Good evening, ladies and gentlemen. Welcome to NetDragon's 2016 third quarter earnings conference call. Accompanying this call, we also have a live webcast on our website, where you will be able to view the quarter earnings presentation. After the presentation, there will be time for a Q&A session, but until the Q&A session, all participants are in listen-only mode. Before the presentation, I would like to remind you all that this call may contain forward-looking statements which may not be relied upon in the future for various reasons. Non-GAAP data is included as a part of this presentation. Non-GAAP data is not expressly permitted by the Hong Kong Financial Reporting Standards and therefore may not be comparable with other similar indicators. For more details on the non-GAAP financial measures, please refer to the disclosed documents on the company's IR website at ir.nd.com.cn.
The company's results were released earlier today and are available on our IR website. A webcast replay of the conference call can also be found there following the conclusion of this call. Now, please allow me to introduce our management team who will join us today, Dr. Simon Leung, Vice Chairman and Executive Director of NetDragon, and Mr. Ben Yam, Chief Financial Officer. Simon will begin with a review of recent developments in NetDragon operating performance, followed by Ben, who will review the company's financial performance. Following the presentation, they will both be available to answer your questions at the Q&A session. With that, I would like to turn the call over to Simon. Simon, please go ahead.
Thank you, Joseph. Good morning, good evening, good day to everyone. Thank you for calling in. What I'm going to do today is actually real quick give you an overview, and then I'll follow by an update on our operations. Then I'll turn it over to Ben Yam, our CFO, to take you through the numbers. Then I'll come back and talk a little bit about Q4 and 2017. A few key points for the quarter. We are seeing robust performance in our businesses, both gaming and education, strong year-over-year growth. The performance of our business actually in line with our seasonality and historical pattern. The key point on that one is consistency of our business. One of the very exciting things is actually we are seeing, and we have developed the strongest pipeline of new games in recent years.
That will tee us up for good growth, not only in Q4 but in 2017. Another key milestone is actually we talk a lot about creating community, and we also talk a lot about how we go about doing it, which is actually to sign up the teachers. I'm very happy to report one of the key number I can share with you is actually year- to- date, we have 1 million teachers registered in our ClassFlow software, which is the platform we use to build our community. I'll talk a little bit more about that later on. Another very exciting thing, which is also part of driving the community growth, is actually our ability to help the teachers in a big market like China. We have launched a product called 101PPT. It actually is a soft launch.
We are getting very strong feedback and good feedback from the teachers. That will be the foundation for us to see accelerated ramp-up of signing up teachers in China. We continue to put our investment in technology to good use, both from a gaming perspective and also from a learning perspective. I will go into that when I am giving you the update. In terms of operations, let us take a look at our gaming. I talk about the strong growth year-over-year, which is actually very exciting. Actually, another key thing is if you double-click into the growth, our two flagship game, Eudemons and also Calibur of Spirit, also seeing double-digit growth year-over-year, which is important, and we are seeing growth both in revenue and in profit. We also launched new games. Tiger Knight is one of them. It is actually a 3D online game, which is exciting.
We also soft launch a VR version of Tiger Knight, which combine, of course, the VR technology also with motion-sensing devices that give you a real-life experience in terms of the game. Again, that is part of our strategy to monetize our game in many different ways. If I can move over to education, solid performance. I talked about it earlier. Our international business continued to deliver strong revenue growth year-over-year, mainly because of the strength of our product and also in both hardware and software. The total user of ClassFlow has reached 2.4 million at the back of the strength of the 1 million teacher registration. So the teacher will drive the total user growth. We expect to see ramp-up not only in Q4 but will continue into the future years. I did talk about 101PPT, so I am not going to repeat it.
Another very exciting product which is a beta version, but we expect to launch it worldwide in the near future, is our VR Editor which is one of a kind in the world right now. It is actually the first of the kind in the world. We are going to give the tool into the hands of the content developers. So this is a way to accelerate the VR content for education. We are very excited about that. With that, I am going to pause. I am going to hand the stage over to Ben, our CFO, and he is going to take you through the financials.
