iHuman Inc. ADR (IH) Q4 2020 Earnings Call Transcript

iHuman Inc. (IH -2.00%)
Q4 2020 Earnings Call
Mar 25, 2021, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and good evening, ladies and gentlemen. Thank you for standing by for iHuman's fourth-quarter and full-year earnings conference call. at This time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session.

Today's conference call is being recorded. Now, I will turn the call over to your speaker host today, Ms. Cynthia Tan, IR director of the company. Please go ahead, ma'am.

Cynthia Tan -- Investor Relations Director

Thank you, operator. Hello, everyone, and welcome to iHuman's fourth-quarter and full-year 2020 earnings conference call. Our earnings release was distributed earlier today and is available on the company's IR website, as well as our news services. Before we begin, I would like to remind you that this conference call contains forward-looking statements as defined in the U.S.

Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon management's current expectations and current market and operating conditions and related to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially. Further information regarding this and other risks, uncertainties or factors is included in the company's filing with the SEC. The company does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

Today, you'll hear from Dr. Peng Dai, director and chief executive officer, who will provide a general overview of the business and our operations, who will be followed by Ms. Vivian Wang, our director and chief financial officer, who will provide additional details on the company's financial results and discuss the financial outlook. Following management's prepared remarks, we'll open up the call to questions.

With that said, I would now like to turn the call over to our CEO. Dr. Dai, please go ahead.

Peng Dai -- Director and Chief Executive Officer

Thank you, Cynthia. Hello, everyone. Thank you all for joining us on the call today. We are pleased to report another quarter of strong growth as we further strengthen our position as China's No.

1 market leader in the online childhood edutainment sector. Over the past year, we have seen that China's online education market has continued to gain traction at an accelerated pace in the post-pandemic landscape. Adoption of online technology and digital penetration in the education sector keep rising as parents and children have grown more comfortable with online learning apps. More importantly, we believe this acceleration will not be a short-lived phenomenon but is here to stay as millennial and gen z parents increasingly look for technology-enabled tools to help improve the learning results for their children.

China's online education market obviously presents huge and attractive growth prospects, and we offer a fairly specific value proposition in the sector. Our edutainment products, release supplement and support the more formal education that kids get elsewhere. But whether it's class-based learning, online education or edutainment, we believe content quality is the No. 1 factor that enables the company to gain market share and stand out amid the intense competition.

Our self-directed and interactive learning products have a clear advantage in meeting the demand from parents to not only improve the learning results for their kids, but also to build their kids' own love of learning. This unique positioning continues to help us build on our unrivaled brand recognition and strong user loyalty in the edutainment space. These are our true assets, and we think we have a huge runway to go. In the fourth quarter, we tapped into the rising demand and industry tailwinds to bring our proprietary edutainment technology and decades of expertise in both education and entertainment to our growing user base.

We continued to leverage our sophisticated technology capabilities to deliver truly interactive and immersive learning experiences to children and help them learn more effectively while having from through our best-in-class educational content. As we step into the new year, we will take a long-term perspective and remain firmly focused on creating premium educational content and pursuing technology advancements to deliver a superior user experience. We will take advantage of our viable and scalable business model to further enhance our existing portfolio and launch innovative new education products and services to drive user growth and user engagement. This, in turn, will help us maximize sustainable value creation, generate healthy cash flow and deliver sustainable outcomes for our shareholders.

Now, I'd like to walk you through our business development and operating results. I'll start with our online learning business. We are pleased that we closed out 2020 on a high note. In the fourth quarter, on a year-over-year basis, we quadrupled revenue in our learning services business to a record RMB 190 million, and almost tripled our average total MAU to 12.77 million.

The solid growth was driven by our unwavering commitment to education content and technology investments, which are the two cornerstones of our ongoing success. In terms of important recent business development, we continued to enrich our curriculum of existing education products with significant new additions of interactive content to our self-directed learning apps. We optimized and updated our key education products on a weekly or biweekly basis to further enrich the curriculum. For example, we continue to expand iHuman English to cover multiple levels with a more systematic curriculum, which effectively catered to children with different English levels.

And with iHuman Math, we added more interactive design to help children practice their Math skills while having fun and connect real-world experiences. And for our most welcomed iHuman Chinese to help kids better master the difficult part of radicals of Chinese characters, we designed a practice section with fun features. We also launched a special Chinese New Year version of iHuman Chinese and added a festival AR theme to these related characters. Now, let me briefly update you on our education product pipeline.

