Cheetah Mobile Inc.

Good day and welcome to the Cheetah Mobile fourth quarter 2025 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch tone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Helen Jingshu, Investor Relations of Cheetah Mobile. Please go ahead.

Thank you, operator. Welcome to Cheetah Mobile's fourth quarter 2025 earnings conference call. With us today are our company's chairman and CEO, Mr. Fusheng, and our company's director and CFO, Mr. Thomas Jin. Following management's prepared remarks, we will conduct the Q&A section. Please note that the management's prepared remarks are presented by AI agents. Before we begin, I refer you to the Safe Harbor Statement in our earnings release, which also applies to our conference call today, as we will make forward looking statements. At this time, I would now like to turn the conference call over to our chairman and CEO, Mr. Fu Zhong. Please go ahead, Fu Zhong.

Good evening, everyone. Thank you for joining us. In 2025, we finished stabilizing the business and built a stronger foundation for Cheetah Mobile. During the year, our total revenue grew 43% year over year, driven by continued growth in both our internet business and AI and other segments. In the fourth quarter, AI and others already accounted for half of total revenues, reflecting the increasing contribution of our new growth initiatives. More importantly, we achieved four-year non-GAAP operating profitability, our first time in six years. Our internet business remained resilient in 2025, generating approximately RMB $460,000 in adjusted operating profit every working day. This consistent operating cash flow forms the financial backbone of the company. and allows us to invest in robotics and the AI in a disciplined and sustainable way. Our second highlight is robotics, which is emerging as a key structural growth. For a full year, robotics revenue grew approximately 31%. In the full quarter alone, robotics revenue reached about 60 million RMB, up 94% year-over-year, and 43% quarter-over-quarter. Our voice robots in China achieved 100% year-over-year growth for three consecutive quarters, accounting for high single digits of the fourth quarter's total revenues. This progress is driven by our strategic focus on core strengths in voice robotics and the integration of AI Asian technology to enhance product experience. We are now seeing our voice robots become a must-have solution in resections, guided tours, retail environments, hospitals, and service halls as they deliver proven, measurable value. We recently introduced a new version of our voice robots, which comes with built-in skills like guiding, patrolling, and advertising. enabling end customers to start using them right away. Our robotic consciousness, mainly in serving overseas markets, is making up high single digits of the first quarter's total revenues. We focused on long-term demands from research institutions and the R&D teams that value openness and customization. This customer base is sticky and repeatable, supporting long-term demand, building on our proven indoor autonomous mobility technologies. we are introducing a smart wheelchair targeting developed regions such as Western Europe and North America. This product is positioned as a premium solution for users who value safety, independence, and confidence in daily mobility. We are seeing a clear shift in demand as users increasingly value safety, assistance, and intelligent features in mobility products. while scalable solutions in the market remain limited. By applying our experience in service own recent recovery, I personally used our smart wheelchair and felt a clear improvement in safety and convenience. Importantly, we can deliver these benefits without significantly increasing the cost compared to traditional high-end electric wheelchairs, making this a more practical and accessible product for users. We have entered into framework agreements with established mobility brands who will manage branding, distribution, and after-sales services. Initial shipments are expected to begin in the second quarter of 2026, representing an early-stage commercial validation of this product category. Across the industry, more companies are starting to test and deploy service robots. We believe the next one to two years will be a validation phase where ROI and reliability will matter most. You don't need a robot that looks like a human. You need a robot that works every day, delivers measurable value, and is easy to operate at scale. This is exactly where our current products are positioned. Our internet business remains strong, generating steady cash flow, which allows us to invest in AI in a disciplined and sustainable way. For more than a decade, We have built utility applications serving hundreds of millions of users. This product's DNA shapes how we approach AI. Rather than competing in model development, we focused on turning AI capabilities into practical tools that help users complete real tasks. During the Chinese New Year, I spent lots of efforts experimenting with an AI agent system built on the Open Cloud framework, starting The system evolved into a multi-agent team capable of running tasks continuously. In one scenario, the system generated personalized new year messages for more than 600 colleagues and managed the entire sending workflow automatically. What we see emerging is not simply a new AI tool, but a new way to organize digital work. AI agents can automate entire workflows from information gathering to processing and distribution. we introduced EasyClaw based on OpenClaw, an open source agent framework for both domestic and overseas markets. EasyClaw is our AI co-worker platform that helps users create and deploy task-oriented AI agents capable of executing real-world tasks autonomously. At this stage, we focus on execution capability rather than scale. We are already seeing a continued increase in user engagement, as reflected in the rapid growth of our total token usage. We are building EasyQL into an agentic operating system. that changes how users interact with software and machines. By integrating Easyglow into our PC products, we are improving user experience and driving higher conversion and ARPU. In robotics, Easyglow allows users to program and customize robots using natural language, lowering customization barriers. This helps us deploy faster, reduce costs, and scale more easily, making our products more competitive. Some investors may ask how we compete with our training foundation models. We believe the real advantage in the agent era lies not in the model itself, but in the systems built on tool usage, and cost management. By leveraging open ecosystems and leading APIs, our products can evolve as models continue to improve. Finally, our global DNA remains a core competitive advantage. We continue to expand both our AI tools and robotics businesses internationally with a disciplined approach. Looking ahead to 2026, we do not provide specific financial guidance We believe our robotics business will maintain strong growth momentum as commercial validation deepens and becomes a more important part of our revenue niche. At the same time, AI-enabled products will gradually enhance engagement and monetization efficiency. across our software ecosystem. We will increasingly apply iInternally to accelerate development, aiming to further improve operational efficiency. As we grow, we will continue improving transparency and disclosure, credibility over time. JITA is entering its next phase of development, combining digital co-workers through AI agents and physical co-workers through service robots, supported by real operating cash flow and disciplined financial management. We are building the foundation for our next stage of growth.