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Cheetah Mobile Inc.

Cheetah Mobile Inc.CMCM決算レポート

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Cheetah Mobile Inc. is a Chinese mobile internet company incorporated in the Cayman Islands and headquartered in Beijing.

What changed in Cheetah Mobile Inc.'s 20-F — 2023 vs 2024

Top changes in Cheetah Mobile Inc.'s 2024 20-F

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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We currently don’t have any present plan to pay any cash dividends on its ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. See “Item 8. Financial Information—A.
We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business and currently don’t have any present plan to pay any cash dividends on its ordinary shares in the foreseeable future. See “Item 8. Financial Information—A.
WFOEs Other Subsidiaries VIEs and Their Subsidiaries Eliminations Consolidated Total (RMB, in thousands) Revenues — 56,465 576,693 348,433 (312,088) 669,503 Service fee revenue from VIEs and their subsidiaries — 23,172 180,306 — (203,478) — Service fee expenses charged by WFOEs and their subsidiaries — — — (203,478) 203,478 — Share of (loss) income from WFOEs and other subsidiaries (228,413) — — — 228,413 — Share of (loss) income from VIEs and their subsidiaries (65,504) (61,482) — — 126,986 — Net loss (602,898) (106,062) (84,599) (64,999) 264,689 (593,869) For the Year Ended December 31, 2022 Cheetah Mobile Inc.
WFOEs Other Subsidiaries VIEs and Their Subsidiaries Eliminations Consolidated Total (RMB, in thousands) Revenues — 56,465 576,693 348,433 (312,088) 669,503 Service fee revenue from VIEs and their subsidiaries — 23,172 180,306 — (203,478) — Service fee expenses charged by WFOEs and their subsidiaries — — — (203,478) 203,478 — Share of (loss) income from WFOEs and other subsidiaries (228,413) — — — 228,413 — Share of income (loss) from VIEs and their subsidiaries (65,504) (61,482) — — 126,986 — Net (loss) income (602,898) (106,062) (84,599) (64,999) 264,689 (593,869) For the Year Ended December 31, 2022 Cheetah Mobile Inc.
We could experience delays to the extent 21 Table of Contents our current or future partners do not continue doing business with us, meet agreed upon timelines, experience capacity constraints or otherwise are unable to deliver components or manufacture service robots as expected.
We could experience delays to the extent our current or future partners do not continue doing business with us, meet agreed upon timelines, experience capacity constraints or 21 Table of Contents otherwise are unable to deliver components or manufacture service robots as expected.
New York Stock Exchange fall within the definition of “abroad” in the provision, however, we are already listed on the New York Stock Exchange, therefore, there can be no assurance if we are required to follow the Cybersecurity review or the security assessment procedures, and if so, whether we would be able to complete the applicable cybersecurity review or the security assessment procedures in a timely manner.
New York Stock Exchange fall within the definition of “abroad” in the provision, however, we are already listed on the New York Stock Exchange, therefore, there can be no assurance if we are required to follow the Cybersecurity review or the security assessment procedures, and if so, whether we would be able to complete the applicable cybersecurity review or the security assessment procedures in a timely manner.
The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond.
The PCAOB is expected to continue to demand complete access to inspections and investigations against accounting firms headquartered in mainland China and Hong Kong in the future and states that it has already made plans to resume regular inspections in early 2023 and beyond.
Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will make determinations under the HFCAA as and when appropriate, then such lack of inspection could cause our securities to be delisted from the stock exchange.
Should the PCAOB again encounter impediments to inspections and investigations in mainland China or Hong Kong as a result of positions taken by any authority in either jurisdiction, the PCAOB will make determinations under the HFCAA as and when appropriate, then such lack of inspection could cause our securities to be delisted from the stock exchange.
Our business has continued to experience some challenges in the international markets and continue exposing to a number of risks, including: • challenges in formulating effective marketing strategies targeting users and customers from various jurisdictions and cultures, who have a diverse range of preferences and demands; • challenges in identifying appropriate local business partners and establishing and maintaining good working relationships with them. • local competition; • challenges in meeting local user, advertiser and customer demands as well as their marketing practices and conventions; • differences in user, advertiser and customer reception and perception of our products and services internationally; • challenges in building direct sales operations in the oversea market; • fluctuations in currency exchange rates; • compliance with applicable foreign laws and regulations, including but not limited to internet content requirements, foreign exchange controls, cash repatriation restrictions, intellectual property protection rules and data privacy requirements; 17 Table of Contents • exposure to different tax jurisdictions that may subject us to greater fluctuations in our effective tax rate and assessments in multiple jurisdictions on various tax-related assertions, including transfer pricing adjustments and permanent establishment; and • increased costs associated with doing business in foreign jurisdictions.
Our business has continued to experience some challenges in the international markets and continue exposing to a number of risks, including: • challenges in formulating effective marketing strategies targeting users and customers from various jurisdictions and cultures, who have a diverse range of preferences and demands; • challenges in identifying appropriate local business partners and establishing and maintaining good working relationships with them. • local competition; • challenges in meeting local user, advertiser and customer demands as well as their marketing practices and conventions; • differences in user, advertiser and customer reception and perception of our products and services internationally; • challenges in building direct sales operations in the overseas market; • fluctuations in currency exchange rates; • compliance with applicable foreign laws and regulations, including but not limited to internet content requirements, foreign exchange controls, cash repatriation restrictions, intellectual property protection rules and data privacy requirements; 17 Table of Contents • exposure to different tax jurisdictions that may subject us to greater fluctuations in our effective tax rate and assessments in multiple jurisdictions on various tax-related assertions, including transfer pricing adjustments and permanent establishment; and • increased costs associated with doing business in foreign jurisdictions.
The trading price of our ADSs has been and may continue to be subject to wide and sudden fluctuations due to factors including the following: • variations in our revenues, earnings and cash flow; • announcements of new investments, acquisitions, strategic partnerships, or joint ventures by us or our competitors; • announcements of disposal of business or assets; • announcements of new services and expansions by us or our competitors; • announcement of termination of partnership by important customers/vendors; • changes in financial estimates by securities analysts; • fluctuations in our user or other operating metrics; 47 Table of Contents • fluctuations in the stock price of Kingsoft Corporation, one of our principal shareholders, or news about Kingsoft Corporation that has an impact on us; • failure on our part to realize monetization opportunities as expected; • changes in revenues generated from our top customers; • additions or departures of key personnel; • detrimental negative publicity about us, our management, our competitors or our industry; • short seller reports that make allegations against us or our affiliates, even if unfounded; • regulatory developments affecting us or our industry; and • potential litigation or regulatory investigations.
The trading price of our ADSs has been and may continue to be subject to wide and sudden fluctuations due to factors including the following: • variations in our revenues, earnings and cash flow; • announcements of new investments, acquisitions, strategic partnerships, or joint ventures by us or our competitors; • announcements of disposal of business or assets; • announcements of new services and expansions by us or our competitors; • announcement of termination of partnership by important customers/vendors; • changes in financial estimates by securities analysts; • fluctuations in our user or other operating metrics; • fluctuations in the stock price of Kingsoft Corporation, one of our principal shareholders, or news about Kingsoft Corporation that has an impact on us; • failure on our part to realize monetization opportunities as expected; • changes in revenues generated from our top customers; • additions or departures of key personnel; • detrimental negative publicity about us, our management, our competitors or our industry; • short seller reports that make allegations against us or our affiliates, even if unfounded; • regulatory developments affecting us or our industry; and • potential litigation or regulatory investigations.
Each of these potential outcomes could adversely affect our company's market penetration and growth prospects. We are substantially reliant on our relationships with suppliers and service providers for the parts and components in our robots, as well as for the manufacture of our service robots.
Each of these potential outcomes could adversely affect our company's market penetration and growth prospects. We are substantially reliant on our relationships with suppliers and service providers for the parts and components in our robots, as well as for most of our manufacture of our service robots.
We believe that such seasonality in advertising spending affects our quarterly results, resulting in growth in our revenues from internet business between the third and the fourth quarters but a decline from the fourth quarter to the next quarter.
We believe that such seasonality in advertising spending affects our quarterly results, resulting in growth in our online advertising revenues from internet business between the third and the fourth quarters but a decline from the fourth quarter to the next quarter.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered as a PRC tax resident enterprise by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following conditions are met: (a) the senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (b) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (d) more than half of 40 Table of Contents the enterprise’s directors or senior management with voting rights habitually reside in the PRC.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered as a PRC tax resident enterprise by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following conditions are met: (a) the senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (b) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (d) more than half of the enterprise’s directors or senior management with voting rights habitually reside in the PRC.
Furthermore, because we qualify as a foreign private issuer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including (i) 49 Table of Contents the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time, and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.
Furthermore, because we qualify as a foreign private issuer under the Securities Exchange Act of 1934, as amended, or the Exchange Act, we are exempt from certain provisions of the Exchange Act that are applicable to U.S. public companies, including (i) the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (ii) the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time, and (iii) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events.
Although SAT Circular 82 and SAT Bulletin 45 only apply to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect the SAT’s general position on how the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals or foreigners.
Although SAT Circular 82 only apply to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect the SAT’s general position on how the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals or foreigners.
If we fail to retain our user base, or if our users decrease their engagement with our products, our business, financial condition and results of operations would be materially and adversely affected. 14 Table of Contents If our products and services, including our service robots, our AI-powered business solutions, our advertising agency services and multi-cloud management services, fail to offer a good experience and meet customer expectations, our business, results of operations and reputation would be materially and adversely affected.
If we fail to retain our user base, or if our users decrease their engagement with our products, our business, financial condition and results of operations would be materially and adversely affected. 14 Table of Contents If our products and services, including our service robots, our AI-powered business applications, our advertising agency services and multi-cloud management services, fail to offer a good experience and meet customer expectations, our business, results of operations and reputation would be materially and adversely affected.
Any failure or perceived failure to comply with all applicable data privacy and protection laws and regulations or to take prompt rectification actions as required by the enforcement authorities, or any failure or perceived failure of our business partners to do 26 Table of Contents so, or any failure or perceived failure of our employees to comply with our internal control measures, especially the data- related measures, may result in negative publicity and legal proceedings or regulatory actions against us, and could damage our reputation, discourage current and potential users and customers from using our products or services and subject us to fines, damages and rectification, which could have a material adverse effect on our business and results of operations.
