Viomi Technology (VIOT) 22 Aug 222022 Q2 Earnings call transcript

Hello, ladies and gentlemen, thank you for standing by for Viomi Technology Company Ltd's Earnings Conference Call for the Second Quarter of 2022. At this time all participants are in a listen-only mode. Today's conference call is being recorded. I would now like to turn the call over to your host, Ms. [indiscernible], from the company's IR Department. Claire. ahead, go Please

Hello, conference welcome quarter call Anita. Co. of Viomi Limited earnings for everyone, you, to and Technology XXXX. Thank the second

company's were reminder, and are release posted a this is and recorded. As conference earlier today operating in issued The results online. our press being financial

of and and the Chen, Financial for Chief are Mr. ir.viomi.com. the Founder, can Q&A will of and the IR the You Thai company's up the earnings the Mr. Participating our with distribution e-mail company's remarks, release begin session. press company's download The of at in of section call today's list Xiaoping sign website the Board and Directors the conclude Executive call with prepared Wickham, Officer; the by Chairman Department. will management vesting Head

today's Litigation Before the under States harbor statements continue, note we Act please Reform will of Private contain forward-looking the made discussion provision United Securities of safe that XXXX.

risks and Forward-looking statements uncertainties. involve inherent

includes company's As included in non-GAAP materially any regarding on risks States filed as not of any is well uncertainties does call company actual law. with today. The filings different and Commission. other unaudited this Exchange company's except as obligation forward-looking to and GAAP measures. and information, unaudited as the also such, that discussions assume annual information and expressed and Viomi's views conference release this update note results statement, Securities financial Form Please by required the report Further the financial as earnings press the other from be XX-F United may

in directly turn Founder, Chen. followed Mr. CEO, call immediately go an measures I Chen, translation. unaudited now over to to please remarks will contains Xiaoping by Chinese, release press comparable a the addition, In ahead. of reconciliation Mr. Chen his will non-GAAP the measure. most English deliver GAAP Mr. Viomi's the unaudited Viomi's

for financial before total the XXXX. due Hello, two Founder's guidance. conference mainly In Chen. us quarter, Language] everyone. with will in [Foreign call. was second our joining our decline our earnings Thanks revenues million Thank quickly of I discussing revenues second XXXX year-over-year in translate factors. for The performance the to remarks you, Mr. RMBXXX line quarter year's quarter reached second our

year, this branded had base a robot, we cut of selling First, for sweeper Xiaomi prior off the high which comparison. year

high-end Second, continued widespread COVID-XX market new consumption since the owing premium and the to the quarter. to we demand quarter, support our spending of To the continued our soft decrease the of transformation, this beginning brand advertising enhance with along release to brand year, second the promotion second in industry-wise. and products recurrences, during increase

variety In well-known large groups addition young of the launch ads, becoming by we elevators a Ideal show, TV more Future forecasted and co-sponsor the Design number a on Mango of reached partnering of targeted Tmall print with platform. and to

high-quality we high-end of contribution trending products business boosted has from and our investment second Our branding enhance high-end our in quarter, build products sales weak ourselves these awareness. few past temporary we Furthermore, strategy. to relatively the our in In the long-term performance us continue and a in to the execute the but operating festival, quarters operation months, position. will our during help judging quarter over measures in a period investment the a second believe branding resulted the of environment to the loss marketing promotions shopping in and brand product recent XXX technology during macro our

optimize our product and continue mix. streamline to SKUs First,

to weak and fourth strategic chain. production cooperation. margin with of year-over-year, quarter effort year-over-year on and gross core product build on This lines COVID-XX consecutive focus selling operation and implement increasing lead ongoing and third, consumer spending products; business expansion in and improvement product considerable ourselves, efficiency Second, channel representing we fast control our exerting and cost optimization X% the in significant to supply since improvement made innovation, XXXX, business - progress about exert by recurrences of pressure despite measures

continue further our product solution, solidifying one-stop we for home branding our long-term develop foundation to addition, the the influx. IoT enhancements In and

