Financial Data and Key Metrics Changes - In Q3 2025, net revenues reached RMB 1.6 billion, up 3.6% year-over-year, while operating profit was RMB 28.3 million, a decline of 73.7% year-over-year due to increased investments and a high comparison base from the previous year [4][5][16] - For the first nine months of the year, operating profit reached RMB 161.1 million, representing a substantial 149.2% year-over-year increase [5] - Operating cash outflow for the quarter was RMB 58.6 million, an improvement of 31.4% year-over-year [5] Business Line Data and Key Metrics Changes - Learning services segment net revenues were RMB 643.1 million, down 16.2% year-over-year, reflecting a strategic approach to customer acquisition [6][17] - Online marketing services net revenues reached RMB 739.7 million, a new record and an increase of 51.1% year-over-year, driven by demand from the NetEase Group and overseas markets [10][11][17] - Smart devices segment net revenues were RMB 245.8 million, down 22.1% year-over-year, due to disciplined marketing expenditures [14][17] Market Data and Key Metrics Changes - Youdao Ling Shi achieved over 40% year-over-year growth in gross billings, with a retention rate exceeding 75% [7][27] - Advertising revenues from the gaming industry grew by over 50% year-over-year, primarily from NetEase [11] - The overseas advertising business delivered strong momentum, with revenues growing by more than 100% year-over-year [12] Company Strategy and Development Direction - The company is focused on executing an AI-native strategy, enhancing the application of its large language model across learning and advertising businesses [15][42] - There is a commitment to driving growth in both learning and advertising sectors by leveraging AI technologies [27][42] - The company aims to achieve full-year targets, including robust year-over-year operating profit growth and reaching annual operational cash flow break-even for the first time [15][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year cash flow break-even despite cumulative net operating cash outflow recorded in the first three quarters [50] - The company anticipates strong revenue growth in both learning services and online marketing services, with a focus on customer satisfaction and operational efficiency [25][40] - Management highlighted the importance of investments in AI capabilities to enhance advertising performance and customer engagement [25][36] Other Important Information - Youdao was included in the 2026 GSV 150, recognizing it as one of the world's most transformational growth companies in digital learning [7] - The company launched several new AI-driven products, including an AI tutor for programming classes and a new AI audio and video translation product [8][10] Q&A Session Summary Question: Will online marketing services become more important than learning services in the future? - Management sees growth opportunities in both areas, with online marketing services currently experiencing higher growth due to advanced ad tech and AI capabilities [24] Question: What is the plan to return online marketing gross margin above 30%? - Management aims to improve gross margin through initiatives like broadening the application of the iMagicBox platform and optimizing data management systems [32][35] Question: What is the potential for operating profit rebound in Q4? - Management is optimistic about achieving operating profit improvement in Q4, supported by strong performance in Youdao Ling Shi and advertising growth [38][41] Question: Should we expect any change to the full-year break-even target? - Management remains confident in achieving the full-year cash flow break-even target, citing significant improvements in cash flow performance [47][50]

Financial Data and Key Metrics Changes - In Q3 2025, net revenues reached RMB 1.6 billion, up 3.6% year-over-year, while operating profit was RMB 28.3 million, a decline of 73.7% year-over-year due to increased investments and a high comparison base from the previous year [4][5][14] - For the first nine months of the year, operating profit reached RMB 161.1 million, representing a substantial 149.2% year-over-year increase [5] - Operating cash outflow for the quarter was RMB 58.6 million, an improvement of 31.4% year-over-year [5] Business Line Data and Key Metrics Changes - Learning services segment net revenues were RMB 643.1 million, down 16.2% year-over-year, reflecting a strategic approach to customer acquisition [5][15] - Net revenues from online marketing services reached RMB 739.7 million, a new record and an increase of 51.1% year-over-year, driven by demand from the NetEase Group and overseas markets [10][15] - Smart devices segment net revenues were RMB 245.8 million, down 22.1% year-over-year, due to disciplined marketing expenditures [12][15] Market Data and Key Metrics Changes - Youdao Ling Shi achieved over 40% year-over-year growth in gross billings, with a retention rate exceeding 75% [6][25] - Advertising revenues from the gaming industry grew by over 50% year-over-year, supported