Any failure or perceived failure to comply with all applicable data privacy and protection laws and regulations or to take prompt rectification actions as required by the enforcement authorities, or any failure or perceived failure of our business partners to do so, or any failure or perceived failure of our employees to comply with our internal control measures, especially the data- related measures, may result in negative publicity and legal proceedings or regulatory actions against us, and could damage our reputation, discourage current and potential users and customers from using our products or services and subject us to fines, damages and rectification, which could have a material adverse effect on our business and results of operations.
We are a China-based IT company providing comprehensive products and services on PCs and mobile devices globally. We generate revenues primarily by providing utility-related business, including advertising services and premium membership services worldwide. At the same time, we actively engages in the independent research and development of its AI technologies, including LLM technologies.
We are a China-based IT company providing comprehensive products and services on PCs and mobile devices globally. We generate revenues primarily by providing utility-related business, including advertising services and premium membership services worldwide. At the same time, we actively engage in the independent research and development of its AI technologies, including LLM technologies.
A key part of our business strategy depends on our ability to provide high-quality products and services, including our service robots, AI-powered business solutions, advertising agency services and multi-cloud management services. Any actual or perceived reduction in the quality or performance of our offerings could damage our reputation and result in customer dissatisfaction.
A key part of our business strategy depends on our ability to provide high-quality products and services, including our service robots, AI-powered business applications, advertising agency services and multi-cloud management services. Any actual or perceived reduction in the quality or performance of our offerings could damage our reputation and result in customer dissatisfaction.
Under the current PRC regulatory scheme, a number of regulatory agencies, including but not limited to the State Administration of Press, Publication, Radio, Film and Television, or SARFT, which has been reformed and become National Radio and 25 Table of Contents Television Administration, or NRTA, the Ministry of Culture, or MOC, which were consolidated with the National Tourism Administration and has been reformed and become the Ministry of Culture and Tourism, or MCT, Ministry of Industry and Information Technology, or MIIT, the State Council Information Office, or SCIO, the Cyberspace Administration of China, or CAC, and the State Administration for Market Regulation, or SAMR, jointly regulate all major aspects of the internet industry, including mobile and PC internet businesses.
Under the current PRC regulatory scheme, a number of regulatory agencies, including but not limited to the State Administration of Press, Publication, Radio, Film and Television, or SARFT, which has been reformed and become National Radio and Television Administration, or NRTA, the Ministry of Culture, or MOC, which were consolidated with the National Tourism Administration and has been reformed and become the Ministry of Culture and Tourism, or MCT, Ministry of Industry and Information Technology, or MIIT, the State Council Information Office, or SCIO, the Cyberspace Administration of China, or CAC, and the State Administration for Market Regulation, or SAMR, jointly regulate all major aspects of the internet industry, including mobile and PC internet businesses.
Risk Factors—Risks Relating to Doing Business in China—The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” 7 Table of Contents Cash and Asset Flows through Our Organization Cheetah Mobile Inc. is a holding company with no material operations of its own.
Risk Factors—Risks Relating to Doing Business in China—The approval of and filing with the CSRC or other PRC government authorities may be required in connection with our future offshore offerings under PRC law, and, if required, we cannot predict whether or for how long we will be able to obtain such approval or complete such filing.” Cash and Asset Flows through Our Organization Cheetah Mobile Inc. is a holding company with no material operations of its own.
We provides advertising services to advertisers worldwide, multi-cloud management platform to companies globally, as well as AI-powered business solutions and service robots to our customer. In connection therewith, our company and certain of our subsidiaries hold interests in securities, including, among other things, minority interests in operating companies and investment funds.
We provides advertising services to advertisers worldwide, multi-cloud management platform to companies globally, as well as AI-powered business applications and service robots to our customer. In connection therewith, our company and certain of our subsidiaries hold interests in securities, including, among other things, minority interests in operating companies and investment funds.
Meanwhile, in the dynamic landscape of today’s market, venturing into new business or strengthening our existing business lines, such as service robots and AI-powered business solutions, presents us with a complex array of risks and uncertainties that are integral to competing in rapidly evolving industries.
Meanwhile, in the dynamic landscape of today’s market, venturing into new business or strengthening our existing business lines, such as service robots and AI-powered business applications, presents us with a complex array of risks and uncertainties that are integral to competing in rapidly evolving industries.
For example, regulatory or legislative actions affecting the manner in which we display content to our users could adversely affect user growth and engagement, and legislations implementing data protection requirements or requiring local storage and processing of data or similar requirements could increase the cost and complexity of delivering our services.
For example, regulatory or legislative actions affecting the manner in which we display content to our users could adversely affect user growth and engagement, and legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements could increase the cost and complexity of delivering our services.
Our ability to achieve and sustain profitability is also affected by market and regulatory development related to, among others, mobile applications, online marketing and artificial intelligence In addition, if we are unable to achieve profitability again, it may become more difficult for us to 29 Table of Contents raise sufficient capital to satisfy our anticipated capital expenditures and other cash needs, in which case our business, results of operations and financial condition may be materially adversely affected.
Our ability to achieve and sustain profitability is also affected by market and regulatory development related to, among others, mobile applications, online marketing and artificial intelligence In addition, if we are unable to achieve profitability again, it may become more difficult for us to raise sufficient capital to satisfy our anticipated capital expenditures and other cash needs, in which case our business, results of operations and financial condition may be materially adversely affected.
Also, on February 24, 2023, CSRC and other three PRC regulatory authorities jointly issued the Confidentiality and Archives Administration Provisions, which will take effect on March 31, 2023, according to which, overseas securities regulators and competent overseas authorities may request to inspect, investigate or collect evidence from a domestic company concerning its overseas offering and listing or from the domestic securities companies and securities service providers that undertake relevant businesses for such domestic companies, such inspection, investigation and evidence collection shall be conducted under a cross-border regulatory cooperation mechanism, and the CSRC or other competent Chinese authorities will provide necessary assistance pursuant to bilateral and multilateral cooperation mechanisms.
Also, on February 24, 2023, CSRC and other three PRC regulatory authorities jointly issued the Confidentiality and Archives Administration Provisions, which will take effect on March 31, 2023, according to which, overseas securities regulators and competent overseas authorities may request to inspect, investigate or collect evidence from a domestic company concerning its overseas offering and listing or from the domestic securities companies and securities service providers that undertake relevant businesses for such domestic companies, such inspection, investigation and evidence collection shall be conducted under a cross-border regulatory cooperation mechanism, and the CSRC or other competent Chinese authorities will provide necessary 40 Table of Contents assistance pursuant to bilateral and multilateral cooperation mechanisms.
As of the date of this annual report, our PRC subsidiaries and consolidated variable interest entities have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company and the consolidated variable interest entities in China, including, among others, Internet Content Provider Licenses, or ICP Licenses, for the provision of internet information services, a license for value-added telecommunications services with the specification of online data processing and transaction processing business, or EDI license, Business License of Value-Added Telecommunications Services, or SP license, and Computer Information System Security Products Sales License for our mobile and PC security applications, the Network Culture Business License for network culture business, and got Algorithm Filing for in-country deep synthesis services (service technology supporter).
As of the date of this annual report, our PRC subsidiaries and consolidated variable interest entities have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our holding company and the consolidated variable interest entities in China, including, among others, Internet Content Provider Licenses, or ICP Licenses, for the provision of internet information services, a license for value-added telecommunications services with the specification of online data processing and transaction processing business, or EDI license, Business License of Value-Added Telecommunications Services, or SP license, and Network Security Products security certification for our mobile and PC security applications, the Network Culture Business License for network culture business, and got Algorithm Filing for in-country deep synthesis services (service technology supporter).
The existing and proposed laws and regulations, as well as any associated inquiries, investigations, or actions, can be costly to comply with and can delay or impede the development of new products, result in negative publicity, increase our operating costs, require 28 Table of Contents significant management time and attention, and subject us to remedies that may harm our business, including fines or demands or orders that we modify or cease existing business practices.
The existing and proposed laws and regulations, as well as any associated inquiries, investigations, or actions, can be costly to comply with and can delay or impede the development of new products, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines or demands or orders that we modify or cease existing business practices.
According to the Security Review Measures, in terms of foreign investments falling in the scope such as important cultural products and services, important information technologies and Internet products and services, important financial services, key technologies and other 42 Table of Contents important fields that concern state security while obtaining the actual control over the enterprises invested in, a foreign investor or a party concerned in the PRC shall take the initiative to make a declaration to the working mechanism office prior to making the investment.
According to the Security Review Measures, in terms of foreign investments falling in the scope such as important cultural products and services, important information technologies and Internet products and services, important financial services, key technologies and other important fields that concern state security while obtaining the actual control over the enterprises invested in, a foreign investor or a party concerned in the PRC shall take the initiative to make a declaration to the working mechanism office prior to making the investment.
Weiqin Qiu is an affiliate of Kingsoft Corporation. (3) We consolidate Beijing Conew through contractual arrangements among our company, Conew Network, Beijing Conew, Mr. Sheng Fu, and Mr. Kun Wang. Mr. Sheng Fu and Mr. Kun Wang own 62.73% and 37.27% equity interests in Beijing Conew, respectively. Mr.
Weiqin Qiu is an advisor of Kingsoft Corporation. (3) We consolidate Beijing Conew through contractual arrangements among our company, Conew Network, Beijing Conew, Mr. Sheng Fu, and Mr. Kun Wang. Mr. Sheng Fu and Mr. Kun Wang own 62.73% and 37.27% equity interests in Beijing Conew, respectively. Mr.
If the imposition of any of these government actions causes us to lose our right to direct the activities of our variable interest entities or our right to receive substantially all the economic benefits and residual returns from our variable interest entities and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of our variable interest entities in our consolidated financial statements.
If the imposition of any of these government actions causes us to lose our right to direct the activities of our variable interest entities or our right to receive substantially all the economic benefits and residual returns from our variable interest entities and we are not able to restructure our ownership structure and operations in a satisfactory manner, we would no longer be able to consolidate the financial results of our variable interest entities in our consolidated 32 Table of Contents financial statements.