In terms of existing products, we will soon launch an independently charged expansion pack of traditional Chinese idiom course within iHuman Chinese app, which will leverage interactive history stories and our edutainment technology to help children matter the hard to understand Chinese traditional idioms in a broader background of Chinese traditional culture. As for iHuman English app, we are also reaching out to various renowned global industry partners to cooperate on bringing world-class content and IP to our users. The first thing we are launching is a section based on the world-famous Mother Goose nursery rhymes. We think this is another example of how we try to create a truly authentic English learning experience which helps to elevate our brand recognition, enhancing the user experience and further increase the user stickiness.

As for the new product pipeline, we have a great lineup of different educational products. But for competitive reasons, I will only highlight a few of them. First of all, we are delighted to officially announce our strategic partnership with Oxford University Press, the largest university publisher in the world, to co-develop and co-promote a comprehensive new English level reading app called iHuman Readers, which will combine world-class content with our advanced edutainment technology. This highly anticipated new product will be launched and promoted globally by iHuman, together with Oxford University Press.

This app will introduce an extensive collection of over 1,000 books of Oxford well-renowned level reading content, including Oxford Reading Tree, TreeTops, Project X, etc., which have been expertly leveled to help kids progress their reading skills and capabilities. In addition to that, it's also the first time Oxford cooperated with an industry partner to co-develop and digitally publish over 100 exclusive level reading in these books, specific for this app, which is called Fantastic Friend. Combining their global leading expertise and our advanced edutainment technology, this app will provide interactive level reading experience to inspire children's passion and interest for English reading. This app will also include an assessment module that is being co-developed by iHuman and Oxford's expert team.

For the publishing in Chinese market, it will be tailor-made for Chinese-speaking kids from 3 to 12 years old and provide accurate assessments across levels and a detailed learning advice to guide their learning progress in English. As product quality and user experience have always been our top priority, and because this app is so comprehensive and requires such precision, the launch time is expected to be around the middle of this year. With world-famous content, advanced English teaching expertise, sophisticated assessment module and iHuman's superior Big Data analysis and edutainment technologies, we expect the product to be at the leading level of the industry. The app will also be published globally, and we will work together with Oxford to promote the product to reach more users in different regions.

We are also working on our next-generation AI courses on different subjects, which are a natural extension for us to meet different user needs while leveraging our advantages in edutainment to provide strong interactive learning experiences for children. As the first step, we will launch a trial version of our Chinese AI course to better utilize the massive and loyal user base of our top-notch iHuman Chinese and satisfy unmet needs from users requiring more detailed guidance. Furthermore, for our off-line business, as we are speaking right now, we are holding our annual national distributor conference to launch our next-generation online merge to offline, or OMO education products, which includes iHuman classroom solutions, ME course and some other courses. The products are designed specifically for kindergartens and include our high-quality online digital resources, including animation, interactive features, foreign teacher videos and so on.

Our products will be highly efficient and effective for these traditional off-line organizations, especially for the post-pandemic era by transforming the teaching approach from a traditional paper-based method to immersive big screen interaction mode, which makes classes more interactive, inspires children's interest and improved learning results. This will also help us discover a new growth driver for our off-line business and forms a close loop to integrate our online and off-line businesses and create a big cross-selling opportunity with the mass and exclusive user base. As 2021 unfolds, we will continue to invest in improving product quality and user experience and devote to building out our already strong pipeline, adding more innovative and interactive educational products and courses to our comprehensive product portfolio. With that, I will now hand the call over to our CFO, Vivian, to talk about our financial results.

Vivian Wang -- Director and Chief Financial Officer

Thank you, Peng, and thank you, everyone, for joining the call. I will now walk you through our financial results. Please note that all financial data that I talked about will be presented in RMB. We achieved a robust growth, both for the full year and the fourth quarter.

Apart from strong revenue growth, we also saw increasing operating efficiency and strong cash liquidity. First, I will briefly recap our financial performance for the fourth quarter of 2020. Total revenues in Q4 came ahead of our expectations, increasing 206% from the same quarter last year to $190 million. This was mainly due to a rapid growth in revenues from our learning services, which leaves 330% to hit at a record high of 157 million.

