These forward looking statements are based upon management's current expectations and current market and operating conditions. And relate to events that involve known and unknown risks uncertainties and other factors. All of which are difficult to predict and many of which are beyond the company's control. These risks may cause the company's actual results, performance or achievements to differ materially. Further information regarding these and other risks uncertainties or factors is included in the company's filings with the U. S. SEC. The company does not undertake any obligation to update any forward looking statements as a result of new information future events or otherwise, except as required under applicable law. I will now turn the call over to our acting Chief Financial Officer, to review some of our business development and strategic and strategic direction. Sishi, please go ahead. Thank you, Laura. Hello, everyone. Thank you all for joining us on our first quarter $20.25 earnings conference call. Before we begin, I would like to note that the financial information on the non GAAP numbers in this release are presented on a continuing operation basis. And in RMB. Unless otherwise stated. And let me begin with our latest business updates We are pleased to report a strong performance in the first quarter of twenty twenty five.

This quarter has marked significant progress and innovation. Particularly with the successful trial and implementation of our AI powered product upgrades. Facilitating teaching and learning efficiency by delivering intelligent, adaptive solutions that enhance daily instructional decision making providing more personalized learning experiences for students. During the quarter, we have seen a strong growth in both new contract acquisitions and the expansion of our existing customer base. Our SaaS subscriptions business has risen as more schools and educational organizations recognize the value of our AI powered solutions. Showcasing strong retention rate and increased adoption of our value added offerings. In the first quarter of twenty twenty five, we recorded net revenues of RMB 21,700,000.0. Representing a 15% decrease from the previous quarter last year. Which was primarily due to the reduction in net revenues from this level projects as we prioritized our resources on school based projects on a subscription model. Which generally have longer revenue recognition period. As we improved operational operational efficiency operating expenses reduced by 42.6% compared to the same quarter last year resulting in a 44.8% reduction in net loss on a GAAP basis. Looking ahead, we will remain vigilant in monitoring our financial performance and making strategic decisions to ensure our long term success and sustainability of our business.

And now let me go into more details. During the quarter, our district level teaching and learning SaaS business remained steady. Continuously contributing an important portion in revenue recognition. Recently, we successfully supported Shanghai Minghang District to launch a specialized generative intelligent agent cluster and demonstrated it at Shanghai Education Expo The intelligent agent integrates universal large language models leveraging vast real time teaching and learning database in Minghang District. And integrating with the localized technology system aiming to provide precise contextualized support for nurse and educators. So that we can transform education services from knowledge transmission to competency development And following the successful launch, of the new AI powered solution in Shanghai, Mingheng, we are confident that this offering will expand to other regions and serve as a model for potential partners pursuing transformative learning technologies. This initiative demonstrates our expertise in educational innovation by delivering adaptable high value AI powered solutions that enhance daily instructional decision making improve teaching and learning efficiency and promote high quality regional education development. And our school based subscription business has sustained a steady growth driven by a year over year increase in newly subscribed students. This momentum underscores its strategic importance. As a critical contributor and integral component of our overall revenue which will continue to prioritize resource allocation.

And during the quarter, we have seen heightened demands and enthusiasm for our offerings in our partner schools reflecting in a higher retention rate and increased adoption of our expandable value added services. Over 90% of renewal customers opted to continue their subscriptions with many expanding their service coverage This strong retention and upselling potential not only reinforce customer engagement and loyalty, but also safeguards the business for long term sustainable growth. And as for our product and service offering in have been continuously upgraded with innovation. Driving customer satisfaction and business growth By integrating AI into core teaching and learning scenarios, including lesson planning, in class interaction, assignment design, automated grading, data driven analysis, and personalized learning recommendations. We aim to streamline teachers' workflows empowering them with evidence based decisions. And individualized learning path for each student Specifically, our intelligent voice and classroom monitoring function are expected to boost classroom efficiency. As smart companion for teachers, it helps teachers understand students' thinking process and learning states while providing teaching research support Teachers can interact with the smart assistants in real time analyzing multidimensional data such as students' response time thinking patterns, as well as learning trajectories. Identifying group and individual differences with multi tiered learning analytics.

So that evidence based teaching decisions can be made. Our intelligent solutions can customize classroom exercises and after school assignments for student based on personalized learning conditions. Automatically grade them and generate dynamic error correction notebooks. And provide customized problem solving ideas and follow-up teaching suggestions. These advancements reduce teachers' workloads while enhancing students' learning efficiency and achievements. To date, we have conducted trials in over 50 schools providing teaching administrators with data driven management tools covering the entire teaching scenario. As well as demonstrating scalable replication potentials of this model. And in terms of distribution channels, our multichannel marketing efforts and strategic partnerships, have further solidified our presence in high growth markets. We have consistently prioritized strategic market penetration by diversifying our distribution methods and fostering collaboration. By aligning product development with emerging educational trends, and enhancing our distribution networks. We have improved product delivery and customer engagement. Leverage data analytics for targeted marketing and deeper customer insights And now I will turn the call over to Lara to walk you through our latest financial performance. Thank you. Thanks, Zhiji, and thank you, everyone, for joining the call. Will now walk you through our financial and operating results. Please note that all financial data I talk about will be presented in RMB terms.