WFOEs Other Subsidiaries VIEs and Their Subsidiaries Eliminations Consolidated Total (RMB, in thousands) Cash and cash equivalents 202,028 29,008 1,612,444 176,711 — 2,020,191 Short-term investments — — 1,023 — — 1,023 Due from related parties, net — 4,175 60,797 6,533 — 71,505 Others 2,715 9,130 1,303,499 58,847 — 1,374,191 Total current assets 204,743 42,313 2,977,763 242,091 — 3,466,910 Investments in subsidiaries 251,747 — — — (251,747) — Contractual interests in VIEs and their subsidiaries 2,232 — — — (2,232) — Others 152,355 101,155 1,638,905 273,859 — 2,166,274 Total non-current assets 406,334 101,155 1,638,905 273,859 (253,979) 2,166,274 Amount due from Cheetah Mobile Inc. — 187 523,349 — (523,536) — Amount due from WFOEs 2,036 — 693,332 86,754 (782,122) — Amount due from other subsidiaries 2,602,611 826,259 — 801,296 (4,230,166) — Amount due from VIEs and their subsidiaries — 342,086 774,265 — (1,116,351) — Amount due from Group companies 2,604,647 1,168,532 1,990,946 888,050 (6,652,175) — Total assets 3,215,724 1,312,000 6,607,614 1,404,000 (6,906,154) 5,633,184 Due to related parties — 240 76,073 7,834 — 84,147 Others 27,052 47,816 2,329,229 239,901 — 2,643,998 Total current liabilities 27,052 48,056 2,405,302 247,735 — 2,728,145 Total non-current liabilities 151,272 6,803 83,571 2,837 — 244,483 Amount due to Cheetah Mobile Inc. — 1,916 2,544,735 — (2,546,651) — Amount due to WFOEs 312 — 800,118 302,086 (1,102,516) — Amount due to other subsidiaries 581,217 719,740 — 845,132 (2,146,089) — Amount due to VIEs and their subsidiaries — 126,753 730,166 — (856,919) — Amount due to Group companies 581,529 848,409 4,075,019 1,147,218 (6,652,175) — Total liabilities 759,853 903,268 6,563,892 1,397,790 (6,652,175) 2,972,628 10 Table of Contents Selected Condensed Consolidated Balance Sheets Data (Continued) As of December 31, 2022 Cheetah Mobile Inc.
WFOEs Other Subsidiaries VIEs and Their Subsidiaries Eliminations Consolidated Total (RMB, in thousands) Cash and cash equivalents 202,028 29,008 1,612,444 176,711 — 2,020,191 Short-term investments — — 1,023 — — 1,023 Due from related parties, net — 4,175 60,797 6,533 — 71,505 Others 2,715 9,130 1,303,499 58,847 — 1,374,191 Total current assets 204,743 42,313 2,977,763 242,091 — 3,466,910 Investments in subsidiaries 251,747 — — — (251,747) — Contractual interests in VIEs and their subsidiaries 2,232 — — — (2,232) — Others 152,355 101,155 1,638,905 273,859 — 2,166,274 Total non-current assets 406,334 101,155 1,638,905 273,859 (253,979) 2,166,274 Amount due from Cheetah Mobile Inc. — 187 523,349 — (523,536) — Amount due from WFOEs 2,036 — 693,332 86,754 (782,122) — Amount due from other subsidiaries 2,602,611 826,259 — 801,296 (4,230,166) — Amount due from VIEs and their subsidiaries — 342,086 774,265 — (1,116,351) — Amount due from Group companies 2,604,647 1,168,532 1,990,946 888,050 (6,652,175) — Total assets 3,215,724 1,312,000 6,607,614 1,404,000 (6,906,154) 5,633,184 Due to related parties — 240 76,073 7,834 — 84,147 Others 27,052 47,816 2,329,229 239,901 — 2,643,998 Total current liabilities 27,052 48,056 2,405,302 247,735 — 2,728,145 Total non-current liabilities 151,272 6,803 83,571 2,837 — 244,483 Amount due to Cheetah Mobile Inc. — 1,916 2,544,735 — (2,546,651) — Amount due to WFOEs 312 — 800,118 302,086 (1,102,516) — Amount due to other subsidiaries 581,217 719,740 — 845,132 (2,146,089) — Amount due to VIEs and their subsidiaries — 126,753 730,166 — (856,919) — Amount due to Group companies 581,529 848,409 4,075,019 1,147,218 (6,652,175) — Total liabilities 759,853 903,268 6,563,892 1,397,790 (6,652,175) 2,972,628 11 Table of Contents Selected Condensed Consolidated Cash Flows Data For the Year Ended December 31, 2024 Cheetah Mobile Inc.
Furthermore, failure to achieve expected returns on our investments in new business segments could negatively impact our financial condition and operating results. Our expansion into service robots and AI-powered business solutions represents a significant transformation in our business model.
Furthermore, failure to achieve expected returns on our investments in new business segments could negatively impact our financial condition and operating results. Our expansion into service robots and AI-powered business applications represents a significant transformation in our business model.
If the PRC government deems that our contractual arrangements with 31 Table of Contents the consolidated variable interest entities do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
If the PRC government deems that our contractual arrangements with the consolidated variable interest entities do not comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if these regulations or the interpretation of existing regulations change or are interpreted differently in the future, we could be subject to severe penalties or be forced to relinquish our interests in those operations.
The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our share 52 Table of Contents register or the books of the depositary are closed, or at any time if we or the depositary thinks that it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement.
The depositary may refuse to deliver, transfer or register transfers of ADSs generally when our share register or the books of the depositary are closed, or at any time if we or the depositary thinks that it is advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason in accordance with the terms of the deposit agreement.
This expansion includes the introduction and development of, among others, service robots and AI-powered business solutions. This strategic pivot is aimed at diversifying our revenue streams and capturing new market opportunities within the corporate sector.
This expansion includes the introduction and development of, among others, service robots and AI-powered business applications. This strategic pivot is aimed at diversifying our revenue streams and capturing new market opportunities within the corporate sector.
When a general meeting is convened, you may not receive sufficient advance notice of the meeting to permit you to withdraw the Class A ordinary shares underlying your ADSs and become the registered holder of such shares to allow you to attend the general meeting and to cast your vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting.
When a general meeting is convened, you may not receive sufficient advance notice of the meeting to permit you to withdraw the Class A 51 Table of Contents ordinary shares underlying your ADSs and become the registered holder of such shares to allow you to attend the general meeting and to cast your vote directly with respect to any specific matter or resolution to be considered and voted upon at the general meeting.
If a claim of infringement brought against us in China or another jurisdiction is successful, we may be required to pay substantial penalties or other damages and fines, enter into license agreements which may not be 20 Table of Contents available on commercially reasonable terms or at all or be subject to injunction or court orders.
If a claim of infringement brought against us in China or another jurisdiction is successful, we may be required to pay substantial penalties or other damages and fines, enter into license agreements which may not be available on commercially reasonable terms or at all or be subject to injunction or court orders.
However, an enterprise holding a valid certificate of new software enterprise or animation enterprise is entitled to an exemption of enterprise income tax for the first two years and a 50% reduction of enterprise income tax for the subsequent three years, commencing from the first profit-making year, while an enterprise qualified as key software enterprise can enjoy a preferential EIT rate 41 Table of Contents of 10%.
However, an enterprise holding a valid certificate of new software enterprise or animation enterprise is entitled to an exemption of enterprise income tax for the first two years and a 50% reduction of enterprise income tax for the subsequent three years, commencing from the first profit-making year, while an enterprise qualified as key software enterprise can enjoy a preferential EIT rate of 10%.
Our business, financial condition and results of operations may be materially and adversely affected by these and other risks associated with our overseas operations. If users do not widely adopt versions of our applications developed for various mobile devices, our business could be adversely affected. The number of people who access the internet through mobile devices is keeping increasing.
Our business, financial condition and results of operations may be materially and adversely affected by these and other risks associated with our overseas operations. If users do not widely adopt versions of our applications developed for various mobile devices, our business could be adversely affected. The number of people who access the internet through mobile devices keeps increasing.
Our articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs. Our currently effective fourth amended and restated articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions.
Our articles of association contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares and ADSs. 49 Table of Contents Our currently effective fourth amended and restated articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions.
Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in our being unable to pay its debts as they fall due in the ordinary course of 51 Table of Contents business.
Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account, provided that in no circumstances may a dividend be paid if this would result in our being unable to pay its debts as they fall due in the ordinary course of business.
Fu under Qihoo’s share incentive plan at a nominal value was valid, a court order that Mr. Fu cease to use any confidential information or know-how of Qihoo, damages for disparagement, and a court order that Mr. Fu account to Qihoo for any profits that he earned as a result of the alleged breach. Mr.
Fu under Qihoo’s share incentive plan at a nominal value was valid, a court order that Mr. Fu cease to use any confidential information or know-how of Qihoo, 23 Table of Contents damages for disparagement, and a court order that Mr. Fu account to Qihoo for any profits that he earned as a result of the alleged breach. Mr.
If we cannot resolve any conflicts of interest or disputes between us and 34 Table of Contents these shareholders, we would have to rely on legal proceedings, which may be expensive, time-consuming and disruptive to our operations. There is also substantial uncertainty as to the outcome of any such legal proceedings.
If we cannot resolve any conflicts of interest or disputes between us and these shareholders, we would have to rely on legal proceedings, which may be expensive, time-consuming and disruptive to our operations. There is also substantial uncertainty as to the outcome of any such legal proceedings.
The growth rate of the Chinese economy had already been slowing since 2010. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies which had been adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China, even before 2020.
The growth rate of the Chinese economy had already been slowing since 2010. There is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies which had been adopted by the central banks and financial authorities of some of the world’s leading economies, including the United States and China.
Although we have worked to make the utmost commercially reasonable efforts to ensure that we collect personal information and data only with users’ prior consent and have adopted measures to protect the data security and minimize the risk of data loss, we cannot assure you that the measures we have taken are always sufficient and effective.
