Cheetah Mobile Inc. (NYSE: CMCM) recently held its Q4 2020 earnings call. The call was attended by corporate participants including Helen Zhu, the Investor Relations Director, Sheng Fu, the Chief Executive Officer and Chairman, and Thomas Ren, the Chief Financial Officer. Analysts Vicky Wei from Citigroup and Melody Chan from Jefferies also participated in the call.
In her opening remarks, Helen Zhu welcomed the participants and introduced the company's Chairman and CEO, Mr. Fu Sheng, and CFO, Mr. Thomas Ren. She also mentioned that the call would include a Q&A session after the management's prepared remarks.
Mr. Fu Sheng then took the floor and discussed the company's operational highlights. He mentioned that despite the challenging macro environment, Cheetah Mobile had managed to improve operational efficiency and expand its revenue streams beyond advertising. He also highlighted the company's commitment to its AI-related robotic business for long-term growth.
Mr. Fu Sheng further discussed the company's cost-cutting efforts and optimization of its internet business, which resulted in a reduction in non-GAAP operating loss. He also mentioned that Cheetah Mobile still had a strong cash reserve of $255 million and expressed confidence in the company's ability to cut costs and improve operating efficiency in the future.
He then talked about the company's focus on offering membership services within its utility products to diversify its revenue streams. By prioritizing user experience, satisfaction, and privacy protection, Cheetah Mobile aimed to improve user retention and attract more users through word-of-mouth. The company had seen growth in paying user count and subscription revenue in 2020 and expected this trend to continue in the future.
Mr. Fu Sheng also discussed the company's efforts to optimize its AI business by focusing on selected use cases. He mentioned the deployment of AI robots in shopping malls and highlighted the potential for these robots to help shopping mall operators serve customers better and promote products and services. He expressed confidence in the direction of the AI business and emphasized the company's strong cash reserve and commitment to shareholder returns.
Thomas Ren, the CFO, then presented the financial results for the fourth quarter of 2020. He mentioned that total revenues were RMB271 million, within the company's guidance, but represented a year-over-year decrease of 56%. This decline was primarily due to the suspension of collaboration with Google and the disposal of certain gaming-related business and assets. Ren also discussed the company's cost-cutting efforts, which led to a significant narrowing of operating loss.
Ren highlighted the company's strong balance sheet, with cash and cash equivalents, restricted cash, short-term investments, and long-term equity investments. He expressed confidence in the company's ability to continue investing in the AI-related business for long-term growth.
The call concluded with a Q&A session, where analysts asked questions about the advertising market outlook, the impact of Apple's privacy control on the advertising business, and the company's outlook for different sectors in 2021. The management team provided detailed responses, emphasizing the recovery of the advertising market in China, the minimal impact of Apple's policy on Cheetah Mobile's utility products, and their positive outlook for the AI and robotics industry.
In their final remarks, Helen Zhu thanked the participants for joining the call and invited them to reach out with any further questions.