.

[Foreign Language] Can management provide some updates about the progress in AI in the second half this year in aspects like the content production, commercialization and like operational efficiencies? What kind of tangible benefits are you seeing?

[Interpreted] Thanks for this question. Last quarter, we have already shared with everybody the large model independently developed by Weibo has successfully passed the filing. And also, we've been using this a lot to really improve the efficiency and also the operation capabilities by making a lot of AI applications. So today, I'm going to share with you my opinion from 2 aspects, one is the product and s So, first of all, in Q3, we primarily applied the AI-based intelligent search functions. And also, you can see that in Q3 versus that of Q2, we've been seeing around 10% growth for both DAUs or using intelligent [ search-in ] and also the traffic as well. And at the current stage, in terms of the total MAUs of using intelligent [ search-in ] features, this has -- this number has already exceeded 20 million, which is doubled actually based on the number of the last quarter. Okay. And also, as we have already mentioned in the previous quarter earnings call that we have been having the AI assistant features for those Big Vs and also important account users. And based on the previously generated contents, this AI assistant is going to be helping them to having the new content generated. And also, in Q3, we've been adding some of the new features to this AI feature. For instance, the summary of the key questions and also the self-training for the bloggers. And also, the total number of trial users in Q3 has already been increasing a lot comparing with that of Q2. And also for those accounts that already applied for the try and also for the test use, the retain rate is already exceeding 85%. Okay. And also in Q3, we've been already applying the AI in the technology department of Weibo and to facilitate the product R&D and also technological R&D as well. And also, we've been actively using the [ V ] code feature in Q4 to further increase the efficiency of the coding and programming of the technicians now. But of course, at the current stage, we do not have a lot of figures to be shared with everyone. So please stay tuned for another 1 or 2 quarters before you are able to see a lot of the statistics coming out from this application.

There are no further questions at this time. I would like to hand back over to management for closing remarks.

Thanks, operator. This wraps up our conference call today. Thank you for joining us. We'll see you next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]