A：Claro Technology's first quarter of 2025 saw a total revenue growth of 10.9% year over year to 32.6 billion RMB, with an average DAU reaching a record high of 13 million, a gross profit margin that approached 20%, and an adjusted net profit of 6 billion RMB with a 14% adjusted net margin.

A：Clean AI, during the first quarter, maintained its global leadership in advanced technology and generated over 1.2 billion RMB in revenue. Notably, it launched the new Clean AI Xi Xi video generation model, which set new benchmarks in motion quality, semantic responsiveness, and visual aesthetics. It also introduced a multi-module editing feature that provides users with greater creative control.

A：The integration of AI technology across content and business ecosystems has led to a better understanding of content and user interest, resulting in precise user demand matching with content value. This, in turn, has increased user time spent on the platform and improved online marketing efficiency. For instance, the average daily advertising spending on AJC marketing materials remained at 100 million RMB, and the conversion rates in the e-commerce scenario saw an increase due to the introduction of a real-time interaction feature for digital human live streaming rooms.

A：During the 2025 Chinese New Year holiday, Claro Technology offered engaging interactive features and extensive content to its 13 million users, which effectively sparked social interactions. The platform experienced a significant increase in user activity, with the average daily new mutual sort exceeding 100,000 and the number of active daily private methods among users with mutual followers growing. The extensive Chinese user lineup, including various online festivals and TV series, delivered immersive content consumption experiences with over 15 billion live streaming views and over 200 billion short video views. This strategy helped in lowering the average user acquisition costs and improving user retention rates.

A：The integration of AI across online marketing solutions enabled clients from content consumption, e-commerce, local services, and other sectors to improve their brand marketing efficiency and achieve better conversion outcomes, leading to an increase in marketing budgets.

A：The content consumption sector experienced a strong year-on-year growth in marketing spending, with a particular focus on aligning campaigns with native and platform content operations such as short plays, mini-games, and novels. For the local service sector, solutions and algorithm optimizations were provided to better meet customer needs, resulting in a significant increase in marketing spending from the local services industry.

A：Key enhancements in the closed-loop marketing solutions for the e-commerce sector include the building of intelligent Omni-channel operations, the introduction of high-quality content and product placement to sales funnels, and the improvement of matching efficiency through enhanced algorithms and strategies.

A：The Omin platform provided greater stability in merchants' Omni domain ad placements, richer control tools, and more commission optimization in Q1. Additionally, the Omin Platform Marketing Agent 4.0 contributed to a significant portion of closed-loop marketing spending in the fourth e-commerce business.

A：The e-commerce business grew in Q1 with an increase in e-commerce monthly average active users and a substantial rise in the number of newly onboarded merchants. The e-commerce GMV for the quarter was significantly higher, and the number of small and medium-sized merchants grew regularly.

A：The company launched major programs including fast track access, targeted promotions, and subsidy incentives to assist exports with market entry and to help them tap into the domestic market.

A：The New Year Blockbuster initiative led to the fortification of price advantages for individual items through subsidies, and it helped to regionalize product functions in live streaming rooms, lowering placement and conversion thresholds and increasing sales. During the Women's Day promotion, the GMB from cars surged significantly.

A：The script in one business model, which combines live streaming shopping with short videos, performed well in Q1, with a growth in active merchants and an improvement in the supply and demand sides. It also benefitted from enhanced traffic support and experienced a significant increase in e-commerce GMV.

A：The reduction in intelligent customer service response time to Ed in Q1 lowered merchant costs, shortened the average response time, and improved the overall user experience, demonstrating the company's ongoing efforts to enhance its e-commerce infrastructure.

A：The live streaming business in Q1 returned to positive growth, increasing year-on-year revenue to Ed billion RMB, supported by diverse top-tier content and the strengthening of the live streaming ecosystem. The company also made consistent efforts to build a stable live streaming community, and the number of partner talent agencies and streamers grew significantly.

A：The company's gaming content ecosystem has been enhanced through the integration of short video, live streaming, and community operations, and the collaboration with major E-Sports for live streaming rights and IP-based events. This has driven exploration and innovation in combining gaming and entertainment, and the 'live streaming plus' strategy has empowered traditional industries.

A：The company's overseas business continued to make steady progress in Q1 with revenue rising significantly, maintaining strong year-on-year momentum in online marketing services with effective cost and expense control.

A：The overseas business achieved quarterly operational profitability for the first time, with improvements in customer and position efficiency through targeted promotion on high-value demographics, contributing to consistent a.u. growth in Brazil, one of the core international plant markets. A strategic partnership was doubled down to become the exclusive official short review pond for 2020 in Brazil, enriching pen content and interactive experiments for local users. The average daily time spent per DAU in Brazil grew year on year and quarter over quarter. The e-commerce business in Brazil saw healthy growth in order volume, supported by disciplined ROI management in the local services business, which further expanded its presence in lower tier cities and drove rapid year on year growth in local services GMV. The general in-store business experienced balanced development across categories, with the number of active merchants and available merchandise growing significantly, and the optimization of local advertising products and traffic allocation strategy contributing to a twofold increase in local service revenue year on year.

A：The company remains committed to its long-standing mission and user-centric approach, even in the face of a complex and evolving marketing environment. It is leveraging AI technology to fortify the content and business ecosystem while exploring new ways to optimize monetization. The focus is on long-term technology investment and delivering real user value, which is expected to improve user experiences, empower industries, and provide merchants and marketing clients with tools for quality and efficiency. This strategy is intended to create more value for shareholders.

