Helport AI Limited

Greetings and welcome to the Hellport AI fiscal year 2024 financial results and business update conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to hand the call over to Alyssa Gale, Hellport AI's sales manager. Alyssa?

Thank you, Operator. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements which reflect our opinions only as the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of any new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent form 20F for a more complete discussion of these factors and other risks particularly under the heading risk factors. Your host today, Guanghai Li, Chief Executive Officer, and Tao Ke, Chief Financial Officer, will present results of operations for the fiscal year ended June 30th, 2024. A press release detailing these results was issued November 1st, 2024, and is available in the investor relations section of our company's website, ir.healthcourts.ai. At this time, I will turn the call over to Healthport AI Chief Executive Officer, Guanghai Li.

Thank you, Alyssa.

And good afternoon, everyone. It's a great honor to welcome you to today's fiscal year 2024 financial result and business update conference call. Albert AI is an AI technology company committed to empowering customer communications with intelligent software and services. As our mission states, empower everyone to work as an expert. We do not replace humans. Instead, we use AI to enhance human capabilities. Compared to many other AI companies, I'd like to highlight four of our unique strengths. First, among numerous AI companies globally, I'm proud to say that Helper AI is among the few that have achieved consistent profitability and sustained growth. Secondly, compared to many technology companies that are struggling to find a good product and business model, Our mature AI software has been recognized by dozens of enterprises across banking, insurance, mortgage, and other industries. Today, we are privileged to serve over 30,000 paying users around the world. Thirdly, we have a robust AI operation and the training team, which enables us to deploy our software quickly. with high productivity and low cost. And furthermore, we can provide AI plus BPO service to assist our client in completing their job. And lastly, we are particularly strong in helping clients enhance sales performance through improved customer communications, even though we can also do well in reducing cost of customer service. Now, let's look at our flagship software, Halpert AI Assist, which offers real-time speech guidance and a suite of essential features for high-performance customer communications. We pride ourselves on our mature industrial software that supports a large user volume, operates with low latency, and at low cost. In addition, our unique AI plus BPO model seamlessly blends AI capabilities with customer contact process outsourcing. Leveraging our AI software and the global network of BPO partners, this service model is designed to help clients enhance sales performance while minimizing cost. With 24 hour and seven day a week supporting and multilingual capabilities across various regions, we believe this result-oriented approach offers a distinctive model that sets us apart from most other AI companies in the market. Our core technological advantages are reflected in four key areas, knowledge-based construction, gateways, AI voice, and operational know-how. Together, these technologies reinforce the unique competitive advantages I just mentioned earlier. For example, our knowledge-based technology Leveraging large language models and combined with our operational know-how can significantly enhance the efficiency of both knowledge-based construction and AI training, resulting in substantial cost and time savings for our client.

With regard to our business landscape, currently,

our business has a global footprint already with significant operations in North America, Southeast Asia, and China. We cater to clients across a range of industries, particularly in banking, insurance, mortgage, wealth management, real estate, and the public services.

Looking at our market potential,

Helper AI is strategically positioned within some of the world's largest and most promising market. Take North America, for example. It's the home to over 2 million real estate agents, 500,000 insurance professionals, and 300,000 mortgage brokers, all of whom represent potential users of our software and services. Especially, the adoption rate of AI in customer communications is still very, very low in these sectors, which offering us a substantial growth potential.

Now, let's dive into our growth strategy.

Firstly, we will continue to invest in enhancing our AI assistance software, particularly to incorporate more large language model technologies, further boost AI operational efficiency, and launch more industry-specific versions of our software. Secondly, we will accelerate the expansion of our AI plus BPO business. On one hand, we will expand our network of BPO partners around the world. And on the other hand, we will build strong in-house capabilities to enhance high quality and productivity. Thirdly, we are developing the Hotpot AI Developer Ecosystems, HDE. So HDE provides an accessible interface enabling third-party developers to effortlessly construct mobile applications, leveraging our proprietary technology, tools, knowledge bases, and algorithms. This initiative aims to attract top talent around the world and to serve a significantly large number of client clients across a broader range of industries and scenarios. In conclusion, our growth strategy encompasses focusing on the largest regional and vertical markets, forming more strategic partnerships and increasing R&D investment, and enhancing AI operations and training capabilities. to support sustainable and the scaled growth.