Thank you, Simon. Hello, everyone. Let me go into the financial highlights for the games business, and then I will talk about the education business, and then I will talk about our overall numbers. First of all, in the games business, if you go to page 12, we are continuing our momentum with a very strong year-over-year revenue growth of about 20%. We have experienced quarter-over-quarter negative variance in our revenue and profits, and that is largely due to seasonality impact. That is consistent with our historical quarterly pattern. When I say historical pattern, in the past few years, Q3 revenue for our gaming has largely been lower compared to Q2. So this quarter is actually very consistent with what we experienced in the past several years. In terms of segmental profits, again, on a year-over-year basis, we have experienced a 27% growth, and that is supported by operation leverage.
For our games business, we have a very strong pipeline of at least five new games to be launched in the next 12 months. As Simon said, this is actually the strongest pipeline that we have seen in recent years, and we believe that that is going to contribute to robust revenue growth in 2017. In terms of our new games, these games will actually leverage the popular brand of Eudemons Online and also it's going to leverage the technologies of Calibur of Spirit. We are very confident that these games will be successful in 2017. Going into our education business, first let me talk about our international education business, which delivers solid growth with 20% increase in revenue year-over-year on a pro forma basis. Again, let me talk about the variance on a quarterly basis.
The drop in revenue from Q2 to Q3 is also due to seasonality, which is consistent with the historical trend in the past several years. Again, if we look at Promethean's revenue in the past several years, Q3 has always been lower than Q2 in the past, I believe, four years, in fact. However, as we have mentioned in the past, Q2 and Q3 indeed are the peak season in the international market. It's just that from a directional standpoint, Q3 is typically lower than Q2 in terms of revenue. On the cost side, in Q3, we have achieved a positive EBITDA for Promethean for two consecutive quarters, and that is through a very intensive cost optimization and also streamlining of our operations. Switching to China.
Our China education business delivered over 4x increase in revenue year-over-year with a very strong contracted sales of about CNY 90 million up to October. That is from January to October this year. This quarter, Q3 actually is the first quarter of our large-scale revenue ramp-up in China, and that is on the back of very positive user engagement feedback that we have collected over the past several months. This very positive feedback, we believe, has validated the value proposition of our product. On the back of this, we are very confident that we will be able to achieve a very successful 2017 in terms of both revenue and also user ramp-up. Let me talk about the overall numbers a little bit. Overall, our revenue for the quarter is CNY 694 million, representing 167% increase year-over-year.
In terms of the bottom line, let me talk about the overall non-GAAP operating loss for this quarter because I anticipate that most of you will be able to see the variance from last quarter to this quarter. If you look at the non-GAAP operating loss this quarter compared to last quarter. In Q3, our non-GAAP operating loss is roughly about CNY 89 million. In Q2, it's a profit of CNY 28 million. There is a bridge of about CNY 117 million. There are actually three components to this. First, the first two components are basically components that are unrelated to the performance of the company. First is that we have a currency exchange difference, which is a non-cash item. Second, we have a difference in government grants, that because in this quarter we have received substantially lower government grants compared to Q2.
But then government grant is something that tends to fluctuate from quarter- to- quarter. The third component is actually a lower revenue contribution from our international education business. Again, that is due to the seasonality impact, which I have mentioned, and that is very consistent with the historical pattern that we have seen in the past several years. If you look at those three components, the first two components, which is again, currency exchange difference and government grants, which are basically not related to the core performance of the company. These two components represent close to about 70% of the difference in terms of the non-GAAP operating bottom line that we are seeing from Q2 to Q3. I just wanted to kind of highlight that so that we all understand why there is such a negative variance.
So with that, let me turn back to Simon, who will give us an outlook for the next quarter and onward.
Well, thank you, Ben. Let me quickly take you through a few key points. I may repeat some of the points we mentioned earlier, but I think it is good that we emphasize those points to give you a view of the future. On gaming, we are very excited about the inventory of games that we have. We are going to launch at least five new games in the next 12 months. If you look at kind of the past few years, it is going to be the harvest year for us going forward. Eudemons Online expansion pack is actually expected to happen. That will have impact not only in the Q4 revenue but also going forward. On the education side, the next few years will be the story of ramping up revenue and also ramping up users worldwide, not just on international.
This is actually the back of the positive feedback that we have with our latest software called 101PPT. We are very encouraged. Another kind of milestone for us will be in Bett in January in 2017. We are going to do worldwide launch, is that with multiple products, is actually in Bett in London. In case you wonder about what Bett is, it actually is in London. It stands for British Education and Training Technology exhibition. It is Europe's largest education show, so a lot of people, not only people from the U.K., going there. We will have four categories of product we are going to be announcing. We have our fifth generation of display coming out with a very interesting handwriting technology. We are going to announce the VR Editor worldwide, AR Editor, and also a 2C product coming out. It is actually going to be very exciting.
