This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk01: Ladies and gentlemen, thank you for standing by and welcome to GLU PENS first quarter 2021 earnings conference call. At this time, all participants are in a listen only mode. After prepared remarks by the management team, there will be a question and answer session. Today's conference call is being recorded. If you have any objections, You may disconnect at this time. I would now like to turn the call over to your host today, Yi-Lin Dai, CluPen's Investor Relations Representative. Please go ahead.
spk04: Hello, everyone, and thank you for joining CluPen's first quarter 2021 earnings conference call. The company's financial and operating results were issued in a press release via Newswire Services earlier today and are posted online. You can download the earnings release and sign up for our distribution list by visiting our IR website. Participants on today's call will be Mr. Chang Xun Sun, our Founder and Chief Executive Officer, and Mr. Steven Lee, Chief Financial Officer. Management will begin with prepared remarks, and the call will conclude with a Q&A session. Before I hand it over to the management, I'd like to remind you of Klugen's safe harbor statement in relation to today's call. Except for the historical information contained herein, certain matters discussed in this conference call are forward-looking statements. These statements are based on current trends, estimates, and projections, and therefore you should not place undue reliance on them. forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about the potential risks and uncertainties, please refer to the company's filings with Securities and Exchange Commission. I will now turn the call over to our CEO, Changxun Sun. Please go ahead.
spk07: Thank you for your time, investors. And thank you for your attention to the development of Ronglin Yun. Today, we are here to release Q1's quarter report in 2021. Q1's income in 2021 is 20.5 billion RMB, which is 54.4% of the total growth. Q1's interest rate reached 43%,
spk04: Hello everyone, thank you for your time and interest in Coupang's development. We are pleased to report robust first quarter 2021 results with overall performance exceeding expectations. Our revenues were 204.5 million RMB. surpassing the top end of our guidance range and representing a 54.4% increase year-over-year. Notably, our first quarter growth margin reached 43%, higher than the 40% growth margin for the full year of 2020, as we benefited from the optimized business mix. In addition, our dollar-based net customer retention rate recovered to 111.6%.
spk07: Our positioning has not changed. We continue to provide cloud and smart products for sales and customer service for enterprises. Let me emphasize again. We provide cloud and smart products for sales and customer service for enterprises. The purpose is to improve the efficiency of customers and customers. As I said in the IPO, 我们是中国云通讯企业赴美上市的先行者。 我们不甘于做一个抵用的企业。 我们致力于成为一个有全球影响力的中国SaaS企业。 Our value proposition has always been very clear, which is to provide enterprises with intelligent cloud-based products to enable better marketing and customer services.
spk04: so as to improve their customer acquisition efficiency and retention rates. As I have mentioned in our IPO roadshows, we are proud to be a forerunner among the China-based communication solutions providers to go public in the United States. But this is not our endgame. We are not satisfied with being an ordinary company. Our goal is to be a Chinese company with global influence using our SaaS-based tools to help transform the enterprise communications industry.
spk07: Our C-Path business serves our CC. With the development of the past one or two years, we have expanded the content of our CC, CC is not just about establishing a channel for business and customer communication. It should also include tools for customer management, such as CRM and SCRM. CRM refers to the management of customer information and the management of customer communication records. SCRM includes the management tools for advertising, As we advocated during our IPO, our strategic focus is on leveraging the vast capabilities of our cloud-based contact center, OCC,
spk04: Over the last few years, we have expanded the boundary of CC from merely a communication channel between enterprises and customers to a more comprehensive tool that includes subsequent customer management mechanisms, such as CRM and SCRM. CRM is the software that manages customer information and communication records, whereas SCRM or social CRM manages private domain traffic and sales processes. Our CRM product is named as Elite CRM, and S-CRM product is named as Zhuke.