by programmatic advertising and influencer marketing campaigns [10] Company Strategy and Development Direction - The company is focused on executing an AI-native strategy, enhancing the application of its large language model across learning and advertising businesses [13][41] - There is a commitment to deepen collaboration with partners like NetEase and Google to unlock additional synergies and support Chinese companies in expanding globally [11][41] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year targets, including robust year-over-year operating profit growth and reaching annual operational cash flow break-even for the first time [13][41] - The company anticipates that the restructuring of the learning services segment will enhance profitability in the long run [41] Other Important Information - Youdao was included in the 2026 GSV 150, highlighting its position as a transformational growth company in digital learning [6] - The company launched several innovative products, including an AI tutor for programming classes and a new AI audio and video translation product [7][9] Q&A Session Summary Question: Will online marketing services become more important than learning services in the future? - Management sees growth opportunities in both areas, with online marketing services currently experiencing higher growth due to advanced ad tech and AI capabilities [22][24] Question: What is the plan to return online marketing gross margin above 30%? - Management aims to improve gross margin through initiatives like broadening the application of the iMagicBox creative production platform and optimizing the data management platform [30][33] Question: What is the potential for rebound in operating profit for Q4? - Management is optimistic about Q4, citing strong performance in Youdao Ling Shi and advertising growth, which will create momentum for profitability [36][40] Question: Should we expect any change to the full-year break-even target given the cumulative net operating cash outflow? - Management remains confident in achieving the full-year cash flow break-even target, emphasizing significant year-over-year improvements in cash flow performance [45][49]

Financial Data and Key Metrics Changes - The group revenue reached an all-time high of $20.5 billion, growing at almost 15% year-on-year [2][11] - Adjusted net income increased more than 25% year-on-year to $512 million, with an adjusted net income margin expanding to 2.5% [2][11] - AI-related revenues accounted for 30% of the group's total, increasing by 13 percentage points year-on-year [2][11] Business Line Data and Key Metrics Changes - Intelligent Devices Group (IDG) revenue grew 12% year-on-year to $15.1 billion, with operating profit climbing 11% to $1.1 billion [15] - Infrastructure Solutions Group (ISG) revenue grew 24% year-on-year to exceed $4 billion, driven by AI infrastructure demand [8][17] - Solutions and Services Group (SSG) achieved 18% year-on-year revenue growth, marking the 18th consecutive quarter of double-digit expansion [9][20] Market Data and Key Metrics Changes - The PC market share exceeded 25% for the first time in Lenovo's history, reaching a historic high of 25.6% global market share [11][15] - The smartphone business achieved record-high concurrent quarter activations, supported by solid end-user demand [11] - All reported geographies delivered double-digit year-on-year revenue growth, reinforcing balanced strength across 180 markets [12] Company Strategy and Development Direction - The company is focusing on AI democratization, with a strategy that includes personal AI and enterprise AI [2][3] - The upcoming Tech World event will showcase a personal AI super agent, emphasizing the vision of one personal AI across multiple devices [4][5] - The company aims to create an enterprise AI twin for customers, leveraging hybrid infrastructure and AI solutions [7][8] Management's Comments on Operating Environment and Future Outlook - Management sees positive signs of stabilization despite uncertainties in the external environment [2] - The company is confident in maintaining double-digit growth in both PC and server businesses over the next two quarters [31] - The management believes that the substantial investments in AI infrastructure will lay the groundwork for future technology waves [29] Other Important Information - The company achieved a 31% year-on-year reduction in adjusted net finance costs, reflecting ongoing cost optimization [14] - Lenovo's factory in Monterrey, Mexico, was added to the World Economic Forum Global Lighthouse Network, highlighting its manufacturing excellence [22] - The company continues to be recognized for its leadership in ESG, ranking eighth in Gartner Supply Chain Top 25 [22] Q&A Session Summary Question: How big will the memory price impact on margin? - Management believes Lenovo is in a better position to manage supply shortages and rising component costs due to strong supplier relationships and procurement power [30][31] Question: What is the PC outlook for the next