The robust growth was powered by our user base expansion and enhanced the user engagement as we continue to build on our unrivaled reputation for superior product quality. MAU of our online business reached a record high of 12.77 million in Q4. The number of paying users was 1.41 million, an increase of 133% from the same quarter last year. We have delivered three consecutive quarters of triple-digit top line growth year on year, which is a clear testimony to our award-leading edutainment technologies and proven educational products and content innovation capabilities.

Revenues from learning material and devices were 32 million, an increase of 28% from 25 million in the fourth quarter of 2019. Along with the rapid growth of our online businesses, which has a higher gross margin, our gross profit and gross margin improved significantly. Gross profit was 133 million, an increase of 243% from the same period last year. Our gross margin further improved to 69.9% in Q4 from 62.4% in the same quarter of 2019.

I will move on to our operating expenses now. Total operating expenses were 196 million, which increased 322% from 46 million in the same quarter of 2019. The increase was mainly due to a SBC of 78 million that were recognized because certain IPO performance conditions of the world were satisfied. No SBC were incurred in the fourth quarter of 2019.

Excluding SBC, our total operating expenses were 118 million, an increase of 165% from the same period last year. As an R&D and product-driven company, we have always focused on R&D to maintain our core competitive advantages. Our R&D expenses were 70 million, an increase of 128% from 31 million in the same quarter of 2019. Excluding SBC, the R&D expenses were 50 million, an increase of 65% from the same period last year, primarily due to a rise in payroll-related expenses and outsourcing expenses as we continue to expand our R&D capabilities and to enhance and develop our educational products and services.

Our sales and marketing expenses were 45 million, an increase of 431% from 8 million in the same quarter of 2019. Excluding SBC, sales and marketing expenses were 42 million, an increase of 397% from the same period last year. Primarily due to an increase in advertising and promotion expenses as we strategically strengthen our brand recognition as a publicly listed company and marketing efforts to supplement organic user growth. Sales and marketing expenses were also higher because a certain channel partner offered an incentive plan with rebate, which can be used to conduct marketing and promotion within the part of channel.

We utilized a certain amount of the rebate to conduct marketing and promotions, which were recognized as sales and marketing expenses, leading to a lower ratio of cost of revenues and higher ratio of sales and marketing expenses as a percentage of revenues for this channel. Even though we accelerated our marketing effort this quarter, which was an effective supplement to our organic user growth, the vast majority of our user growth still came from word-of-mouth referrals. As a percentage of total revenue, our sales and marketing expenses stayed at a relatively low level. Our G&A expenses were 82 million, increased 999% from 7 million in the same quarter last year.

Excluding SBC, G&A expenses were 26 million, an increase of 251% from same quarter last year, primarily due to an increase in payroll-related expenses and onetime IPO-related expenses. Operating loss was 64 million compared with 8 million in the same quarter of 2019. Adjusted operating income was 16 million compared with adjusted operating loss of 8 million in the same quarter of 2019. Income tax benefits were 8 million, which was mainly due to the tax exemption benefit as one of our major operating entities was expected to qualify as a software enterprise for fiscal year 2020.

This compares with income tax expense of 0.5 million in the fourth quarter of 2019. Net loss was 54 million compared with 6 million in the same quarter of 2019. Adjusted net income was 26 million compared with an adjusted net loss of 6 million in the same quarter of 2019. Basic and diluted net loss per ADS were 104 cents compared with 17 cents in the same quarter of 2019.

Adjusted diluted net income per ADS was 48 cents, compared with adjusted diluted net loss per ADS of 17 cents in the same quarter of 2019. Deferred revenue and customer advances were 269 million as of December 31, 2020, an increase of 274% year on year from 72 million as of December 31, 2019, primarily driven by our user expansion and enhanced user engagement. Cash and cash equivalents were 862 million as of December 31, 2020, compared with 105 million as of December 31, 2019, primarily due to strong operating cash inflow together with IPO proceeds. As a result, we have a healthy balance sheet with a strong cash balance and no debt.

The majority of our current liabilities is deferred revenue, which actually gave us great visibility on our future revenue growth. Next, let me go through the key financials for the fiscal year 2020. In 2020, total revenue came in at 532 million, an increase of 143% from 219 million in 2019. Revenues from learning services were 430 million, which [Inaudible] from that of 2019.

