Friends, good morning. Thank you for joining NetDragon Websoft Holdings Limited today for the 2018 annual results presentation. Managements who are joining us today, we have Dr. Simon Leung, Group Vice Chairman and Executive Director. Mr. Ben Yam, Group CFO. Mr. Vin Riera, CEO of Promethean. Mr. Ravi Angadi, CPO of Promethean. Mr. Lin Xin, CEO of Game Operations. [Non-English content ]. Mr. Lin Xin is also the Game Operations CEO. Dr. Simon Leung. [Non-English content ]
Thank you, thank you. Wow. Good morning. Good morning. Good morning. Thank you. One more time. Good morning. Good morning. Well, thank you for getting up early to join us this morning. We hold it in American Club because we have a couple of colleagues from the U.S., so we are doing it to make them feel comfortable.
They are kind of fear of height, so we did not know. Next time, we will maybe do it on the ground floor instead of the 48th floor. Sorry, Ben. We have a lot of stuff to go through with you. My speech, it is your lucky day, is going to be short, and we are going to do it slightly differently. We are going to do it in different languages. Besides English, we are going to do something in Mandarin.
If you want, we can do something maybe in Hindi or something in Spanish. A little bit broken, but that's okay. You can ask in any languages you want. If we don't know the language, we are going to make it up. Anyway, I look a little bit tired, that's true. It's not because I went out partying last night because of the good result.
Because I've been doing a lot of traveling. Actually, that's why we are going to talk about a lot of the projects that we have. Looks like the traveling is going to continue. To do it very quickly, this is actually the agenda. We will take you through the different organization. Actually, the highlights of 2018, I have to admit, we are in end of March, when we talk about 2018, it seems like ancient history, but it is what it is.
We promise we'll do it better next time. Let me start with our result. I think you all read it. I'm not going to go and drill on it, even though I love to, but I'm not going to. Actually, we have a record year last year, both in revenue and also in profit, both in gaming and also in learning. Which is something that make us quite happy.
That said, we still have a lot of work to do to make it even better. We gain market share all over the place. That means we are growing. Not only we are growing, but we are growing faster than the market. We also acquire a very large education learning community called Edmodo, and we continue to grow that community. That's very central to our strategy going forward.
Quickly on gaming, I'm not going to steal limelight from Lin Xin. He has a lot of slide to go through with you. If you look at the number, it's actually everything is plus, and then there's 40% growth overall. It's actually the profit growth is excellent. That's why when you look at him, he's very happy man because the bonus check is actually quite big, as far as I know.
It's not laughing matter, by the way. Anyway, we continue to work on actually monetizing our existing IP. Again, Lin Xin will take you through in more detail. Actually, we also launch our first casual game, H5 game, in China. Some of the numbers that actually we like, we love the number actually now, but we like to see it going even more.
Look at our ARPU, actually look at our APA, is actually all very interesting and very exciting for us. Turning to learning, which is actually good growth. Don't forget, it's actually the year before, and also a big growth year for us. On the back of a growth year, it's actually anything around 20+% is actually remarkable.
Same thing, we gain market share, that means we grow faster than the market. We talk about Edmodo. One thing to notice is actually last December, actually the community of Edmodo surpassed 100 million registered users. I'll go through in a little bit detail after this. One thing I'm very excited about is actually you're looking at one of it, is actually is our new product. Ravi is going to take you through actually our thinking around our hardware and software strategy going forward.
And with everything that we have supporting the learning classroom in mobile and also at home, I think we can start to monetize our community. A snapshot is actually 100 million users, is actually a lot of resources that we can tap into. It's actually the 700 million is actually out of date. I think we're closer to 800 million resources right now. Okay. I'm going to pretend I'm the Edmodo CEO for now.
But I am the Chairman of it because Vibhu cannot make it. I'm going to talk a little bit about Edmodo, then I'm going to hand it over to Vin to talk about Promethean. This is actually our user distribution. It actually is getting quite evenly distributed now. It used to be very heavy in the U.S., but now it's more like 50/50.
50% actually in the U.S., the other 50% is the rest of the world. Our largest market outside of the U.S. are Indonesia, Mexico, Colombia, and Philippines. We expect continued growth in the international market. Just to remind you, our core value is that we provide a platform for teachers and students and parents to collaborate in learning.
We can do a lot of things going forward. Edmodo acquisition complete our ecosystem because for the longest time, we have a technology platform. We have the world's best go-to market to the classroom. But with this, we have completed, so we also have entry point into the mobile space, and more importantly, getting into the home space. Since our acquisition of Edmodo, we've been averaging acquiring 1 million users a month, new users, which is actually quite exciting.
But it's more remarkable is actually, we didn't spend any money on marketing. It's all word of mouth, all organic. Just think about from a different standpoint, we're going to put some money into marketing, and to will speed up the acquisition of the users. The way we're going to be planning to monetize the community is actually through content and through services.
Maybe I'll go through very quickly. One of the area that we believe is going to be big growth is actually in the tutoring area. We look at the tutoring area as a triangle. At the top is really the high-end, one-to-one tutoring. We are doing some trial right here in Asia. Because it's trial, so I can't give you the detail, but we're very happy with the results.
So it's actually using the Edmodo community, is actually offering one-to-one tutoring to the high-end users. At the bottom is actually a lot of the AI-based tutoring, which we are putting a lot of resources into. So if you see a lot of our R&D dollars going forward, it's actually in the AI area, because we believe that will drive a lot of growth.
Because we have 80 million users, 80+ million. If we can get $1 from them every month, it will be $80 million a month, which is actually quite remarkable. But we are launching an on-demand homework help business, which is all subscription-based, in the second half of 2019. We're doing a lot of not only planning, but trial and everything, which address the middle part of the triangle, which is still a very big market.
Actually, one thing I forgot. Maybe I should have a slide here. On the content, in the content area, we are also doing a lot of work actually partnering with different people. We just signed a deal with Smithsonian. Everybody knows Smithsonian? Yes? No? Okay. Thank you. At least Ben knows, which is good. If not, we are in trouble. Actually, Smithsonian is very famous for the museum in Washington, D.C. I think 16 of them, Vin?
Yep.
Yeah, it is a big number, but they have a lot of content. We signed a deal with them on two things. We get access to all the content that they have, which is actually tremendous. Also, we are going to do a game with them, which actually teaching kids to collaborate on how to save the endangered species, which is actually quite interesting for the younger children.
The other one is actually, we have announced a partnership with a young company called Happy Not Perfect. How many of you heard of it? Well, zero. But I use it. How many heard of Calm? Nobody? Okay. It is actually all around meditation. Calm is actually the company, I think they just raised the last round, valuation is over $1 billion. Happy Not Perfect is targeting the younger generation. The younger teachers, and they can do it with the students.