year? - The company is optimistic about maintaining double-digit growth in the PC business, despite rising storage and memory component prices [32][35] Question: What is the smartphone outlook for 2026? - The smartphone market is expected to grow in single digits, with a focus on premium devices that are less affected by component cost increases [36][39] Question: How does Lenovo capture opportunities in hybrid AI infrastructure? - The company is leveraging its hybrid AI strategy to resonate with customer needs, focusing on agility and flexibility in AI deployments [40][43] Question: Can Lenovo sustain strong growth and margins in SSG? - SSG is expected to continue its growth momentum, driven by high demand for AI services and solutions [44][54] Question: What is Lenovo's strategy for AI servers? - The company is focusing on AI inferencing as a significant market opportunity, with plans to enhance its capabilities in this area [68][70] Question: What is the overall outlook for the year-end? - Management reaffirms confidence in maintaining strength in order levels, particularly for PCs, despite some analyst revisions [73][74] Question: Are there plans for new AI or AR devices? - The company is preparing for the AI revolution, with plans for more AI-native devices to be revealed at the upcoming Tech World event [75]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $540 million, representing a 6.4% increase quarter-over-quarter [5][23] - Live streaming revenue reached $388 million, up 3.5% from Q2, marking two consecutive quarters of growth [5][24] - BIGO Ads generated $104 million in revenue, with a year-over-year growth of 33.1% [5][17] - Non-GAAP operating income was $41 million, up 16.6% year-over-year [5][28] - Operating cash flow for the quarter was $73 million, with a net cash position of $3.3 billion as of September 30 [6][28] Business Line Data and Key Metrics Changes - Live streaming revenues from the BIGO segment were $367.7 million, contributing to the overall live streaming revenue increase [24] - Non-live streaming revenues totaled $151.7 million, up 27.3% year-over-year, now accounting for 28.1% of total group revenues [25][24] - BIGO Ads' advertising revenues increased by 33.1% year-over-year and 19.7% quarter-over-quarter [26][17] Market Data and Key Metrics Changes - Global average mobile MAUs reached 266 million, up 1.4% quarter-over-quarter [14] - The number of paying users for BIGO increased by 0.8% quarter-over-quarter, while app users grew by 3.4% [15][24] - Revenue from North America grew 22% quarter-over-quarter, and Western Europe saw a 41% increase [20] Company Strategy and Development Direction - The company aims to strengthen ecosystem synergies, reinforce organizational vitality, and reject growth as key priorities for 2026 [7][10] - The focus is on diversifying revenue streams, particularly in EdTech and SaaS, while leveraging the live streaming business as a cash cow [7][8] - The company is enhancing its advertising platform, BIGO Ads, to become a global performance-driven multi-channel advertising platform [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the live streaming business returning to steady year-over-year growth in 2026, supported by operational adjustments and improved user engagement [34][45] - The advertising and SaaS businesses are expected to maintain strong double-digit growth, contributing to overall revenue growth [45][46] - The company anticipates a new growth cycle with positive revenue growth visibility for 2026 [46] Other Important Information - The company has repurchased $88.6 million worth of shares as part of its capital return strategy [21][29] - The share buyback program is expected to accelerate as the company believes its shares are undervalued [21][53] Q&A Session Summary Question: Long-term trend of the live streaming business - Management noted that the live streaming business is on a steady recovery trajectory, with expectations for year-over-year growth in 2026 due to operational enhancements and focus on high-value users [33][34] Question: Long-term strategic goals for the advertising business - The advertising business is being transformed into a global platform for performance-driven advertising, with plans for multi-channel monetization and diversification of advertiser types [38][39] Question: User and revenue trend outlook for 2026 - Management indicated clear visibility for positive year-over-year revenue growth in 2026, with live streaming, advertising, and SaaS all expected to contribute positively [45][46] Question: Expenses trend and profitability outlook - The company expects continued improvement in operating profit and EBITDA in 2026, driven by growth in live streaming and SaaS businesses [50][49] Question: Shareholder return initiatives - The company is executing a three-year shareholder return program and plans to accelerate share buybacks, expecting enhanced returns as operating profits grow [53][54]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $540 million, representing a 6.4% increase quarter-over-quarter [5][23] - Live streaming revenue reached $388 million, up 3.5% from Q2, marking two consecutive quarters of growth [5][24] - BIGO Ads generated $104 million in revenue, with a year-over-year growth of 33.1% [5][26] - Non-GAAP operating income was $41 million, up 16.6% year-over-year [5][28] - Non-GAAP EBITDA reached $51 million, reflecting a 16.8% year-over-year increase [5][28] - Operating cash flow for the quarter was $73 million, with $3.3 billion in net cash as of September 30 [6][28] Business Line Data and Key Metrics Changes - Live streaming revenues from BIGO segment were $367.7 million, showing a quarter-over-quarter increase [24] - Non-live streaming revenues totaled $151.7 million, up 27.3% year-over-year, contributing 28.1% to total group revenues [24][25] - BIGO Ads' advertising revenues increased by 33.1% year-over-year and 19.7% quarter-over-quarter [26][27] - The number of paying users for BIGO increased by 0.8% quarter-over-quarter, while app users grew by 3.4% [15][24] Market Data and Key Metrics Changes - Global average mobile MAUs reached 266 million, up 1.4% quarter-over-quarter [14] - Revenue from North America grew 22% quarter-over-quarter, while Western Europe saw a 41% increase [20] Company Strategy and Development Direction - The company aims to strengthen ecosystem synergies, reinforce organizational vitality, and reject growth [7] - Focus on diversifying revenue streams, particularly in AdTech and SaaS, with live streaming serving as a reliable cash cow [7][8] - BIGO Ads is being transformed into an AI-powered global platform for performance-driven advertising [8][10] - SHOPLINE is positioned as a fully integrated SaaS platform, enhancing product capabilities and strategic advancements [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the live streaming business returning to steady year-over-year growth in 2026 [14][34] - BIGO Ads is expected to sustain robust double-digit revenue growth year-over-year [14][45] - The company anticipates a return to positive year-over-year revenue growth starting in Q4 2025 and continuing into 2026 [14][30] Other Important Information - The company has repurchased $88.6 million worth of shares under its buyback program as of November 14, 2025 [21][29] - The group expects net revenues for Q4 2025 to be between $563 million and $538 million, indicating a year-over-year growth of 2.5%-5.2% [29][30] Q&A Session Summary Question: Long-term trend of the live streaming business - Management noted that the live streaming business is on a steady recovery trajectory, with expectations for year-over-year growth in 2026 due to operational adjustments and focus on high-value paying users [31][34] Question: Long-term strategic goals for the advertising business - Management outlined plans to establish BIGO Ads as a global platform for multi-channel advertising, expanding into various verticals and enhancing data infrastructure [36][38] Question: 2026 outlook on user and revenue trends - Management indicated clear visibility for returning to positive year-over-year revenue growth, with expectations for live streaming and advertising to maintain strong performance [43][46] Question: Shareholder return initiatives - The company is executing a three-year shareholder return program and plans to accelerate share buybacks, expecting enhanced returns as operating profits grow [52][54]

Financial Data and Key Metrics Changes - The group revenue reached an all-time high of $20.5 billion, growing at almost 15% year-on-year [2][11] - Adjusted net income increased more than 25% year-on-year to $512 million, with an adjusted net income margin expanding to 2.5% [2][11] - AI-related revenues accounted for 30% of the group's total, increasing by 13 percentage points year-on-year [2][11] Business Line Data and Key Metrics Changes - Intelligent Devices Group (IDG) revenue exceeded $15 billion, with 12% year-on-year growth [6][15] - Infrastructure Solutions Group (ISG) revenue grew 24% year-on-year to exceed $4 billion [8][17] - Solutions and Services Group (SSG) achieved 18% year-on-year revenue growth, marking the 18th consecutive quarter of double-digit expansion [9][20] Market Data and Key Metrics Changes - The PC market share exceeded 25% for the first time in Lenovo's history, reaching a historic high of 25.6% global market share [6][11] - The smartphone business achieved record-high concurrent quarter activations, driven by solid end-user demand [11][12] - All reported geographies delivered double-digit year-on-year revenue growth, reinforcing balanced strength across 180 markets [12] Company Strategy and Development Direction - The company is focusing on AI democratization, with significant progress in personal AI and enterprise AI [2][3] - The strategy includes leveraging a unique global local model to navigate uncertainties and capture hybrid AI opportunities [3][4] - The company aims to create an enterprise AI twin for customers, driving data into insights and value [7][8] Management's Comments on Operating Environment and Future Outlook - Management sees