Jianpu Technologies Inc. (NYSE:JT) Q1 2023 Earnings Get in touch with Transcript Might 29, 2023
Operator: Thank you and welcome to Jianpu Technologies, Inc. Very first Quarter 2023 Earnings Conference Get in touch with. All participants will be in listen-only mode. Right after today’s presentation, there will be an chance to ask concerns. Please note this occasion is becoming recorded. I would now like to hand the conference more than to Mr. Lisa Lu. Please go ahead.
Liting Lu: Thank you, operator. Hello, everybody, and thank you for joining us right now. Our 1st quarter 2023 earnings release was distributed earlier right now and is offered on our IR web page at ir.jianpu.ai, as properly as on PR Newswire Solutions. On the get in touch with right now from Jianpu Technologies, we have right here Mr. David Ye, Co-Founder, Chairman and Chief Executive Officer and Mr. Oscar Chen, Chief Monetary Officer. Mr. Ye will speak about our operations and enterprise highlights, followed by Mr. Chen, who will talk about the financials and guidance. They will all be offered to answer your concerns for the duration of the Q&A session that follows. Just before we commence, I’d like to remind you that this conference get in touch with includes forward-seeking statements as defined in Section 21E of the Securities Exchange Act of 1934 and the US Private Securities Litigation Reform Act of 1995.
These forward-seeking statements are primarily based on management’s existing expectations and existing marketplace and operating circumstances and relate to the events that involve identified or unknown dangers, uncertainties and other elements, all of which are tricky to predict and lots of of which are beyond the company’s handle. These dangers may possibly result in the company’s actual final results or overall performance to differ materially. Additional data relating to these and other dangers, uncertainties or elements is integrated in company’s filings with the US SEC. The enterprise does not undertake any obligation to update any forward-seeking statements as a outcome of new data, future events or otherwise, except as necessary below applicable law. Lastly, please note that unless otherwise stated, all figures described for the duration of the conference get in touch with are in renminbi.
It is now my pleasure to introduce our Co-Founder, Chairman and Chief Executive Officer, Mr. David Ye. David, please go ahead.
David Ye: Thank you, Liting. Hello, everybody, and thank you for joining us right now. In spite of the ongoing challenges brought on by the lagging impact of COVID, our capital asset capital-light platform model, diversification, digital tech and AI approaches permitted us to advantage from the financial rebound in the 1st quarter. We are pleased to announce a robust 39.four% year-more than-year income development in the 1st quarter of 2023. At the similar time, the net loss was trimmed by significantly 60.eight% year-more than -year, top to a loss margin of 7.two%. The third consecutive quarter with a single digit net loss margin. Searching ahead to the rest of 2023, we stay committed to facilitating the digital transformation of our monetary service providers and other ecosystem partners.
Additionally, we are excited about the emerging trend in artificial intelligence driven by substantial language models and its huge application prospective. We are actively exploring the feasibility of implementing such new technologies across all facets of our enterprises. We drive the improvement of a tech-primarily based inclusive finance model and empower our small business partners much more digitally, automatically and intelligently. We are focused on executing our vision of becoming everyone’s monetary companion and driving the digital transformation of the monetary market and beyond. Let me now go by way of 3 crucial overall performance highlights from the 1st quarter. Very first, we bolstered our technological and operational capabilities to improved serve our partners and remain on the cutting edge of digital transformation.
Our income from credit card and loan recommendation solutions for the duration of the quarter improved by 30.1% and 32.two% year-more than-year respectively. The robust development reflects our established capability to help monetary institutions with their digital promoting, user acquisition, buyer retention and danger management. As a top independent platform for discovery and recommendation of monetary goods and solutions, our years of practical experience have permitted us to obtain deeper insights into market trends. We constantly optimize our digital promoting and danger handle models to empower monetary service providers. We reached our operational practical experience and compliance practices recognized by our ecosystem companion. As a result enhancing our omnichannel capabilities.
