Core Viewpoint - NetEase Cloud Music reported a slight decline in total revenue for FY25, but adjusted net profit showed significant growth, indicating a mixed financial performance with concerns over revenue growth in online music services and overall gross profit margin [1]. Financial Performance - Total revenue for FY25 decreased by 2% YoY to RMB7.76 billion, slightly below the Bloomberg consensus estimate of RMB7.91 billion [1]. - Adjusted net profit increased by 68% YoY to RMB2.86 billion, aligning with consensus estimates [1]. - Adjusted operating profit grew by 32% YoY to RMB1.73 billion, excluding the impact of deferred income tax credit [1]. Revenue Breakdown - Online music services revenue grew by 8% YoY to RMB3.0 billion in 2H25, a slowdown from 16% YoY growth in 1H25 [2]. - Membership subscription revenue rose by 12% YoY to RMB2.6 billion in 2H25, driven by subscriber base growth but offset by a decline in monthly ARPPU [2]. - Non-subscription music revenue fell by 7% YoY in 2H25, primarily due to decreased revenue from digital album sales [2]. - Revenue from social entertainment and others dropped by 17% YoY to RMB905 million in 2H25, although it stabilized with a 5% HoH growth [2]. Margin Analysis - Overall gross profit margin (GPM) increased by 2.7 percentage points YoY but declined by 1.4 percentage points HoH to 35.0% in 2H25, mainly due to reduced revenue from higher-margin non-subscription business [3]. - Adjusted operating margin improved by 4.6 percentage points YoY to 21.1% in 2H25, attributed to operating leverage and effective expense control [3]. Future Outlook - For FY26E, total revenue is forecasted to increase by 8% YoY to RMB8.4 billion, driven by solid growth in the online music business [4]. - Music subscription revenue is expected to rise by 13% YoY to RMB5.7 billion in FY26E, supported by growth in both subscriber base and ARPPU [4]. - Adjusted operating profit is projected to grow by 19% YoY in FY26E, with operating profit margin increasing by 2 percentage points YoY [4].

Core Insights - Spotify's CEO Gustav Söderström highlighted that some senior developers have not written code for weeks, focusing instead on generating and supervising code, indicating a shift in productivity dynamics due to AI advancements [1] - The transition to AI integration in tech companies is expected to be challenging, requiring significant changes in engineering, product, and design practices, with Spotify committed to leading this change [2] - The impact of AI on the workforce is debated, with concerns about potential unemployment versus the opportunity for increased efficiency and productivity [3] Company Insights - Spotify is experiencing a shift where senior engineers are primarily reviewing and fixing code rather than writing it, which some engineers describe as "AI fatigue," reflecting a new reality in software development [3][4] - Söderström emphasized the efficiency gains from AI, suggesting that companies like Spotify will produce significantly more software, constrained only by consumer acceptance of change [5]

Core Insights - Spotify's senior engineers have not written any code since December, utilizing AI tools like Claude Code and Honk to develop new features through Slack [1] - The AI-driven development process allows engineers to request bug fixes or feature additions remotely, significantly enhancing productivity [1] - Spotify has introduced over 50 new user features in 2025, with many launched recently, attributing this rapid development to the integration of AI technologies [1] Group 1 - The combination of Claude Code and Honk has dramatically changed the operational dynamics for Spotify's developers, increasing their efficiency [1] - The deployment of AI tools has allowed engineers to focus on higher-level tasks rather than coding, as exemplified by an engineer being able to manage app updates during their commute [1] - The advancements in AI technology, particularly with the release of Antropic's Claude Opus 4.5, are seen as just the beginning for Spotify's feature development strategy [1]

Core Viewpoint - NetEase Cloud Music is navigating challenges with a revenue decline while achieving significant profit growth due to cost-cutting measures and tax asset recognition [1][2]. Group 1: Financial Performance - In 2025, NetEase Cloud Music reported a revenue decline of 2.4% year-on-year to 7.759 billion yuan [1]. - The adjusted net profit for the same year was 2.860 billion yuan, a substantial increase of 68.2%, primarily driven by the recognition of deferred tax assets amounting to 747 million yuan [1]. - Excluding the tax asset impact, the adjusted net profit was approximately 2.1 billion yuan [1]. Group 2: Revenue Breakdown - Online music service revenue grew by 12.0% year-on-year to 5.994 billion yuan, with subscription revenue increasing by 13.3% to 5.053 billion yuan, driven by membership growth [1]. - Conversely, revenue from social entertainment services and other sources fell by 32.0% to 1.765 billion yuan, mainly due to the closure of the live streaming feature after a 2024 update [1]. Group 3: Cost Management - Sales expenses decreased by 33.2% to 409 million yuan, reflecting a more cautious approach to promotions and advertising [2]. - Management expenses fell by 4.4%, and R&D expenses decreased by 2.3%, attributed to improved resource utilization and a focus on core products and AI capabilities [2]. Group 4: Market Position and User Engagement - NetEase Cloud Music maintained a relatively stable market position, introducing K-POP labels and enhancing its content library with over 1 million registered independent musicians and more than 5.6 million uploaded tracks by the end of 2025 [2]. - The platform's user scale and engagement improved, with a DAU/MAU ratio exceeding 30% and an increase in average daily listening time on mobile [2].