The increase was driven by our user expansion and enhanced the user engagement as we continue to pursue the best product quality and capitalize our proprietary interactive technology to cater to the increasing demand from parents and kids. Average total MAUs for our learning services for 2020 were 10.61 million, an increase of 187% from 2019. And our paying users reached 3.73 million, an increase of 183% year over year. Revenues from learning materials and devices were 101 million compared with 111 million in 2019.

Despite the impact from the COVID-19 pandemic, there was only a slight decrease from 2019. Gross profit was 365 million, an increase of 172% year on year. Gross margin was 68.7%, which improved from 51.5% in 2019. The increase was driven by the strong growth of our learning services business with a higher gross margin.

Total operating expenses were $410 million, a slight decrease from $413 million in 2019. This included share-based compensation costs of 78 million this year compared with 271 million in 2019. Excluding SBC, total operating expenses were 332 million, an increase of 132% from last year. Our R&D expenses were 200 million, increased 17% from 170 million in 2019.

Excluding SBC, R&D expenses were 180 million, an increase of 92% from last year. The increase was primarily due to a rise in payroll-related expenses as we continue to expand our R&D team and to enhance and develop our products and services. Our sales and marketing expenses were 96 million, an increase of 78% from 54 million in 2019. Excluding SBC, sales and marketing expenses were 93 million, an increase of 234% from last year, primarily due to an increase in advertising and promotion expenses as we strategically strengthened our brand recognition and marketing efforts to supplement organic growth.

Our G&A expenses were 115 million, decreased 39% from 189 million in 2019. Excluding SBC, G&A expenses were 59 million, an increase of 180% from last year, primarily due to increasing payroll-related expenses and onetime IPO-related expenses. Operating loss was 44 million compared with an operating loss of 279 million in 2019. Adjusted operating income was 35 million compared with an adjusted operating loss of 8 million in 2019.

Income tax expenses were 0.5 million compared with 1.4 million in 2019. Net loss was 37 million compared with 276 million in 2019. Adjusted net income was 42 million compared with an adjusted net loss of 5 million in 2019. Basic and diluted net loss per ADS were 107 cents compared with 762 cents in 2019.

The adjusted diluted net income per ADS was 66 cents compared with adjusted diluted net loss per ADS of 16 cents in 2019. With that, I will now provide our business outlook. Based on our current estimates, total revenues for the first quarter of 2021 are expected to be between 220 million and 226 million, representing an increase of 182% to 190% year on year. This takes into consideration the expected growth from the strong and continued expansion of our learning services.

These estimates represent management's current and preliminary view, which is subject to change. That concludes our prepared remarks. Operator, we're now ready to take questions. Thanks.

Questions & Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator instructions] The first question today comes from Mark Li with Citi. Please go ahead.

Mark Li -- Citi -- Analyst

Hi, management. Congratulations on the results. I wish to ask, firstly, I noticed our Q4 revenue, actually beat our previous guidance. Could you share what are the drivers for that bit in your view? And secondly is for the first quarter outlook, could you give a bit color on the growth momentum you have expectations for the core learning services revenue? Thank you.

Vivian Wang -- Director and Chief Financial Officer

Yeah. Thank you, Mark. As we mentioned, we keep continuing to expand our content to make sure that we really deliver best-in-class learning experience to our kids. So during this quarter, I mean, in Q4, we made a lot of the initiative to keep expanding and either optimize our content.

As we mentioned earlier, for example, for iHuman English, we actually expanded to multiple levels with a more systematic curriculum. As for iHuman Math, we actually designed a fun practice vision to help the kids connect with the real-world experiences. And also, as for iHuman Chinese, we also designed a practice session with fun feature to help them a bette master, the very difficult part of the radicals of Chinese characters. So with a lot of the progress going on with our continued improvement and enhancement of our content, we are able to deliver robust growth.

Notably, our iHuman Chinese, our flagship title, continue to rank No. 1 in the app store in terms of within the education category every day. And a lot of the time, three or even four out of the top five ranked app are all our products. And besides iHuman Chinese, which enjoyed a very nice growth.

Our iHuman Math and iHuman English also enjoyed a robust growth during the quarter. And during the quarter, we also had made some more initiatives in terms of bundle sales because we have our online product and also off-line product that can match exactly with each other. So we actually see quite a bit of bundled sales to our kids and parents. And we found about that parents really love those bundling products, because by bundling the online and off-line product, they can really offer the kids the learning experiences from online to offline, better protect their eyes and also effectively lengthen their learning cycle and increase their learning efficiency.