That is one of the content strategy that we have, which is actually we give them daily exercise, and then we upsell with that community. Tutoring is actually a focus, but at the same time, content is equally important for us. With that, I am going to turn it over to Vin Riera. I hope he is not going to do it in Spanish. Vin. By the way, this man is doing a great job in the last two years. Or three years.
Yeah.
Okay.
Thank you.
Yeah.
Hi, everybody. Good morning. My name is Vin Riera. I am the CEO of Promethean, and I am going to talk to you a little bit about our business and our performance in 2018. I am going to start with an award that we won. For those of you that have heard of Bett, it is the biggest edtech show globally. It takes place in London every single year.
One of the things that I like about this award is it is not for a specific product, it is for a company. So we were awarded the Bett 2019 Company of the Year, and I think it is a reflection of what we do in education and the services that we provide to our customers. Last time we got together in August, at the half-year mark, I talked about our new product line that was launching.
I am going to save some of the exciting things for Ravi to present to you. I want to talk to you about the philosophy of the products that we did launch. We have three different versions of the product that we are launching. We have a value-based offering, we have a mid-tier offering, and we have a higher-end offering.
The reason that we offer three different products and different form factors is because we are a global company, and we see the need to do that across multiple markets. One of the things that we are doing for the first time is we are starting to step away from just being a hardware company and focusing on the merging of hardware and software. Again, Ravi is going to talk a little bit more about that.
What we realized is there is a true opportunity in the market to start to merge hardware and software and really get behind the use cases and how these products are being used. We have had fantastic growth over the last couple of years. Last year was no exception. We finished 2018 in $331.8 million in revenue and over $26 million in operating profit.
As Simon mentioned, this is a consistent trend. We have seen this over the last three years, so we are thrilled with that performance. Moving on to a couple different things that I look at in the business, both ASP and our market share and how we are doing compared to the rest of the market. The first thing I want to talk about is our average sales price. We saw our ASP jump in 2018 from 2017.
There are a couple different reasons for this, but the underlying trend, I think, is the same. We see customers with a willingness to pay more for a more feature-rich product and one that has the ability to connect with the internet, the ability to connect with devices in the classroom, and we are seeing that the use cases are becoming much more sophisticated than we have seen in the past, which means that customers are willing to pay for that. What it also tells me as we take a look at market share, is that we are growing faster than market. Market grew 17% last year. Promethean grew at 22% last year.
I think one of the reasons that we grew last year, aside from having a great product and a great sales organization and great partners, is that we have a product set that meets the needs of most geographies around the globe. The K-12 interactive display market is going to continue to grow for the next couple of years.
We are excited to be able to participate in that growth. There are three key areas that we focus on for growth. Number one is there are still classrooms around the globe that have not adopted any type of front of classroom technology or have brought technology into the classroom. There is some green space there.
The second area that we see that we can grow is in more mature markets where customers have already purchased interactive whiteboards or interactive flat panels, early-stage ones, that are ready to move on to a more higher end technology or a newer technology. That is the refresh market. The third market that we are spending a lot of time on is recognizing that there is growth that is going to take place within emerging markets.
Those are markets where governments are looking to bring technology into classrooms within their entire country. We are actively involved with multiple countries right now in building a pipeline there to make sure that as these countries start to make buying decisions, that we are there to help them bring that forward. I thought it would be helpful to talk about a couple things that make us unique in the market.
What I would like to do is give you two different examples of two different customers that we have that are unique installations, and I think represent who Promethean is at the core and some of the capabilities that we have. We have talked about Russia in the past and the Moscow Smart City project. One of the things that is so interesting about what we have been able to do in Russia is not that we have sold them over 20,000 panels last year.
That is really important, but what we have done is we have become an integral part of the solution that they bring into their classrooms. What they have done is they have recognized that technology is the future, and they realize that it is not just about a device at the front of the classroom. It is a device at the front of the classroom. It is lesson delivery software.
It is applications to bring technology into devices that allow students and teachers to communicate with the panel in the front. What we are starting to see again is that merger of how customers are behaving using the products that we have available to them. Moscow has been a great customer for us, and like I said, we have had a lot of success implementing our products into the city over the last couple of years.
Another example is a little bit different, but it is Cypress-Fairbanks, which you may not have heard of, but it is one of the top 25 school districts in the U.S. It has got over 150,000 students, and they set upon a three-year project a few years back, where they needed to put interactive flat panels into all of their classrooms. What they realized, though, it was more than just the hardware device that they needed.
They needed a lesson delivery service. They needed a place to store their content and curriculum and allow their teachers to interact with each other and share best practices. Then finally, what they realized that they needed was professional services. How do you make sure that the products that they're buying are going to be used the way that they're supposed to be used in the classroom? This was a three-year project that we just wrapped up.
Incredibly successful project. I think, again, what it does is it represents that, of course, Promethean can sell interactive flat panels to small school buildings. We can replace things. But really what we're great at is doing large, complex projects to scale, and I think that's a differentiator for us. It's something that sets us apart.
There are many key performance indicators that I look at the business, but some of the ones I wanted to share with you today quickly are we growing in market share? I've talked about that. We are. How are we doing in revenue? Nice revenue growth in 2018. Constantly looking at our gross profit margin and our average selling prices.
Additionally, looking at our OpEx as a percent of revenue. We're making more money, but we want to make sure that we're investing responsibly back into the business, and we're not spending on things that we don't need to. Then overall operating profit. Key metrics across the board are positive in 2018. One of the things we do here is we sell very large physical devices, and that means that we have to have our eye on every aspect of our operations.
Three key areas that we keep track of and we strive to do better on a monthly basis. The first is design and manufacturing. Are we keeping our design and our manufacturing costs in check, and are we working with our partners to make sure that we continue to do that and continue to improve? The second is in shipping and distribution.
We've done a lot of work in 2018 to optimize our shipping and distribution network. We still have some work to do in 2019 and in the future as well. Then also warehousing and support. We've made changes in 2018. We're continuing to make changes in 2019 to make sure that we're optimized in those areas. Our outlook for 2019.
I feel pretty confident that we're going to continue to outgrow the market, in terms of revenue and volume in our core markets that we participate in today. I'm going to continue to focus on profitable growth and invest responsible investment in people and products. Clearly want to maintain our global market leadership position.
Then, as I've mentioned before, I'm optimistic about some of the large tenders that we're working on, and we're going to continue to be very focused and put time and resources on those. That's it for me. Now I'm excited to hand it over to Ravi and have him show you what we've done with our ActivPanel Elements Series (V7) products.