Thank you for your attention. I will now pass it over to our CFO, Tao, for our financial overview. Thank you, Guanghai.

Now let me walk you through our financial performance of FY24. First of all, our top line performance. We are pleased to report that Hellport AI achieved significant revenue growth this year. Our top line revenue reached 29.6 million US dollars, representing an impressive year-over-year growth of 132%. This growth was primarily driven by our SaaS solutions and the rapid expansion of our core customer base. Now look at the bottom line performance. We recorded a net profit of $7.4 million with a profit margin of 25%. This is reflective of our scalable SaaS model and the operational efficiency achieved through our ongoing core business. While we continue to invest in innovation and partnership, we've maintained a disciplined approach to managing cost which has allowed us to deliver strong profitability. Looking ahead, sustainability is the key to maintaining our momentum. We are adopting a measured approach as we scale in the U.S. and other markets with a focus on long-term profitability. Our diverse range of technologies combined with our ongoing expansion into new industries and steady progress in each of the market position us well for stable growth for FY25, which is a crucial year for us to establish the foundation in the global market, especially U.S. As highlighted by Guanghai earlier, We've already had our early breakthrough in mortgage loan, insurance, wealth management, real estate, as well as our strategic partnership with Google and our first joint success case with eWorld in Hawaii DHS, further illustrating our mission of empower everyone to work as an expert with almost unlimited growth potential ahead of us. Now I'll turn to forecast for FY25. Based on the past three-year financials listed out here, we expect our revenue to grow by 25% driven by the full impact of our new partnership and expanded U.S. presence. We also anticipate our profitability to continue to improve as we continue to refine our product offerings and enhance operational efficiencies. In line with this, We will continue to prioritize our R&D investment, particularly in the development of HDE to support long-term innovation and expansion. Now I will pass it back to Guanghai for closing remarks.

Yeah, thanks, Tao.

In closing, Opera AI is well positioned for continued growth. We've built a strong foundation with our AI-driven solutions, and our strategic initiatives have set the stage for greater global impact. As we enter fiscal year 25, we remain focused on driving value for our clients, our partners, and our shareholders. Thank you for our entire team for their dedication and to our investors for your continued trust in Help World AI.

We'll now open the floor for questions. Thank you.

At this time, the floor is open for questions. If you would like to ask a question, please press star 1 on your telephone keypad. If at any point your question is answered, you may remove yourself from the queue by pressing star 2. Again, to ask a question, please press star 1 at this time. And we'll pause just a moment to allow questions to queue.

And once again, that's star 1 to ask a question.

Our first question will come from Mike Lattimore with Northland Capital Markets. Please go ahead, sir.

All right, great. Thanks very much. Good afternoon, and congrats on the strong results and the first earnings call here. So technology is very interesting and, you know, some interesting use cases there, but can you explain maybe a little bit more how you differentiate your AI assistant? You know, there's a lot of companies that highlight, you know, doing AI or digital assistants or co-pilots. Maybe just help us frame a little bit how you differentiate yours specifically.

Yes. Thank you for your question.

Yes, we do have a unique, have some unique strengths. So, first, unlike many other technology companies, which are still searching for right product market fit. Actually, our mature AI software has already earned the trust endorsement of many enterprises across key sectors, like banking, insurance, as I mentioned. So we are proud to report that today we serve a community of over 30,000 paying users, which highlights a very strong market demand for our solutions. So that's one strength. A second strength is our operational strength, which lies in a highly capable AI operations and training team. This allows us to roll out our software swiftly and with remarkable efficiency, maintaining high productivity levels and at a low cost for our client, which is a key driver of our competitive advantage. Third, where we excel is empowering our client to significantly enhance sales performance by improving customer communications. Or in short, we focus more on improving sales for our client than reducing cost. So many of other similar competitors claim their solution to work across many, many different scenarios, including inbound customer service and outbound cost. Actually, we have a more focused strategy with actually focus on sales more than cost reduction. So this strategic focus enables us to deliver greater impact where it's needed most in the market. And our fourth differentiation can be found in our unique knowledge base, which combine both large language models and the small language models. So this combination not only ensures the accuracy and the completeness of AI-generated content, but also maintains efficiency, cost effectiveness, and real-time responsiveness. Thank you.

Great. That makes sense. And one of the things you hear about with large language models is, you know, hallucinations or giving inaccurate information. Does your software help to, or how does your software help to address that issue?