Core Viewpoint - The report from CICC maintains the Non-IFRS net profit forecast for NetEase Cloud Music (09899) for 2026/27, with a target price of HKD 224, indicating a 22% upside from the current price [2][7]. Financial Performance - For 2025, the company reported revenues of CNY 7.759 billion, aligning closely with CICC's expectation of CNY 7.807 billion, and a Non-IFRS net profit of CNY 2.860 billion, which is also in line with expectations [8]. - Online music revenue for 2025 reached CNY 5.994 billion, reflecting a 12% year-on-year increase, with subscription revenue growing by 13.3% and non-subscription revenue by 5.2% [8]. - The gross margin for 2025 improved to 35.7%, up by 2 percentage points year-on-year, while sales, management, and R&D expenses decreased [4][8]. Business Segments - The social entertainment and other revenue for 2025 was CNY 1.765 billion, down 32% year-on-year due to a cautious operational strategy, although there was a slight quarter-on-quarter increase in the second half of 2025 [3][8]. - The company aims to expand its paid user base in 2026, with expectations for a 10.8% year-on-year growth in online music revenue, and a 12.1% increase in subscription revenue [8]. Industry Outlook - The industry is experiencing concerns regarding stability, but NetEase Cloud Music's user base remains relatively stable compared to competitors [5][10]. - The company has launched its self-developed AI recommendation model, Climber, and is focusing on user experience and continuous innovation to maintain a differentiated position in the market [10].

Group 1 - Apple confirmed that the AI version of Siri is still on track for release within 2026, despite reports suggesting delays, which led to a 5% drop in its stock price [1][1] - The stock price decline erased Apple's gains for the year, with a nearly 4% drop attributed to the news [1] - The company aims to stabilize investor confidence by affirming its commitment to the planned release schedule [1] Group 2 - Zhao Ming, former CEO of Honor, announced his joining of Qianli Technology, expressing excitement about building an AI business ecosystem [2] - Zhao's decision to join Qianli Technology is influenced by his belief that AI is a field worth investing in for the next 20 years [2] Group 3 - Google announced a significant upgrade to its Gemini 3 Deep Think model, designed for scientific and engineering applications, achieving high performance in complex reasoning tasks [3][3] - The upgraded model demonstrated a 48.4% score on the Humanity's Last Exam and 84.6% on ARC-AGI-2, verified by ARC Prize Foundation [3] - In addition to mathematics, the model also showed strong capabilities in chemistry and physics, achieving gold medal-level results in international competitions [3][3] Group 4 - OpenAI and Cerebras launched the GPT-5.3-Codex-Spark model, aimed at real-time programming, marking their first public collaboration [4][4] - Codex-Spark is designed for high-speed interactive software development, achieving over 1000 tokens/s inference speed [5] - OpenAI emphasized the importance of developer control in the coding process, positioning Codex-Spark as a collaborative tool [5] Group 5 - Spotify revealed that its top developers have not written any code since December 2022, attributing this to the use of an internal AI system called "Honk" [6][6] - The "Honk" system utilizes generative AI technology to enhance coding speed and efficiency, allowing for real-time code deployment [6] Group 6 - Xiaomi announced that it will provide at least 10 years of spare parts support for its first-generation SU7 model, even after its discontinuation [8] - The new generation SU7 will be showcased in various cities starting February 13, with plans for a launch event in April [8] Group 7 - BMW confirmed a global recall of several hundred thousand vehicles due to a potential fire risk associated with the starter motor, affecting 16 models produced between July 2020 and July 2022 [9][9] - The company will notify affected vehicle owners to replace the potentially defective motors [9] Group 8 - Mercedes-Benz announced a recall of 11,895 EQB electric vehicles in the U.S. due to a risk of fire from the high-voltage battery [10] - The company will replace the batteries free of charge and has advised owners to park their vehicles outdoors [10] Group 9 - Sony launched the WF-1000XM6 wireless earbuds, claiming a 25% improvement in noise-canceling performance compared to the previous model [12][12] - The new earbuds feature an upgraded processor for enhanced audio processing and improved connectivity [12] Group 10 - NeuroXess announced a significant advancement in brain-computer interface technology, enabling a paralyzed patient to perform daily activities through thought control [15][15] - The patient achieved a brain control decoding rate of 5.2 BPS, comparable to international standards [15]

