Financial Data and Key Metrics Changes - In the first half of 2025, total revenue decreased by 10.6% year on year, but adjusted revenue excluding media policy impacts increased by 7.8% [34][36] - Adjusted EBITDA reached 72 million, and adjusted net profit was 17 million, marking the first turnaround since 2021 [7][46] - Gross profit increased to 7.5 billion yen, an 8.7 percentage point rise, with adjusted gross profit up 36% year on year [6][7] Business Line Data and Key Metrics Changes - Subscription revenue was 440 million, down 10.1% year on year, but stabilized on a half-on-half basis [35][39] - Merchant solution revenue was 338 million, down 11.3% year on year, but adjusted for rebates, it showed a growth of 45.3% [35][41] - AI-related revenue reached 34 million, accounting for 7.9% of subscription revenue, indicating a new growth driver [36][41] Market Data and Key Metrics Changes - Smart retail revenue remained stable at 286 million, with a high retention rate among merchants [10][15] - Gross billing for merchant solutions was 8.8 billion, reflecting a 3% increase year on year [12][41] - The overall GMV growth for merchants was up 13.4% year on year [15] Company Strategy and Development Direction - The company is focusing on AI technology as a core growth driver and aims to enhance operational efficiency [4][8] - There is a strong emphasis on high-quality development and phasing out low-margin businesses [5][14] - The company plans to expand into local life services and international markets, targeting growth in various sectors [30][31] Management Comments on Operating Environment and Future Outlook - Management acknowledged a complicated external environment but expressed confidence in achieving a turnaround due to cost control and efficiency improvements [33][54] - The company anticipates positive growth in subscription revenue in the second half of the year, driven by a stable base effect and increased investment in smart retail [58][60] - Future growth is expected from AI commercialization and the expansion of multi-channel business opportunities [26][29] Other Important Information - The company has integrated various platforms, including WeChat and TikTok, to enhance its service offerings [16][28] - The total number of employees as of June 30, 2025, was 3,400, with a significant reduction in salary expenses by 24.5% [37][39] Q&A Session Summary Question: What are the new highlights for subscription revenue and AI products in the second half? - Management noted that subscription revenue from key customers is stable, and AI revenue has shown good progress, with expectations for year-on-year growth in the second half [55][57][58] Question: What has been done regarding WeChat mini stores and their impact? - The company launched integrated solutions for WeChat mini stores, achieving a high penetration rate and rapid growth in daily active users [64][66] Question: What is the outlook for Merchant Solutions and advertising operations? - Management indicated that gross billing for Merchant Solutions was 8.6 billion, with a significant increase in net rebate ratio, and they expect continued profitability in the second half [68][75][76]

Financial Data and Key Metrics Changes - The company's revenue has dropped by 28% compared to the same period last year, with adjusted losses narrowing from RMB600 million to RMB200 million [4][5][53] - Positive cash flow of RMB30 million has been achieved, marking the best cash flow in the last 30 months [5] - Overall costs have decreased significantly, particularly in selling expenses and cost of sales, contributing to the narrowing of losses [8][53] Business Line Data and Key Metrics Changes - Subscription revenue has decreased by 31%, while the retail segment, particularly Weimarc Retail, has shown organic growth of 3.1%, contributing 62% to overall revenue [7][9][42] - Merchant solutions revenue has decreased by 28.3%, with subscription solutions also seeing a decline [39][48] - Gross billing from merchants has increased by 9.4%, indicating some resilience in the merchant segment despite overall revenue decline [40] Market Data and Key Metrics Changes - The company has focused on core cities, reducing the number of subsidiaries from 15 to 5, which has impacted revenue from small and medium firms [6][7] - The overall economic situation has affected client acquisition costs and budgets for small and medium enterprises, leading to strategic adjustments [8][9] Company Strategy and Development Direction - The company is shifting focus towards smart retail and corporate services, aiming to increase the contribution of corporate services to 70% in the future [14][35] - There is a strong emphasis on AI product commercialization and enhancing international market presence, particularly in North America [30][32][71] - The company plans to introduce new service fees and interface calling fees to boost revenue in the second half of the year [67][68] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenging economic environment but expects stable or slight growth in the second half of the year compared to the first half [66][68] - The company anticipates that the adjustments made in the first half will lead to improved financial performance moving forward [66][69] - There is optimism regarding the potential of AI products and their integration into customer workflows, although the commercialization is still in early stages [62][63] Other Important Information - The company has optimized its cash flow management, maintaining stable loan and liability levels with no bad debt concerns [44][53] - The introduction of new AI products, such as Y. Me, has already attracted 5,000 paying customers within two weeks of launch [24] Q&A Session Summary Question: Impact of Weixin shops and video accounts on the company - Management believes that Weixin small shops will not significantly impact the business as they target small customers, while the company focuses on medium to large customers [57][58] Question: Company's view on AI product commercialization - Management sees AI as a crucial part of the strategy but acknowledges that commercialization is still in early stages, with several hundred customers starting to pay for AI products [61][62] Question: Expectations for the second half of the year and international expansion - Management expects stable or slight growth in the second half, with a focus on North America for international expansion, targeting small and medium customers with simpler, AI-driven products [66][71][72]