spk07: We established this product concept in order to improve the transfer of customer efficiency from traffic to clues, and to bring communication, customer-to-customer, and customer-to-customer, and to increase the level of satisfaction. In the implementation of the product, we fully adopt the method of clouding and automation, Through the extension of the functionalities of the CC and establishment of product interconnections,
spk04: We can help enterprise customers improve their conversion rates from traffic to sales leads and ultimately to orders, creating value from end to end, encompassing communications, customer acquisitions, customer retention, and satisfaction improvement. For our product development, we have adopted a cloud-based and AI-driven approach. We attach great importance to AI applications and consistently invest in our artificial intelligence R&D team while also exploring new AI-based avenues and use cases. Leveraging our AI capabilities, we're steadily enhancing the value proposition of our products by identifying and accumulating data through facilitating connections. And we're helping enterprises utilize data to help intelligent operations, ultimately empowering our enterprise customers with smarter customer acquisition and customer service capabilities.
spk07: 基于这样的产品战略规划,我们在IPO后的几个月也做了系列的优化工作。 第一项进展是我们对组织结构做了一些调整。 围绕我们的产品主线,我们按客群 The division combines the original multiple product lines into four major business departments. Each business department has its own core product and a complete product development path. This can effectively improve sales efficiency and operation efficiency. These four major business departments are The first is what we call the industrial digital business department. It is aimed at the head and shoulders of customers. to provide them with SaaS products and solutions for the industry. The second one is called the New Marketing Service Department. It provides SaaS products standardized by the contact center for customers below the waist. The third one is called the Political and Energy Department. It is aimed at the central government and the government. We provide them with video capabilities and deep learning We will expand the existing SaaS products to Japan, Malaysia, and the Philippines. In the future, we will gradually deploy other countries. We hope that Rongnian will become a truly international company. While adjusting the organizational structure, we also strengthened the construction of core teams, including our overseas team. We recruited a new sales VP. We also recruited a new technical manager. We also recruited from a well-known university, Langkai University, a young PhD student as our chief AI scientist. The second step is that our brand will upgrade from Ronglian Cloud to Ronglian Cloud. From the communication cloud service as a starting point, we will extend to the entire functional product service of the company's marketing and customer service. Ronglian Cloud is our new brand, which includes industrial digital cloud, With a solid product strategy in place, we have recently made significant advancements
spk04: we adjusted our organizational structure to effectively improve sales and operational efficiency, we integrated multiple divisions into four major departments. Based on the characteristics of our customers, each of them has its own core products and a complete product development path. These four departments include one, The Industrial Digital Division, which provides the contact center SaaS-based products and industry solutions for large enterprise customers. Two, our New Marketing Services Division, which provides standardized contact centers and SaaS-based products for small and medium-sized enterprises. The third one is the SOE and Government Smart Operations Division, which caters to large state-owned enterprises and government agencies, providing video and audio capabilities and deep learning-based video analysis technology with applications such as video surveillance to ensure production safety and intelligent transformation of social governance. The fourth is our overseas division. Having expanded our existing business to Japan, Malaysia, and the Philippines, We're enthusiastic about our progress so far in the international market and will continue to explore further overseas opportunities, aiming to become a truly international company. While realigning our organizational structure with our customer base, we have also been strengthening our internal team. Most recently, our efforts have included establishing our overseas teams, recruiting new sales VP, reorganizing sales teams based on the four customer groups, and hiring new technology director to enhance our R&D efforts. Notably, we have also appointed a PhD supervisor from Nankai University as our chief scientist. Second, we have upgraded our brand from Rongliang Cloud-based communications to Rongliang Cloud Our refined name and brand reflect the expansion from our entry point in cloud-based communications to our current suite of full-fledged products and services for corporate marketing and customer service, including industrial digital cloud, new marketing services cloud, and SOE and government smart cloud. We strive to provide more valuable and multidimensional products to clients, in order to strengthen our competitive position.
spk07: At present, we have a clear product development path. In the next few months, our key work will focus on SCIM and overseas market layout. We also have a clear organizational structure. We have a fighting executive team. The company's operating efficiency is also clearly improving, and it has been reflected in the business data.