incorporating with AI smart we a air all-space removal; products strategic First, Space series AI in our definition super fitness with series them, conditioner, pesticide product series at came XXXX washing of and large-flux Boss, Royal display; and market remove products, functionality; ultra-micro to featuring of Among new AI regards interactive water smart in our to screens refrigerator the which our Pro, AI our to twin-tub our formaldehyde air large-screen second laser high XK purifier, gallons our Super residues; new including machines. screen interactive bubbles event Royal quarter. water ultra our launch of purifier AI X, introduced March, generates conditioner the

technology, across a new sales appliances managing home favorable our In XD increasing. product recognition control of These and as addition, we smart screen-based superior products our mid- among are influence smart smart as market growth home received high-end with our and AI HomePad series as interface consumers experience upgraded smart and products our well feedback introduced also Plus, to a AI-equipped new facial scenarios. also have provide reviews. devices, home Furthermore, lock with for all such EyeLink,

as Yinchuan bundled Beijing, first merchants one-stop and from and RMBXXX,XXX Kunming conditioners, sales some to the offline charts purifiers e-commerce the based ranging and offline domestic RMBXXX,XXX. categories, solution exceeding our their Meanwhile, of implementation water in series our Zunyi, on RMBXXX,XXX accelerating After RMBXXX,XXX shopping other series Space mid-to-high-end home XXFace signed certain some Guangzhou, suit we the multiple orders quarter merchants Super high-end orders in and to customers followed recording Chengdu, solutions, with nation-wide. recent second Changsha in such solution AI large-screen our whole-home whole-home quarter, respective festival, the of refrigerators. cities offerings of products solution in our IoT our the During topped are in home XXX premium air of

launch and our in success AI development and our and recognition the are a for consumers' Our home offerings solution brand to and AI positive research our a received would smooth of technological and into our transformation our and testament offerings research phased adoption development. possible adoption efforts solution bundled of of product products. successful our AI of premium innovation product, the without new in products which premium market not our bundled feedback, home and The investment team

our and of XX, accumulated X,XXX patent patents registered reached than XXXX, As respectively. June applications and global X,XXX, more

recognized our our at purifiers Our detection with one range took we water integrated Also of only module research our Excellence and Xth Patent are been by institutions. the in professional XXrd also a the April, AI In the have Award. visual achievements hood, China not and industry capability July, development also difference. the technology. of This silver wind innovation module power the Guangdong with water intellectual of technological Patent affirmation but award Award won recognition

second separation to large provinces with merchants store In channel starship emerging in unified XS immersive stores through scenario and and we additional the quarter, execute our front an flagship and newly Second, in our This including the signed Hunan, experience offline Anhui positioning brand in our training XS strategy. technology, enhanced Guizhou store continue we Also sluggish brought collaborated macro and opened certain sales. demand including Xiaomi and stores market transformation. same overseas our for positive optimization help material implement international business increase the mid-to-high-end for and environment overseas the oil At second we quarter, West led in European IoT of solution. and our backload challenges piece [indiscernible] one-stop home to in made our the the and our prices China time, second. and

wafers international agent joined a large has mid-and-high-end established newly with cooperation overseas. sold Asia population Southeast mobile in and of sales with high-end stable of further have trend increased. The We market the expanded the the

products roll in intelligent some markets. categories out through As offering we simultaneously of overseas progress the XXXX, product and further we enrich products will other of clean

smart and quarter China Third, with our half the we and of we Tmall whole will industry. home integration, and deepen one Kuka, the to accelerating public home home with health leading [indiscernible] with Voimi popularization while quality stable customization Telecom. we one-stop reached the in facilitate this promote of and home strategic first second scenarios. smart the In of enterprises. the ecology continue the May, our intelligence In expanded design strategic development ILD partnerships the cooperation channels of home our to of of upgrading year, Jingdong.com, business jointly domestic to integrate solution more integrated the cooperation