Great. Thank you. Good morning, everyone. It's great to be here. What I'm going to be unveiling is our latest line of ActivPanels. We call it the Elements Series, element as in the periodic table. This particular model is called a Titanium. That's really on our premium end. The other two are Cobalt in the middle and Nickel on the bottom.
I won't go into the specifics of why those names, but this is the new Elements Series. This is the culmination of thousands of hours of user research, design, and engineering. This particular year, we're going to be launching 50% more models than we've had. Each of those is going to have more capabilities than what we've ever shipped with before in terms of features and benefits.
On top of that, we've been able to actually do all of this while actually reducing cost. My objective in this session is to be able to walk you through why we think we're going to, as Vin said, going to be driving market leadership, why we're actually going to be, with this product, actually increasing our user engagement more than we've ever been, and also introduce you to our platform-based approach that's actually going to be setting ourselves up for potentially future value creation.
I think the first thing to note, this has been completely redesigned from the ground up. I think the most distinctive feature that you draw into immediately is the center console. This is something that's actually angled up.
It's got really large buttons that are easy to use so that a teacher doesn't have to actually bend over in front of a classroom and actually have to fiddle with the device and figure out how to operate it. Right? In addition, our user interface is actually-- By the way, this should be switched over to the actual I know what I'm going to do.
Just give me one moment here. Okay. This is where the slides are going to be. This is where I'm actually going to do a demo. Right. In addition, our user interface is actually completely redesigned. When you look at some of its features, it actually starts looking a little like a mobile phone, and that's absolutely on purpose because as we all use those, it's instantly familiar.
We've actually done a lot of work and enabled that user interface to actually be much more driven for the user's perspective right in front. While it's designed for a large format panel, this particular view, I'm not having to look back and figure out where the controls are. They're right within my field of vision. Of course, the other thing we've done is we've enabled all of the key tools that a teacher is going to be able to use accessible from any potential part of the panel.
Right? In these tools here, I actually have all of my apps. I have all of my files. I have all of the tools in terms of switching sources if I have multiple devices connecting to this, as well as my most recent apps. The key thing here is driving absolute ease for the teacher.
What is also really important is this device is now connected up into the cloud. Think of a teacher that actually has education resources that might be sitting in their school Google Drive, it might be in OneDrive, it might be in a Box account. Now, this is a one-stop shop for them to be able to access that during a class and actually teach seamlessly.
So in addition to the user interface, one of the things that we have done, and why when I say it has been designed from the ground up, is we have actually. This is no longer an off-the-shelf device. We have actually taken a commodity product. Essentially, we have disaggregated that.
We have taken all the key components of that, in many cases, totally reworked them and brought it together into something that essentially integrates the hardware, the systems, and all of the applications, make it something that is absolutely K - 12 specific. I think the best way to highlight that is using one of our apps, the Whiteboard.
So if I switch into the Whiteboard here, extremely responsive, fast, and accurate. Of course, it actually can recognize hand gestures. We have taken an actual eraser that you might find in a whiteboard. We have been able to actually recognize that shape. But we also have modes where we can actually switch into a dual student mode. So two different students can
So we can each do our own thing. So if I do make a mistake and I am a student up here, and I do not want to look like a dork in front of my friends because I have made a mistake, instead of using an erase that is a lot more coarse, I can actually just flip the back of the pen and just get a fine erase. So whether it is a teacher or student, that is a big thing.
In fact, that is really cool because you will not find that on any other education product on the market. This is something that we have been able to do because of that disaggregation and everything else that we have brought to the table. So, this device, I think another thing to keep in mind is it is no longer just a device that you hang on the panel.
It is not a standalone device. What you cannot see behind the screen is an actual platform that allows you to hang all sorts of peripherals, computing devices, whether they are Chromeboxes, Android devices, Windows machines. You can actually connect STEM devices, robotics, and also with the networking, as a teacher now, I can have my own companion mobile apps. Student devices such as tablets all connect up through this.
Essentially, it drives towards us setting ourselves up to make this the foundation such that you can actually create a larger ecosystem for future value creation. I will come back to that in just a moment. Of course, I will talk about this more. This is now fully manageable from an IT perspective. Before I get to that, I think we are extremely proud of the fact that all of this innovation has already been rewarded.
In fact, we join some distinguished other companies and their products such as the Google Home, the BMW i- Series, the iPhone X, all of which received a prestigious Red Dot Design Award, and we were just awarded this just a few weeks ago for this particular panel. We are super excited about that. In terms of looking at the stakeholders that we have to actually deal with, right?
Two major stakeholders, IT, who are typically our buyers, and teachers who are the main users, right? I am sure all of you have experiences or talk to teachers, but go any place in the world, and you talk to a teacher, they will all tell you, "I have too much to do, too little time. What are you doing with this device? I do not have time." Right?
For us, ease of use is important, but speed and efficiency was critical. If you are able to convince a teacher that they are not adding any more time in the day in actually using this device, that is a big deal. What did we do? We actually had gloves with LEDs on the tips and had teachers come in with that glove and actually use our product and competitors' products, and we analyzed what they did. We measured reach. We measured how many clicks they were actually doing. We actually measured how much their finger traversed and actually perform an action and how long it took.
When you look at that and you look at what we were able to measure across all sorts of different common activities that they did, we are not just good, we are way better than what we did before and way better than the competition, right?
That matters because, again, like I said, if you can make the teacher feel like they are not spending any extra time, it not only sort of increases the usage of the product, but it actually does it for more than just the teacher. The entire class starts using this, and that is about increasing our daily active usage of this device, right? I was at a school in the U.K. a few months ago, and the principal shared the fact that with the eight schools that they were a part of, they only had one IT person.
He said that they were lucky if they could get a few hours each week of that IT person to come in and fix all the stuff that they have in the school, right? Again, same problem. IT, too much to do, too few resources. In the Elements Series panel, we have done a lot of work to actually make manageability in the IT persona really be a focus of our innovation.
There are a whole host of capabilities that you can now control, monitor, and control remotely on this panel, whether it is volume, whether it is the users that are on there, whether it is the brightness of the panel, whether it is power state, whether it is the applications. Let us take for instance the firmware on the hardware.
The operating system, which runs on Android, all of the applications that are running in this, now we can have all of that updated remotely. Not just remotely, but over the air, right? When is the last time any of you stuck a USB drive into your phones to update them? Hopefully never, right? You should not have to do that with this panel, too.
Imagine an IT person running in a large school trying to figure out how to get updates for this across thousands of panels, right? Now they can just do that with a click of a mouse, right? In addition to just updating software in the panel, the other thing that we have done, given that lots of users use this panel differently, right? We have actually created a user management system that allows IT to actually manage all of the users in the school.