Although we have worked to make the utmost commercially reasonable efforts to ensure that we collect personal information and data only with users’ prior consent and have adopted measures to 27 Table of Contents protect the data security and minimize the risk of data loss, we cannot assure you that the measures we have taken are always sufficient and effective.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the Cybersecurity review under the Cybersecurity Review Measures and the draft of Regulations on the Network Data Security, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
If it is determined in the future that approval and filing from the CSRC or other regulatory authorities or other procedures, including the Cybersecurity review under the Cybersecurity Review Measures and the National Security Review under the Regulations on the Network Data Security Management, are required for our offshore offerings, it is uncertain whether we can or how long it will take us to obtain such approval or complete such filing procedures and any such approval or filing could be rescinded or rejected.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the ADSs. 45 Table of Contents Increases in labor costs in the PRC may adversely affect our business and our profitability.
If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of the ADSs. Increases in labor costs in the PRC may adversely affect our business and our profitability.
For example, to the extent that we need to convert U.S. dollars we receive from our initial public offerings or convertible senior notes offering into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion.
For example, to the extent that we need to convert U.S. dollars we receive from our initial public offerings or convertible senior notes offering into Renminbi for our operations, 45 Table of Contents appreciation of the Renminbi against the U.S. dollar would have an adverse effect on the Renminbi amount we would receive from the conversion.
On February 12, 2017, Kingsoft Corporation have entered into a voting proxy agreement with Mr. Sheng Fu, which became effective on October 1, 2017. According to such agreement, Kingsoft Corporation have delegated to Mr. Sheng Fu its approximately 37.8% voting power of our company. Mr. Sheng Fu has approximately 47.6% voting power of our company so far.
On February 12, 2017, Kingsoft Corporation have entered into a voting proxy agreement with Mr. Sheng Fu, which became effective on October 1, 2017. According to such agreement, Kingsoft Corporation have delegated to Mr. Sheng Fu its approximately 37.4% voting power of our company. Mr. Sheng Fu has approximately 47.1% voting power of our company so far.
Where personal information is processed in violation of the provisions of the Personal Information Protection Law, or the processing of personal information fails to fulfill the personal information protection, the department performing personal information protection duties shall order corrections , give warnings , confiscate illegal gains and order to suspend or terminate the provision of services by the applicants that illegally process personal information; if the personal information processor refuses to make corrections, a fine of not more than RMB 1 million shall be imposed; the directly responsible person in charge and other directly responsible personnel shall be fined not less thanRMB10,000 but not more than RMB100,000.
Where personal information is processed in violation of the provisions of the Personal Information Protection Law, or the processing of personal information fails to fulfill the personal information protection, the department performing personal information protection duties shall order corrections, give warnings , confiscate illegal gains and order to suspend or terminate the provision of services by the applicants that illegally process personal information; if the personal information processor refuses to make corrections, a fine of not more than RMB1 million shall be imposed; the directly responsible person in charge and other directly responsible personnel shall be fined not less than RMB10,000 but not more than RMB100,000.
Certain services we provide and businesses we operate through the VIEs are subject to the foreign investment restrictions or prohibitions set forth in the Negative List (2021 Version).
Certain services we provide and businesses we operate through the VIEs are subject to the foreign investment restrictions or prohibitions set forth in the Negative List (2024 Version).
Any significant security breach or attack on our system could result in a material adverse impact on our reputation, business prospects and results of operations. The successful operation of our business depends upon the performance and reliability of the internet infrastructure in China and the safety of our network and infrastructure.
Any significant security breach or attack on our system could result in a material adverse impact on our reputation, business prospects and results of operations. 29 Table of Contents The successful operation of our business depends upon the performance and reliability of the internet infrastructure in China and the safety of our network and infrastructure.
The trading performance of these Chinese companies’ securities after their offerings, including the securities of companies in the mobile and PC internet businesses, may affect the attitudes of investors toward Chinese companies listed in the United States, which consequently may impact the trading performance of the ADSs, regardless of our actual operating performance.
The trading performance of 48 Table of Contents these Chinese companies’ securities after their offerings, including the securities of companies in the mobile and PC internet businesses, may affect the attitudes of investors toward Chinese companies listed in the United States, which consequently may impact the trading performance of the ADSs, regardless of our actual operating performance.
For example, in comparison with a private company, we need an increased number of independent directors and have to adopt policies regarding internal controls and disclosure controls and procedures. In addition, we incur additional costs associated with our public company reporting requirements.
For example, in 53 Table of Contents comparison with a private company, we need an increased number of independent directors and have to adopt policies regarding internal controls and disclosure controls and procedures. In addition, we incur additional costs associated with our public company reporting requirements.
In addition, if we were to become subject to the 40 Act, any violation of the 40 Act could subject us to material adverse consequences, including potentially significant regulatory penalties and the possibility that certain of our contracts would be deemed unenforceable.
In addition, if we were to become subject 24 Table of Contents to the 40 Act, any violation of the 40 Act could subject us to material adverse consequences, including potentially significant regulatory penalties and the possibility that certain of our contracts would be deemed unenforceable.
Furthermore, on March 17, 2017, the SAT promulgated the Announcement of the State Administration of Taxation on Promulgating the Administrative Measures for Special Tax Investigation Adjustments and Mutual Agreement Procedures, or Bulletin 6, which become effective as of May 1, 2017.
Furthermore, on March 17, 2017, the SAT promulgated the Announcement of the State Administration of Taxation on Promulgating the Administrative Measures for Special Tax Investigation Adjustments and Mutual Agreement Procedures, or Bulletin 34 Table of Contents 6, which become effective as of May 1, 2017.
Although we have adopted a code of business conduct and ethics to help restrict conflicts of interest involving directors and officers, 22 Table of Contents any violation of this code by our directors or officers may materially and adversely affect our business operations, prospects and reputation.
Although we have adopted a code of business conduct and ethics to help restrict conflicts of interest involving directors and officers, any violation of this code by our directors or officers may materially and adversely affect our business operations, prospects and reputation.
The FIL also establishes several administration systems for foreign investment, amongst others, the information reporting system. Foreign investors or FIEs are required to submit investment information to the competent authorities through the system of enterprises 33 Table of Contents registration and enterprise credibility disclosure.
The FIL also establishes several administration systems for foreign investment, amongst others, the information reporting system. Foreign investors or FIEs are required to submit investment information to the competent authorities through the system of enterprises registration and enterprise credibility disclosure.
The VIEs, together with their subsidiaries, contributed a portion of our consolidated revenues in the years ended December 31, 2021, 2022 and 2023.
The VIEs, together with their subsidiaries, contributed a portion of our consolidated revenues in the years ended December 31, 2022, 2023 and 2024.
Under Circular 6, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire the “de facto control” of domestic enterprises with “national security” concerns.
Under Circular 6, a security review is required for mergers and acquisitions by foreign investors 42 Table of Contents having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire the “de facto control” of domestic enterprises with “national security” concerns.
Selected Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Data For the Year Ended December 31, 2023 Cheetah Mobile Inc.
Selected Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Data For the Year Ended December 31, 2024 Cheetah Mobile Inc.
Foreign ownership of internet-based, including mobile-based, businesses is subject to significant restrictions under current PRC laws and regulations. The PRC government regulates internet access, distribution of internet information services and value-added telecommunication services through strict business licensing requirements and other government regulations. These laws and regulations also limit foreign ownership of PRC companies that provide internet information services.
Foreign ownership of internet-based, including mobile-based, businesses is subject to significant restrictions under current PRC laws and regulations. The PRC government regulates internet access, distribution of internet information services and value-added telecommunication services through strict business licensing requirements and other government regulations. These laws and regulations also include limitations on foreign ownership of PRC companies that provide internet information services.
You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs. You may not receive dividends or other distributions on our Class A ordinary shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.
You may not realize a return on your investment in the ADSs and you may even lose your entire investment in the ADSs. 52 Table of Contents You may not receive dividends or other distributions on our Class A ordinary shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.
Our customers primarily comprise mobile advertising networks and partners, e-commerce companies, mobile application developers and mobile game developers, as well as individual customers, to which we refer traffic, sell advertisements, provide network security and technical services. In 2021, 2022 and 2023, our five largest customers in aggregate contributed approximately 35.6%, 46.3% and 29.2% of our revenues, respectively.
Our customers primarily comprise mobile advertising networks and partners, e-commerce companies, mobile application developers and mobile game developers, as well as individual customers, to which we refer traffic, sell advertisements, provide network security and technical services. In 2022, 2023 and 2024, our five largest customers in aggregate contributed approximately 46.3%, 29.2% and 30.3% of our revenues, respectively.
GAAP. 32 Table of Contents We rely on contractual arrangements with the VIEs and their shareholders for the operation of our business in China, which may not be as effective as direct ownership.
GAAP. We rely on contractual arrangements with the VIEs and their shareholders for the operation of our business in China, which may not be as effective as direct ownership.
Business Overview—Regulations— Regulations on Outbound Investment” for further details. Our business collects and processes a large amount of data, including business and personal data, and any improper collection, hosting, use or disclosure of data could harm our reputation and have a material adverse effect on our business and prospects.
Information on the Company—B. Business Overview—Regulations— Regulations on Outbound Investment” for further details. Our business collects and processes a large amount of data, including business and personal data, and any improper collection, hosting, use or disclosure of data could harm our reputation and have a material adverse effect on our business and prospects.
We may be subject to injunction or court orders or required to redesign our products or technology, any of which could adversely affect our business, financial condition and results of operations.
We may be subject to injunction or court 20 Table of Contents orders or required to redesign our products or technology, any of which could adversely affect our business, financial condition and results of operations.
Key Information—Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from loans to our PRC entities or to make additional capital contributions to our PRC subsidiaries, which may materially and adversely affect our liquidity and our ability to fund and expand our business.” For the years ended December 31, 2021, 2022 and 2023, certain of our PRC subsidiaries have declared dividends to our Hong Kong subsidiaries for an aggregate amount of RMB9.5 million, nil and RMB10.2 million (US$1.4 million) ; the dividend payments are subject to withholding tax.
Key Information—Risk Factors—Risks Relating to Doing Business in China—PRC regulation of loans to, and direct investment in, PRC entities by offshore holding companies and governmental control of currency conversion may restrict or prevent us from loans to our PRC entities or to make additional capital contributions to our PRC subsidiaries, which may materially and adversely affect our liquidity and our ability to fund and expand our business.” For the years ended December 31, 2022, 2023 and 2024, certain of our PRC subsidiaries have declared dividends to our Hong Kong subsidiaries for an aggregate amount of nil, RMB10.2 million and RMB19.8 million (US$2.7 million) ; the dividend payments are subject to withholding tax.
