A：The recent highlights in AI product launches include the release of Confucius 4, an open source learning large language model with multi-model inputs; Emotive Voice 2, an open source high fidelity AI text to speech model; and Confucius translation, the company's latest AI translation model.

A：The learning services segment delivered revenues of RMB 627.5 million, up 4.2% year over year, maintained strong momentum with growths over 20% year over year in Q1, and achieved industry leading capabilities in solving and teaching K12 subjects requiring visual understanding.

A：The students' participation resulted in winning one gold, one silver, and two bronze medals at the 43rd National Olympiads in Informatics Winter Camp, one student being selected for the Chinese national team and winning a gold medal at the 2026 International Winter AI Olympiad, showcasing the strength of the company's programming education ecosystem within learning services.

A：The AI-driven subscription services continued their robust growth trajectory, with total sales exceeding RMB 100 million, representing year-over-year growth of over 70% in the first quarter.

A：The new AI agent products launched include Lobster AI, a personal AI desktop assistant for productivity and secure deployment with over 5000 stars on GitHub, and an AI native knowledge base designed for complex knowledge and synthetic reasoning. The core applications were further validated as the company won championships in eight of the 16 AI track language categories at the 14th National Interpretation Contest.

A：The net revenues for the smart devices segment in the first quarter of 2026 were RMB 109.4 million, down 42.6% year over year.

A：The gross profit for the first quarter of 2026 was 602.3 million, which reflects a gross profit margin of 60.2%, compared with 59.8% for the same period in 2025.

A：The contract liability, which mainly consists of deferred revenue from rent services, decreased from RMB 847.7 million as of December 31, 2025, to RMB 667 million as of March 31, 2026.

A：The recent updates indicate that the retention rate has exceeded 75% and is showing a year-over-year upward trajectory. This high retention rate is attributed to user recommendations of the AI interactive learning formats and high-quality services, which is a solid foundation for growth in Q2 and through the full year. Looking ahead, the company plans to leverage its large-scale model to deepen its footprint in differentiated AI interactive learning formats and expand the application across the entire learning life cycle.

A：The strategies for growth in the advertising business include AI evolution, with AI agents revolutionizing creative efficiency and an AI placement optimizer boosting ROI. These strategies have propelled the advertising business from RMB 1.3 billion in 2023 to 43% of total revenue, with a claim of an over 20% year-over-year increase in the first quarter. The momentum is expected to continue, with a projected revenue increase to RMB 6.111 billion, a 28.9% year-over-year increase, for Q2.

A：The seasonality of operating profit is characterized by typically higher revenue levels in the second half of the year, leading to higher operating profit as well. Quarterly operating profit is affected by various factors, including restructuring or investments in key areas. The revenue in H1 was a lagging effect from H2 2024 customer acquisition, resulting in high operating profit in the first half of the previous year. Despite robust revenue performance in H2, operating profit is relatively low. It is expected that H2 of 2025 will return to historical norms, improving the overall financial health of the business. The seasonality of cash flow shows net outflow in Q1 and Q3, which peak during customer acquisition phase, while Q2 and Q4 have a major retention cycle. This year, the cash flow position has continued to improve rapidly.