That just does not make the IT's person or their life easier, but it allows for users to now take all of their preferences and all of their profiles and have that stored centrally. As a teacher, I walk into the classroom here, use this panel, log out, I go to another panel, and now I have everything there with me. We expect this in our daily lives from our iWatch to the laptop that we are working.
We are actually replicating a lot of those experiences, right? By the way, a really important piece of that is what it does allow us to do, it allows us to continue delivering innovation over the course in the life of this product. No longer at the mercy of waiting for someone to walk around with a USB drive, right? That is a big deal for us.
Again, going back to future value creation. Before I end, let me just walk you through a specific app. We have a new polling app, which I will not go through because we do not have time right now. A polling app is what you would expect a teacher, say, at the end of a class, end of a lesson, wants to do a spot test for their students to figure out what they have learned.
Okay, what would a teacher actually do? A teacher would actually open up the app. First, they would have to log in, then they would use a wizard to go create some sort of a poll. They would then have to actually get their students' identities created, have them then be part of a class or some sort of a roster, and then deliver the poll to those students.
When the poll gets delivered, they'd have to then somehow figure out how to capture those results, which would be live on the panel. They'd capture those results and store it as part of his or her lesson, right? Oh, boy. There's a lot of potentially non-trivial steps that a teacher would have to take, and imagine doing that every single time.
But with the way we've done our platform, the way we've implemented applications on top of a platform, what would typically happen here in the Promethean ecosystem is, first of all, log in for the teacher, easy peasy. I walk in and either because I'm using my cell phone or I've already identified myself, automatically logged in or right up on the panel. Creating all of your students' identities is done once, probably at the beginning of the year.
All of those identities are now stored in the system. Definition of a classroom, again, boy, you shouldn't be doing that every single time you use a new app. Also done once and used many times, right? If the teacher has synced up their cloud accounts into their profile, just a click of a button, you can actually store or export the poll results straight into the lesson that might be stored somewhere up in a shared drive, right?
So imagine if all of these services, which are now part of our underlying platform and used by the apps, are used by any app. Not just our app, but any third-party vendor out there. What I'm trying to get at is what Amazon with AWS did to actually spur a massive growth industry for developers.
It's exactly what we're trying to do for the education space. Imagine these services used not just by those apps running on the panel, but by apps running anywhere, right? Those apps could be running on the teacher's mobile phone, on a student's laptop, in a tutoring center, or at home.
At the end of the day, what we're expecting is that that seamless experience that it creates when you use a core platform to deliver these kinds of experiences will actually make the school and the teachers go, "Hey, you want your app running in my school integrated into this platform." Because it just creates a much better experience for the teachers and the students, right?
In concluding, I think the key thing here that I hope I've left you with is that we think this product, not just the hardware piece, but as Vin said, the entire ecosystem of software is set up such that we're going to drive and continue to drive market leadership. The ease of use and the ecosystem is also going to drive much greater engagement and daily active usage. We believe that our platform-based approach is going to create opportunities for us to actually deliver long-term value creation. Thank you.
Good morning. I am really happy to be able to see you here and able to tell you about our deployment and outlook for 2019 as well as our achievement last year. In 2018, we have 12% of year-to-year growth. As for PC game, we also have YoY 40%. In fact, our mobile solution will be the core of our future development because the YoY growth was 49%.
We hope that we can continue to drive value growth. I will quickly showcase our two main games, Eudemons Online. A lot of users participated in our promotional campaign activities and the growth of users is really tremendous. Here, the Eudemons Online includes all the mobile phone user and also desktop game and various modes of the game.
We can realize our core philosophy in Eudemons, and also differentiate us in the market. You see that we have the Eudemons Pocket Version last year and also Eudemons Mobile last year. The first HTML5 is called the Eudemons Here We Come. We are also grossing in a lot of revenues for us. Overall, the Eudemons is growing and growing.
As for the growth, the sustained growth mainly come from the PC and mobile version. Within two months, the interactive version already penetrate 40% of the user market. In fact, our PC mobile version is no longer just simply the end device version, but can be downloaded onto the mobile phone.
Now we have the multiple major version updates, and we have the new cultivation system, and we actually got CNY 0.14 billion revenue within a particular month where we peak in our revenue growth. We have a lot of updates of content. We have the new version competitive promotion system. That is why you drive the growth for Eudemons all over.
Now as for another one is the Heroes Evolved. We have issued over the world, and in fact, we are the number two MOBA game in China, and we have a differentiation in that. In mobile version, we also are getting ready of Heroes of Ages, and also in the second quarter, we will launch that overseas first.
Last year, we already have the application of licensing in China, and this year we will be able to issue the SLG in China, and TCG will also be launched. Now is our first IP, and we already have 300 million registered user. Next is Heroes Evolved seasonal IP language. In each season, we will also do the IP crossover.
Last year, we used Bruce Lee. He is very influential IP. To assign all these new popular IP, the games that were welcome and very popular with young people. That is a very unique features of our games. I believe all this element will be able to drive more activities on our game platform. I will briefly explain our categorization in the gaming. The three areas that we will devote our main resources. First, about MMORPG. The second is MOBA.
That is to say, the multiple players online game, and it will be the future mode because nowadays, the new generation of game player, they want a fair, level playing field to compete. Third is the SLG, that is the war game, and overall it is the game which grossing very good revenues all over the world, and it continue to evolve in mode.
These three categories, we have very good system to support the growth and development in these three key areas. I believe we are going to see brilliant results in these three categories. Next, I will be very fast to explain the items, the Vows of Heroes. We have already invested over CNY 50 million, and the second one is Eudemons II that will cater to the needs of the future group of user.
As for mobile, we have all new Cyber Legends (Open World Multiplayer Mobile) version game. We also have other, such as TCG Battle Mobile, which is Heroes Evolved for HTML5, which is Battle of Giants. The mobile version of Treasure Hunt Heroes. I will further introduce to you, for instance, the Vows of Heroes. The subtitling and also the voice overs actually done entirely in Japan, and it continue the legacy of animation, but at the same time, it innovates on the animation tradition of Japan.
You can see the entire battle game is just like a full animation film. Next, we find some professional resources that we incorporated, for instance, in developing the We have the CG animation created by the famous animation director Tingmu Yang . Also, we also invited TEDDY, CHOBI from Nishihara to join us in this innovation.
The theme song was also created by the Japanese music production house that are very famous. Next about the Eudemons Online II, we have the overworld, which is the all-new realism and experience. It's through imaginative AI, so you will have more realistic NPC. We'll have even more upgraded version on the Eudemons Online II.