Yes, as I mentioned, we have a company. Our strategy is to combine small language models and the large language models. Large language models tend to have hallucinations and cannot ensure consistency in generated content. So we use a small language model, which is based on knowledge base, actually, so to ensure accuracy and completeness of the content.

Yeah, makes sense. Thank you. And just last one for me. You mentioned Google. Can you just elaborate a little bit more on your, you know, how you work with Google? Is it a channel partner, a technology partner? And, I mean, it almost feels like you might even compete with them in some situations.

Actually, we don't compete with companies like Google or Microsoft. Just take Google as an example, right? We are partners. We are not competitors. They are a platform company. They offer, you know, a large range of support to companies like us, including, you know, the AI software. and the storage capabilities and the calculation capabilities. So they are more like a channel partner. So by putting our product in the Google marketplace, we have got the potential to reach out to all the global client of Google. So by leveraging their platform as a channel, we significantly enlarge our market reach Of course, we work together to integrate our software with Google technologies so we can provide the client with more integrated solution.

Thank you. Great. Thank you very much, Jack. Best of luck this year.

Thank you. Again, if you would like to ask a question, please press star 1 at this time. We'll pause just a moment to allow any further questions to queue.

And at this time, I'm showing no further questions in queue.

At this time, I will turn the call over to Larry Hullab with some webcast Q&A.

Our first webcast question asks, how does Heliport AI's assistant differ from similar products offered by other companies, and what are its strengths and weaknesses?

Yeah, so this is just the answer. Let me just quickly summarize, right. We have four differentiated competitive advantage. One is we have a mature product compared to many other players. They are still struggling for, you know, mature product. So that's one thing. Secondly, we focus on like album sales more. than cost reduction for inbound customer service. So we can, you know, have a more focused strategy to serve our clients to achieve a larger value, particularly in sales and revenue. And thirdly, Helper AI, we have a very unique and strong operational capability in knowledge base construction and AI training. which enables us to deploy our product and train our software in a very high productivity and low cost for our client.

Our next question asks, in the company's products, how is AI technology specifically applied?

Yeah.

Let me answer this. So in our product, AI technology is applied across several key areas. One is knowledge base construction and operations. So our system leverages AI operations research and the real time communications technologies to build and operate industry specific knowledge bases. So this allows us to quickly create customized knowledge base tailored to client business scenarios, which can be easily updated and iterated. So this adaptability aims to help our AI solutions remain current and aligned with changing business needs of our client and customers. So particularly large language model is deeply used you know, knowledge-based construction. Second area is AI voice technology. So, the AI voice technology is the core focus for our contact for our software. So, this includes speech recognition and conversion, semantic understanding and analysis, voice synthesis and generation, and the emotional analysis and recognition. So these applications demonstrate how helpful AI uses artificial intelligence, especially in small language model and the large language model mixing, and in our product and service offering designed to enhance efficiency, adaptability, and the customer satisfaction. Thank you.

Our next question asks, what impact does the rapid development and innovation in large model technology have on the company?

Yes, large language model offers us a very great opportunity. So far, we have successfully integrated a large language model. across our knowledge base operation, and which help us to achieve over 80% improvement in the efficiency of building and maintaining our knowledge base. So this allows us to deliver information faster and more accurately to our users. So that's one. And second is leveraging large language model technology. We have introduced some new, product features such as automated summaries of customer calls. So this enhancement allows customer service agent and the salesperson, right, to quickly capture key points from each interactions, which improves productivity and ensures a seamless follow-up process in their customer engagement. And thirdly, in case where an knowledge base doesn't provide a direct answer, in many cases, and with controlled parameters, we can utilize large language model to generate real-time suggestions, real-time content for our users. So this functionality enhance the agent's ability to respond more effectively to customer inquiries and even in unfamiliar scenarios. So in summary, a large language model technology has significantly advanced our product capabilities, while there are still challenges associated with large language models. For example, like the occasional inaccuracies and the inconsistencies, this do not deter us from expanding its application. So we continue to invest in leveraging large language model technology to push the boundaries of what our solutions can achieve for our customers. Thank you.

And our next question asks, what are the company's R&D plans for the next one to three years, and how do these R&D plans align with the company's strategic development?