challenges devoting strategic with channels experience caused first and family. successfully are pandemic cooperation for company environment a and more streamlining providing of additional more building the We moving the portfolio; exploring immersive focus forward, ecology addition, to year progress create the product half and a smart navigated continuously improving we in X second, product more and experience. awareness, products the and macro in industry products enhancing and and by we the smart development will home to promote of by to In leading convenient weak the continue new optimizing scenario selling first, developing SKUs and made aspects; competence, resources brand

value control for value customers facilitating in user disciplined for and of and and Founder's concludes That lay off-line experience solution for long-term expense cost creating improvement the consumption more run. measures Third, foundation shareholders implementing foundation implementation our Fourth, lay and one-stop our the our long IoT long-term you. to the more to Thank development. remarks. out immersive healthy growth solid create home the and brand a

third second quarter quarter go XXXX our outlook in more of Head will detail. Wickham, the unaudited Thai financial Mr. Now and our Finance results Department, over

Thank you.

Now were company's of go XXXX. second second detail revenues of guidance. compared the revenues I unaudited line for previous with financial RMBX,XXX.X net quarter the the of RMBXXX.X the of million in Net XXXX over million will results to quarter

continued expenses. year RMBXX.X in XX.X% decreased to with to quarter mainly the for the environment, operating and for off XX.X% and increased due million quarter In to sell RMBX,XXX.X decline XXXX, XXXX. selling of the to base for decreased XX.X% to by RMBXXX.X by decrease decreased the sales of research decreased prior Total as as consumables more the complete shareholders overall million to robots small quarter attributable adjustment due estimated million from X.X% slightly RMBXXX.X of million enhance this The million the by million product second of year portfolio RMBXX.X that the attributable to million adjustments for ordinary XXXX, RMBXXX.X RMBXXX for Company XX.X% Company's increased and attributable from categories. of RMBXXX.X within well the to XX.X% high small period. ordinary by of in due increase was to from due appliances decrease home some RMBXX.X million increased marketing the branded products to to the of the higher Revenues quarter from of XXXX. this Company mainly of RMBXX.X million appliances and cut product by by accounts due compared the second Xiaomi-branded the experts activities quarter and by category, water the second categories. selling solutions product for million to Company's addition this Non-GAAP to allowance prices to shareholders the XXXX. million of compared its increased the ordinary margin of primarily and notes by was Gross of for to year-over-year efforts the gross second the expenses, and the Revenues for primarily others purifiers. of million and shop ongoing well clean-up decreases administrative input by RMBXX.X development loss due related RMBXXX.X for decreased expenses XXXX, recognition. decreased from mix robots, to adjustments portfolio for was RMBXX.X net profit and to Revenues XXXX. well to of for shift ordinary RMBXXX.X from of Revenues the driven product XXXX. compared development. income the in from Company General the from of RMBXXX.X Gross shareholders to million quarter expenses XXXX, to expenses sweeper expenses due quarter advertising cutoff was due product comparison, in XXXX, XX.X% second mainly to of for second expenses, from margin quarter. as offset and of some the for XX.X% decreased offset Net and million the from the to products. toward decreased complete second of development to current and of Selling by was weaker net the by portfolio RMBXXX.X and the second primarily of adjustment the RMBXXX.X receivables RMBXXX.X XX.X% XXXX. was the home loss the the as SKU detail, consumption salaries branding in the quarter of million to million shareholders on attributable quarter demand marketing research decrease in water the partially decline million to to million primarily and due compared RMBXX.X million quarter the recognized marketing second RMBXXX.X million primarily in million the the new The from second to In RMBXXX.X quarter some IoT from Company for portfolio to decrease non-GAAP for for quarter million second XX.X% income the net second and Xiaomi RMBXX.X demand XXXX, in primarily of products, expenses decreased partially business

balance Additionally, healthy. maintained our sheet

June had cash short-term million the XXXX, restricted RMBXXX of deposits million RMBXXX.X As and of million. of short-term XX, RMBXX equivalents and investments RMBXX.X million company cash cash of

to turn let's our Now outlook.