spk04: In summary, we have developed a clear product roadmap with key focuses on SCRM in addition to overseas expansion. Through these effects as well as establishment of a highly efficient organizational structure and a strong executive team, We have considerably improved our operating efficiency and are proud to see it reflected in both our operating and financial metrics. Thank you for joining our call, and I look forward to having more discussions with you in the future. I will now turn the call over to our CFO, Stephen Lee, for a closer review of our progress in integrating Ellipse CRM and our first quarter financials.
spk00: Hello everyone and thank you for joining us today. First, let me provide updates on our progress of the Elite CRM integration. Since the acquisition announcement, our main task has been focused on integrating products and technologies with our existing platform. It is invigorating that integration with Roon CC was basically completed at the product level. and we have started to deliver on many financial products. As our next step, we expect to complete the in-depth integration and hand over more tasks to be handled by Elite CRM. In terms of the integration of AI technologies, we provide the underlying AI technology as well as an interface so that Elite CRM can utilize this technology and develop it into applications. we are pleased to see that Elite CRM has already started to leverage our NLP technologies to acquire customers. We are also excited that the product integration work between Elite CRM and our subsidiary in Japan is almost completed. Since the acquisition of Elite CRM, there have been quite a few new clients, mainly in the finance industry, that have signed contracts with CC Plus CRM. And further synergies from acquisition in customer acquisition are evident by the solid pipeline of potential clients for combined CC and CRM. Now let's move to our first quarter financial results. Our revenues reached 204.5 million RMB in the first quarter of 2021, increasing 54.4%. The increase was mainly driven by very strong performance from our cloud-based contact center solutions business, which saw revenues increase 63.4% year over year to 70.2 million RMB, primarily due to an increase in the number of customers, as I mentioned earlier. Cost of revenues increased by 65.6% to 116.6 million RMB in the first quarter of 2021, from 70.4 million RMB in the first quarter of 2020, which was primarily due to increased telecommunications resources cost, outsourcing costs, and infrastructure and equipment costs as the company continues to scale its business. Gross profit increased by 41.8% to 87.9 million RMB in the first quarter of 2021, and the growth margin was 43% in the first quarter of 2021. Now let's look at our expenses. In the first quarter of 2021, operating expenses were 238 million RMB, representing a 92.8% increase from 123.4 million RMB in the first quarter of 2020. R&D expenses increased by 78.1% to 68.7 million RMB in the first quarter of 2021, compared with 38.6 million RMB in the first quarter of 2020, primarily due to an increase in the R&D staff expenses for development of core features and the functions in cloud-based CC solutions and cloud-based UCNC solutions. An increase in share-based compensation expense of 6.1 million RMB and an increase in technology service expenses paid to the third-party outsourcing service providers for the development of certain non-core features and functions in cloud-based UCMC solutions. Sales and marketing expenses increased by 48.7%. to 68.3 million RMB in the first quarter of 2021 from 45.9 million RMB in the first quarter of 2020, primarily due to an increase in share-based compensation expenses of 7.7 million RMB, an increase in staff expenses, and the increase in spending on online advertising campaigns and the marketing activities as our company continues to scale its business and reach a wider customer base. G&A expenses increased significantly to 101 million RMB in the first quarter of 2021 from 38.9 million RMB in the first quarter of 2020, primarily due to an increase in share-based compensation expense of 64.7 million RMB relating to share options granted to eligible employees and directors. certain restricted shares of the company's funders under the share restriction agreements and ordinary shares issued to management employees for acquisition of active interests in a majority-owned subsidiary, partially offset by a decrease in bedside expense resulting from reduced impact on collection of accounts receivable from the COVID-19 outbreak. Net loss for the first quarter of 2021 was 171 million RMB, compared with 47.7 million RMB in the first quarter of 2020. The increase was primarily driven by increases in non-cash items of 115.1 million RMB, including the increase in change in fair value of warrant liabilities of 21.8 million RMB The increase of share-based compensation of 78.4 million RMB and the decrease in gain from disposal of subsidiaries, which was 14.9 million RMB in net amount. Basic and diluted net loss per share was 12.76 RMB in the first quarter of 2021. For the second quarter of 2021, Klopin currently expects revenues to be between 255 million RMB to 260 million RMB, which would represent a year-over-year increase of 37.6% to 40.3%. The above outlook is based on the current market conditions and reflects the company's current and the preliminary estimates of market and operating conditions and customer demand, which are all subject to substantial uncertainty. With that, I'd like to open up the call to questions. Operator, please.