Going forward, we will continue to forge stronger relationships with banks and other monetary institutions, assisting them with digital transformation, refining promoting method and deepening our client engagement and danger management capabilities. Our commitment to becoming bank’s trusted strategic partners will allow us to present a higher high-quality and effective solutions to adapt to the difficult marketplace demand. Second, our new small business initiatives produced substantial progress, our continued efforts to drive new small business initiatives beyond impressive final results in terms of category expansion and delivering a income development of promoting and other solutions by 80.eight% year-more than-year in the 1st quarter. Income contribution from promoting and other solutions for adjacent category also improved from 16.three% of income in 2022 to 27.% in the 1st quarter of 2023.
Our user acquisition and retention capabilities have also gained widespread recommendation from top players in adjacent categories and industries. In the 1st quarter, we additional strengthened our partnership in insurance coverage, telecom, e-commerce and way of life sectors. In distinct, we facilitated the acquisition of much more than a single million new customers for top telecom service providers showcasing our sophisticated digital promoting capability and established social media and partnership applications. A thriving deployment in covering a wider spectrum of customers with several requirements other than monetary sectors. Third, our enhanced operational efficiency and optimized expense structure drove additional margin improvement. With the lingering effects of COVID, our ROI remained incredibly robust and steady with an all round year-more than-year ROI of 126.three% in Q1.
Workplace, Function, Laptop
Photo by Vadim Bozhko on Unsplash
We saw a year-more than-year our improvement of two.four%. For recommendation solutions, four.three % points for the new small business initiatives for the duration of the quarter. The stability demonstrates the resilience and the profitability of our strong small business model, even in the face of difficult situations. Total operating costs, which includes sales and promoting, R&D and G&A decreased by 11.four% year-more than-year in the 1st quarter. This was driven in aspect by our targeted streamlining of operations in the strategic human resource allocation, resulting in additional margin improvement and a decline in net loss. In Q1, our operating loss and net loss decreased by 56.eight% and 60.eight% year-more than–year respectively. Operating loss margin and the net loss margin enhanced by 18.two% and 18.three% percentage points year-more than-year for the duration of this quarter respectively.
In distinct, our Q1 net loss margin of 7.two% is the third consecutive quarter of single-digit net loss margin, reflecting positively our continued efforts of efficiency improvement and the expense optimization as properly as our capability to turn profit in the close to future. Right after sharing our small business highlights in the 1st quarter, I would like to take a couple of minutes to speak a bit about our artificial intelligence initiatives. Getting a monetary item recommendation platform, construct upon huge information AI and a single of our underlying technologies, we are excited about and we are excited and inspired by the substantial trend led by substantial language model and its transformative influence on AI improvement. Presently, we are actively implementing an integrating AI tools such as ChatGPT into our operations.
As of March 31st, about 60% of our employees will use the AI tools and technologies to strengthen function efficiency and buyer service. And this quantity continues to develop on a day-to-day basis. In addition to this, we are also actively exploring techniques to deploy AI across our enterprises. For instance, our computer software-as-a-service primarily based and customized danger modeling and management practice, we have created a customized danger handle model by fine tuning our external all-natural language processing model with our proprietary algorithm and information. This enables us to much more effectively provide danger assessment evaluation aligned with our client particular requirements. In summary, AI options present an chance to improve our goods and service, delivering efficiency and effectiveness across several functions such as item improvement, inventive style, promoting, operation, danger management and other functions.
Lastly, let me take a couple of minutes to share our views on the macro atmosphere and our small business outlook. Concerning the macro atmosphere, the government and the regulators not too long ago emphasized the revival and expansion of marketplace demand with a distinct concentrate on stimulating private sector consumption. As such, we anticipate the government’s implementation of much more productive and relaxed fiscal policy, steady and precise monetary policy and extra incentives to market private and public sector investments. Nevertheless, we did observe some volatilities because late 1st quarter predicting GDP development price in Q2 may possibly slow down a bit sequentially. Beneath-overall performance in aggregate finance in the genuine economy in April versus marketplace forecasts and the recovery of customer self-assurance and household sector self-assurance is nonetheless topic to observation.
General, mainly because of lagging impact of COVID, we count on China’s financial rebound will stay gradual all through the 1st half of 2023 with a much more steady footing in the second half. The current inauguration of the National Monetary Regulatory Administration also signals an imminent enhancement in the regulatory oversight of the monetary sector, which will outcome in additional tightening of pricing and operational scope of monetary goods supplied by monetary institutions. In spite of this, we anticipate the government’s continued emphasis on higher high-quality financial development will present strong foundation for our small business to develop. General, we think our small business is properly positioned for a robust recovery, thanks to our effective capital-light small business model frequently innovating digital and AI-primarily based technologies, rising diversification, income mix and ongoing efficiency gains.
