The seasonal characteristics of the performance are significant, and the financial report of iFLYTEK attracts attention: Liu Qingfeng said that the profit in 2024 will be better than that in 2023

"The company's profit in 2024 will be better than in 2023. On April 23, Liu Qingfeng, chairman of iFLYTEK, said with confidence at the performance briefing. On the same day, because of the polarized performance of the results in the first quarter of 2023 and 2024, iFLYTEK's share price was affected, falling 5.22% to 41.97 yuan per share as of the close.

The reporter noticed that the completely different performance of the two financial reports is related to the large-scale investment of iFLYTEK in the large model, and on the other hand, because of the particularity of its business, the revenue and net profit attributable to the parent company in the first four quarters basically show the characteristics of gradual growth, so in 2023, iFLYTEK will be able to achieve revenue growth on the basis of the loss in the first quarter and harvest 660 million yuan of net profit attributable to the parent company.

And this year will be a year to continue to attack in the field of large models, in the words of Liu Qingfeng, this year is a year of "spark" fire. Following the fact that a number of indicators of iFLYTEK Xinghuo V3.5 in January directly pointed to GPT4, Liu Qingfeng revealed that the large model released in June this year will be directly benchmarked against GPT4.

Performance is seasonal

According to the financial report, in 2023, iFLYTEK will achieve operating income of 19.65 billion yuan, a year-on-year increase of 4.41%, and the net profit attributable to the parent company will be 660 million yuan, a year-on-year increase of 17.12%.

Among iFLYTEK's products that accounted for more than 10% of the company's revenue or operating profit, the revenue of educational products and services was 5.56 billion yuan, a year-on-year decrease of 9.7%, and the gross profit margin reached 56.59%, the revenue of open platform was 3.938 billion yuan, a year-on-year increase of 41.61%, and the gross profit margin was 21.35%, and the revenue of operator-related business was 2.096 billion yuan, a year-on-year decrease of 0.05%, and the gross profit margin was 45.37%.

Overall, iFLYTEK's performance last year was better than that of 2022, especially in terms of revenue and net profit attributable to the parent company. In 2022, iFLYTEK's revenue in 2022 increased by 2.77%, and the net profit attributable to the parent company fell by 63.94%.

However, compared with the performance of the whole year of 2023, the results of the first quarter of 2024 announced by iFLYTEK on the same day look mixed, achieving revenue of 3.646 billion yuan, a year-on-year increase of 26.27%, and a loss of 300 million yuan.

On the one hand, with the expansion of business scale, the company's cost investment is also continuing to increase, in addition to the relatively large scale of research and development expenses, this year iFLYTEK has also increased a lot in the market. "Last year was the first year of the Spark model, and this year is the Spark Blaze, and market investment is bound to increase. ”

On the other hand, Liu Qingfeng said that because some of the stocks held by the company in the first quarter of last year achieved value-added, but because of the huge investment in the large model, the company cleared these stocks, combined with the increased investment in R&D and sales, the overall loss was higher.

Of course, the loss in the first quarter of this year may not be sustained. In the first quarter of last year, iFLYTEK also suffered losses, but with the growth of performance in the next three quarters, especially in the fourth quarter, the company's revenue and net profit attributable to the parent company will still be growing in 2023.

In the first four quarters of 2023, iFLYTEK's revenue will be 2.888 billion yuan, 4.954 billion yuan, 4.772 billion yuan and 7.04 billion yuan respectively, and the net profit attributable to the parent company will be -57.895 million yuan, 131 million yuan, 25.79 million yuan and 558 million yuan respectively.

The reporter of "China Times" interviewed iFLYTEK on the seasonal characteristics of performance, and the other party said that the announcement shall prevail.

In the financial report, iFLYTEK explained that the company's education business and smart city business are mainly for schools, governments and other enterprises and institutions, as well as large-scale enterprises, and have certain seasonal characteristics in project construction, such as planning demonstration in the first half of the year, implementation in the middle of the year or the second half of the year. "Judging from the operating conditions of each quarter in recent years, it also shows the characteristics of lower operating income in the first quarter and higher operating income in the fourth quarter. ”

GPT4 will be benchmarked soon

For iFLYTEK, 2023 is a special year, and the R&D and launch of large models have had a positive impact on the company's business, especially the open platform business segment.

According to the financial report, from the release of Xunfei Xinghuo on May 6, 2023 to the end of 2023, 1.676 million new developer teams have been added to the iFLYTEK open platform, a year-on-year increase of 229%, including more than 350,000 large model developers, and attracted 27,000 assistant developers and developed 49,000 assistant applications.

At the same time, the company has cooperated with Chery Automobile, Pacific Insurance, Bank of Communications, China Energy Group, China Mobile and other industry leading enterprises to create large-scale industry model applications in various fields to accelerate industrial upgrading.

The update and iteration of the large model, iFLYTEK is still working tirelessly. Liu Qingfeng revealed at the performance briefing that the company's large model to be released in June this year will be directly benchmarked against Open AI's GPT4. In January this year, the company released the first iFLYTEK Xinghuo V3.5 based on the training of the national computing power platform, and iFLYTEK said that its language understanding, mathematical ability, and voice interaction ability surpassed GPT-4 Turbo, the code reached 96% of GPT-4 Turbo, and the multimodal understanding reached 91% of GPT-4v.

But it also means investing in R&D expenses. In 2023, iFLYTEK's R&D investment will reach 3.837 billion yuan, accounting for 19.53% of the overall revenue, compared with 17.83% in the previous year. In the first quarter of this year, its R&D expenses were 842 million yuan, an increase of 126 million yuan over the same period last year. Jiang Tao, senior vice president and secretary of the board of directors of iFLYTEK, revealed at the performance briefing that most of the R&D investment was spent on the Spark model.

Wang Chao, founder of Wenyuan Think Tank, told the China Times that this kind of high-investment R&D state may continue for a while, of course, for iFLYTEK, this investment is very necessary, because the current AI track, whether it is domestic or foreign enterprises, are in a period of heavy investment, but the real large-scale return period has not yet arrived.

"When can R&D investment and performance reach a real balance? That is, when AI really enters thousands of industries and ordinary people's homes, AI can play a huge role in both the B-end and the C-side, and when consumers and enterprises are willing to invest in it, there will be a relatively large increase in income in this area. Until then, companies need to continue to invest more. Wang Chao said.

The reporter noted that before the update in June, iFLYTEK's Xinghuo large model will also be launched on April 26 V3.5 updated version, this time not only open the long text, but also compete for long graphics and texts, long voice, and for the enterprise-level application market, iFLYTEK will launch an intelligent twink platform, which can help enterprise users solve the needs of real scenarios more efficiently and safely.

Editor-in-charge: Huang Xingli Editor-in-chief: Han Feng