Yeah, in the next one to three years, we anticipate that our R&D effort will be anchored around the three key strategy pillars, each aligning closely with our growth mission and our aim to drive industry impact. First, we plan to incorporate more large language model technologies, as I just mentioned, So expanding our use of large language models will enable us to enhance the sophistication and adaptability of our AI solutions, ensuring they deliver even more value across various applications. Our second focus is on further boosting the efficiency of AI operations and AI training. So this work will enable us to deploy updates faster, improve the learning curve of our AI, and ultimately provide a more powerful and costly effective solution for our client. So this is our very differentiated competitive advantage compared to many other like unicorns of AI technology. And thirdly, we are committed to launch more industry-specific versions of our software. So these are tailored to the unique requirement of different sectors and different clients. So this includes introducing a mobile version to increase accessibility and the reach for client who needs flexible solutions on the go. Additionally, we are developing the helper AI developer ecosystem, as I also mentioned, which this is called HDE. So HDE is designed as an accessible platform for third-party developers offering tools, knowledge databases, algorithms, and proprietary technology through HDE developers particularly third-party developers, will be able to build their own applications by leveraging our AI capabilities. So this platform aims to attract top talent worldwide and enable us to expand our customer base, reaching more clients across a wide range of industries and scenarios. Thank you.

Our next question asks, we noticed that unlike in the pre-ipo materials the company introduced ai plus bpo services in this annual report what is the business rationale behind this and will you be turning into a bpo company uh yeah that's a great question to ask so first i'd like to clarify we we will

We are a technology company. We are artificial intelligence technology company, so we are not a BPO company, and we will not turn into a BPO company. So even we are providing, we are offering AI plus BPO service. These are not a traditional BPO. Right? These are not traditional BIMS process outsourcing. Actually, all AI plus BPO service model is very distinctive from this traditional model. So ours is next generation AI BIMS model supported by robust operational capabilities. I think that this is a more accurate definition. We launched our AI Plus BPO service for two key reasons that align with both customer needs and our competitive strength. So in terms of meeting customer demand, so our client are not simply looking to purchase software, actually. They are seeking measurable business outcomes. So many companies prefer to invest in service that include the people and expertise needed to perform a task more effectively and at a lower cost. So for them, simply buying software isn't enough to achieve their goals. So by integrating AI with BPO, we meet this demand by delivering comprehensive solutions that drive real impact. So that's kind of, this is a very real and very big market demand for this outcome rather than merely software. And secondly, if you look at our differentiation, as I keep mentioning, right, we have a unique capability in operating operations and AI training. So by combining our AI software with our operational expertise, we can deploy AI software much faster and train the AI more effectively and ensure to deliver value efficiently. So this capability allows us to bring faster and greater value to our client, something that You know, many other AI-only companies struggle, struggling to match due to their limited operational resources. So, in summary, our AI Plus BPO model aligns with what customers want and the leverages our strengths to set us apart from the market. Thank you.

Our next question asks, what is the company's business strategy for the North American market? And what is the progress of the business there?

Yeah.

Yeah, North American, North America represent the largest customer contact market globally and has a very strong demand for AI assistance software. in customer communication. So this market and the regions also has a high payment capacity, and the companies fully embrace the SaaS model, so make it a very ideal foundation for scalable and rapid growth. Our strategy to capitalize on this market opportunity include three primary components. First, actually, we have a very clear vertical focus. We focus on high, you know, large-scale, high-need sectors. So we are concentrating on verticals with a strong demand for sales performance improvement, such as insurance sales, real estate mortgage sales, to name a few. So these industries have a clear need for AI-driven tools to enhance productivity, to enhance sales, which aligns well with our solution offering. That's one thing.

Our second growth strategy, our second growth strategy,

is uh to build strategy partnership for scaled growth so uh we aim to grow through partnership with leading enterprises including you know large digital platforms such as like a google So, as I mentioned earlier, right, strategy collaboration with Google offers us the potential to serve Google's global client base. Additionally, by partnering with organizations that possesses deep expertise and customer network in specific verticals, we are developing industry-specific AI software So this approach enable us to deliver comprehensiveness solution across different industries and creating significant value for client in this given sector. And the third component, strategy component is, yeah, we, of course, like many other companies, right, in addition to organic growth, we are also actively exploring M&A opportunities to further accelerate our growth. So inorganic growth through acquisition allows us to expand our reach, add capabilities, and deepen our market presence in a much faster manner. In terms of the process so far, we have secured client across sectors, including insurance. government sector, real estate mortgages. So, as we continue to executing on this strategy pillars, we are very confident that we'll have a much faster pace for continued growth going forward. Thank you.