On the back of the 2C product, if I go to the next page, I want to give you a taste of some of the things that we will be also working on that takes us into another growth area. This is actually a product called English Galaxy, which is actually developed right here in Hong Kong by our education team. This combines AR, VR, and 3D technology, and then with adaptive technology behind and also big data technology. It is actually, you can say we have all the technology behind this product. This is actually a product that we can provide to a tutor center, but also a product we can provide to individuals. So it is a product that is both 2B and 2C. Very exciting.
Exciting in the sense of not only the technology but also open up additional revenue opportunity for us, which is actually the consumer market. If we go to the next page, this is something which is part of our learning community, part of our learning product, which we call empowerment community. This is actually an integral part of lifelong learning. It is a true O2O implementation, which is online to offline. We can bring very rich experiences from anywhere to anywhere at any time. This combines both VR and AR and holographic technology. To me, holographic technology is a form of AR. It is actually, in addition to the exciting technology, also is a very healthy, good margin business.
The first one I want to introduce to you is actually in the first quarter next year, we are going to be using our holographic technology to bring Stephen Hawking from the U.K. into multiple locations in China at the same time, with the capability of not only on the presentation part, but also have the capability of interacting with the audiences in the multiple locations at the same time. The picture, as you can see, is our working crew and our Chairman in Cambridge, working with Hawking to prepare for the event in Q1 next year. We also will work with Tony Robbins, who is a very famous speaker in the U.S., to run a few events in the U.S. Last but not least, is actually Deepak Chopra, a guru in meditation.
We are going to use our various technology to work with him to bring his presence into multiple locations worldwide at the same time. Not only we are making great progress in our education business, but from a lifelong learning perspective, we have been in vocational training. Now we are branching out to professional training. So this is actually is rounding out our vision of lifelong learning. With that, I am going to pause, and I am going to hand the stage back to the operator, and then we will open it up for question- and- answers.
Thank you. Ladies and gentlemen, we will now begin the question- and- answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please note investors are restricted to ask up to two questions at a time. Thank you. Your first question comes from the line of Hillman Chan of Macquarie. Please ask your question.
Thank you, management, for taking my question. Firstly, I want to ask about our pocket edition of Eudemons Online to be developed with Kingsoft. Could you share more about the game design, the progress of the development, and the timeline of this title next year? I have another question.
Okay. I'll let Ben handle the question. Okay, Ben.
Yeah, sure. What I can say on the Eudemons Online pocket version, the new version that we're working with Kingsoft, it's a game that we are on track to launch in the first half of next year, in fact, most likely in the second quarter of next year. This is a game that we're very confident because both Kingsoft and NetDragon have put in a lot of resources. With the brand of Eudemons Online, we are actually very confident that this will be a hit. I think your other question is on the overall pipeline. The pipeline for next year, as we have mentioned, we're looking at at least five games to be launched in the next 12 months.
We're going to be launching shortly our Calibur of Spirit mobile game. Both the overseas version and also the Chinese version of Calibur of Spirit mobile game will be launched within the next several months, I would say. Then we're going to also launch a couple of new games that will be leveraging the Calibur of Spirit, so-called M-O-B-A MOBA technologies. Also, in addition to that, as Simon has mentioned earlier, we have already launched the English and traditional Chinese version of Tiger Knight. Then next year, most likely in the first half of next year, we're going to be launching the Mainland Chinese version of Tiger Knight as well. Just a little word on VR as well, because we have added VR capabilities to a couple of our games. One is Tiger Knight and the other one is a new Calibur of Spirit.
Well, it's actually a new game that will be leveraging our MOBA technologies, and we're going to have VR component into that game as well.
Okay. Thank you. My other question would be about the expansion plan for our education business. On the announcement, we say we expand into India, Middle East, and some of these other countries. How should we think about the expense, particularly the marketing? Thank you.