spk01: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. When you ask a question, please ask it first in Chinese and then in English. At this time, we will pause momentarily to assemble our roster. The first question comes from Hongjie Li with CICC. Please go ahead.
spk05: My question is about our strategic cooperation. Thanks management for taking my question. So in terms of the collaboration with some big ecosystem, such as Tencent and domestic telecom carriers. Could you give us more color on the partnership? Thank you.
spk07: Let me answer that. Tencent, as our strategic shareholder, has sold many products this year as Tencent's free products. Tencent Yun's financial, political, electrical, industrial manufacturing, retail industries are all pushing Longlian's self-developed CC products. Longlian and Tencent have already, or are signing with 20 major customers. There are dozens of projects in the process. On the second hand, Longlian is also working with Xie Weixin. Longlian's All products of Coupang has entered Tencent Cloud's own product family.
spk04: And many sectors of Tencent Cloud, including the finance, energy and power, industrial manufacturing, and retail industries are all promoting Crouppen's products. We have already signed or is signing tens of customers with Tencent, and there are more in pipeline. Also, we have collaborated with Tencent's enterprise version of WeChat to better serve our customers. and help Tencent develop new customers.
spk07: 除了跟腾讯的战略合作之外, 我们跟四五个发达省份的运营商也开展了深度的合作。 我们把我们的SaaS产品,行业的解决方案, CV的技术应用, 通过各省的运营商覆盖到了当地的一些大客户。
spk04: We have also signed a strategic collaboration contract with mobile telecom operators in several provinces regarding development of 5G RCS messages and also promoting our CV product.
spk07: In addition to our collaboration with the carrier, we have also worked with major central enterprises, including electricity, energy,
spk04: We are also exploring the opportunities to have strategic collaborations with big SOEs and ICE companies.
spk05: Was there a follow-up? Thank you. Thank you.
spk01: The next question comes from Dai Li with Citi. Please go ahead.
spk06: Hello, Mr. Guan. Thank you for sharing. I would like to ask two questions about our Citi business. First of all, I would like to share with you about the performance of Qimoyun and Rong CC in our CC business. Can you tell us about their fee rate or contract rate? Secondly, what is the status of our CC business in terms of the competition of the market when it comes to ordering? That is to say, we are competing with our competitors. Okay, I will translate my question. Hi, Benjamin, thanks for your presentation. I have two questions about your cloud-based CC business. Could you please share some data or general trend for revenue growth by products such as the Tmall Cloud, 7Mall Cloud, and ZoneCC for first quarter? And how is the customer retention or dollar retention trend? And lastly, could you share some color on the market competition recently when you get new orders from the cloud-based CC business? And how do we differentiate our sales in terms of the product?
spk00: Thank you. I will answer the first question, and our CEO will answer the second question. So for your first question, regarding our 7MORE and Zoom CC, like we mentioned, CC increased by over 60% in the first quarter of 2021. very strong performance. In comparison, Runcc is actually increasing faster compared to 7More because we mentioned this before, Runcc is focusing on large enterprise customers and large enterprise customers are the very best customers in our business, in our industry, in China. So there will be many, many more cross-selling and up-selling opportunities for large enterprise customers. So as a result, the room CC business for the first quarter of 2021 is actually increasing faster than the 62, 63%. Sevenmore is, leave this floor, if I remember correctly, I think Sevenmore is increasing around 50%, but Rongxi is, I think, over 70%. And we actually expect this trend will continue in the future. As for the retention rate or the term rate, The first quarter, as we mentioned, the net dollar retention rate is back to over 110% after COVID-19, the impact of COVID-19 outbreak is disappearing. For Sevenmore, all of the revenues from Sevenmore are subscription revenues, so the net dollar retention rate for Sevenmore is roughly the number, actually, I just mentioned. Well, in terms of the number of customers remain with us, I think right now it's around 75% of the customers, four or seven more, has remained with us. For RoomCC, because RoomCC is mainly dealing with large enterprise customers, so we almost never lose a large enterprise customer. The 98% or 99% of large enterprise customers will stay with us. Okay, then Mr. Sun will answer the second question about the competition.