We're casting the classic Eudemons system for battles upgrade. It's head to the camp. It is a really large-scale battleground. Next is on the mobile, which is the All New Cyber Legends, which is the overworld mobile. That is even more open. That's going to change the type of ecosystem, is because currently what you'll find on the market is more sterile, more limited, but because with the new IT, we'll be able to have even all-new and more refreshing experience for the user.
It will start to be launched to the public in July. We anticipate we're going to see a quick response, more enthusiasm for this all-new category IP, we are going to see even more success with these games. Next, as I had mentioned, new version is Heroes Evolved Fronts. It's simply three to five minutes light combats, and neither all-out combats in the other types.
As I mentioned, they are a very popular game, which people are just doing it for leisure, such as the Battle of Giants, which is the first mini-game by League of Legends. All these heroes from the Legends, we have already been displaying it in the community of the Legends, but we also will issue that to QQ in Mainland China and other platform. Next is the Treasure Hunt Heroes.
It is very unique because it is low-poly style, HTML5 card game. It is very simple, but it is really fun. With this product, in the first quarter, we will issue overseas. Finally, we have two other games which are in the pipeline. First is the Heroes of Ages, is what we call the RTS SLG. RTS plus the SLG. We harmonize the two system.
There is no other similar kind. Our theme is to integrate all the key and unique characteristics over the world, so that we have our very individualized type of games. This is the very first time we have such RTS plus SLG key product. Again, we will issue it all over the world. Another one is the Legends of Ocean, which the world's first-ever real-time strategy navigation SLG game.
It is about maritime life and globally for the maritime battle, and they can realize the game. These are those key products in the pipeline this year and next year. Of course, we are still developing other games. We are researching on other category. In the NetDragon gaming, we will have the Heroes of Heroes: Battle of Giants, Heroes of Ages, Heroes Evolved Fronts, Eudemons Legends. This year, we have four rounds of product launch. We believe on the eigth of this month, we will have an issue of new games in Greater China. This is the overall status of our gaming development. Thank you.
Good morning. I am actually going to take you guys through the financials relatively quickly, because when the business is doing well, thanks to my colleagues, the numbers are actually a lot easier and faster to go through. First of all, this is the condensed income statement. As you can see, the revenue goes up by 30% year-over-year.
When you look at the breakdown in terms of education and gaming, when we look at education, we have over 20% of year-over-year growth. First of all, thanks to the great execution by my colleague, Vin. Promethean has been growing at a phenomenal rate. In addition to that, we also consolidated Edmodo and JumpStart, which is our acquisitions that we have done in the past two years.
In terms of gaming, again, we have been growing at a very fast rate, over 40% on the back of a great IP monetization, and also our mobile gaming revenue has been growing at a very fast rate as well. I think mobile gaming, we have been growing close to around 50% year-over-year.
I think if you look at the SG&A, we have been maintaining a very disciplined and controlled approach when it comes to cost. I think if you look at the absolute numbers, comparing 2018 and 2019, I think you are seeing a little bit of increase for the SG&A. A lot of that is actually because of the inclusion of the cost of our acquired companies, in particular Edmodo.
So I think, for example, if you look at the R&D expense, if you take out Edmodo, I think the increase is only around 3.8% year-over-year. Again, I think if you look at the SG&A as a percentage of revenue, you are seeing a decreasing trend, and that is because of our operational efficiency and also very much of a disciplined approach when it comes to cost control.
All in all, if you look at the entire bottom line, so basically we have turned around from a loss of CNY 20 million to CNY 545 million for the entire year. So on to the segmental financial highlights. I have talked about the revenue growth for both segments. I can talk a little bit about the gross margin. If you look at the education business, the gross margin has been relatively stable. In fact, it has increased a couple of points.
A lot of that is actually because we have been That is actually on the back of operational excellence when it comes to pricing and also cost control, such as supply chain and logistics. If you really dig down into the gross margin for the education business, we actually have increased our penetration in the emerging markets, which actually entail a lower gross margin.
So that actually implies that we have been increasing our gross margin in the developed markets, which is great. The other thing I want to highlight in this segmental disclosure is, for the gaming business, we have increased our segmental operating profits by almost double, basically 92.5% to CNY 1.3 billion in 2018. We are very excited about that. If you look at the segmental operating expense, again, I think a lot of the increase is because of the acquisitions.
I also want to highlight one point. When you look at the acquisitions that we have made, even though they have led to an increase in the operating expense from an absolute dollar amount standpoint, but they have actually allowed us to accelerate ourselves to faster monetization. As Simon mentioned, we are going to be starting the monetization in the second half of this year in tutoring.
For us, I think it is a well worth effort for us to make these acquisitions. High expense in the short term, but faster monetization and a bigger rewards in the long term. That is it for me, so I am going to pass the stage back to Simon, who is going to take us through the outlook.
Okay. Thank you, Ben. Okay, so hopefully, you have a kind of clear idea of what we have done. Maybe I will give you some idea of what we are going to be doing in 2019, and then we open it up for Q&A. I think Lin Xin took you through in great detail of our strategy, so I am not going to go into any detail. We expect even better things from him in 2019.
Vin did the same thing, Vin and Ravi. He did talk about a lot of our growth will be from the replacement cycle, but also from a new emerging market. As a matter of fact, it is actually Vin and I just came back from Egypt. We spent a week in Egypt. That was a very good trip that we have done. That is why we look a little bit tired.
The thing to talk about is actually what Ravi took us through. I hope a couple of messages to you. One is actually, we put a lot of thoughts behind is actually our new product, not only on the features, the hardware and all that, but also in the usability. What we are doing in Promethean is not hardware, frankly. It's actually a lot of what Ravi has shown you is actually all the software behind the scenes. I think it's a misnomer that Promethean is a hardware company.
We talk about tutoring. It's actually we're going to launch it in the second half. It's going to be exciting from my standpoint. We'll continue to drive the user engagement in Edmodo. We'll acquire more users, and we also drive the engagement because that is going to lend ourselves to monetize tutoring even more efficiently.
Last but not least, based on the new product that we have in Promethean, is actually we're going to be thinking about how we go after the China market as a whole, where we launch our strategy. Because like Ravi said, no one has the same capability as we do. I think China has been using our panel for a long time. It's actually is about time that they even step up.
Why should I say they? But we step up from that standpoint, and then kind of take advantage of all the new features that we put in, and also connecting the teachers and the students and the parents. With that, on behalf of the management team, thank you for your time. We expect to do even better in 2019, and I hope that's the best guidance I can give at this point. Thank you. Yeah.
Thank you, Simon.
I think we're going to open it up for Q&A, right?
Yes.
Okay.
We will enter the Q&A section now. Please allow us some time to set up the stage.