Well, actually, we have always talked about India as a market. By the way, it's not expanding into it. I don't know where we But we have always been in India, by the way. We have been in India for quite some time. If you look at the education market, anywhere with a population is actually, by naturally is a market for us. I wouldn't say it's expanding into India. But since you talk about India, I will address it as quickly. One is, we believe in the long term, India will be a good market, so we continue to work on it, and we will increase our resources.
The other one is actually we are looking at India as both a market but also as a resource pool, because there's a lot of good resource, both from a people standpoint and also from a product standpoint that we can tap into to help us to expand into the worldwide market. Middle East is actually, I think you're referring to the fact that we opened up an office in the Middle East. We have always been in the Middle East, frankly. But what we have done is actually because we want to strengthen up our support because we know it's going to be a growing market. Now, when we look at the Middle East market, that is actually a market for the region, not just for Middle East, because we believe from there we can support countries in North Africa and also countries like Turkey and Iran.
Exactly, it's an overall strategy for us to go in and not only to expand but also to strengthen our support.
Thank you very much for the comment. I'll get back into the queue.
Thank you.
The next question comes from the line of Thomas Chong of BOCI. Please ask your question.
Hi, thanks, Simon and Ben, for getting my question. I have two questions. My first question is about a follow-up of Simon's comments about talking the consumer market. We know China has a huge population size as well as in overseas. How should we envision NetDragon's education strategy in the 2C market? Is there anything that we can sort of quantify the monetization potential? My second question is about the online gaming revenue breakdown. Ben, can you just give us some color about the revenue mix between PC and mobile in the first quarter? Thanks.
Okay. Because as I was talking education, I'll continue to talk about it, and Ben can take your question. I don't know whether you remember, when we talk about education, we always talk about lifelong learning, and we're also talking about capturing the learning 24/7. With that, 2C market has always been in our view, and we are starting to move into it. That's why I talk about the package or the product called English Galaxy. Actually, there are many ways to get into the home. I would try to do it at a very high level because it's actually, if I want to, I can probably talk about it for the whole day. There are a couple of things we are doing. One is the particular product we can help people in a certain area.
English Galaxy is a gamified English learning product that we developed along the Cambridge English curriculum. This is actually both a 2B product and 2C. When I say 2B, that means we can provide it to the tutor centers in China, for example. You mentioned about China. They can use it to help people to learn English. The other one is actually 2C. We can sell it directly to the home. That is one example. Another example will be once we build up the community, the community of teachers and students and parents. What we can do is we can provide a lot of the services and/or contents that we have to the students. That is also a 2C market, whether it's to the student in the school or to the student at home. That would be also classified as 2C.
From a hardware standpoint, we also start to think about some of the technology that we have, whether it is in the area of our display technology, our augmented reality technology, or VR technology, that we can create product, that we can bring it to the home. That will be another 2C revenue stream. By sometime next year, you should start to see the 2C revenue coming into our community. Okay? On the gaming side, I am going to turn this over to you. On the revenue side, and Ben is going to try to break it down for you.
Yep. Sure. In terms of the breakdown, in Q3, our online game revenue is 87%, and our mobile game revenue is about 13%.
Thanks, Simon and Ben. Back to the queue.
Thank you.
The next question comes from the line of Eric Qiu of CCBI. Please ask your question.
Hi. Good evening, management. Thank you for taking my question. My first question is regarding the education business. I think although it recorded 20% year-over-year growth, it is still slightly below my estimation because for the first and second Q, both the pro forma growth for Promethean was above 45%, and this quarter is only 20%. I think before, we expected that both second quarter and third quarter should be quite strong and peak season. I am just wondering why the third quarter the growth speed dipped down, and what are the prospects for next quarter or next year? This is my first question.
Okay. Thank you, Eric. That is a good question. Let me go back to Ben's original comment about seasonality. It is actually the quarter to quarter is actually really depending on the buying pattern. The way I would suggest you to look at is actually for our business, rather than looking at each quarter, you look at Q1 and Q4, and then Q2 and Q3. It is actually that in the international market, a lot of people are buying within those two quarters. It is a B2B market, it is not a B2C market. I think it is better to look at it two quarter as a whole, and then you look at the growth. I am sorry I disappointed you with only 22% year-to-year growth, but I am sure when you combine the two, I think that is a better way to look at it.