And this is a truly advantage of us compared to a lot of the peers because we are able to kind of have this bundled or combined the capability of offering superior, both online and off-line products. So that's why we actually came in ahead of our expectations in terms of the Q4 number or revenues. And looking forward to Q1 and beyond, as we continue to offer more and more content. And we believe that we're on a very kind of superior trend in terms of hyper growth.

And specifically, for Q1, we're offering a lot of different content, continue to enhance our iHuman Chinese opinion, math and english. And of course, beyond Q1, we're also launching some of the major products, as Peng mentioned. So yeah, we really look forward to a robust future growth, yes. Thank you.

Mark Li -- Citi -- Analyst

Sure. Thank you. And for your Q1 number, actually, what's your growth expectation, your pricing for the core learning services for your 182 to 190% year-on-year growth? Thank you.

Vivian Wang -- Director and Chief Financial Officer

Yeah. For Q1, we are also expecting a pretty nice growth of our learning services. So yeah, within the -- so actually, Q1 is typically a pretty good season for us. We're also seeing a very nice kind of traffic growth for both MAU and paying users.

And of course, in terms of ARPU, we also keep improving our ARPU pretty nicely. So on combined factor, yes, we are pretty confident to deliver another robust growth quarter in Q1. Yeah.

Mark Li -- Citi -- Analyst

Sure. Thank you.

Vivian Wang -- Director and Chief Financial Officer

Thank you.

Operator

The next question comes from Xin Wang with Essence Securities. Please go ahead.

Xin Wang -- Essence Securities -- Analyst

Hi. Thanks for taking my question. My first question is about the new product supply. What's the timetable? And how do you expect the revenue contribution in the next one to two years? And my second question is about the user expansion strategy.

So besides the content enhancement, what's your strategy to drive user base expansion this year? Thank you.

Peng Dai -- Director and Chief Executive Officer

OK. Thank you. For our product pipeline, actually, as we mentioned earlier, we will have several different dimensions to continue to drive our product and content development. Firstly, for our current existing portfolio of apps, we will continue to upgrade and update new content.

For example, for iHuman Chinese, we will launch a new expansion pack, which is Chinese idiom course. It is pretty early in Q2, which we will launch very soon. And this will be a very, very interesting course and with a lot of edutainment features and interactive features. So the kids will love them, and they can just better understand the Chinese traditional idioms.

And that is just the beginning of our expansion packs actually. Moving forward, we will further introduce several other expansion packs within iHuman Chinese. And at the same time, for a iHuman English and iHuman Math , we will also continue to build more new levels of content within each of the two apps. So that the whole curriculum will be expanded.

And also, we will introduce some additional expansion packs. For example, for iHuman Math, we will build upon the currency foundation course. We will also introduce new higher age group course, which is more about the calculation package. And then we will have another extension course package, which is about the mathematical thinking skills.

So these are the new core packages which will be introduced within our current portfolio. And also, at the same time, because we are -- we have a very unique product strategy, which is a -- we call a pyramid product structure. So the current apps are at the foundation of this pyramid structure. And based upon that, we will continue to introduce more new categories of products, new types of products, and we can leverage the current user pool to convert and drive more new users into these new products.

For example, we -- as we mentioned earlier, we are working with Oxford University Press to develop the iHuman Readers. This is an English level reading app. And with that app, we will be able to expand our age group coverage from the current, like the three to eight years old to like three to 12 years old. Because a lot of content from this app will be focusing on the primary school students and to help them to build and upgrade their English reading capabilities.

And also, for our new next-generation AI courses, which is -- the first one will be our Chinese AI course. This will also be introduced pretty early in Q2 very soon. And this will also help us to meet the different unmet needs from the users, especially based upon our current iHuman Chinese at user base. So these new course will happen to sort of penetrate into new unmet needs from these user groups.

And also, at the time, they will help us to penetrate into higher price levels. So these new courses and new products will help us to expand our age coverage and also the customer need coverage. And at the same time, we were also working to upgrade our off-line business solutions. As we mentioned earlier, we are introducing the new OMO product solutions, the iHuman Classroom and the related courses.

So these will help us to build a new growth driver for off-line business and also help us to promote more cross-selling opportunities across the online and off-line businesses. So these are our new pipelines moving forward. And your second question about the user -- expansion of user growth. Actually, as we introduced earlier, for some of the new products and the new courses, they will help us to upgrade or the age group coverage from the current three to eight-year coverage to three to 12 years old.