After the losses have been made up and common reserves have been drawn, the remaining profits shall be 44 Table of Contents distributed to shareholders in proportion to the actual capital contribution actually paid by them, unless otherwise agreed upon by all the shareholders.
After the losses have been made up and common reserves have been drawn, the remaining profits shall be distributed to shareholders in proportion to the actual capital contribution actually paid by them, unless otherwise agreed upon by all the shareholders.
The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of the consolidated variable interest entities in which we have no legal ownership, totaling RMB200.6 million, RMB201.7 million and RMB200.6 million (US$28.3 million) as of December 31, 2021, 2022 and 2023, respectively. For details, see “Item 3.
The amounts restricted include the paid-up capital and the statutory reserve funds of our PRC subsidiaries and the net assets of the consolidated variable interest entities in which we have no legal ownership, totaling RMB201.7 million, RMB200.6 million and RMB464.4 million (US$63.6 million) as of December 31, 2022, 2023 and 2024, respectively. For details, see “Item 3.
We conduct our operations primarily through our PRC subsidiaries, the VIEs and their subsidiaries in China. As a result, Cheetah Mobile Inc.’s ability to pay dividends depends upon dividends paid by our PRC subsidiaries.
We conduct our operations primarily through our PRC subsidiaries, the VIEs and their subsidiaries in China. As a result, Cheetah Mobile Inc.’s ability to pay dividends depends upon 7 Table of Contents dividends paid by our PRC subsidiaries.
These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party, and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business.
These alliances could subject us to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party, and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect our business. We have limited experience in independent manufacturing.
Operating Results—Taxation.” Any increase in the enterprise income tax rate applicable to our PRC entities in China, or any discontinuation or retroactive or future reduction of any of the preferential tax treatments currently enjoyed by our PRC entities in China, could adversely affect our business, financial condition and results of operations.
See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Taxation.” Any increase in the enterprise income tax rate applicable to our PRC entities in China, or any discontinuation or retroactive or future reduction of any of the preferential tax treatments currently enjoyed by our PRC entities in China, could adversely affect our business, financial condition and results of operations.
While we endeavor to comply with NDRC Order 11 and other regulations regarding outbound investment, we cannot assure you that our existing or future subsidiaries will maintain all applicable outbound investment procedures in a timely manner, and any non-compliance on their part may cause potential liabilities to us and disrupt our operations. See “Item 4. Information on the Company—B.
While we endeavor to comply with NDRC Order 11 and other regulations regarding outbound investment, we cannot 26 Table of Contents assure you that our existing or future subsidiaries will maintain all applicable outbound investment procedures in a timely manner, and any non-compliance on their part may cause potential liabilities to us and disrupt our operations. See “Item 4.
We may not be able to repay our indebtedness, and our shares may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of the consolidated variable interest entities, which contribute to 42.9% of our revenues in 2023.
We may not be able to repay our indebtedness, and our shares may decline in value or become worthless, if we are unable to assert our contractual control rights over the assets of the consolidated variable interest entities, which contribute to 35.0% of our revenues in 2024.
Risks Relating to Our Business and Industry • Our products users decreased in the past years and may continue to decrease in the future, which would materially and adversely affect our business, financial condition and results of operations. 12 Table of Contents • If our products and services, including our service robots, our AI-powered business solutions, our advertising agency services and multi-cloud management services, fail to offer a good experience and meet customer expectations, our business, results of operations and reputation would be materially and adversely affected. • If our expansion into new businesses is not successful, our results of operations and growth prospects may be materially and adversely affected. • Because a limited number of customers contribute to a significant portion of our revenues, our revenues and results of operations could be materially and adversely affected if we were to lose a significant customer or a significant portion of its business. • We are subject to risks and uncertainties faced by companies in a rapidly evolving industry. • If we fail to compete effectively, our business, financial condition and results of operations may be materially and adversely affected. • We have certain operations in international markets.
Risks Relating to Our Business and Industry • Our internet products users decreased in the past years, w hile we have observed marginal user growth in recent periods, this recovery remains highly uncertain and subject to volatility and may continue to decrease in the future, which would materially and adversely affect our business, financial condition and results of operations would be materially and adversely affected. 12 Table of Contents • If our products and services, including our service robots, our AI-powered business applications, our advertising agency services and multi-cloud management services, fail to offer a good experience and meet customer expectations, our business, results of operations and reputation would be materially and adversely affected. • If our expansion into new businesses is not successful, our results of operations and growth prospects may be materially and adversely affected. • Because a limited number of customers contribute to a significant portion of our revenues, our revenues and results of operations could be materially and adversely affected if we were to lose a significant customer or a significant portion of its business. • We are subject to risks and uncertainties faced by companies in a rapidly evolving industry. • If we fail to compete effectively, our business, financial condition and results of operations may be materially and adversely affected. • We have certain operations in international markets.
For more details, see “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations of Foreign Investment”.
For more details, see “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations 33 Table of Contents of Foreign Investment”.
For the years ended December 31, 2021, 2022 and 2023, our overseas subsidiaries provide promotion service to our PRC subsidiaries, total amount paid for such services by our PRC subsidiaries to our overseas subsidiaries were nil, nil and RMB13.9 million (US$2.0 million).
For the years ended December 31, 2022, 2023 and 2024, our overseas subsidiaries provide promotion service to our PRC subsidiaries, total amount paid for such services by our PRC subsidiaries to our overseas subsidiaries were nil, RMB13.9 million and nil.
WFOEs Other Subsidiaries VIEs and Their Subsidiaries Eliminations Consolidated Total (RMB, in thousands) Revenues — 80,522 834,233 344,288 (374,977) 884,066 Service fee revenue from VIEs and their subsidiaries — 24,180 191,165 — (215,345) — Service fee expenses charged by WFOEs and their subsidiaries — — — (215,345) 215,345 — Share of (loss) income from WFOEs and other subsidiaries (475,119) — — — 475,119 — Share of income (loss) from VIEs and their subsidiaries 3,409 3,820 — — (7,229) — Net (loss) income (513,475) (99,032) (387,372) 3,792 475,396 (520,691) 9 Table of Contents For the Year Ended December 31, 2021 Cheetah Mobile Inc.
WFOEs Other Subsidiaries VIEs and Their Subsidiaries Eliminations Consolidated Total (RMB, in thousands) Revenues — 80,522 834,233 344,288 (374,977) 884,066 Service fee revenue from VIEs and their subsidiaries — 24,180 191,165 — (215,345) — Service fee expenses charged by WFOEs and their subsidiaries — — — (215,345) 215,345 — Share of (loss) income from WFOEs and other subsidiaries (475,119) — — — 475,119 — Share of (loss) income from VIEs and their subsidiaries 3,409 3,820 — — (7,229) — Net (loss) income (513,475) (99,032) (387,372) 3,792 475,396 (520,691) 9 Table of Contents Selected Condensed Consolidated Balance Sheets Data As of December 31, 2024 Cheetah Mobile Inc.
(4) Each of Cheetah Technology, Cheetah Mobile Calls Hong Kong Limited and Multicloud Limited has entered into deeds of nominee with the nominee shareholders of certain of our Hong Kong operating entities which we do not control through equity ownership.
(4) Each of Forward Vision ("Forward Vision", formerly known as Cheetah Technology Corporation Limited), Cheetah Mobile Calls Hong Kong Limited and Multicloud Limited has entered into deeds of nominee with the nominee shareholders of certain of our Hong Kong operating entities which we do not control through equity ownership.
Kun Wang, and Mr. Wei Liu. Mr. Kun Wang and Mr. Wei Liu each own 50% equity interests in Beijing Network. Mr. Kun Wang is a former employee of our company, and Mr. Wei Liu is an affiliate of Kingsoft Corporation, one of our principal shareholders.
Kun Wang, and Mr. Wei Liu. Mr. Kun Wang and Mr. Wei Liu each own 50% equity interests in Beijing Network. Mr. Kun Wang is a former employee of our company, and Mr. Wei Liu is Director of certain subsidiaries of Kingsoft Corporation, one of our principal shareholders.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

124 edited+43 added−44 removed401 unchanged
Violations of the regulations regarding outbound investment may result in the imposition of fines and other administrative penalties. For serious violations, criminal liability may arise.
Violations of the regulations regarding outbound investment may result in the imposition of fines and other administrative penalties. For serious violations, criminal liability may arise.
Risk Factors—Risks Relating to Doing Business in China—Under the PRC Enterprise Income Tax Law, we may be classified as a PRC “resident enterprise,” which could result in unfavorable tax consequences to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.” Regulations on Labor Laws and Social Insurance The principal laws that govern employment include: • Labor Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on July 5, 1994, effective since January 1, 1995 and amended on August 27, 2009 and December 29, 2018; 83 Table of Contents • Labor Contract Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on June 29, 2007 and effective since January 1, 2008 and amended on December 28, 2012; • Implementation Rules of the PRC Labor Contract Law, promulgated by the State Council on September 18, 2008 and effective since September 18, 2008; • Work-related Injury Insurance Regulations, promulgated by the State Council on April 27, 2003 and effective since January 1, 2004 and amended on December 20, 2010; • Interim Regulations on the Collection and Payment of Social Insurance Fees, promulgated by the State Council on January 22, 1999, effective since January 22, 1999 and amended on March 24, 2019; • Social Insurance Law promulgated by the National People’s Congress on October 28, 2010, effective since July 1, 2011 and amended on December 29, 2018; and • Regulations on Unemployment promulgated by the State Council on January 22, 1999, effective since January 22, 1999, and • Regulations on the Administration of Housing Provident Fund promulgated by the State Council on April 3, 1999 and latest revised on March 24, 2019.