positive signs of stabilization despite uncertainties in the external environment [2] - The company is confident in maintaining double-digit growth in both PC and server businesses over the next two quarters [31] - The outlook for the overall group remains strong, with reaffirmation of estimates despite some market fluctuations [73] Other Important Information - The company is recognized for its leadership in ESG, ranking eighth in Gartner Supply Chain Top 25 [22] - The upcoming Tech World event is expected to showcase new innovations in personal AI [4][59] Q&A Session Summary Question: Impact of memory price on margin - Management believes they are in a better position to manage supply shortages and rising component costs due to strong supplier relationships and procurement power [30][31] Question: PC outlook for next year - The company is optimistic about maintaining double-digit growth and expanding market share despite rising storage and memory component prices [34][35] Question: Smartphone outlook for 2026 - The smartphone market is expected to grow in single digits, with a focus on premium devices that are less affected by component cost increases [36][39] Question: Opportunities in hybrid AI infrastructure - The company is leveraging its hybrid AI strategy to resonate with customer needs, focusing on agility and flexibility [42][43] Question: General server demand outlook - Continued high double-digit growth is expected in the CSP segment, with high single-digit growth in the ESMB segment [56][63] Question: AI server strategy - The company is focusing on inferencing services and capabilities, which are becoming increasingly important for enterprise customers [70] Question: Overall business outlook - The company reaffirms strength in order levels, particularly for PCs, and maintains confidence in market estimates [73][74]

Financial Data and Key Metrics Changes - Lenovo reported a record revenue of $20.5 billion for the last quarter, representing a year-on-year growth of almost 15% [2][11] - Adjusted net income increased by more than 25% year-on-year to $512 million, with an adjusted net income margin expanding to 2.5% [11][12] - AI-related revenues accounted for 30% of the group's total, marking a 13 percentage point increase year-on-year [2][11] Business Line Data and Key Metrics Changes - Intelligent Devices Group (IDG) revenue grew 12% year-on-year to $15.1 billion, with operating profit climbing 11% to $1.1 billion [15] - Infrastructure Solutions Group (ISG) revenue increased by 24% year-on-year to exceed $4 billion, driven by AI infrastructure demand [8][17] - Solutions and Services Group (SSG) achieved 18% year-on-year revenue growth, marking the 18th consecutive quarter of double-digit expansion [9][19] Market Data and Key Metrics Changes - Global PC market share reached a historic high of 25.6%, with Lenovo maintaining leadership in both consumer and commercial segments [11][15] - The smartphone business achieved record-high concurrent quarter activations, supported by strong end-user demand [11] - All reported geographies delivered double-digit year-on-year revenue growth, reinforcing balanced strength across 180 markets [12] Company Strategy and Development Direction - Lenovo is focusing on AI democratization, with a strategy that includes personal AI and enterprise AI, aiming to capture hybrid AI opportunities [2][3] - The company plans to launch a personal AI super agent at Tech World in January 2026, emphasizing hyper-personalization across multiple devices [4][5] - Lenovo's hybrid AI strategy aims to create enterprise AI twins for customers, enhancing their data processing and insights capabilities [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating uncertainties and capturing substantial AI opportunities despite external challenges [2][3] - The company anticipates continued double-digit growth in both PC and server businesses over the next two quarters [28] - Management highlighted the importance of maintaining competitive costs and supply chain resilience amid rising component prices [26][28] Other Important Information - Lenovo's commitment to sustainability and ESG initiatives was emphasized, with recognition in global rankings for supply chain performance and inclusion efforts [22][23] - The company is optimistic about global trade improvements and plans to elevate its brand through partnerships and major initiatives [23] Q&A Session Summary Question: How big will the memory price impact on margin? - Management believes Lenovo is well-positioned to manage supply shortages and rising component costs due to strong supplier relationships and procurement power [26][28] Question: What is the PC outlook for the next year? - Management is optimistic about maintaining double-digit growth in the PC segment, despite rising storage and memory component prices [30][31] Question: What is the smartphone outlook for 2026? - The smartphone market is expected to grow in single digits, with a focus on premium devices that are less affected by component cost increases [32][33] Question: