Cheetah Mobile Inc.

Welcome to Jinta Mobile's second quarter 2026 earnings conference call. With us today, our company's chairman and CEO, Mr. Fu Sheng, and our company's director and CFO, Mr. Thomas Jung. Following management's prepared remarks, we will conduct the Q&A section. Please note that the management's screen will be presented by an AIA agent. Before we begin, I refer you to the Safe Harbor Statement in our earnings release, which also applies to our conference call today, and we will make forward-looking statements at this time. I would like to turn the conference call over to our Chairman and CEO, Mr. Fouché. Please go ahead, Mr. Fu.

Hello, everyone. Thank you for joining Kihu Mobile's second quarter 2026 earnings call.

This quarter, we made further progress in changing the mix and improving the quality of our business. Our newer AI businesses are growing quickly and becoming a much larger part of the company. At the same time, our internet services business remains profitable and is becoming more efficient. Today, I would like to focus on three areas. The accelerated growth of our services of cloud and AI infrastructure business. The progress we are making in robotics, especially in smart mobility, and the continued improvement in the mix and quality of our business. Jintao Mobile now has three reporting segments. Internet Services Robotics and Others, and Global Enterprise Services. Global Enterprise Services include services of cloud and AI infrastructure and our advertising agency services. Let me start with services of cloud and AI infrastructure business because it is becoming one of our most important growth drivers. In the second quarter, services of cloud and the AI infrastructure revenue for 59 million RMB of 83% year-over-year and 26% quarter-over-quarter. It accounts for 22% of total revenue. The growth in this business is accelerating. Its year-over-year growth rate increased from 68% in the first quarter to 83% in the second quarter. Gross feelings, which reflects the total value of services sold through our company, exceeded 500 million RMB during the quarter, compared with about 200 million RMB in the same period last year and about 300 million RMB in the previous quarter. This shows that the scale of customer demand is growing critically based on our current business momentum. We expect gross billings from services of cloud and AI infrastructure to exceed 2 billion RMB in 2026. representing year-over-year growth of over 100%. We also expect related revenue to exceed 200 million RMB to exceed representing year-over-year growth of over 50%. We operate as a connection point between leading global clubs and AI ecosystems and enterprises extending overseas as enterprises use a broader range of clubs and AI services Thank you for joining us. including Amazon Web Services, Google Cloud, and Microsoft Azure. We also support deployments, cost control, and daily operations. I have personally spent a great deal of time talking with Chinese entrepreneurs and management teams about how to use AI in practical ways. These conversations have shown us that many companies want to use AI, but need simple and effective tools that can truly improve their work. Our goal is not to join the costly race to build foundation models. Our goal is to help these companies make effective use of leading AI models and turn AI into real productivity. We will stay disciplined in how we invest and focus on real customer demand, service quality, repeat business, and Haovi returns. AI infrastructure also brings us closer to the daily needs of enterprise customers. Today we may help a customer with cloud resources, computing power, or AI model services. Over time we may also serve the same customer with AI agents, software tools, and other services. This gives us a path to deepen customer relationships and expand the services we provide over time. Now let me turn to robotics. Revenue from robotics and others was 55 million RMB of 73% year over year and 6% quarter over quarter. It accounted for more than 20% of total revenue. During the second quarter, we began shipping smart mobility products for sale in Europe for Pride Mobility and in China as a result. Smart Mobility began contributing revenue during the quarter. Our robotics arm business began to grow. While revenue from our bullish robots business was broadly stable, within robotics, we see Smart Mobility as a potential growth engine. The long-term need is significant, as more people face mobility challenges. And once you travel independently, safely, and with dignity, we are designing our products around these needs. Our smart mobility products, weighing less than 16 kilograms, can be folded for easier transport, are designed to support air travel, and can operate for approximately 10 hours under specified conditions. These features help users travel independently and with confidence in daily life and on longer journeys. To address unmet needs, we incorporate autonomous mobility capabilities developed through our robotics mark. into proven electric mobility products. This helps us control product costs while meeting customers' needs for safety, reliability, and ease of use. We developed this product with established electric mobility manufacturers, combining our robotics capabilities with their products and market expertise. Some companies in this field have spent several years and raised substantial capital to bring similar trials to market. By reusing our existing robotics capabilities and working with established partners, we moved from project initiation to initial mass production and shipments in a little over a year. With huge investment in the range of several tens of millions of RMB, this reflects our disciplined and capital efficient approach to product development This business is still at an early stage. Our priorities are to deliver reliable products, meet local standards, and earn the trust of customers and partners. We will move step by step and build the business on solid commercial results. More broadly, we have built a shared robotics platform that brings together voice interaction, autonomous mobility, and robotic arm capability. We do not view our voice robots, smart mobility products, and robotic arms simply as separate product categories. They are different applications of the same underlying platform. We reuse and adapt its capabilities to address specific customer needs and solve real-world problems, rather than trying to build an all-in-one robot today. By applying and demonstrating these capabilities through individual products, this approach could allow us to