spk07: Okay, let me talk about the competition in the CC industry. Compared to competitors, I think there are six advantages. The first one is that we have the capability of CPaaS. Other companies that make CC products are basically lacking in the integration capabilities of CPaaS. This is the first point. Compared to other competitors, we can form an advantage in our customers. The second point is our investment in AI. We have more than 100 AI NLP or CV engineers on AI. Our AI We have more than 1,300 people and more than 400 salespeople. Our sales team is much bigger than our competitors. The fourth aspect is our customer coverage. We have a lot of customers There is a standard cover for customers below the waist. There is also a cover for customers on the head and shoulders of the industrial digital cloud business department. The fifth aspect is that we have added the function of CIM and SCM products. This is something that most competitors do not have. We think that we have about six advantages over our competitors. The first one is that
spk04: We also have CPAS product line, which means that we can provide our customers with telecom resources. However, our competitors, they don't have full-suit products, so that they must contract with other mobile operators to provide this telecom resource. And the second is we also have a very strong R&D team. we have very strong AI capability. And the third one, we think our sales team is larger and better than our competitors. We have a sales team of over 400 staff. And the fourth advantage, we think that we are already covered all range of customers. We have seven more for small to medium enterprises and also Rome CC for large enterprise customers. And the fifth advantage we have, we think, is we have recently acquired a lead CRM. And we can provide the CRM functions to our customers while our competitors cannot. The last one is that we also have overseas businesses in Japan, Malaysia, and the Philippines. But our competitors, currently, they just a focus in China. I think in one word, we can provide more to our customers than a pure CC player and industry.
spk06: Okay. Thank you very much. Thank you very much. Thank you very much.
spk01: Again, if you have a question, please press star then 1 on a touch-tone phone. The next question comes from Akita Eriken with China Securities. Please go ahead.
spk03: Thank you for accepting my question. I have three main questions. The first one is about the CCA business. We can see that the development of these systems is very strong. I would like to ask the manager to describe this with us. If we look at it from the perspective of the next two to three years, these businesses will have a speedy development and a potential market space. And then the second question, the manager just talked about the return of the market competition. And then I want to know more about CRM, including what we are doing now. From the level of communication to more of this kind of marketing, if you compare it to some of the companies that specialize in CRM on the market, our product has a competitive advantage. And then the third question is, we see that the flow rate of this revenue has dropped a little in the past year, but this year there is still a very strong recovery. So how should we judge the future trend? Is it possible to return to the previous level of 130? I'm going to translate my talk quickly. I have three questions. The first one is about the cloud-based business. What is the expected growth rate of cloud-based business solutions in the next two to three years, and what is the potential market size if we look forward to long-term? And my second question is, what is the current progress of CRM, and can you share with us a bit more about the long-term expansion strategy if marketing says, Also, compared with other CRM standards in the market, what are our competitiveness and differences of these products? And my third question was about the dollar-based retention rate, which has been decreasing the past few years, but we've seen a very positive trend in the first quarter. And how should we look at the trend in the near to long term, and how much can it reach at the federal stage? Thank you, Guan Yicheng.