How does Lenovo capture opportunities in hybrid AI infrastructure? - Lenovo's hybrid AI strategy focuses on agility and flexibility, with a strong emphasis on AI services to accelerate customer AI journeys [36][37] Question: Can Lenovo sustain strong growth and margins in SSG? - Management is confident in the growth of SSG, driven by demand for AI services and a focus on sustainability [39][43] Question: What is Lenovo's strategy for AI servers? - Lenovo aims to capture growth in AI inferencing by enhancing its infrastructure capabilities and focusing on customer needs [52][53]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $540 million, representing a 6.4% increase quarter-over-quarter [5][23] - Live streaming revenue reached $388 million, up 3.5% from Q2, marking two consecutive quarters of growth [5][24] - BIGO Ads generated $104 million in revenue, with a year-over-year growth of 33.1% [5][23] - Non-GAAP operating income was $41 million, up 16.6% year-over-year [5][28] - Non-GAAP EBITDA reached $51 million, reflecting a 16.8% increase year-over-year [5][28] - Operating cash flow for the quarter was $73 million, with a net cash position of $3.3 billion as of September 30 [5][28] Business Line Data and Key Metrics Changes - Live streaming revenues from BIGO segment were $367.7 million, contributing to the overall live streaming revenue growth [24][25] - Non-live streaming revenues totaled $151.7 million, up 27.3% year-over-year, now accounting for 28.1% of total group revenues [25][26] - BIGO Ads' advertising revenues increased by 33.1% year-over-year and 19.7% quarter-over-quarter [17][25] - The number of paying users for BIGO increased by 0.8% quarter-over-quarter, while app usage rose by 3.4% [15][24] Market Data and Key Metrics Changes - Global average mobile MAUs reached 266 million, up 1.4% quarter-over-quarter [14] - Revenue from North America grew 22% quarter-over-quarter, while Western Europe saw a 41% increase [19] Company Strategy and Development Direction - The company aims to strengthen ecosystem synergies, enhance organizational vitality, and reject growth [6][10] - Focus on diversifying revenue streams, particularly in EdTech and SaaS, while leveraging live streaming as a cash cow [6][10] - Plans to expand BIGO Ads as an AI-powered global platform for multi-channel advertising [8][10] - Anticipates significant growth in the SaaS-based e-commerce sector through Shopline [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the live streaming business returning to steady growth in 2026 [12][32] - BIGO Ads is expected to continue its rapid growth, driven by traffic expansion and improved advertising capabilities [21][39] - The company anticipates a return to year-over-year revenue growth starting in Q4 2025 and continuing into 2026 [13][30] Other Important Information - The company has repurchased $88.6 million worth of shares as part of its capital return strategy [21][29] - The group expects consolidated operating profit to improve, benefiting shareholders in the long term [21][29] Q&A Session Summary Question: Long-term trend of the live streaming business - Management noted that the live streaming business is on a steady recovery trajectory, with expectations for year-over-year growth in 2026 [31][32] Question: Long-term strategic goals for the advertising business - Management highlighted the transformation of BIGO Ads into a global platform for performance-driven advertising, with plans for diversification and geographic expansion [34][36] Question: User and revenue trend outlook for 2026 - Management indicated strong visibility for returning to positive year-over-year revenue growth, with expectations for live streaming and advertising to maintain strong performance [39][40] Question: Shareholder return initiatives - Management confirmed a commitment to a three-year shareholder return program, with active share buybacks expected to continue [44][45]

Financial Data and Key Metrics Changes - Total revenue in Q3 reached $35.4 million, up 12% year over year, marking the fourth consecutive quarter of GAAP profitability [3][9] - GAAP net profit for the quarter was $2.7 million, with a GAAP net margin of 7.8% [3][10] - Gross margin for Q3 was 66%, slightly decreased by 0.7% year over year [10] - Operating cash flow was $0.7 million in Q3, compared to negative $4.6 million last year [11] - The company ended Q3 with $374.3 million in cash and equivalents [11] Business Line Data and Key Metrics Changes - Agora revenues reached $18.2 million in Q3, representing 15.9% year-over-year growth [9] - Shenghua revenues reached RMB 122.4 million in Q3, up 8.4% year-over-year [9] - Dollar-based net retention rate is 108% for Agora and 90% for Shenghua, marking the fourth consecutive quarter of improvement for both businesses [9] Market Data and Key Metrics Changes - Demand recovery trend continues in China, with growth in social entertainment and education sectors [16] - In the US and international markets, live commerce demand continued its rapid growth, with other verticals also showing