I would like to remind you that the quarterly results we present here should be taken with care and reference to our potential future performance are subject to potential impacts from seasonality and one off events as a result of the series of regulations introduced in 2021 and corresponding adjustment to our business model, organization and workforce In the first quarter of twenty twenty five, we recorded net revenues of RMB 21,700,000.0 compared with RMB 25,500,000.0 in the first quarter of twenty twenty four, representing a 15 decrease on a year on year basis. Which was primarily due to the reduction in net revenues from district level projects as we prioritize our resources on school based projects and their subscription model. Which generally have longer revenue recognition period. Gross margin for the first quarter of twenty twenty five was 36.2% compared with 38.4% in the first quarter of twenty twenty four. Net loss on a GAAP basis for the first quarter of twenty twenty five was RMB30.9 million compared with RMB 56,100,000.0 in the first quarter of twenty twenty four. Representing a decrease of 44.8% year on year. The adjusted net loss, non GAAP, for the first quarter of twenty twenty five was RMB22.4 million, compared with adjusted net loss non GAAP of 40,000,000 in the first quarter of twenty twenty four.

A decrease of 47.5% year on year. As of March 2025, we have cash reserves of 3 RMB333.3 million, on our balance sheet compared with RMB359.3 million as of 12/31/2024. Next, I will go through our our first quarter financials in greater detail. Net revenues Net revenues for the first quarter of twenty twenty five were RMB 21,700,000.0, representing a year over year decrease of 15% from RMB25.5 million in the first quarter of twenty twenty four. This was mainly due to the reduction in net revenues from the district level as we prioritize our resources on school based projects and the increasing number of contract and the success SaaS subscription model, which requires longer period revenue recognition. Cost of revenue. Cost of revenues for the first quarter of twenty twenty five was RMB 13,800,000.0. Representing a year over year decrease of 11.9% from RMB15.7 million in the first quarter of twenty twenty four. Which was largely in line with the decrease of net revenues during the quarter. Gross profit for the first quarter of twenty twenty five was RMB 7,800,000.0 compared with 9,800,000.0 in the first quarter of twenty twenty four. Gross margin for the first quarter of twenty twenty five was 636.2% compared with 38.4% in the first quarter of twenty twenty four.

Total operating expenses for the first quarter of twenty twenty five was 41,700,000.0, including RMB 8,500,000.0 of share based compensation expenses representing a year over year decrease of 42.6% from RMB72.7 million in the first quarter of twenty twenty four. Loss from operations for the first quarter of twenty twenty five was RMB 33,900,000.0, compared with RMB62.9 9,000,000 in the first quarter of twenty twenty four. Loss from operations as a percentage of net revenues for the first quarter of twenty twenty five was negative 156.3% compared with negative 246.7% in the first quarter of twenty twenty four. Net loss Net loss for the first quarter of twenty twenty five was RMB 30,900,000.0 compared with a net loss of 56,100,000.0 in the first quarter of twenty twenty four. Net loss as a percentage of net revenues was negative 142.8% in the first quarter of twenty twenty five compared with negative 208219.9% in the first quarter of twenty twenty four. Adjusted net loss, non GAAP, Adjusted net loss, non GAAP, for the first quarter of twenty twenty five was 22,400,000.0 compared with adjusted net loss non GAAP of RMB42.7 million in the first quarter of twenty twenty four. Adjusted net loss non GAAP as a percentage of net revenues was negative 103.4% in the first quarter of twenty twenty five.

Compared with negative 167.4% of the adjusted net loss non GAAP as a percentage of net revenues in the first quarter of twenty twenty four. Please refer to the table captioned of non GAAP measures to the most comparable GAAP measures at the end of this press press release for the reconciliation of net loss under U. S. GAAP to to adjusted net loss, non GAAP. Cash and cash equivalents restricted cash and term deposits Cash and cash equivalents, restricted cash and term deposits were 333,000,000, equals USD45.3 $9,000,000 as of 03/31/2025, compared with RMB 3 and 59,300,000.0 as of 12/31/2024. Next, I'd like to share a brief update from the Board. From the from our Board. We warmly we warmly welcome Mr. Guijia as an independent director and a member of Audit Committee, the compensation committee and nominating and corporate governance committee of the Board Mr. Jia has extensive experiences in fintech and education sectors and we are confident that his insights will further strengthen 17A Tech's strategic direction governance and operations. We also extend our sincere gratitude to Mr. Jiawei Gan for his outstanding service and invaluable contributions as he retires. Additionally, Mr. Michael Chao Du, has resigned as Director and Chief Financial Officer.

And the company announced appointing Ms. Shijou as our acting Chief Financial Officer. Ms. Zhou joined the company in December 2020. 2020 and has served as financial director since June 2022, overseeing the company's overall financial operations, including financial reporting, business analysis and strategies and strategy team. Ms. Joe brings extensive financial expertise and has held advisory roles at at several multinational companies as well as senior auditor at PwC, Zhong Tian CPAs LLP, She received the due bachelor's degree in accounting and law from Tsinghua University in 2011 and her MBA from Peking University's Guanhua School of Management in 2000 in 2023. We welcome Mr. Jia and Ms. Zhou to the leadership team. [indiscernible] Their joint expertise will be instrumental we drive forward to our next growth phase. We also sincerely thank you thank Mr. Michael Chaudhoo and Mr. Jiawei Gang for their invaluable contributions during their tenure with the company. Moving forward, seventeen ad tech will take AI driven educational innovation as its core focus deeply integrating AI plus education to actively align with the national strategy for the educational digital transformation and upgrading. The company remains unswerving in its commitment to enriching learning experiences while upholding the mission of making learning a wonderful experience.

Centered on delivering efficient, high quality educational projects. Products and solutions, we aim to maintain growth momentum enhance our operational efficiency and steadily drive long term stable and sustainable development. With that, that concludes our prepared remarks. Thank you. Operator, we are now ready to begin the Q and A session. Thank you. There may be a short pause while we compile the q and a roster. I'm showing no questions. I'll now turn the conference back to Ms. Laura Gel for closing comments. Thank you, operator. In closing, on behalf of 17A Tech's management team, we'd like to thank you for your participation on today's call. If you require any further information, please feel free to reach out to us directly. Thank you for joining us today. This concludes the call. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.