spk00: Okay, so for the first question, we actually had an industry report in our prospectus during our IPO. In that report, I think, if I remember correctly, by year 2024, the CC market will increase to over 35 billion RMB in terms of the overall market size, I think with the annual growth rate of around 35%. And for Runlian, For Q1, our CC revenue increased by over 60 to 63%. For the next two to three years, we expect our CC business will increase somewhere between 50 to 60%, well above the industry average. Other than CC, as Mr. Sun mentioned earlier, we also have AI vertical solutions. We have CRM, ICRM. We have many, many other product features in addition to the basic CC solution. So we can offer a total solution with many product modules which our competitors can't. That's why we think, and also the overseas market, we think the overseas market for the next two to three years will also become one of the key drivers for our business. In general, that's why we are very confident our CC revenue will increase in the range of 50 to 60% for the next two to three years. And your third question is regarding the dollar-based net retention rate. I think probably, as you know, this percentage was not very good for last year, 2020, due to the COVID-19 break. The COVID-19 thing had a very big negative impact in our business for last year. As the COVID-19 outbreak has been disappearing, this percentage has come back to the normal level as evidenced by the fact that our dollar-based net return rate for Q1 is over 110%. We expect this percentage will continue to get better in the future. Ah, let me ask Mr. Sun to answer your second question about the differences between CRM. Okay.
spk07: Well, as I mentioned before, we are the first one to acquire a company called Guo Hebin's CRM low-digit platform. At the same time, we have recently launched a product called G-KER's SCRM. So, the first one is that we started from CC products are extended to CIM, SCM. As I said, from traffic to clues to sales transformation, the management of the sales process is a very natural extension. So we do this operation, whether it is the acquisition or the development of new products, it should be reasonable. We think that on this track, we have several competitive advantages. There are four aspects. The first one is that we have 13,000 pure customers. This is our CC product. This is a very important advantage for us. The second one is that we have, in addition to CIM products, we have CC product capabilities compared to the companies that focus on CIM products. We have the ability of PaaS. We have the ability of AI. We also have the tools of short video marketing. Our product thickness is much thicker than that of a pure CIM company. We are a complete, full-scale solution. In the third aspect, we have a perfect sales system for customers below the waist and the head and shoulder. This system was created by us in the past 8 years. So, some of the new and emerging SCM companies, or the big companies of big companies, they don't have this. The fourth aspect is that we think that the product form of SCM, There should be many types. We can see at least three types in the market. The first type is B2B. For example, like sales. They emphasize more on B2B business sales and follow-up management. The second type is called B2C business. B2C business is also classified as B2C services for long-term products and CIM services for short-term products. For example, we all think of fast-trade products or e-commerce services as B2C services for short-term products. For example, financial insurance, education, EMEI belongs to long-term decision-making products. There are three different categories. In fact, for competitors in this market, there will be a difference in the market choice. We chose B2C, long-term decision-making customers' CRM service. This is one of our different choices. For example, we can see that sales are B2B, for the B2B scene of CRM management. And like Yuzhan and Weimeng, more emphasis is on fast-selling, e-commerce type, such as short-term role-playing, such as CRM or S-CRM service. So in competition, we have different choices. The extension from our CC products to CRM is actually natural and reasonable.
spk04: This rationale is to help enterprise with their customer acquisition to their customer retention. We have competitive advantage in the following aspects. The first one is we have more than 13,000 existing customers. The second one is that we have contact center products. such as AI capabilities and et cetera. We can provide a one-stand solution to our customers than a pure CRM professional company. Also, we have established a comprehensive sales team, a sales system, respectively, for different kinds of customers. The last one is that there are CRM systems targeting B2B or B2C customers There are two kinds of main competitors currently are doing CRM systems. The first one is they're doing CRM systems for B2B enterprises, such as Xiaoshouyi. And the second is they're doing CRM systems for B2C enterprises, which does consumer products, such as Weimeng or Youzhan. We have actually targeting different customer base comparing with other major players. We choose the B2C enterprises whose end customers have long decision cycle, such as finance industry or cosmetic medicine. We are confident to become one of the top players regarding our competitive advantage.