and current estimates the For well expect the be the impact of RMBXXX between of of we XXXX. effects as that due the customer which conditions pertaining be the outlook The net to to year-over-year XXXX, potential reflects the million and to We and COVID-XX third preliminary million. demand all the is on based will quarter quarter Company's and change. revenues uncertainty as current of market and are operating revenues the potential market RMBXXX recurrences, mainly conditions of change above the currently in of in third to subject demand, overall market estimate

This concludes remarks. prepared our

We Q&A for will now open the session. call

Mr. go will questions. session Operator, join and please and Founder Thai this answer ahead. Our

go Stanley. [Operator from Please Morgan today Hildy first Instructions] ahead. comes question The Ling with

the Hi, you, thank for management to have ask. three questions, I presentation. allow me

the the also one not the second expectation? but drivers what the about about of expectation do you sales and this second second in and for is the sales for behind first the So is year the key quarter, the expectation, So such the half first think this of quarter terms - margin question.

about is sales. the expansion market The or second one overseas overseas

overseas quite We the - demand there seems to in a Europe has this inflation weak, or sales macro nowadays think for robotic are expectation resilient been segment is about year? terms Language] question But of the about - the has do of the trends segment. robot U.S. the in how market first How your [Foreign that half? half the see quite market the vacuum second seeing of bit from but relatively that the been second this of half less third The is as overseas performing you market perform - be in volatile. what's little the European And and in more year? in well trend and that. the is you improvement to pressure What do the

Okay. Thanks Hildy's for questions.

regarding margin sales especially yes usual, expectation, year, second specific revenue revenues several the the be and COVID-XX the due question more uncertainties macro guidance, driven as of guidance this in the with expect first for half the terms environment under perspectives. for we to of don't but we market the macro to and For give

long-term over increasing months during the our solidness some to estimate our season. will sales the to been hit promotion products and growth. the SKUs best AI-centric drive the past of high-end have revenue premium help increasing, new We products First, several lead major

to level. the have we finance re-consumer which some the to product short we the categories, near the and term. drive respect overseas maintain partly it With the been gross in partially growth in from future, mitigate preparing stable additional to compliance market impact estimate or help exporting including will Second, for still base margins, a

Let's the whole say, at over least year. for XX%

a the As margin to we portfolio in premium take adjustments, gross with products midterm. higher level will to overall and continue the be promote margins expect we product reasonable

overseas in overseas especially the but consumer will observation, second in weak For from the only still U.S. Europe. sales, not we about estimate be our the overall the question relatively demand

to in of the materials exchange into oil we geopolitics, we falling year. As due of the rate, expect alongside overall in see, consumer euro this relatively is to euro the prices this crude raw sentiment and second low, and increase the the international turn half

taking see actions with market a While weak we market, and dynamic the are some to we impacts potential. mitigate of great market first the consumer overseas we relatively in see sentiment Asian growing is Southeastern

this increase will at of we Southeastern in the So our sales moment, products Asia.

the markets. months, growth sell additional which start the overseas in sweeper help following to could think categories in for drive we Second, additional product robots, will our

We due course. regarding will this share more details

the question to our third sweeper to our were this own branded increasing due compared euro the of materials year rate, same this exchange prices of such we market, last just about geopolitics, now. relatively year. expect the mainly of alongside sales half to of to raw including robotics, overseas trend period second robots the international - very mentioned weak For crude we is oil Euro the the sweeper and with the

share as in in sweeper Thank we Southeastern are the addition we However, packages market. in discussed some more making product this will will which you. in sell increase efforts some course. to robots months, big this Like additional sales previously, to we businesses, following we details like mitigate the second, And Asian regarding we impact. will due

me allow a [Foreign a Language] little follow Sorry, of bit up to question.