Core Viewpoint - The company reported its 2025 performance, showing a mixed financial outcome with a slight decline in revenue but significant growth in adjusted net profit, primarily due to deferred tax asset recognition [4]. Financial Performance - The company achieved revenue of 7.759 billion RMB, a year-over-year decrease of 2.4%, compared to Bloomberg's consensus forecast of 7.913 billion RMB [4] - Gross profit reached 2.770 billion RMB, up 3.3% year-over-year, with a gross margin of 35.7%, slightly below the expected 36.4% [4] - Operating profit increased by 38.5% year-over-year to 1.622 billion RMB, mainly due to reduced sales expenses [4] - Adjusted net profit attributable to shareholders was 2.860 billion RMB, a substantial increase of 68.2% year-over-year, largely due to the recognition of deferred tax credits amounting to 747 million RMB [4] Revenue Breakdown - Online music service revenue was 5.994 billion RMB, reflecting a year-over-year growth of 12.0%, with subscription revenue increasing by 13.3% to 5.053 billion RMB, driven by membership growth [5] - Social entertainment services and other revenues fell by 32.0% to 1.765 billion RMB, primarily due to the closure of the live streaming entry after the version update at the end of 2024 [5] - The platform's user base and activity levels grew year-over-year, maintaining a DAU/MAU ratio above 30%, with increased average daily listening time on mobile [5] Content Strategy and Innovation - The company is enhancing its differentiated content ecosystem by deepening partnerships with domestic and international copyright holders, introducing K-POP labels and expanding its Chinese popular music library [6] - The independent musician ecosystem has grown, with over 1 million registered independent musicians and more than 5.6 million tracks uploaded by the end of 2025, enhancing unique content supply [6] - AI-driven product innovations, including a self-developed AI recommendation model and new interactive tools, have improved user experience and engagement [6] Cost Management - Sales expenses decreased by 33.2% year-over-year to 409 million RMB, attributed to more prudent promotional and advertising spending [7] - Management expenses fell by 4.4%, benefiting from controlled administrative costs [7] - R&D expenses declined by 2.3%, due to improved resource utilization and a more focused investment structure on core products and AI capabilities [7]

Core Viewpoint - The company reported 2025 performance that aligns with expectations, showing a slight decline in revenue but stable Non-IFRS net profit, indicating resilience in its business model [1][2]. Performance Review - In 2025, the company achieved revenue of 7.759 billion yuan, a decrease of 2.4%, which is in line with expectations but slightly below Bloomberg consensus [1]. - Non-IFRS net profit for 2025 was 2.860 billion yuan, meeting both internal and external forecasts [1]. Development Trends - The online music segment is expected to see growth in both volume and price in 2026, with a projected revenue increase of 10.8% year-on-year [1]. - Online music revenue for 2025 was 5.994 billion yuan, reflecting a 12% increase, driven by a 13.3% rise in subscription revenue [1]. - Social entertainment revenue for 2025 was 1.765 billion yuan, down 32%, but showed slight improvement in the second half of 2025 [1]. Profitability and Cost Management - The gross margin for 2025 improved to 35.7%, up 2 percentage points year-on-year, while sales, management, and R&D expenses decreased [2]. - The company plans to increase investment in 2026, focusing on content costs and customer acquisition [2]. - Operating profit is expected to grow by 20% in 2026, reaching 1.95 billion yuan [2]. Industry Outlook - The industry is experiencing stabilization, with user experience and continuous innovation being key focus areas [2]. - The company has launched its AI-driven recommendation model, Climber, to enhance user engagement and differentiate itself in the market [2]. - Despite competitive pressures, the company is expected to maintain a stable user base and mitigate risks from competitors' strategies [2]. Profit Forecast and Valuation - The company maintains its Non-IFRS net profit forecasts for 2026 and 2027, with current price corresponding to 16/15 times the Non-IFRS P/E for those years [2]. - The target price has been adjusted down by 31% to 224 HKD, reflecting a 22% upside potential from the current price [2].