We have been leveraging our marketplace-top position, sophisticated technologies and established track record of execution to facilitate the digital transformation of the economy and producing lengthy-term worth for our prospects and shareholders. I will now hand more than the get in touch with to our CFO, Oscar Chen, to run by way of our financials. Thank you.
Oscar Chen: Thank you, David, and hello, everybody. As David described earlier, we delivered robust final results in the 1st quarter of 2023, supported by our capital-light small business model and a thriving diversification method. Our total revenues for the quarter improved by 39.four% to RMB289.four million from RMB207.six million in the similar period of 2022. This robust development overall performance was primarily driven by improved revenues from recommendation solutions and promoting and other solutions and to a lesser extent, the recovery of our huge information and technique-primarily based danger management solutions. We sustained our marketplace top position in the recommendation small business with total revenues from this small business line rising by 30.9% to RMB188.six million in the 1st quarter from RMB144.1 million in the similar period of 2022.
Revenues from credit card and loan recommendation solutions improved by 30.1% and 32.two% year-more than-year in the 1st quarter respectively. Credit card volume improved year-more than-year by 22.two% to roughly 1.1 million and the typical charge per credit card improved slightly to RMB114.three in the 1st quarter of 2023. The boost in income from loan recommendation solutions was primarily driven by the boost of typical charge per loan application by about 26.7% year-more than-year to RMB14.7 in the 1st quarter of 2023 due to a much more favorable item mix. Revenues from huge information and technique-primarily based danger management solutions resumed development by 11.9% to RMB22.six million in the 1st quarter of 2023. The boost was primarily attributable to the boost in typical spending per buyer.
Revenues from our promoting and other solutions improved by 80.eight% to RMB78.1 million in the 1st quarter of 2023 from RMB43.two million in the similar quarter of 2022, mainly due to the improved income from other new small business initiatives, additional proving the accomplishment of our category expansion by applying technologies and operational capabilities into adjacent categories. Moving onto charges and costs. Price of promotion and acquisition improved by 41.two% to RMB211.1 million in the 1st quarter of 2023 from RMB149.five million in the similar period of 2022. The all round ROI for recommendation solutions and promoting and other solutions enhanced to 126.three%. The ROI of recommendation solutions and promoting and other solutions recorded year-more than-year boost by two percentage points and 4 percentage points in the 1st quarter respectively implying additional improvement in our efficiency.
Price of operations remained relatively steady at RMB18.four million in the 1st quarter of 2023 compared with RMB18.five in the similar period of 2022 as we continued to execute our expense optimization initiatives. Our sales and promoting costs, R&D costs and G&A costs for the 1st quarter decreased by six.two%, 15.1% and 13.four% year-more than-year respectively. Measured as a percentage of total income, our total sales and promoting, R&D and G&A costs declined to 28.9% in the 1st quarter compared with 45.four% in the similar period of 2022, which represents a lower of about 16.five percentage points. Thanks to our continued efforts to optimize our expense structure and strengthen our productivity. Loss from operations was RMB23.six million in the 1st quarter of 2023, down drastically from RMB54.six million in the similar period of 2022.
Operating loss margin was eight.1% in the 1st quarter of 2023, compared with 26.three% in the similar period of 2022. Our net loss and non-GAAP adjusted net loss was RMB20.eight million and RMB19.four million in the 1st quarter of 2023 compared with RMB53 million and RMB50.eight million in the similar period of 2022 respectively. As we continue to scale up and strengthen our efficiency, our net loss margin and non-GAAP adjusted net loss margin for the 1st quarter enhanced by 18.three and 17.7 percentage points respectively compared with the similar period of 2022. As of March 31, 2023, we preserve the strong balance sheet with money, money equivalents and brief-term liquidity of RMB613.five million. With that, I will conclude our ready remarks. We will now open the get in touch with to concerns.
Operators, please go ahead.
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