Actually, this is one thing I never understand. When it comes to Q&A, we all get high chair, which is very uncomfortable. Yeah, right. I would much rather have an easy chair or something. At least this has. There has got to be a better way to do this next time.
Let me just briefly introduce the way to ask questions. If you have questions, please raise your hand. Our colleague will pass you the microphone. Before asking the question, please also tell us your name and the firm you are representing. [Non-English content]. We welcome questions in English, Mandarin, and Cantonese. Please allow our first question.
Just like last time, I am going to be directing the questions. The easy ones I get. The difficult ones, they get.
Hi, this is Hillman Chan from Citi. Congrats on the solid quarter results. I have two quick questions. The first one is on the Edmodo. Understanding we are going to start monetization second half this year, more tutoring side. How should we think about the longer term, like three, four years? The addressable market and monetization upside from there. My second question will be on online game. PC Eudemons was pretty impressive with 40% revenue growth last year, after a pretty long period of operation.
Let me reply. As I have explained, there is the upstream [inaudible] system. Our users in playing, they are very enthusiastic. In terms of number, because our system is very new. Last year, that is why it drives the figures up, and interactive panel is very useful and very easy. As for the Eudemons Online, because it requires and depends upon the community to drive the figures.
It is very different for the online version. That is why in terms of that, and in term of the future development it is going, that is because of the participation. As for the user participation, we use membership mode when they play our game. Actually, there are also collateral that are value-added service, such as we will give them bonus. That is why they have very high degree of loyalty.
Last year, our IP is growing, but also other version, end version, desktop version, they also grow. We feel that through the mobile version, the mobile version is going to account even a greater share. Overall, in the market, the Eudemons has account for quite last year. I think this year's development is multi-pronged. It is not just simply on the Eudemons Online. We will not focus simply on this game. In fact, we have all around even stable growth.
To monetize the community, because actually, once you have traffic, you can do many different things. Today, exactly, we are monetizing it through advertising and also marketing programs. I will give you one example. FDA actually came to us, because they want to have an anti-smoking or actually anti-vaping campaign.
What is the best community to go to when you want to reach the young people, right? Actually, when we talked to them, we just realized advertising is not the only way to reach the community. It is actually you can do marketing programs and all that. That is one way to monetize it. By the way, the US Army also came to us because they want to reach those youngsters. I think NFL, the National Football League, is actually coming to us. Actually, while we are getting ready for tutoring, we already are monetizing.
Going forward, it is actually anything related to content, anything related to homework, actually, we can do. We can even see going forward we can do e-commerce on the community. It is actually nothing stopping us from doing that. So we see huge upside in the longer term horizon. Okay, next. [Non-English content] Okay. Then we will go to Susanna, yeah.
Thank you so much. I just have a couple of questions. I am from [inaudible] . First of all, I want to ask about games. So I would like to ask, in 2019, we have a lot of these games. As you have mentioned, in 2018, a lot of games have grossed over the 50 million level. Now with a lot of games, what are those games that you put high expectation, that you anticipate will be the main drivers for revenue? Also, I want to ask, Promethean about due to many deals from different countries, and what is your plan to promote the period, and what is your target markets in future periods years? Okay, thank you very much.
Okay. Why don't you go first and then we will. Yeah.
Yeah. Thanks. We have an indirect sales model. The way that we approach covering the entire planet is that we have relationships. We have direct salespeople on the ground in countries working with indirect channels that have relationships into buying decision-makers, whether it is in the government or in education.
So when we grow, for us to expand our presence, it does not necessarily mean we have to keep hiring more people. Because for every person that we bring on board, that specific sales professional can then work with multiple other channel partners to get reach. So we actually are able to scale faster by working through the indirect channel. Yeah.
But that said, let me add to it. Also, major opportunities, we do get directly involved, but we have indirect channel to fulfill. I think we have both an indirect method but also direct, but fulfilled by our partners. Okay.
And you mentioned over the 50 million that is about the interactive mobile panel, but because the games, we have three different modes. Concerning our core products, the 50 million and its expectation, it is actually the minimum. Actually, because with Eudemons I and II, when we want to design something that we can issue over the world.
Because with the Legend Heroes and all these other games, as I have explained, actually in the mobile games in Mainland, we see great opportunities for growing, and we anticipate CNY 50 million is actually the minimum. Interpreter cannot hear without the microphone. In fact, our R&D operation, we have actually hired 200 new employees to do the design. Now we have some IP in the pipeline application. We are also looking for global collaborative opportunities.
And within Mainland China, we hope our R&D teams will have innovative ideas, they can join us. In terms of gaming, we also have studio. We have a subsidiary called JumpStart. We have a game called [inaudible] . We just acquired the subsidiary, the game.
We have six in total. Let me add something. Just that in terms of educational game and virtual game, actually domestically, the government is promoting that. That's why in future we're going to see even big more breakthroughs in this area because these games are very entertaining, not just educational. If we can add more unique features, I believe we will have even greater revenues and market share.
10:30 A.M., right? Is that hard stop? Okay. Hard stop at 10:45 A.M. Please maybe ask one question, maximum two, and then we will give you brief answers. If you want more detail, we can do it offline, okay? More people can ask questions. Sorry.
Hi, I am DBS, Susanna. Congratulations on very good results last year, actually. Last year's result, I believe you will see even greater result this year. Next, I want to ask about the Eudemons Online on PC. I want to ask, for the last two months, last year, you almost double. I also want to ask because we are also interested in the mobile game area.
You organize online pocket version. Can you share with us? You actually asked three questions, not just one question. Okay. One more question I will quickly ask. About 2019, the gaming and the revenues and the profit margins. Can you give us more view concerning the Eudemons 2019?
In the first quarter, of course, the YoY grow. In fact, we have spent four years in R&D. In March, we have the first trial, and in May, we are going to have the second trial, and there are no barriers to issuing it overseas. Of course, if we can get the mainland version that we will issue in mainland China. Our current process, we are doing really efficiently, and we also have very good regard and views from our current clients. I believe it is going to be a smoother.
Concerning the margins of this game, it is about 90% or so. Of course, we cannot get 100% so easily. In fact, it is already at a very high level and trying to drive the remaining few percent to get 100%, it is going to take us a lot of endeavors. In the business growth, definitely we are seeing room for growth and we definitely anticipate growth.
Compared to 2018, I'm sure this year we're going to seek the growth. From ASP, it is not going to be at such a fast speed because the new growth area will be focused in emerging markets. For instance, the panel will be smaller. We are going to see a little bit of plateauing rather than the steep growth as we have shown. I'm sure one to two big project, if those projects are out, we are going to see also very fast growth. Our margin is pretty high on the mobile because we are monetizing and we share the revenue. Also in the advertising, we also have high margins.
