Good morning and good evening, ladies and gentlemen. Thank you for standing by, and welcome to QuantaSing's Earnings Conference Call. [Operator Instructions]. Please note that today's event is being recorded. I will now turn the conference over to Ms. Leah Guo, Investor Relations Director of the company. Please go ahead, ma'am.

Thank you. Hello, everyone, and welcome to QuantaSing's Earnings Call for the Third Quarter of Fiscal Year 2025. With us today are Mr. Peng Li, our Founder, Chairman and CEO; and Mr. Tim Xie, our CFO. Mr. Li will provide a business overview for the quarter, then Peng will discuss the financials in more detail. Following their prepared remarks, Mr. Li and Tim will be available for the Q&A session. I will translate for Mr. Li. You can refer to our quarterly financial results on our IR website at ir.quantasing.com. You can also access a replay of this call on our IR website when it becomes available a few hours after its conclusion. Before we continue, I would like to refer you to our safe harbor statement in our earnings press release, which also applies to this call, as we will be making forward-looking statements. Please note that all numbers stated in the following management's prepared remarks are in RMB terms, and we will discuss non-GAAP measures today, which are more thoroughly explained and reconciled to the most comparable measures reported in our earnings release and filings with the SEC. I will now turn the call over to the CEO and Founder of QuantaSing, Mr. Li.

Okay. Good morning, everyone. Thank you for joining our Q3 2025 earnings call. I'm pleased to share an update on our performance and strategic direction, as we continue our transformation journey. This quarter marked a significant milestone in our evolution. We achieved revenue of RMB 570.7 million. This reflects our ongoing strategic shift from traffic-driven to product-driven business models. More importantly, we completed the consolidation of Letsvan on March 31. This positions us at the forefront of the high-growth Pop Toy market. I should note that our Q3 results includes only balance sheet consolidation from this acquisition. Profit consolidation began on April 1 and will be reflected in our Q4 results. Before I discuss our existing new winter, let me update you about our existing businesses. They continue to demonstrate the strength of our disciplined approach to growth. We maintain strict ROI assessment across all results allocation decisions. This ensures we invest promptly in promising opportunities, while maintaining financial discipline. In our financial literacy program, our offerings remain well received by users. We expanded our community out search -- outreach with 3 major financial anti-fraud education initiatives this quarter. These programs not only fulfill our social responsibility commitments, but also strengthen our brand presence among the general public and the broader society. Our senior focused recreation and leisure classes continue to excel with strong retention rates. Particularly noteworthy is our calligraphy program, which has achieved repeat purchase rate exceeding 55%. We also developed an innovative combination of online learning and offline graduation trips, successfully delivering our first trip to over 60 participants with a 100% satisfaction rate. Our second cohort of over 50 participants demonstrates the growing demand for this integrated approach. Building on this success, the sixth annual [indiscernible] calligraphy competition attracts over 800 participants. Selected works were featured…

Thank you. Before I go into the details of our financial results, please note that all amounts are in RMB terms, that the reporting period is the third quarter of fiscal year 2025, ending on June 30, 2025, and that in addition to GAAP measures, we'll also be discussing non-GAAP measures to provide greater clarity on the trends in our actual operations. In March, we completed the acquisition of our 61% equity stake in Shenzhen Yiqi Culture, also known as Letsvan. For total cash consideration of RMB 235 million through a multistep transaction. We began consolidating Letsvan results into our financial starting April 1, and then assets and the liabilities have been included at fair value in our consolidated balance sheet as of March 31. Please note that the income statement discussion that follows does not include Letsvan's operating results for the quarter. For the third quarter of fiscal year 2025, our total revenues were RMB 570.7 million, representing a 39.6% decrease year-over-year. This reflects our deliberate approach to business development as we transition from traffic-driven growth to high-quality growth. Among our revenues, individual online learning services generated revenues of RMB 467.2 million accounting for 81.9% of total revenues. This business line continues to operate effectively, generating steady cash flow that supports our strategic initiatives. Our gross billings from individual online learning services were RMB 515.6 million, representing a decline of 47.5% year-over-year. We view this as a natural progression during strategic transformation of our product mix. Revenues from enterprise services were RMB 48.1 million, a decline of 26.1% from a year ago and representing 8.4% of total revenues. The decline was mainly due to fewer marketing services for enterprise customers. Revenues from our customer -- consumer business were RMB 48.7 million, down slightly from RMB 49.4 million a year…

[Operator Instructions]. Our first question today comes from Michael Kim with Zacks.

Great. First, just curious, if you could speak a bit more to the strategic vision for Letsvan and just how you plan to leverage the company's marketing expertise to enhance growth going forward?

Yes, sure. Thank you for your question. I will answer in Chinese. [Foreign Language].