And at the same time, actually, the geographic coverage expansion is our -- also our strategic focus. So we will continue to penetrate into lower-tier cities. Actually, we do see a very good growth momentum during the past two quarters in terms of the user mix from the lower-tier cities, and we will continue to drive the growth into those lower-tier cities. And actually, our pricing and the quality of our products are pretty -- feeding these kind of customer needs from these lower-tier cities.

Yeah, we do see a very good momentum and growth opportunities for different age group coverage and to those lower-tier city coverage. Yeah. Thank you.

Xin Wang -- Essence Securities -- Analyst

Yeah. Thank you for the very detailed answer.

Operator

[Operator instructions] The next question comes from Alex Xie with Credit Suisse. Please go ahead.

Unknown speaker -- Credit Suisse -- Analyst

Hi, management. Thanks for taking my question. I have two questions on behalf of Alex. The first one is about the iHuman Chinese app.

Would you share more color on your target for its penetration rate and ARPU in the next few years? And the second one is about the product ASP. Given current competitive landscape and your penetration to lower tier city, what would be your pricing strategy? Thank you.

Vivian Wang -- Director and Chief Financial Officer

Yeah. Thank you for your questions. For iHuman Chinese, every single of our product, we will continue to launch expansion packs [Inaudible] and optimize our easier experience. So by doing so, we're able to always able to monetize better.

For example, for iHuman Chinese, as we mentioned, we will launch a new expansion pack soon in April, which is the Chinese idiom, and it will charge separately. It will leverage interactive history stories and our edutainment technology to help children master the very hard to understand Chinese traditional idioms in a broadened and background of Chinese traditional culture. And in the future, we will also launch a series of expansion pack iHuman Chinese, around Chinese traditional literature such as the Chinese poem and so on. So with continue to adding a lot of content, we believe that we can better broaden our user base, both in terms of age group and in terms of the penetration down into lower-tier cities.

And for math, english, the same logic. We will continue to expand multiple levels of enhanced content to make sure that our kids really love our content and have fun with learning. With that, we are pretty confident that we can better penetrate our product into broad areas geographic-wise. In terms of the internal tracking of data, we're seeing that actually, we have more and more users coming from lower-tier cities.

And pricing-wise, because our pricing is kind of pretty affordable and we really can address a lot of the parents' kind of needs in terms of helping their kids learn with fun. So we're seeing better penetration already. And in the future, we think that we can broaden our penetration gradually. And in terms of ASP, of course, as a product-driven company, we always believe that so long as we can better kind of optimize our content, it's always a chance for us to better monetize our products.

As you can see in the past, our ARPU actually continues to improve quite a bit gradually quarter over quarter. Of course, with the launching of new expansion packs, added features, we are able to increase ASP every year for all of our major products. But on the other hand, we are also launching a lot of the new products and especially some of the premium products that can naturally kind of meet our users' different needs, as Peng mentioned. And we have a pyramid model in terms of our product portfolio, so we can actually expand our product into some of the higher pricing premium kind of course product that can also help us increase the ARPU quite a lot.

And also, there are a lot of the cross-selling opportunities, as we mentioned. We can certainly leverage the current already very big user base to better co-promote our product and cross-sell into all of our different products. So we believe that we have a long way to go in terms of increase of ARPU in the future. I hope that answers your question.

Unknown speaker -- Credit Suisse -- Analyst

Thank you. That's very helpful.

Operator

This concludes our question-and-answer session. I would now like to turn the conference back over to Ms. Cynthia Tan for any closing remarks.

Cynthia Tan -- Investor Relations Director

Thank you, operator. In closing, on behalf of iHuman's management team, we would like to thank you for your participation on today's call. If you require any further information, feel free to reach out to us directly. Thank you for joining us today.

This concludes the call.

Vivian Wang -- Director and Chief Financial Officer

Thank you, everyone.

Peng Dai -- Director and Chief Executive Officer

Thank you.

Duration: 47 minutes

Call participants:

Cynthia Tan -- Investor Relations Director

Peng Dai -- Director and Chief Executive Officer

Vivian Wang -- Director and Chief Financial Officer

Mark Li -- Citi -- Analyst

Xin Wang -- Essence Securities -- Analyst

Unknown speaker -- Credit Suisse -- Analyst

All earnings call transcripts