The other point I want to make is actually the business we are in and the business where we are going to is actually quite different, right? We are leveraging our core competency in going into the classroom, but going forward, what we want to do is actually not only B2B, right, but also B2C. That was the previous question. Over time, because when we get to the B2C market and we also ramp up the China business, I think you will see a much better spread among the quarters because of the different mixes. For the short term, I think you will continue to see the fluctuation a little bit from quarter- to- quarter. I do strongly encourage for you to look at it, really Q1 and Q4 and then Q2 and Q3.
Okay. May I follow up? I noticed that your data for ClassFlow were quite encouraging. The users saw from 500,000 in Q2 to 750,000 and to 2.4 million this quarter. I'm just wondering what's the implication for future revenue growth from this ClassFlow product. For your domestic education business, I also noticed that revenue saw from CNY 10 million to CNY 26 million to CNY 56 million this quarter. You also disclosed some number about the backlog. I'm wondering also what's your expectation for revenue in Q4 and next year for both overseas market and China market? Thanks.
Okay. Let me take the ClassFlow question. If you look at the future of our business, that is a very critical element, and I would say it's a very critical metrics for us within the company. We're going to measure our success in the next little while internally by how well we do in scaling the community. Thank you for commenting on that one. We internally are very encouraged. That's why in the earlier presentation, in one of the slides, I did talk about next year I think it's going to be our harvest year for both growing our community and also growing our revenue. Going forward, our revenue will come from three different parts from an education standpoint. The first part is actually our solution business, which is actually our display technology that would network within the classroom and all that.
That will be our base business going forward. Because with new technology coming in, product refreshment, we'll continue to expect it to perform well and with growth. The other thing I want to talk about it is actually, I'm not too sure Ben and I talk about it at this call, but we have been talking about it in the last couple of calls. We continue to improve and work on our supply chain for that business. We will continue to monitor, number one, is actually our cost reduction effort. Actually not only monitoring, it's actually is improved. We believe that we will continue to see improvement in our costs. That will help our gross margin. Also we have been retooling our go-to-market. That's why if you look at it quarter-over-quarter, our SG&A has been very consistent while our revenue is growing.
Our base business we expect it to be very healthy with good growth. Now to add on top of that, which I don't believe a lot of company can do that is actually the next level we're looking at once we have the community built up and also which is why I mentioned a lot about the number of teachers within our community. When we have all the tools that we have, for example, like VR Editor going out, that means a lot of the users within the community can start creating content or they will start creating contents. The basic level of content we will give it to them for free. But if they want better content, specialized content with IP, we will start to monetize it. We're going to see a revenue stream in the form of subscription coming in based on content.
Then the level on top of that is we were going to monetize the community just like any other company like Facebook or LinkedIn or whatever. They will monetize it through advertising, selling the traffic, pushing services, so we do revenue sharing. So that's how we're going to be building our ultimate revenue model. Sorry, I'm a little bit long-winded, but I think it's important for us to talk about it. I think the other question you have is actually about China. China is actually, I think we need to look at it from two different areas. One is, if you remember, we started to roll out the product. So that's why we are seeing significant growth year-over-year. Q4, we believe the trend will continue.
The other one I want to go back on is actually the positive reaction to 101PPT, which is actually a tool that we use to build our community. We are very excited about the positive feedback. So again, next year in China, will be both a revenue growth year and also a user growth year.
Oh, okay. Thank you.
Thanks, Eric.
The next question comes from the line of Xin Wang of Citigroup. Please ask your question.
Hi, management. Thank you for taking my question. My questions are regarding the monetization of your new product, the VR Editor. How do you see the entry barrier, and do you expect any possibility of homogeneous products coming out next year? What is your expectation on the revenue contribution from this product in 2017? As you mentioned, it will be a core revenue component. Thank you.
I have to admit, I do not know what the definition of homogeneous product means. I think you are referring to competitive product maybe. Let me address it in this way. The way we are going to be monetizing this is actually not by selling the VR Editor. Actually, our intention is to provide the VR Editor to the users in our community for free. They can go and use it to create content, because we believe this is the quickest way to popularize that particular product. The way we are going to make money is actually once they create the content, they will put it on our content store so we can resell for them. This is actually how the community works, and we will make money when they resell the content. This is going to be a network effect. We push it out, everybody uses it.
There will be a lot of content in our content store. Of course, we also would create content ourselves. There is going to be different level of contents and that will be available on the content market. Every transaction happens on the content market, we take a share, that is how we monetize.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Please note investors are restricted to ask up to two questions at a time. Thank you. We have another question from the line of Thomas Chong of BOCI. Please ask your question.