Risk Factors—Risks Relating to Doing Business in China—Under the PRC Enterprise Income Tax Law, we may be classified as a PRC “resident enterprise,” which could result in unfavorable tax consequences to us and our shareholders and have a material adverse effect on our results of operations and the value of your investment.” Regulations on Labor Laws and Social Insurance The principal laws that govern employment include: • Labor Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on July 5, 1994, effective since January 1, 1995 and amended on August 27, 2009 and December 29, 2018; • Labor Contract Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on June 29, 2007 and effective since January 1, 2008 and amended on December 28, 2012; • Implementation Rules of the PRC Labor Contract Law, promulgated by the State Council on September 18, 2008 and effective since September 18, 2008; • Work-related Injury Insurance Regulations, promulgated by the State Council on April 27, 2003 and effective since January 1, 2004 and amended on December 20, 2010; • Interim Regulations on the Collection and Payment of Social Insurance Fees, promulgated by the State Council on January 22, 1999, effective since January 22, 1999 and amended on March 24, 2019; • Social Insurance Law promulgated by the National People’s Congress on October 28, 2010, effective since July 1, 2011 and amended on December 29, 2018; and • Regulations on Unemployment promulgated by the State Council on January 22, 1999, effective since January 22, 1999, and • Regulations on the Administration of Housing Provident Fund promulgated by the State Council on April 3, 1999 and latest revised on March 24, 2019.
As a result, we, through Beijing Security, hold approximately 29.6% of then equity interest in Beijing OrionStar and have a two-year warrant to subscribe to additional equity interests amounted to US$62 million at the same valuation of our capital injection in September 2017.
As a result, we, through Beijing Security, hold approximately 29.6% of the equity interest in Beijing OrionStar and have a two-year warrant to subscribe to additional equity interests amounted to US$62 million at the same valuation of our capital injection in September 2017.
The Cybersecurity Review Measures provides that: (i) network platform operators that are engaged in data processing activities which have or may have an implication on national security shall undergo a cybersecurity review; (ii) the CSRC is one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review mechanism; (iii) network platform operators that master personal information of more than one million users and seek to list abroad shall file for a cybersecurity review with the Cybersecurity Review Office; and (iv) 74 Table of Contents the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties, and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the Cybersecurity review process.
The Cybersecurity Review Measures provides that: (i) network platform operators that are engaged in data processing activities which have or may have an implication on national security shall undergo a cybersecurity review; (ii) the CSRC is one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review mechanism; (iii) network platform operators that master personal information of more than one million users and seek to list abroad shall file for a cybersecurity review with the Cybersecurity Review Office; and (iv) the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties, and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the Cybersecurity review process.
Our Core Offerings for Users and Customers Internet Products Duba Anti-virus Duba Anti-virus is an internet security application which incorporates anti-virus, anti-malware, anti-phishing, malicious website blocking and secure online shopping in a single lightweight installation package and leverages the power of our cloud-based data analytics engines to protect our users against known and unknown security threats and malicious applications.
Our Core Offerings for Users and Customers Internet Products Duba Anti-virus Duba Anti-virus is a PC internet security application which incorporates anti-virus, anti-malware, anti-phishing, malicious website blocking and secure online shopping in a single lightweight installation package and leverages the power of our cloud-based data analytics engines to protect our users against known and unknown security threats and malicious applications.
In Jan, 2024, we signed a share purchase agreement to further invest in Beijing OrionStar, which enable us to make a cash investment of US$16.7 million in Beijing OrionStar and exercise our right under the convertible loan with principal amount of RMB100.0 million that we provided to Beijing OrionStar in 2021 to convert all of the principal and the accrued interest into Beijing OrionStar's equity interest.
In January 2024, we signed a share purchase agreement to further invest in Beijing OrionStar, which enable us to make a cash investment of US$16.7 million in Beijing OrionStar and exercise our right under the convertible loan with principal amount of RMB100.0 million that we provided to Beijing OrionStar in 2021 to convert all of the principal and the accrued interest into Beijing OrionStar's equity interest.
Duba Anti-virus provides a one-click solution to scan and fix vulnerabilities in computer configurations that could create an elevated risk level of system intrusions. Membership Services . To deliver a superior user experience, since 2019 we began to introduce membership services in Duba Anti-virus, through which users can get more advanced functions and premium services.
Vulnerability fixing . Duba Anti-virus provides a one-click solution to scan and fix vulnerabilities in computer configurations that could create an elevated risk level of system intrusions. Membership Services . To deliver a superior user experience, since 2019 we began to introduce membership services in Duba Anti-virus, through which users can get more advanced functions and premium services.
Risk Factors—Risks Relating to Our Corporate Structure” for “—If the PRC government finds that the structure we have adopted for our business operations does not comply with PRC governmental restrictions on foreign investment in internet businesses, or if these laws or regulations or interpretations of existing laws or regulations change in the future, we could be subject to severe penalties, including the shutting down of our platform and our business operations” and “—Substantial uncertainties exist with respect to the interpretation and implementation of PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” D.
Risk Factors—Risks Relating to Our Corporate Structure” for “—If the PRC government finds that the structure we have adopted for our business operations does not comply with PRC governmental restrictions on foreign investment in internet businesses, or if these laws or regulations or interpretations of existing laws or regulations change in the future, we could be subject to severe penalties, including the shutting down of our platform and our 88 Table of Contents business operations” and “—Substantial uncertainties exist with respect to the interpretation and implementation of PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations.” D.
Risk Factors—Risks Relating to Doing Business in China—We may be adversely affected by the complexity of, and uncertainties and changes in, PRC regulation on mobile and PC internet businesses and companies.” Anti-fatigue Compliance System and Real-name Registration System In 2007, the General Administration of Press and Publication and several other governmental authorities issued a circular requiring the implementation of an “anti-fatigue system” and a real-name registration system by all PRC online games operators in an effort to curb addictive online game play behaviors of minors.
Risk Factors—Risks Relating to Doing Business in China—We may be adversely affected by the complexity of, and uncertainties and changes in, PRC regulation on mobile and PC internet businesses and companies.” 64 Table of Contents Anti-fatigue Compliance System and Real-name Registration System In 2007, the General Administration of Press and Publication and several other governmental authorities issued a circular requiring the implementation of an “anti-fatigue system” and a real-name registration system by all PRC online games operators in an effort to curb addictive online game play behaviors of minors.
Regulations that apply to outbound investments primarily include: • Administrative Measures for Outbound Investment by Enterprises, or the NDRC Order No. 11, promulgated by NDRC on December 26, 2017, effective since March 1, 2018 (NDRC Order No. 11); • Catalogue of Investment Projects Subject to Government Verification and Approval (2016 Version), promulgated by the State Council on December 12, 2016, effective since then; • Administrative Measures for Outbound Investment, issued by the MOFCOM on September 6, 2014, effective since October 6, 2014; and • Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Policies of Foreign Exchange Administration Applicable to Direct Investment, promulgated by the SAFE on February 13, 2015, effective on June 1, 2015.
Regulations that apply to outbound investments primarily include: • Administrative Measures for Outbound Investment by Enterprises, or the NDRC Order No. 11, promulgated by NDRC on December 26, 2017, effective since March 1, 2018 (NDRC Order No. 11); • Catalogue of Investment Projects Subject to Government Verification and Approval (2016 Version), promulgated by the State Council on December 12, 2016, effective since then; • Administrative Measures for Outbound Investment, issued by the MOFCOM on September 6, 2014, effective since October 6, 2014; and • Notice of the State Administration of Foreign Exchange on Further Simplifying and Improving the Policies of Foreign Exchange Administration Applicable to Direct Investment, promulgated by the SAFE on February 13, 2015, effective on 76 Table of Contents June 1, 2015.
The Circular optimized the foreign exchange administration from the following aspects: promoting the facilitation reform of capital account income payment nationwide; (ii) cancelation of the registration of special refund business; (iii) Simplify the registration and management of certain capital project businesses; (iv) relaxation of domestic foreign exchange loans with export background to purchase foreign exchange and repay; (v) facilitating the use of electronic documents for foreign exchange business; (vi) Optimization the bank’s cross-border e-commerce foreign 79 Table of Contents exchange settlement; (vii) relaxation of business review and endorsement procedures; (viii) supporting banks to innovate financial services.
The Circular optimized the foreign exchange administration from the following aspects: promoting the facilitation reform of capital account income payment nationwide; (ii) cancelation of the registration of special refund business; (iii) Simplify the registration and management of certain capital project businesses; (iv) relaxation of domestic foreign exchange loans with export background to purchase foreign exchange and repay; (v) facilitating the use of electronic documents for foreign exchange business; (vi) Optimization the bank’s cross-border e-commerce foreign exchange settlement; (vii) relaxation of business review and endorsement procedures; (viii) supporting banks to innovate financial services.
According to the Negative List (2021 Version), foreign investment in internet news information services, online publication services, online audio-visual program services are prohibited, and foreign equity share in a value-added telecommunication business shall not exceed 50% (excluding e-commerce, domestic multi-party communication, store-and-forward, and call center).
According to the Negative List (2024 Version), foreign investment in internet news information services, online publication services, online audio-visual program services are prohibited, and foreign equity share in a value-added telecommunication business shall not exceed 50% (excluding e-commerce, domestic multi-party communication, store-and-forward, and call center).
Conew Network is currently engaged in the business of research and development of digital technology, telecommunication technology and relevant products, self-technology transfer, technology service, technology consultancy and computer technology training, sale of self-developed products, graphic design, business consultancy and investment consultancy, all of which are permitted foreign investment industries under Catalogue of Industries for Encouraging Foreign Investment (2022 Version) and Negative List (2021 Version).
Conew Network is currently engaged in the business of research and development of digital technology, telecommunication technology and relevant products, self-technology transfer, technology service, technology consultancy and computer technology training, sale of self-developed products, graphic design, business consultancy and investment consultancy, all of which are permitted foreign investment industries under Catalogue of Industries for Encouraging Foreign Investment (2022 Version) and Negative List (2024 Version).
During 2020, we disposed certain internet business which resulted in a disposal gain of approximately RMB394.2 million. Subsequent to the deconsolidation, we own 0% to 47.1% voting rights of those disposed business. Remaining interests is accounted for equity investment using the equity method or measurement alternative.
During 2020, we disposed certain internet business which resulted in a disposal gain of approximately RMB394.2 million. Subsequent to the deconsolidation, we own 0% to 47.1% voting rights of those disposed business. Remaining interests are accounted for equity investment using the equity method or measurement alternative.