[Interpreted] Since its launch in 2020, Letsvan has built its presence across global artist discovery, IP incubation and management, copyright commercialization, promising Pop Toy culture and related industry investments. Our goal is to become a global leader in IP and cultural innovation as well as a top player in the Pop Toy industry. [Foreign Language] [Interpreted] Leverage investments established IP portfolio and proven operational expertise in Pop Toys, QuantaSing will drive Letsvan's omnichannel expansion. We will share our fundamental capabilities, particularly in our team's expertise in corporate leadership, business operations, digital infrastructure development and user growth to bridge online and offline retail channels. Our collaboration will establish a complete ecosystem, spanning IP development through immersive consumer experiences. [Foreign Language] [Interpreted] This collaboration represents modern resource consolidation is powered by the QuantaSing's 2 core competencies honed in adult online learning that translate perfectly into Pop Toys. First, our data-driven marketing approach lets us precisely target consumers using our proven brand management system, creating comprehensive brand impact. Second, with our extensive community management expertise, we will enhance user experience to drive community engagement and loyalty through fully integrating product development, operations and marketing capabilities, we're confident that we will successfully upgrade its brand, while expanding its business in the Pop Toy market. [Foreign Language] [Interpreted] To be specific, we will cultivate world-class operational competencies across the following dimensions to ensure flawless execution and tangible business outcomes. The first is our original IP incubation. We've developed a systematic IP cultivation framework and methodology that identified emerging cultural trends, execute targeted creation development and implement rapid market validation. This data-informed approach has already used 10 distinctive IP assets as of March 2025. [Foreign Language] [Interpreted] Second is holistic product innovation strategy. We merge cutting-edge trend sensibilities with artistic integrity, translating nuance to consumer insights into market-defining IP products, fortifying the cornerstone of our enduring IP ecosystem. Third is our IP influence expansion initiative. We'll run a smart social network, connect online-offline channel smoothly and launch creative campaigns creating a complete promotion route that keeps our IP pop and trending. [Foreign Language] [Interpreted] Fourth is end-to-end supply chain optimization. We team up with the best factories in the business, building strong partnerships to build top quality products. We're always finding ways to speed up production and improve quality, so we can keep up with what consumers want. Fifth and finally is our omnichannel growth strategy. We are dividend tied with trusted distributors, while rolling out our own direct sales channel both online stores and physical retail stores to build a complete flexible sales network. Our IP Pop Toys business runs as 1 complete system, we always put products first, constantly improving how we work to quickly boost Letsvan's performance and bringing fresh energy into the industry.

Okay, that's all for the questions. Thank you.

Great. That's very helpful. And then just maybe to follow-up, any sense of what the current sales mix for Letsvan looks like just in terms of products, IP, channels or maybe geographies?

Michael, I'll take your question. Yes, that's a good question. I think just as mentioned by Matt, our Chairman and CEO, just now, as of end of this quarter, Letsvan has already created 10 original IPs. Since our investment in Letsvan in December last year, we are focusing this year on building 2 to 3 standout IP-based Pop Toy products to establish our brand in the market. We are growing our IP portfolio through continuous in-house development and licensing, third-party IPs constantly upgrading both our product quality and business scale. Letsvan has strong IP development capabilities and well established partnerships with major Pop Toy retailers. This year, we are doubling down on these relationships, working closely with key partners to launch hit IP products through co- marketing and joint operations. This approach should we boost both brand recognition and sales performance this year. And also, we are rapidly expanding our pop toy IP lineup, while building our own retail network, both online and offline. Our successful pop-up store at Beijing Chaoyang Toy City that's launched in May last month proved the model. And based on its strong performance metrics, we are now accelerating the rollout of more branded stores. We expect our direct retail sales to grow significantly through late-2025 and into 2026. Concurrently, we are optimizing our omnichannel online operations by integrating social media traffic, e-commerce platform resources and proprietary online channels to create a seamless integrated online to off-line marketing ecosystem. From a regional perspective, currently, Mainland China remains our primary revenue source. We are -- we have begun expanding internationally this year, especially, since the acquisition and consolidation of the business, launching in Southeast Asia and laying the groundwork for North America. We are committed to growing globally. And while 2025 marks our first step overseas, we expect our geographic mix -- sales mix to become more diverse in the coming years. Thank you.

The next question comes from Alex Cai with Citibank.

I have 2 questions. Specifically, first what revenue contribution do you expect from Letsvan in Q4? And second, given the decline in education revenues how will you balance the traffic allocation between the lines of business and new initiatives? And will you continue reducing education marketing spend lending to [indiscernible] expansion? And finally, 1 thing expect overall revenue to return to growth in the fiscal year 2026?

Thank you, Alex. I will take your question. Yes, it's very, very important. So as we have just disclosed the profit and loss statement of Letsvan business will be merged and consolidating to QSG Group's consolidated financial statements starting from April 1. And also WAKUKU and our key IP and also other IPs, all of the financial statements will be merged in the future, starting from April 1. And we will disclose the specific information in a timely manner. Since investing in Letsvan, based on its excellent product strength, we'll continue to focus on operating WAKUKU and 2 other core IPs, as I just mentioned in the last question. Currently, the overseas -- the overall sales process of Letsvan is very good. With a significant year-on-year improvement since our acquisition. Our -- and also currently, we are cooperating with key channel partners and the shipping price have a certain discount on the terminal price because of this sales model. At the same time, this year, we will increase the proportion of our own self-operated channels and the overall income level and also the price level will gradually improve. And in terms of the Q4 estimate and forecast I think with the deepening of our strategic adjustment of the business model and also the improvement of our integrated operations with Letsvan. It is expected that the Pop Toy business will account for a very significant level of overall revenue at the consolidated level in the next quarter -- starting from the next quarter in fiscal year 2025 Q4. We will continue to optimize the operating system of the Pop Toy business, and we also disclose revenue guidance as soon as possible at the proper time. In terms of the traditional education-related business, we continue to search for and explore high-quality growth…

Since there are no further questions, I'd like to hand the conference back to management for any closing remarks.

Thank you again for joining our call today. If you have any further questions, please feel free to contact us also made a request through our IR website. We look forward to speaking with everyone in our next call. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.