Hi. Thanks, management. My follow-up question. I just have a quick question about the online games industry outlook in China next year. Can management give us some color about the overall competitive landscape in PC and mobile, and how should we think about the revenue growth rate for the industry at large? Thanks.
Actually, I will make one comment, I will let Ben comment on it. I would encourage you to look at us as not just PC games and mobile games or VR games. Because if you look at the kind of games that we have, is actually we have a game, but we have a PC version, but the same game, we have a pocket version, which is the mobile version. And then a VR version, which is actually part of the game. So the gaming experience is actually will go across, the same experience will go across all the different technologies. So I would encourage not to look at it separately, but to look at the game, as an entity. That said, we will provide you with some numbers. So, Ben.
Great. So I guess your question is on the bottom line of online games next year. So I cannot provide a very concrete guidance in terms of a concrete number. But I guess I can say this. So if you look at our current existing games, right? These are games, which have very strong IPs, right? We have Eudemons Online, we have Calibur of Spirit. These are extremely popular games in the market, where we are seeing growth, not just in our newer game, Calibur of Spirit, but also in the older legacy game, Eudemons Online. We are seeing growth of these two games this year compared to last year. So these are kind of our cash cow games, if you will.
And then if you look at our pipeline, as we have mentioned, we have at least five new games that we will be launching in the next 12 months, right? In these games, we will be leveraging, first of all, the IP, Calibur of Spirit or Eudemons Online. These games will also leverage the technologies. For example, Calibur of Spirit, we have a lot of in-house know-how in browser-based action mobile games. I guess the point I am trying to make is, because we are leveraging our IP for our new games, we are very confident that the hit rate of these games are going to be very high. Obviously, it is very tough to give concrete guidance, but we are actually very confident that these games will be successful next year. As you are also aware, the online gaming business, the operating leverage is very high.
The SG&A, we are not expecting a very large increase. In fact, it is probably going to be flat or slightly increased next year in terms of the SG&A. That is why we are expecting that next year on the EBITDA side or on the operating profit side, we are going to be seeing good growth next year.
Thanks.
Another question from the line of Hillman Chan of Macquarie. Please ask your question.
Thank you, Simon and Ben, for taking my question again. Just wanted to clarify on the mobile game, Eudemons, with Kingsoft. Is Kingsoft merely a publisher for the game, or are they also participating in the game development process?
No, it's a co-development.
Co-development. How should we think about the revenue-sharing scheme between the two parties?
I don't think we are in liberty to disclose the business arrangement between us and Kingsoft. It's going to be consistent with market practice, that's what you can say, yeah.
Okay. Another question is about the contracted revenue, CNY 91 million for the China education business. How long, actually, and when are they going to be recognized as revenue?
Okay. So CNY 90 million contracted revenue is the cumulative value of contracts that we have signed from January to October of this year. In fact, part of that has already been recognized. These are the actual revenue that you are seeing in the P&L.
Oh, okay.
over the past few quarters. Of the CNY 90 million, I do not have the exact figure right here in front of me, but part of this figure will be recognized over the next several months. The cycle of revenue recognition is usually about three to five months because of the product validation cycle that the customers need in this business.
Okay. Thank you, Simon and Ben.
Thank you.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Currently, we don't have any questions on the line. Please continue.
Okay, since there are no questions, what I would like to do is actually make a couple of closing comments. First of all, thank you for calling in from different parts of Asia, maybe around the world. I just want to reemphasize, I think our performance has been very consistent with the seasonality and also with the previous years. What got us really exciting, in addition to the consistent performance, is actually the number of new games and the number of new products that we have in both the gaming business, also in the education business. Last but not least is actually the pace of scaling up the community in our education business. With that community, we can start also moving into the B2C market. That also open up another area that we can grow our revenue.
Last but not least is actually the expansion into the Empowerment Community, which is part of our education business under division of lifelong learning. We are very happy to be able to use our technology to support Stephen Hawking to go from the U.K. and coming over to China in four different cities at the same time and talking to the audience. That is a very exciting way of using our technology. With that, I'm going to sign off on behalf of Ben and the entire NetDragon team. Thank you for calling in, and have a good day. Thank you.
Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating, and you may all disconnect.