Our next question asks, what is the logic behind your product's pricing? Is it a subscription fee plus a performance-based component? Is the same pricing model used in different countries? Thank you, Larry.

We offer two main pricing models with each client choosing one of the models or sometimes combining elements from both, really depending on client needs. First is a SaaS subscription model, which is a monthly subscription fee based on the number of paying users. It offers clients predictable cost and scalability as the user space grows. Secondly is the performance-based pricing. This model is tied directly to the value we deliver. Fees are calculated based on the measurable impact our AI solutions have on our client business outcomes. It is worth noting that most of our competitors rely on a project-based pricing model. This approach reflects the fact that their products are less mature, require significant customized projects to deliver values. In contrast, our solution is highly mature and already optimized for rapid deployment and very low-cost training. So, we do not charge for initial implementation. This approach allows us to deploy and adjust solutions very quickly, which is a clear advantage for us. Across different markets, different regions, and for various client types, our standard pricing model remains the same. However, the pricing level may vary depending on several factors. including the client-specific scenarios, competitive landscape, local cost considerations, and the specific market feasibility. Our flexible approach allow us to tailor our offering to best fit each client's needs and ensure they receive the maximum value from our solutions. Thank you.

Our next question asks, What are the main components of the company's costs and expenses, and what do they cover specifically? Aside from R&D, are there any significant increases in costs and expenses?

In our most recent 20F, the company's main cost expense component are mainly these categories. One is called operational service fee. These are the charges based on the number of license purchased, covering service planning, quality control, all sorts of daily service deliveries. This is a key component of our cost of goods sold. Secondly is we call it server rental cost. It is smaller but necessary expenses for our infrastructure. especially for some of our own model training. Thirdly is amortization and depreciation of intangible asset. These accounting for the gradual use of our intangible resources. Number four is general and administrative expenses, previously detailed as a key area for growth. Number five is R&D, another key growth area already being highlighted and detailed in the 20F. The increase of operational service fee is directly tied to the rise in licenses, which grew from an average 2,192 to 5,475 in fiscal year of 2024, which is also highlighted in our 20F, mainly driven by an expansion in agency and business demand. To support this growth, we renegotiated service terms with our outstanding partners, aligning costs more closely with our business activities. We believe that charging based on license numbers not only optimized our cost structure, but also incentivized our service providers to maintain their service standards, providing more flexibility as our needs evolve.

And our last Our last webcast question asks, what is the company's vision? Ultimately, what kind of company do you aspire to become?

Yes.

Yeah, that's a great question. Our mission is to empower everyone to work as an expert through AI. So this mission drives everything we do as we aim to become a truly renowned globally respected company. Our goal is to bring the power of AI to everyone across all industries and regions, making expert level performance accessible to all. So we see almost unlimited potential for our technology worldwide. We have already proven success with early wins in areas like mortgage lending, insurance, wealth management, government sectors, and some more. Our strategy partnership with Google, as well as our work with various public sector clients, further validate our approach and the capabilities. Ultimately, We aspire to become a transformative force setting new standards in AI-driven efficiency, accuracy, and effectiveness in industries across the globe. By focusing on scalable growth and building long-term partnerships, we are confident in our journey toward becoming a world-leading AI company which will, you know, contribute significant return of our shareholders and investors, you know, in the meanwhile to serve to bring the biggest value to our client across the world.

Thank you. That concludes our Q&A. I would now like to turn the call back over to Mr. Lee for his closing remarks. Yeah.

So Halpert, you know, as we just, we were just listed in NASDAQ in August. We are very proud that we have approved this model. We have already achieved profitability and constant growth. And we have already developed very unique competitive advantage over our competitors. So looking ahead, we are very confident in further innovation in delivering much more value to our client through AI-assist, AI-empowered software in customer communications. So we will do our best to bring the biggest value to our client and to meet our investors' expectations.

Thank you.

Thank you. This does conclude the HelpPort AI Fiscal Year 2024 Financial Results and Business Update Conference Call. Please disconnect your line at this time and have a wonderful day.