Winston Shu. I have a question about the V7 product. It looks phenomenal from a user experience standpoint, but I understand now you have two software products. How are you planning to transition your product that seems to be less of a focus for, which is ClassFlow, back onto your latest software on ActivInspire?
That's my first question. The second one is more about the educational side, and there are having comments around spinning off the business. I'm just wondering what management's thoughts are on when you think the business will be ready for a spin-off. Will it be after you integrate Edmodo into the Promethean side of the business, after you launch in China, perhaps? Any thoughts around that would be appreciated.
Go ahead. I'll go deal with the second one. Yes.
Like you said, ClassFlow and ActivInspire, right? What's not evident here is we're actually starting to merge those. That polling app that you saw there was actually really a ClassFlow component. We are looking at really stepping. Yes, we still have half a million or more teachers using ClassFlow, so that's not going anywhere.
What we're really trying to do is actually look at sort of lesson delivery in a more holistic standpoint, where we see more and more teachers end up using, sometimes maybe large applications like ClassFlow and ActivInspire, but we're also seeing a lot of them wanting to use bite-size components of tools that might be part of those assets.
Looking at how we actually disaggregate the software piece of this also, we did that with the hardware, and actually making those sort of more materialized as a portfolio of tools. The same thing goes with harvesting a bunch of assets that we have even on the NetDragon education side. There are quite a few components there, so that's really going to be our approach, I think, going forward. We'll continue to enhance ClassFlow and ActivInspire, but we really want to figure out how we actually make this sort of more universally applicable using sort of a bite-sized app-oriented structure.
Go back to your IPO question. We're getting ready right now. A couple of things we like to see it happening before we go IPO, so we can get the most value. I think you alluded to a couple of them. One is actually if we start to monetize the community so we can demonstrate to the market that we know how to do it and we have a trademark to do it. So our launch in H2 for tutoring is actually very important. China is such a big market.
As you know, only China. China and India are the two big markets. So we want to make some traction in there. We believe we can. So those are kind of some of the gauging element that we're going to be using to decide when to go IPO. Now, of course, there have to be the market sentiment. From my standpoint, I think we are 12- 18 months away. Jeff.
I don't think you'll have to take that long.
First, congratulations on very strong performance. I have two questions, if I may. First is about Promethean. We very much appreciate your quiet development in the emerging markets. Do you expect those seems like a one-off and bulky project to be recurring, to generate recurring revenue in the three to five years, in the future, for example, in Russia after phase II and phase III? What is your expectation? My second question is about China strategy.
It is quite exciting that you have Promethean finally have the plan to enter into China, but, we all know that there are some established leaders in China, in the panel market. How would you like to compete with those manufacturers, especially, they have a very competitive price, probably. How would you position yourself in China? That lead to another question in China, that currently you have two separate team to develop the China markets. In the future, do you plan to integrate your strategy in China, or you continue to the separate team in China? Thank you.
I will take the first half.
Yeah.
Okay. Your first question was around some of these larger projects that we are working on and the potential reoccurring revenue associated with them. Many of these projects are large multi-year projects. So there is an element of natural hardware reoccurring revenue in that you win the first phase of the project, which then gives you the opportunity to commit or to compete to win the second phase and third phase and phase IV.
It is important as we build the business to make sure that we have a robust pipeline of countries and big projects, that there is a reoccurring element from a hardware piece. I think secondary, and I think you heard the undertones of some of the things that Ravi was saying today, is that our technology that we are putting in the classroom has connectivity to the internet, has ability to use different types of apps.
There are ways that we can look to monetize usage on these panels, either through third-party relationships, whether it is curriculum, whether it is different applications. So it is not just a reoccurring revenue from a hardware standpoint, it is what we can do once it is installed and how we can monetize it from there. That is part of the underlying strategy. From the China piece, do you want to take that?
Yeah. I will take a crack at it. First of all, the reason we did not go into the Well, I mean, we were in there, but because it is actually, we do not feel the product we had actually had enough differentiation that we can really go after the mass market, right? With this, if you kind of go back to what Ravi was talking about, not only we put in a lot of new features, at the same time we also reduce costs. So this is actually a very different product.
So, we have how many different models to it? Nine? Nine different models that we can address different markets, right? Because of differentiation and also because a lot of the school have been using panels, so they do know what they have today. So we believe we have comparative advantage on that one.
That answers one of your question. The other one is actually, we are definitely looking at rationalizing our resources in China so we can really take this product and really go after the market. For detail, maybe we will take you through in the half year announcement. But we are doing a lot of work around that.
Hi. Good morning to the managers. I have a question concerning the educational part sector, concerning the educational product. Are they relying mainly on the hardware revenue? As for the service, they contain revenue, what is or what are the shares of the other two? As for the educational product they target and school, as for government, concerning the financial investment, are we relying mainly on the government's investment on the educational sector?
We have a lot of the cash flow. I want to understand the liquidity status. Are we having a lot of cash flow out? Concerning the Chinese market in Guangzhou, the government is doing very well in promoting that, so the market is very good. What is our differentiation in that market?
Actually our product is predominantly on the hardware side. Do we have a strategy to monetize software and content and all that? The second one I forgot. The other one is-
Second question again. The second question is that concerning educational product, the source of the investment, would that mainly concerning the fund government and will affect cash flow?
A lot of deal is actually B2G, like to government. How does it affect our cash flow? The last one is actually about our... About CBTE.
Okay.
Yeah. Go on.
I'll take the first one on maybe software strategy, and Ravi, maybe we'll joint on this. The core software that we offer with our product is the lesson delivery software. When you think about how teachers create lessons, they pull in applications, and they pull in digital content from other sources to embed in their lessons. What Ravi's building in the product is the ability to essentially store that in a single location, and that's an opportunity for us to monetize. I don't know if you want to add on to that or give a little bit more texture.
Yeah. It's probably not an exact example, and you think about when Apple launched their platform with the iPhone. They had to invest in building some core applications that made that phone really productive, right? As Vin said, we need to do the same. We need to continue doing the same, whether it's in lesson delivery or some of the other things that you've seen here.
But having done that, I think one way to think about it is the hardware becomes sort of the Trojan horse. It's the hook that then gets you. Essentially you own the classroom. And if you can create compelling reasons to actually allow people to integrate into your panel, then I think that then creates an opportunity for us to monetize anybody else that wants to come onto that platform.
And it's not just come onto the platform as it relates to just the classroom, because that could manifest itself in terms of anywhere those applications are used, right? Because it's about the platform, right? The first place the platform manifests is in the classroom, but it could actually reside in the home, in tutoring centers, it could be anywhere, right? So that's really our approach to actually getting to monetization opportunities on the software side, whether it is content, it could be games, it could be curriculum, it could be any of those things.