spk07: We would like to add that why we choose the B2C enterprises whose end customers have long decision cycle. Because those have long decision cycle, there are many
spk04: many operating activities we can optimize from acquiring the customer to the customer's final deal. So we decided to choose the B2C enterprises with long decision cycle.
spk07: Okay.
spk04: Thank you. This is our answer to your question.
spk01: Thank you very much. Thank you. The next question comes from Tina Ho with Goldman Sachs. Please go ahead.
spk02: No, no, no, no, no, no, no. We remember that during the IPO process, we actually thought that this business might later be planned to give up, but now it should be a business that is better than previously expected. So do we have any ideas for C-Path to be updated? And then the third one is about Guo Hebin. I want to know if Guo Hebin is... Uh, she, uh, she, uh, she, uh, Let me translate it. So I have four questions. The first one is, could management predict the growth margin by CPAS, CC, and UC segments? And then the second question is regarding CPAS. So during IPO, we mentioned that we would probably not focus too much on CPAS business, but then now it's still have very strong growth. So do we have any updated thoughts on CPAS. And then the third one is regarding elite CRM. When did we integrate the revenue number into the first quarter result? How much was that? And then the last question is regarding the second quarter revenue guidance, because the growth has slowed down from the first quarter percentage. So wondering what is the main driver or main reason for that growth slowdown? Thank you.
spk00: Okay. Yeah, I will answer those questions. So for the first question, I think the growth margin for CPAS for Q1 is around 30%. So it's a little bit higher than last year. And the growth margin for CC business, I think, is 55%, 58%. for the CC business, and the gross margin for the UCMC business is between 50 to 55%. Well, actually, the reason, because I understand your question, the gross margin for Q1 for 2020 is around 46%. The gross margin for the Q1 of this year is 43%. Actually, for Q1 of last year, due to the COVID-19, I think the first quarter of 2020 is probably the quarter that was mostly impacted by the COVID-19 outbreak. The gross margin numbers for that quarter is not a very good indicator of the gross margin for the overall business of the company. Like for example, there are probably some revenues or contracts are recognized for revenue in the first quarter of 2020, but some costs may be reported in different quarters due to the different scenarios related to this COVID-19. But the overall gross margin for 2020 is only a little bit less than 30%, but our gross margin for Q1 has increased for 43%. And we fully expect our gross margin for the remaining quarters of this year, or for the whole year of 2021, will be in line with our original expectations. And for your second question, the CPAS business Regarding our CPaaS business, the company's strategy or strategic focus has been the same compared to before. As our CEO, Mr. Sun, mentioned, the CC business will still be the major business focus going forward. The reason why the revenue for CPaaS in Q1 increased rather significantly was mainly due to we have several very big strategic clients who had very big demands for our CPaaS in Q1. CPaaS in the future will become one of the combinations or one of the total solution offerings of our total CC solution As a result, when we serve those very large strategic customers, we think that's the reason why the revenue for CPAP business for Q1 increased pretty big. We have not changed our strategic focus regarding our overall business. Your third question is regarding ElixIRM. We actually completed or finalized the acquisition at the end of March. So for Q1, there were almost no revenues recorded from this acquisition for Q1. But we expect, starting from Q2, the revenues will be 100% included in our CC business. So for your last question, we performed very great for Q1. The revenue and everything increased a lot. Part of the reason is due to, as I mentioned earlier, the Q1 of 2020 was probably mostly impacted by the COVID-19 outbreak. That's why if you compare the revenue increase of Q2 this year with Q1, the previous quarter, the revenue increase slowed down a little bit, but in terms of the overall revenue growth rate for the entire year of 2021, so far, we are still very confident that we can achieve the expectations we set up at the beginning of this year.
spk02: Thank you very much, management.
spk01: Showing no further questions, this will conclude our question and answer session. At this time, I'd like to turn the conference back over to Yilin Investor Relations for any closing remarks.
spk04: Once again, thank you everyone for joining today's call. We look forward to speaking with you again soon. Good day and good night.
spk01: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Disclaimer