Sheng Fu, our chief executive officer and director, pursuant to which Kingsoft Corporation agreed to delegate voting rights pertaining to up to 399,445,025 Class B ordinary shares of our company that it owns to Mr. Fu. Pursuant to which, Kingsoft Corporation has delegated approximately 37.8% voting power of our company held by Kingsoft Corporation to Mr.
Sheng Fu, our chief executive officer and director, pursuant to which Kingsoft Corporation agreed to delegate voting rights pertaining to up to 399,445,025 Class B ordinary shares of our company that it owns to Mr. Fu. Pursuant to which, Kingsoft Corporation has delegated approximately 37.4% voting power of our company held by Kingsoft Corporation to Mr.
The review concluded that our handling of Facebook user data is compliant with the relevant data protection requirements in relevant Facebook policies. Unfortunately, Facebook has not resumed the collaboration with us. In February 2020, our Google Play Store, Google AdMob and Google AdManager accounts were disabled by Google.
The review concluded that our handling of Meta user data is compliant with the relevant data protection requirements in relevant Meta policies. Unfortunately, Meta has not resumed the collaboration with us. In February 2020, our Google Play Store, Google AdMob and Google AdManager accounts were disabled by Google.
The K+ defense system blocks phishing and malicious shopping websites, prevents online shopping webpages from being altered or login information being intercepted by Trojan horses installed on users’ computers and provides security module plug-in to enhance browser security. Critical processes such as online payments can be conducted in a secure virtual environment free of interference by malware. Vulnerability fixing .
Online shopping protection. The K+ defense system blocks phishing and malicious shopping websites, prevents online shopping webpages from being altered or login information being intercepted by Trojan horses installed on users’ computers and provides security module plug-in to enhance browser security. Critical processes such as online payments can be conducted in a secure virtual environment free of interference by malware.
Providers of deep synthesis services shall fulfill their role as the bearer of responsibilities for information security, and establish and improve their user registration, algorithm mechanism and logic review, scientific and technological ethics review, information release review, data security, personal information protection, anti-telecom and online fraud, emergency response and other management systems, along with safe and controllable technical safeguards in place.
Providers of deep synthesis services shall fulfill their role as the bearer of responsibilities for information security, and establish and improve their user registration, algorithm mechanism and logic review, scientific and technological ethics review, information release review, data security, personal information protection, anti-telecom and online fraud, emergency response and other management systems, along with safe and controllable technical safeguards 68 Table of Contents in place.
Pursuant to the Interpretation, “citizen’s personal information” refers to all kinds of information recorded in electronic form or any other form, which can be used, independently or in combination with other information, to identify a specific natural person’s personal identity or reflect 70 Table of Contents a specific natural person’s activities, including the natural person’s name, identity certificate number, communication and contact information, address, account password, property status, and whereabouts, among others.
Pursuant to the Interpretation, “citizen’s personal information” refers to all kinds of information recorded in electronic form or any other form, which can be used, independently or in combination with other information, to identify a specific natural person’s personal identity or reflect a specific natural person’s activities, including the natural person’s name, identity certificate number, communication and contact information, address, account password, property status, and whereabouts, among others.
On January 23, 2019, four relevant government authorities jointly issued the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Apps, pursuant to which, app operators should collect and use personal information in compliance with the Cyber Security Law and should be responsible for the security of personal information obtained 71 Table of Contents from users and take effective measures to strengthen the personal information protection.
On January 23, 2019, four relevant government authorities jointly issued the Announcement of Conducting Special Supervision against the Illegal Collection and Use of Personal Information by Apps, pursuant to which, app operators should collect and use personal information in compliance with the Cyber Security Law and should be responsible for the security of personal information obtained from users and take effective measures to strengthen the personal information protection.
On September 28, 2009, the GAPP, the National Copyright Administration, or the NCA, and the Office of the National Working Group for Combating Pornography and Illegal Publications jointly issued a Notice on Implementing the Provisions of the State Council on “Three Determinations” and the Relevant Explanations of the State Commission Office for Public Sector Reform and Further Strengthening the Administration of the Pre-approval of Online Games and Examination and Approval of Imported Online Games, or 63 Table of Contents Circular 13.
On September 28, 2009, the GAPP, the National Copyright Administration, or the NCA, and the Office of the National Working Group for Combating Pornography and Illegal Publications jointly issued a Notice on Implementing the Provisions of the State Council on “Three Determinations” and the Relevant Explanations of the State Commission Office for Public Sector Reform and Further Strengthening the Administration of the Pre-approval of Online Games and Examination and Approval of Imported Online Games, or Circular 13.
It remains unclear whether a common foreign- invested enterprise, other than such special types of enterprises as holding companies, venture capital or private equity firms, can use the converted RMB in the designated account to make equity investments if equity investment or the like is not within their approved business scope.
It remains unclear whether a common foreign- invested enterprise, other than such special types of enterprises as holding companies, venture capital or private equity firms, can use the converted RMB in the designated account to make equity investments if equity investment or the like 79 Table of Contents is not within their approved business scope.
Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the 66 Table of Contents General Provisions of the Book on Contracts of the Civil Code of the People's Republic of China, which was promulgated by the Supreme People's Court on December 4, 2023 and became effective on December 5, 2023. • Measures for the Supervision and Administration of Online Transactions, which was promulgated by the State Administration for Market Regulation on March 15, 2021 and became effective on May 1, 2021.
Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the General Provisions of the Book on Contracts of the Civil Code of the People's Republic of China, which was promulgated by the Supreme People's Court on December 4, 2023 and became effective on December 5, 2023. • Measures for the Supervision and Administration of Online Transactions, which was promulgated by the State Administration for Market Regulation on March 15, 2021 and became effective on May 1, 2021.
Where such documents need to be transferred or transmitted to outside the Chinese mainland, the approval procedure shall be carried out in accordance with the relevant regulations of the State. 85 Table of Contents C. Organizational Structure Foreign ownership of internet-based and mobile-based businesses is subject to significant restrictions under current PRC laws and regulations.
Where such documents need to be transferred or transmitted to outside the Chinese mainland, the approval procedure shall be carried out in accordance with the relevant regulations of the State. C. Organizational Structure Foreign ownership of internet-based and mobile-based businesses is subject to significant restrictions under current PRC laws and regulations.
Failure to comply with these laws and regulations could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” As a significant portion of our business operations are conducted in China, we are materially affected by the laws and regulations in China.
Failure to comply with these laws and regulations could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.” 60 Table of Contents As a significant portion of our business operations are conducted in China, we are materially affected by the laws and regulations in China.
However, as of the date of this annual report, we have not received any formal notice from any cybersecurity regulator that we should apply for a cybersecurity review. On October 25, 2022, the MIIT issued the Measures for the Administration of Recordation of Network Product Security Vulnerability Collection Platforms, or the Provisions.
However, as of the date of this annual report, we have not received any formal notice from any cybersecurity regulator that we should apply for a cybersecurity review. 75 Table of Contents On October 25, 2022, the MIIT issued the Measures for the Administration of Recordation of Network Product Security Vulnerability Collection Platforms, or the Provisions.
However, there is no further explanation about what would constitute an “indirect foreign investment”. According to the FI Information Report Measures, foreign investors establishing foreign investment enterprises in China shall submit an initial report through the Enterprise Registration System at the time of completion of registration formalities for establishment 77 Table of Contents of foreign investment enterprises.
However, there is no further explanation about what would constitute an “indirect foreign investment”. According to the FI Information Report Measures, foreign investors establishing foreign investment enterprises in China shall submit an initial report through the Enterprise Registration System at the time of completion of registration formalities for establishment of foreign investment enterprises.
This 78 Table of Contents Circular 19 is to implement the so-called “conversion-at-will” of foreign currency in capital account, which was established under a circular issued by the SAFE on August 4, 2014, or Circular 36, and was implemented in 16 designated industrial parks as a reform pilot.
This Circular 19 is to implement the so-called “conversion-at-will” of foreign currency in capital account, which was established under a circular issued by the SAFE on August 4, 2014, or Circular 36, and was implemented in 16 designated industrial parks as a reform pilot.
In addition to the pre-transaction regulation, NDRC Order 11 strengthens interim and ex post supervision. NDRC Order 11 provides mechanisms for major adverse situation reports, project completion reports, major matters inquiries and reports in order to 76 Table of Contents achieve control over outbound investments; and further improved the disciplinary measures to achieve the after-regulation of overseas investment.
In addition to the pre-transaction regulation, NDRC Order 11 strengthens interim and ex post supervision. NDRC Order 11 provides mechanisms for major adverse situation reports, project completion reports, major matters inquiries and reports in order to achieve control over outbound investments; and further improved the disciplinary measures to achieve the after-regulation of overseas investment.
Information on the Company— C. Organizational Structure—Contractual Arrangements with the VIEs.” Based on our PRC legal counsel, Global Law Office’s understanding of the current PRC laws, rules and regulations, our corporate structure complies with all applicable PRC laws, and does not violate, breach, contravene or circumvent or otherwise conflict with any applicable PRC laws.
Organizational Structure—Contractual Arrangements with the VIEs.” Based on our PRC legal counsel, Global Law Office’s understanding of the current PRC laws, rules and regulations, our corporate structure complies with all applicable PRC laws, and does not violate, breach, contravene or circumvent or otherwise conflict with any applicable PRC laws.
Operators of such apps shall not refuse to provide basic services to users on the ground of users’ refusal to provide their personal non-essential information. On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Protection Law which took effect on November 1, 2021.
Operators of such apps shall not refuse to provide basic services to users on the ground of users’ refusal to provide their personal non-essential information. 72 Table of Contents On August 20, 2021, the Standing Committee of the National People’s Congress adopted the Personal Information Protection Law which took effect on November 1, 2021.
An amendment to the registration is required if there is a material change in the SPV registered, such as any change of basic information (including change of such PRC residents, name and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions.
An amendment to the registration is required if there is a material change in the SPV registered, such as any change of basic information (including change of such PRC residents, name and operation term), increases or decreases in investment 81 Table of Contents amount, transfers or exchanges of shares, or mergers or divisions.
In addition, we enter into confidentiality and non-disclosure agreements with our employees and customers. The agreements we enter into with our employees also provide that all software, inventions, developments, works of authorship and trade secrets created by them during the course of their employment are our property. Patents .