Okay, thanks. Just for translation, the capital question was specific.
Selling to government.
Yep.
Does it kind of impact our cash flow?
Yeah. Depending on where we are, we are typically able to negotiate pretty beneficial payment terms when we do these large deals. From a cash flow standpoint, we are able to do these larger deals and coordinate and do payment terms.
You want to add?
Is that?
Add on.
[Non-English content] Let me add something in financial, in terms of education, the revenue mostly come from hardware. But in terms of content, as we have been talking about, the tutoring is going to be monetized. That part will start in the third quarter, second half, because it is simply the new start. In the last few years, we have been building a foundation.
In the first half, we hope that we start in this area. As for the cash flow issue, this year, as we have explained, with Promethean, the profit last year is 36 million, and that is very close to our cash flow because every year [inaudible] , our depreciation is about 2 million-3 million. Basically, you see the reconciliation with the cash flow. Actually, in different countries, the purchase of Edmodo will be very different for each term in the U.S.
Basically, you go to a different district because we have the issue of chain notes. That is why they will assist or sponsor us. We have different way. For instance, first we make profit. Second, as said, we have also manufacturer and also we have partners. That is why we share the cash flow burden. As for content, first of all, I do not agree with the way you put it.
In fact, Promethean, it is not a hardware, it is a solution. A lot of things is actually the software behind, but we have not separated them because if we only sell the hardware only it is not possible because a lot of people can do the panel. But the software supporting panel is the important part. That is why we should not talk about Promethean being the hardware. It is a solution that we are selling.
Also about the surface, the content, we are not just looking at Promethean. We also have to look at Promethean as a model, like Jumpstart. We have other collateral or supporting or other products, category of supporters.
I have a third question that you have not answered yet concerning the Guangzhou case. Can you also answer the question?
I am sorry, I forgot. Yes. Actually, about the two companies in China, in that market, as I have mentioned to Jeff, we feel that our software and our capability and our ability to solve various different problem and also introduce it and build those into China, and it is a very different case. Our competition is by means of value, not by means of price only. But I believe their ActivPanel Premium is more expensive than others. But every year we still see growth.
You see that it is by quality, not by price only. The interpreter cannot hear without the microphone. Yes, we also have hardware because we Or maybe you do not know there are a lot of hardware manufacturers are actually our partners. Even though they are competing with us on some areas, they are also our partners in other sectors. Those who have paid a visit to our companies would know. Our interpreters cannot hear. This question should be directed to my colleague.
Asset Management. My two questions on basically the Promethean offering. For us to think about it, is it something with a walled ecosystem, like an Apple iOS, where if any third-party app wanted to get on, we take a cut? Or is it like a jailbroken Android system where anyone can load an app on it? If so, how would we control that flow, quality, and actually most importantly, user security and information? That is my first question. Second question is with the Edmodo software offering. For these panels currently as shipped, is Edmodo pre-installed? If not, why not?
I am going to have Ravi answer the question. What I will say, I will just tee it up. There are some things we want to keep confidential at this point. I am sure you appreciate that. Just like in August, I said we are going to launch an amazing product in V7, and I will share it with you. You are going to see a lot more of this at the half-year mark. We just want to keep some things from a competitive standpoint close to the vest. You want to....
Yeah, I think, just sort of follow up on that. Let me put it to you this way. You can imagine going back to some of the examples I gave you. In a school environment, a classroom environment, teachers do not want stuff breaking on them. So we do need to be careful about how and what gets onto the panel. But at the same time, we have to balance that with not being in the way of creating that large ecosystem. I think we are still trying to figure out where the balance lies on that at this stage.
The way I look at it is actually we are somewhere between Apple and Android. We are not as closed as Apple, but we are not as open as Android. We are somewhere in the middle, maybe more towards a Microsoft kind of situation. I think that is probably an okay analogy from that standpoint. Definitely, because again, we need to look at the bigger picture.
Actually, Promethean is only one part of it. Edmodo is actually we also have an app store. It is actually that the plan had got to be we open it up. So a lot of people can come in and innovate on top of our platform. Actually, in August, when we did the half yearly review, actually, Ravi took you through, maybe you are not here, is actually something we call Mango Wish Limited at the time.
Actually, that's kind of equal to, from my standpoint, the back end of what Apple is doing and Android is doing. Actually, ActivInspire plus ClassFlow plus Edmodo is kind of like iTunes, if you will. That's actually how we go and support all these users from my standpoint. Hopefully, that's the way to do it. In terms of Edmodo, the answer is not yet because integration needs to be thinking about.
It's actually a teacher, a lot of time will use ActivInspire and ClassFlow in the classroom, but also use Edmodo to deal with homework and use Edmodo at home. There's a lot of opportunities for us to integrate. I did talk about Edmodo has an app store, Promethean has an app store, reading between the lines. It's actually there's a lot of work that we are doing and we will be doing and make it a very seamless experience for the users, be it the teacher, be it the student, and the parent.
One quick use case I'll leave you with is, I talked about being able to export or seamlessly connect this to the cloud, essentially services that might be running elsewhere. One of those services we expect absolutely to be is Edmodo. Edmodo has its own stream, an activity stream. For a teacher to be able to write up the homework here and then export it to the Edmodo stream, it would be an example of something that would be very valid and that we're working on. Again, the platform enables this. You can export to Google just as easily as you could export to Edmodo. It's just a natural extension.
Yeah, actually, good point. We seamlessly integrate with Promethean and also integrate with all the G Suite product and also Office 365. We integrate with most of the prominent players. Okay. At the very back.
Thank you, management, for taking my questions. I am [inaudible] from [inaudible] International Asset Management. I have two very quick questions. It is all about education segment. Firstly, actually, when hearing about your plan to monetize the users on the education platform, I think the right strategy to do that, and actually that is what I imagine it would like be an iOS platform or Android platform, and it is going to be very profitable.
You mentioned that actually you are going to launch the tutor service in second half this year. Maybe could you give some rough idea, maybe, for example, the tuition fee and the revenue sharing system with the tutors or something like that for us to understand? It is because you have a huge registered user space, and may you also drive, for example, $100 per month, and that means a lot for you. I just want to know maybe, could you give some kind of what is your plan?
Okay. Yeah.
on this?
Yeah.
My second question is that you mentioned there will be some growth for Promethean this year. On top of that, there will be also some monetization opportunities, which is of much higher margin as I imagine. Is it fair to say that the operating loss from education segment is going to be, I think, for taking the most conservative perspective, is going to be level or even stable at 2019 level? Just my two questions. Thank you.
Okay. They are asking for guidance again.