Core Viewpoint - The company reported its 2025 performance, showing mixed results with a slight decline in revenue but significant growth in adjusted net profit, primarily due to tax asset recognition. Financial Performance - The company achieved revenue of 7.759 billion RMB, a year-over-year decrease of 2.4%, compared to Bloomberg's consensus estimate of 7.913 billion RMB [1] - Gross profit reached 2.770 billion RMB, up 3.3% year-over-year, with a gross margin of 35.7%, slightly below the expected 36.4% [1] - Operating profit increased by 38.5% year-over-year to 1.622 billion RMB, attributed to reduced sales expenses [1] - Adjusted net profit attributable to shareholders was 2.860 billion RMB, a substantial increase of 68.2% year-over-year, mainly due to the recognition of deferred tax assets amounting to 747 million RMB [1] Revenue Breakdown - Online music service revenue was 5.994 billion RMB, reflecting a year-over-year growth of 12.0%, with subscription revenue increasing by 13.3% to 5.053 billion RMB [2] - Social entertainment services and other revenue fell by 32.0% to 1.765 billion RMB, primarily due to the closure of the live streaming entry after a version update at the end of 2024 [2] User Engagement - The platform's user base and activity levels showed year-over-year growth, maintaining a DAU/MAU ratio above 30%, with increased daily listening time on mobile [2] Content Strategy - The company is enhancing its content ecosystem through partnerships with domestic and international copyright holders, introducing K-POP labels and expanding its Chinese music library [2] - The independent musician ecosystem has grown to over 1 million registered musicians and over 5.6 million uploaded tracks, strengthening the platform's unique content supply [3] Innovation and Cost Management - The company launched the AI-based recommendation model "Climber" and introduced new features to enhance user experience, such as the "Shen Guang Player" and AI songwriting tools [3] - Sales expenses decreased by 33.2% to 409 million RMB, reflecting a more cautious approach to promotions and advertising [3] Future Outlook - The company plans to focus on expanding its membership base, leading to increased content production and marketing investments, with adjusted net profit forecasts for 2026 and 2027 revised down by 15% and 13% respectively [4] - The long-term profitability potential remains positive due to scale effects, maintaining a "buy" rating [4]

Financial Data and Key Metrics Changes - The company reported consolidated revenue of $20.3 million for Q3 fiscal 2026, with total revenues for the nine months reaching over $58 million [4][13] - Adjusted EBITDA for Q3 was $2.6 million, contributing to a positive consolidated adjusted EBITDA of $1.6 million for the second quarter [13] - The company posted a net loss of $4.1 million or 37 cents per diluted share for Q3 [13] Business Line Data and Key Metrics Changes - The audio division generated $18.6 million in revenue for Q3 and $52.2 million for the nine-month period, with an Adjusted EBITDA of $2.6 million for Q3 [5][13] - PodcastOne subsidiary achieved record revenue of $15.9 million and adjusted EBITDA of $2.8 million [13][14] - Slacker subsidiary reported Q3 revenue of $2.8 million with an adjusted EBITDA of negative $0.1 million [13] Market Data and Key Metrics Changes - The company has over $125 million in net operating loss carryforwards, which represent significant long-term shareholder value and tax efficiencies [5][6] - Industry valuation dynamics are improving, with the company trading at 60% of revenues compared to the industry average of over 3x revenues [6] Company Strategy and Development Direction - The company is focused on expanding partnerships with major players like Amazon, Apple, and Tesla, aiming to launch three significant Fortune 500 partnerships [7][9] - A strategy is in place to convert over 1 million free and ad-supported subscribers into paid tiers, representing potential incremental revenue [7] - The company is also expanding its original IP, having sold its fourth television series to a major streaming platform [8] Management's Comments on Operating Environment and Future Outlook - Management highlighted that the company has emerged leaner and more disciplined after navigating various challenges, positioning itself for the next growth cycle [4][5] - The preliminary fiscal guidance for the upcoming year is set at $85 million to $95 million in revenues and $8 million to $10 million in Adjusted EBITDA [5][40] - Management expressed confidence in the company's undervaluation and the potential for significant growth driven by B2B partnerships and AI initiatives [11][12] Other Important Information - The company has streamlined its workforce from 350 to 88 members, resulting in a reduction of operating expenses by over 52% year-over-year [4] - The company is actively exploring M&A opportunities as the market stabilizes and valuations normalize [7][11] Q&A Session Summary Question: On the B2B business, can you elaborate on customization and options for customers? - Management stated that the company is uniquely positioned in the B2B space, leveraging AI for customization and offering competitive pricing [17][20] Question: What is the competitive landscape for content provision? - Management indicated that while some competition exists, the company's unique service offerings and flexibility provide a competitive advantage [29][31] Question: What is the potential for advertising revenue from Slacker's non-subscription customers? - Management noted that they are actively increasing advertising offerings and expect to convert free subscribers into paid subscriptions over time [24][26] Question: When will the 10-Qs be released? - The CFO confirmed that the 10-Qs for both LiveOne and PodcastOne would be released the following day [47] Question: How sustainable are current cost levels? - The CFO indicated that G&A and sales and marketing costs are expected to decrease further in the upcoming quarters [49][50] Question: What is the timing for revenue from the 30 million subscriber deal? - Management mentioned that revenue from this deal is expected to ramp up in the following year, with some initial revenue potentially coming in this quarter [61][63]