Cheetah Mobile Inc. Q3 FY2025 earnings call

CEO's Remarks - Hit quarterly breakeven ahead of expectations, first operating profit in 6 years in Q3. Q3 revenue rose 50% y-o-y driven by Internet business and AI and other businesses. AI and other segment up 151% y-o-y and 6% q-o-q, now 50% of total revenues. 2025 first 9 months revenue up ~48%. Made progress in AI robots and AI tools. Voice-enabled wheel robots in China had revenue doubling y-o-y for second quarter in a row, contract backlog up. AgentOS enhances product experience. Robotic arm business growing supported by industry trends and acquisition. AI tools business using AI agents to build new tools and upgrade existing products like Duba Antivirus with natural language interaction. ### CFO's Remarks - Q3 reported first quarterly operating profit in 6 years. Total revenue RMB 287 million, up 50% y-o-y. AI and other segment 50% of total revenues vs 30% same period last year. Gross profit up 64% y-o-y, gross margin 75%. Operating profit RMB 4 million, non-GAAP operating profit RMB 15 million. Internet business adjusted operating profit up 55% y-o-y. AI and other segment adjusted operating loss narrowed 82% y-o-y and 53% q-o-q. Cash and cash equivalents about USD 224 million, long-term investments USD 107 million. Prioritize operating profit growth over revenue growth for Internet business. For AI and other business, focus on high potential robotics use cases, leverage third-party and open source models, take disciplined approach for advertising agency service etc.

In Q3 2025, total revenue reached RMB 287 million, up 50% year-over-year. The AI and other segment grew 151% year-over-year and 6% quarter-over-quarter, accounting for 50% of total revenues. The Internet business saw revenue increase 6% year-over-year. The AI robotic business in Q3 contributed about 15% of total revenue, growing about 100% year-over-year and 40% quarter-over-quarter. The voice-enabled wheel robots in China made up around 5% of total revenues, with contract backlog up 32% from previous quarter and doubling again since then. The robotic arm business is profitable with tens of millions of RMB in annual revenue, mostly from overseas customers. The AI tools business has seen small-scale testing of tools like meeting summarizers with strong user engagement.

- For Internet business, prioritize operating profit growth over revenue growth. ### - For AI and other business, aim to further manage cost and expenses, focusing on high potential use cases for robotics business, leveraging third-party and open source models to enhance robotic experience, taking more disciplined approach for advertising agency service and multi-cloud management services. ### - Continue to invest in AI robots and AI tools but stay disciplined and ROI focused in every decision.

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