Financial Data and Key Metrics Changes - In H1 2025, revenue increased by 11.2% year-over-year, reaching RMB 3,192 million [4] - The gross profit margin grew by 2.4%, reaching 65.6% [7] - Operating cash flow was significantly decreased, but the company expects it to exceed RMB 1 billion for the year [10][38] - The loss from the same period last year was reduced from RMB 280 million to RMB 98 million [10] Business Line Data and Key Metrics Changes - Cloud subscription revenue grew by 22.1% year-over-year, with an annual recurring revenue (ARR) growth of 80.5% [13] - The contract liability of cloud subscriptions increased by 24.7% [13] - The gross profit margin for cloud subscriptions was 96.2%, a 0.9 percentage point increase compared to last year [13] Market Data and Key Metrics Changes - The company reported that cloud subscription revenue now accounts for over 50% of total revenue, with a significant contribution from the Kinky Cloud and Constellation platforms [16][23] - The net total retention rate for Constellation subscriptions was 108% [15] Company Strategy and Development Direction - The company is adjusting its strategy to seek more opportunities while controlling internal risks, particularly in the context of persistent macroeconomic challenges and the rise of artificial intelligence [3] - The focus is on transforming from a traditional one-time license model to a subscription-based model, emphasizing cloud services and AI integration [21][24] - Future plans include strengthening SaaS offerings and expanding AI capabilities, with a goal for AI revenue to account for 30% of total revenue by 2030 [39][68] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatility of the external environment but expressed confidence in achieving profitability and strong cash flow growth in the coming years [12][96] - The company aims for a sustainable margin of around 8% and expects to maintain a high gross profit margin due to the growth of the subscription business [97] Other Important Information - The company has introduced various AI-powered products, receiving positive feedback from clients, particularly for the Gold Key financial report analytics app [48][49] - The company is actively expanding its international presence, with plans to consolidate its foothold in Southeast Asia and the Middle East, and aims for international revenue to reach 5% to 10% of total revenue in the next three to five years [104] Q&A Session Summary Question: What is the trend of demand for large, medium, and small enterprises? - Management noted that large enterprises are integrating their business lines for better supply chain management, while medium-sized enterprises seek faster deployment and lower costs [42][44] Question: What is the pricing model for AI products and customer feedback? - The company received positive responses for AI products launched in May, with large companies interested in pilot testing and mid-sized companies needing full systems [43][46] Question: What is the sustainability of the cloud business transformation? - Management expressed confidence in sustainable growth, with a target for subscription business to increase from 50% to 80-90% of total revenue [70] Question: What are the plans for international business? - The company plans to localize products for different regions and aims to expand into Africa, Europe, and Japan starting in 2026 [77][104] Question: How will team optimization impact project implementation? - Management clarified that team optimization aims to improve efficiency without sacrificing customer experience, with implementation services being outsourced to certified partners [58][60]