growth [16] Company Strategy and Development Direction - The company is significantly increasing investment in conversational AI to address challenges in voice-based human-machine interaction [3][4] - Launched Conversational AI Engine 2.0, integrating advanced audio research and development [4][6] - Introduced Conversational AI Studio to help developers create voice agents through a zero-code interface [6] Management's Comments on Operating Environment and Future Outlook - Management expects revenue and net profit to continue growing on a quarter-over-quarter basis in Q4 [3][11] - Anticipates total revenues for Q4 to be between $37 million and $38 million, representing year-over-year growth of 7.2% to 10.1% [12] - Conversational AI applications are expected to drive meaningful revenue contributions towards the end of next year [18] Other Important Information - The company repurchased 5.2 million ordinary shares in Q3, representing 1.4% of outstanding shares at the beginning of the quarter [11][12] - The recent Convo AI and RTE conference attracted over 3,000 attendees, marking a record for the company [7] Q&A Session Summary Question: Demand outlook and key trends in domestic and international markets - Management noted a continued recovery trend in China, with growth in social entertainment and education sectors, and rapid growth in IoT and digital transformation customers [16] Question: Update on AI development and key scenarios for revenue contribution - Management highlighted three advanced use cases for conversational AI: call centers, education, and companionship toys, with expectations for revenue growth in the first half of next year [18] Question: Profitability outlook for Q4 and 2026 - Management expects GAAP operating profit in Q4, with net profit growing sequentially from Q3, and anticipates year-over-year net income improvement for 2026 [20]

Financial Data and Key Metrics Changes - Total revenue in Q3 reached $35.4 million, up 12% year-over-year, marking the fourth consecutive quarter of GAAP profitability [3][9] - GAAP net profit for the quarter was $2.7 million, with a GAAP net margin of 7.8% [3][10] - Gross margin for Q3 was 66%, slightly decreased by 0.7% year-over-year and 0.8% sequentially [10] - Operating cash flow was $0.7 million in Q3, compared to negative $4.6 million last year [11] - The company ended Q3 with $374.3 million in cash and equivalents, with a net cash outflow mainly due to share repurchase of $4.8 million [11][12] Business Line Data and Key Metrics Changes - Agora revenues reached $18.2 million in Q3, representing 15.9% year-over-year growth and flat quarter-over-quarter [9] - Shenghua revenues reached RMB 122.4 million in Q3, up 8.4% year-over-year and 6% sequentially [9] - Dollar-based net retention rate is 108% for Agora and 90% for Shenghua, marking the fourth consecutive quarter of improvement for both businesses [9] Market Data and Key Metrics Changes - Demand recovery in China is supported by stabilized regulatory environment and growth in social entertainment and education sectors [16] - In the US and international markets, live commerce demand continued its rapid growth, with other verticals also showing growth [16] Company Strategy and Development Direction - The company is significantly increasing investment in conversational AI to address challenges in voice-based human-machine interaction [3][4] - Launched conversational AI Engine 2.0, integrating advanced audio research and development to enhance user experience [4][6] - The company aims to empower the next chapter of AI innovation by building reliable and scalable voice agents [8] Management's Comments on Operating Environment and Future Outlook - Management expects revenue and net profit to continue growing on a quarter-over-quarter basis in Q4 [3] - For Q4, total revenues are expected to be between $37 million and $38 million, representing year-over-year growth of 7.2% - 10.1% [12] - Management anticipates that conversational AI will become a meaningful revenue contributor towards the end of next year [18] Other Important Information - The company repurchased 5.2 million ordinary shares in Q3, representing 1.4% of outstanding shares at the beginning of the quarter [11] - The recent Convo AI and RTE Conference attracted over 3,000 attendees, marking it as the largest gathering focused on conversational AI technology globally [7] Q&A Session Summary Question: Demand outlook and key trends in domestic and international markets - Management noted that demand recovery continues in China, with growth in social entertainment and education, while live commerce demand in the US and international markets is also strong [16] Question: Update on AI development and key scenarios for revenue contribution - Management clarified the focus on conversational AI, with call centers, education, and companionship toys showing advanced use cases [18] Question: Profitability outlook for Q4 and 2026 - Management expects GAAP operating profit in Q4, with year-over-year net income improvement anticipated for 2026 [20]