Cheetah Mobile Inc. Q2 FY2025 earnings call

• Revenue grew 58% year-over-year in Q2 2025, with Internet business up 39% YOY and AI and other segments up 86% YOY. First half of 2025 revenue grew 47% YOY.
• Shifted from advertising to subscription model in Internet business, with subscriptions making up ~60% of Internet revenues, improving user engagement and retention.
• Made AI a core part of processes, using AI in R&D teams to design, test, and build products more efficiently. Enhanced existing apps like Duba Anti-virus and PDF tools with AI agents.
• Made solid progress in service robotics: revenues from service robots contribute to AI and other segment growth. Completed acquisition of a profitable robotic company, with robots in use for various real-world scenarios like factories, agriculture, etc.
• R&D expenses in AI and other segment decreased, with adjusted operating losses in AI and other segments down 63% YOY and 32% QOQ.

In the second quarter of 2025, total revenue reached RMB 295 million, up 58% year-over-year. The Internet business saw a 39% year-over-year increase in revenue, while the AI and other segments had an 86% year-over-year revenue growth. Gross profit increased by 85% year-over-year to RMB 22 million, with a gross margin of 76%. Subscriptions make up about 60% of the Internet revenues. The operating loss narrowed significantly, with non-GAAP operating loss down 97% from the previous year, almost breakeven.

• Believes can maintain fast growth in second half of 2025, driven by ~100% YOY revenue growth in AI and other segments along with stable Internet business.
• Confident in reaching profitability in near term with disciplined strategy. Core Internet business remains healthy and profitable, and investing in AI tools and robotics with discipline.

• Service robotics market is still developing; not expected to reach mass deployment in coming quarters.

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