A：AI technology was used to fortify questions, content, and the business ecosystem, resulting in a stronger core competitiveness. This led to enhanced user experience and operational efficiency for online marketing clients and merchants through the application of AI in online marketing solutions. It significantly improved the conversion efficiency of marketing materials and increased consumption from marketing clients. The number of e-commerce monthly active paying users and monthly active merchants also increased, supported by richer marketing tools and diverse traffic incentives. Additionally, live streaming revenue grew, and the company aimed to build a long-term and sustainable live streaming ecosystem by refining operations and developing varied content categories.

A：During the first quarter, the company's total revenue increased by 9.9% year on year to 32.6 billion RMB. The operating metrics and financial performance showed a solid foundation, with the overseas business recording its first-ever quarter of operating profit. The company continued to advance its iterative operator of a clean AI large model, enhancing core competitiveness. Total revenue in the first quarter was driven by growth across core businesses such as online marketing services, e-commerce, and live streaming. Online marketing services revenue grew significantly, gross profit increased by 10.4% year on year to 17.8 billion RMB with a gross margin of 54.6%, and group level net profit and adjusted net profit rose to 1 billion RMB and 8 billion RMB respectively.

A：The company actively delivered on its commitment to shareholder returns by repurchasing an aggregate of approximately HK$1.42 billion, or 29.19 million shares, which accounted for about 0.58% of its total shares outstanding as of the end of the quarter. This action reflects the company's strategy to strengthen shareholder value and maintain a positive relationship with its shareholders.

A：The main growth driver for clean AI's commercialization is the revenue mix, where paid presumer subscriptions account for almost 70% of clean AI's revenue. The growth strategy involves maintaining a globally leading position by continuously iterating technological capabilities, enhancing user experience through product innovation, and carrying out operational activities to grow the user base.

A：Clean AI introduced a major upgrade to its Video Generation Foundation model, launching Queen AI 2.0 Master Edition, which significantly improved motion quality, semantic responsiveness, and visual fidelity, expanding the capabilities of large video generation models to meet the needs of professional creators.

A：The plans to maintain the global position of clean's foundational model include continuous technological capability iteration, enhancement of user experience through product innovation, and growth of the user base, particularly in overseas regions, through ongoing operational activities and initiatives like the next gen new image venture capital plan.

A：AI is significantly empowering the company's online marketing and e-commerce business by enhancing aspects such as marketing, material production, placement agents, and recommendations. It is used in a 1-stop video creative production platform, Magnetic Creator, to generate high-quality marketing materials and improve conversion rates. AI is also integrated into live streaming, customer service, and e-commerce scenarios to increase efficiency and enhance the user experience.

A：Specific impacts of AI integration in online marketing services include an average steady study on AIGC marketing materials reaching approximately 30 million norms for external marketing services, and the Smart Placement product predicting potential audiences and automatically adjusting placement strategies. In e-commerce, large AI models enhance merchant efficiencies through content production, precise matching, and intelligent customer service, leading to increased daily GMB from AI-generated live streaming highlights, improved user product matching, and an intelligent customer service resolution rate of up to 100%.

A：Recent trends in marketing services show a steady pickup in client placement, and the year-over-year growth rate for online marketing services is expected to return to double digits in the second quarter. Sectors like closed loop marketing services have seen an increase in the number of merchants due to improvements in e-commerce sales funnels and platform upgrades. The content consumption sector and local services spending have experienced high double-digit year-over-year growth. The common consumption industry, e-commerce, and local services are witnessing rapid growth by helping clients operate efficiently and sustainably.

A：To maintain rapid growth, strategies include helping more clients in content consumption, e-commerce, and local services operate efficiently and sustainably on the platform. This entails using large model technology to address user payment issues and further grow the common consumption industry. In the e-commerce sector, efforts are focused on improving how brands and merchants build content-driven operations and lower operating costs. For the local services industry, there is a rising demand for services which is opening up new growth opportunities for merchants. AI and AIGC capabilities are being used to assist merchants in lowering operation costs and scaling up their marketing impact.

A：The strategy for the 618 shopping festival includes strategic initiatives to help merchants and influencers fully harness new opportunities in omnichannel operations. The company will provide 100 billion in traffic resources and 2 billion in subsidies, launching innovative strategies across three dimensions: users, products, and merchants and influencers. User engagement will focus on pre-sale promotions and live streaming reservations to lock in early demand, with additional efforts to activate and re-engage users during the official promotion period. Product strategies will cater to various types including new launches and bestsellers. For merchants and influencers, tiered support plans will be developed based on their scale and potential, with marketing tools and support services to aid in their growth.

A：The development strategy for the shopping mall feature in the next stage is to launch tailored operational strategies for different types of merchants. This includes providing diverse marketing hosting services such as AI-driven material optimization, free traffic support, marketing activities, registration, and blockbuster production mechanisms for merchants with limited resources. For more experienced merchants, exclusive traffic channels, marketing tags, and extra exposure in the shopping mall will be provided. The goal is to improve operational efficiency and reduce costs through features such as AIGC content production, precise placement, and intelligent customer service. The company aims to enable merchants to achieve explosive growth and enhance their business scale and operational quality through major promotions.

A：The investment plan on AI for the year entails anticipating an increase in spending, especially in AI-related research and development personnel costs, to attract and retain top AI talent and build team capacity. Clean AI has achieved a revenue scale that exceeded expectations and has received praise from creators for addressing complex creative needs. The company plans to continuously accelerate the commercialization of clean AI through technological iteration. Even with scaling up in inference computing power, the impact on the company's bottom line is expected to be relatively small. AI is projected to generate a positive marginal profit and contribute to narrowing overall losses. The company expects its AI investment, including clean AI, to improve the group's overall profit margin by one to two percentage points in a medium to long-term perspective, thus contributing to the company's growth curve and value creation for shareholders.