in focus coming the net from In or much expand is you. to the planning profit the in the focus Thank company And we contribution, of in put future, if is domestic - overseas terms more revenue overseas and market? put market? of how more it about market the think

answer. I'll Mr. Chen's quickly Language] translate [Foreign

of overseas second for the revenues half year. We quite about the are our optimized

introduce products to percentage of you. percentage the of revenue we categories for although the of of mentioned to overseas the these before, more is to revenue than As except and we Thank the by first plan aroundXX%. products, are year market of looking new overseas the markets, cleaning half we the appliance XX%, achieve overseas

Thanks. very Thank Language]. all me. you [Foreign for much. That's

comes from [Alex Wang] Please The question ahead. CICC. next go with

the My Thank in question the of What the is in of revenue? home Xiaomi? of is, information the revenue top the contribution future me in adjust? about Will new question account solution to smart how you the impact company growth? the to is is future company's is the home company's my in there real My updated from the for the give the the estate? or [Foreign industry the with for from for third outlook your solution, the revenue. contribution cooperation current second the terms continue quarter presentation estate pressure What brought company's performance you is XXXX, future China? any question is, Xiaomi tier expand real revenue? Could in view in what Language] is first from demand the does the at How the me. second cooperation related how And smart

questions. you for Thank Okay.

firstly, to always with the For and and this of expect short Xiaomi revenue business Xiaomi-branded maintain over several quarters, XX% the midterm. has business, we to the maintain in question first stable cooperation contribution about level it Xiaomi stabilized past at we been around

scaled other small categories despite currently we water robots on products other cooperate, source relevant of and In strip. Xiaomi solutions, We to currencies. cooperate our we cooperate. smart don't on home We we material back brand changes have due terms some categories sweeper the kitchen

first selling question home maintain and the at all, of home explore and our promoting second calculated reciprocal one certain see is it's We offerings cooperation started opportunities the separately our as bundle current merchants. if categories. revenue we And for have IoT solution, will recently offering so disclosure premium sales and cooperation through additional we the services The mainly the and off-line solution about further a to of with sector. bundled metrics not

for impact our from Guangzhou, accomplished with by with other don't home and solution whole As or size for terms second the to overall Yinchuan influence customers Zunyi, not orders impacted and partners RMBXXX,XXX of are we industry an in recover. policies second regarding we RMBXXX,XXX Beijing, apartments. But impeded new home observed demand direct the cooperation in We trending Kunming degree estate real previously to to quarter assisting ranging implemented it households. real estate, sales overall to Chengdu, have in as Changsha indirectly high-end multiple though shared, - the first mill industry's in and our offline some orders as on as RMBXXX,XXX merchant our offline directly are cities your declaration from and the for some impact question cities. home the we RMBXXX,XXX in about takes it And on the appliances industry, stimulate have solution real time quarter market

estate before addition, replace trends the In industry, the home than smart ones to particular, in old people the increasing starting the dependent demand appliances the the home within less smart young with with products. home is on real

incremental traditional and smart So you. we think industry. than is markets home of the which the stock housing Thank more flexible size on industries market, home housing rely also plans

translate our will Language] [Foreign Okay. - translate basically response. quickly Founder's I

the price revenue to looking bundled to So first new our towards forward quite looking enhance in now those you. to forward is And we growth we out sales industry new small on the customer. And stable Thank categories detail environment, second future. topic for would total cooperations to cooperation consumer XX% the And new we are now - question, are be improve supply company industry-wide. per the sales aim is Xiaomi to - decreasing. needs three by recently, about to revenue are the and working are the - to It and revenue. we introducing our our the to offering, of the - forward, new And Xiaomi to questions new and looking on are brings the question, market. near we with unit the this challenge the the of actually be one a we we part increasing macro are looking being the for

questions. concludes you. Thank That to our Okay. response your

closing I'd back now, call for like to any questions turn over further remarks. the no the company are there As

Okay. once for joining us again, today. you, Thank

free on Relations or the contact Group, feel have further please website you questions, If Piacente the us through contact our The consultant. to information company's Investor

This conference concludes call. this

your disconnect attending. line. now Thank you may You for