In addition, we enter into confidentiality and 59 Table of Contents non-disclosure agreements with our employees and customers. The agreements we enter into with our employees also provide that all software, inventions, developments, works of authorship and trade secrets created by them during the course of their employment are our property. Patents .
However, if non-resident enterprises have not formed permanent establishments or premises in the PRC, or if their permanent establishment or premises in the PRC have no actual relationship to the relevant income derived in the PRC, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.
However, if non-resident enterprises have not formed permanent establishments or premises in the PRC, or if their 82 Table of Contents permanent establishment or premises in the PRC have no actual relationship to the relevant income derived in the PRC, enterprise income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.
Risk Factors—Risks Relating to Doing Business in China—PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us to liability and penalties under PRC law.” In addition, the State Administration for Taxation has issued circulars concerning employee share options, under which our employees working in the PRC who exercise share options will be subject to PRC individual income tax.
Risk Factors—Risks Relating to Doing Business in China—PRC regulations relating to offshore investment activities by PRC residents may limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or otherwise expose us to liability and penalties under PRC law.” In addition, the State Administration for Taxation has issued circulars concerning employee share incentives, under which our employees working in the PRC who exercise share options or are granted restricted shares will be subject to PRC individual income tax.
Our principal executive offices are located at Building No. 11 Wandong Science and Technology Cultural Innovation Park No.7 Sanjianfangnanli, Chaoyang District, Beijing 100024, People’s Republic of China. Our telephone number at this address is 55 Table of Contents +86-10-6292-7779.
Our principal executive offices are located at Building No. 11 Wandong Science and Technology Cultural Innovation Park No.7 Sanjianfangnanli, Chaoyang District, Beijing 100024, People’s Republic of China. Our telephone number at this address is +86-10-6292-7779.
It was the first national securities law in the PRC, and is divided into 14 chapters and 226 articles comprehensively regulating activities in the PRC securities market, including the issue and trading of securities, takeovers by listed companies, securities exchanges, securities companies and the duties and responsibilities of the State Council’s securities regulatory authorities.
It was the first national securities law in the PRC, and is divided into 14 chapters and 226 articles comprehensively regulating activities in the PRC securities market, including the issue and trading of securities, takeovers by listed companies, securities exchanges, securities companies and the duties and 85 Table of Contents responsibilities of the State Council’s securities regulatory authorities.
Key Information—Our Holding Company Structure and Contractual Arrangements with the Consolidated Variable Interest Entities.” Pursuant to Catalogue of Industries for Encouraging Foreign Investment (2022 Version) and Negative List (2021 Version), Beijing Security is currently engaged in the business of technology promotion, technology development, technology service and technology consultancy, sale of computers, software, auxiliary devices and AI hardware, computer animation design, investment consultancy and advertisement design, production, agency and publication, all of which are permitted foreign investment industries under Catalogue of Industries for Encouraging Foreign Investment (2022 Version) and Negative List (2021 Version).
Key Information—Our Holding Company Structure and Contractual Arrangements with the Consolidated Variable Interest Entities.” Pursuant to Catalogue of Industries for Encouraging Foreign Investment (2022 Version) and Negative List (2024 Version), Beijing Security is currently engaged in the business of technology promotion, technology development, technology service and technology consultancy, sale of computers, software, auxiliary devices and AI hardware, computer animation design, investment consultancy and advertisement design, production, agency and publication, all of which are permitted foreign 86 Table of Contents investment industries under Catalogue of Industries for Encouraging Foreign Investment (2022 Version) and Negative List (2024 Version).
Besides, the ICP Measures and other relevant measures also ban the internet activities that constitute publication of any content that propagates obscenity, pornography, gambling and violence, incite the commission of crimes or infringe upon the lawful rights and interests of third parties, among others.
Besides, the ICP Measures and other relevant measures also ban the internet activities that constitute publication of any content that propagates obscenity, 62 Table of Contents pornography, gambling and violence, incite the commission of crimes or infringe upon the lawful rights and interests of third parties, among others.
Failure to comply with these consumer protection laws could subject us to administrative sanctions, such as the issuance of warning, confiscation of income, imposition of fines, order to cease business operations, revocation of business licenses, as well as potential civil and criminal liabilities.
Failure to comply with these consumer protection laws could subject us to administrative sanctions, such as the issuance of warning, 67 Table of Contents confiscation of income, imposition of fines, order to cease business operations, revocation of business licenses, as well as potential civil and criminal liabilities.
Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder. Copyright .
Except under certain specific circumstances provided by law, any third-party user must obtain consent or a proper license from the patent owner to use the patent, or else the use will constitute an infringement of the rights of the patent holder. 69 Table of Contents Copyright .
The PRC Trademark Law, adopted in 1982 and amended in 1993, 2001, 2013 and 2019, with its implementation rules adopted in 2002 and amended in 2014, protects registered trademarks. The Trademark Office of the SAIC handles trademark registrations and grants a protection term of ten years to registered trademarks.
The PRC Trademark Law, adopted in 1982 and amended in 1993, 2001, 2013 and 2019, with its implementation rules adopted in 2002 and amended in 2014, protects registered trademarks. The Trademark Office of the SAIC handles trademark 70 Table of Contents registrations and grants a protection term of ten years to registered trademarks.
Category II internet audio/ video program services relate to the transmission of audio/video programs on current political news and the hosting, production, reporting and broadcasting of audio/video programs on literature and art, entertainment, science and technology, finance and economics, sports, education and other topics.
Category II internet audio/ video program services relate to the transmission of audio/video programs on current political news and the hosting, production, reporting and broadcasting of audio/video 66 Table of Contents programs on literature and art, entertainment, science and technology, finance and economics, sports, education and other topics.
In July and September 2018, Beijing Security acquired additional equity interest in Beijing OrionStar through exercising part of the foregoing warrant. In 2019, Beijing 54 Table of Contents Security fully exercised its warrant in Beijing OrionStar. Subsequent to the consummation of the transaction, we, through Beijing Security, hold 38.73% equity interest in Beijing OrionStar.
In July and September 2018, Beijing Security acquired additional equity interest in Beijing OrionStar through exercising part of the foregoing warrant. In 2019, Beijing Security fully exercised its warrant in Beijing OrionStar. Subsequent to the consummation of the transaction, we, through Beijing Security, hold 38.73% equity interest in Beijing OrionStar.
This agreement will be effective unless terminated according to the terms of the agreement or otherwise terminated by mutual agreement of the signing parties. Agreements that provide us with the option to purchase the equity interest in Beijing Mobile Loan agreements .
This agreement will be effective unless terminated according to the terms of the agreement or otherwise terminated by mutual agreement of the signing parties. 87 Table of Contents Agreements that provide us with the option to purchase the equity interest in Beijing Mobile Loan agreements .
In addition, the PRC agents shall file each quarter the form for record-filing of 81 Table of Contents information of the Domestic Individuals Participating in the Stock Incentive Plans of Overseas Listed Companies with the SAFE or its local branches.
In addition, the PRC agents shall file each quarter the form for record-filing of information of the Domestic Individuals Participating in the Stock Incentive Plans of Overseas Listed Companies with the SAFE or its local branches.
Our overseas advertising agency service assists companies to launch advertisement on large overseas advertising platforms, such as Facebook. Our Customers For our internet business, our customers primarily comprise of customers who place advertisements on our application offerings and individual customers who subscribe premium services or purchase virtual items used in our applications.
Our overseas advertising agency service assists companies to launch advertisement on large overseas advertising platforms, such as Meta and Tik Tok. Our Customers For our internet business, our customers primarily comprise of customers who place advertisements on our application offerings and individual customers who subscribe to premium services or purchase virtual items used in our applications.
Regulations on Broadcasting Audio/Video Programs through the Internet 65 Table of Contents National Radio and Television Administration, or NRTA, the successor of SARFT is the primary governmental authority regulating activities involving broadcasting audio/video programs and services in China.
Regulations on Broadcasting Audio/Video Programs through the Internet National Radio and Television Administration, or NRTA, the successor of SARFT is the primary governmental authority regulating activities involving broadcasting audio/video programs and services in China.
For the enterprise which is not a radio station, television station, newspaper or periodical publisher, the term of validity of the registration of advertisement publication shall be consistent with the term of validity of the approval document for relevant media.
For the enterprise which is not a radio station, television station, newspaper or 65 Table of Contents periodical publisher, the term of validity of the registration of advertisement publication shall be consistent with the term of validity of the approval document for relevant media.
Cultural Development Fee According to applicable PRC tax regulations or rules, advertising service providers are generally required to pay a cultural development fee at the rate of 3% on the revenues (a) which are generated from providing advertising services and (b) which are also subject to the value-added tax. Cultural Development Fee was exempted in 2021.
Cultural Development Fee According to applicable PRC tax regulations or rules, advertising service providers are generally required to pay a cultural development fee at the rate of 3% on the revenues (a) which are generated from providing advertising services and (b) which are also subject to the value-added tax.
And the FITE Regulations clarifies that foreign-invested telecom enterprises may operate the 60 Table of Contents business of basic telecommunications services and the business of value-added telecommunications services, subject to the specific service classification under the Telecommunications Regulations.
And the FITE Regulations clarifies that foreign-invested telecom enterprises may operate the business of basic telecommunications services and the business of value-added telecommunications services, subject to the specific service classification under the Telecommunications Regulations.
The remaining interests is accounted for equity investment using the fair value option in accordance with ASC825-10.
The remaining interests are accounted for equity investment using the fair value option in accordance with ASC825-10.
Among such patent applications, in relation to the proprietary technologies that are essential to the operations of our platform and important to our business, our wholly-owned or controlled subsidiaries, had independently filed 324 patent applications, and the VIEs, had independently or jointly filed 19 patent applications.
Among such patent applications, in relation to the proprietary technologies that are essential to the operations of our platform and important to our business, our wholly-owned or controlled subsidiaries, had independently filed 168 patent applications, and the VIEs, had independently or jointly filed 5 patent applications.
At the same time, we actively engage in the independent research and development of our AI technologies, including large language model ("LLM") technologies to provide AI-powered business solutions for enterprise customers, enabling them to apply LLM technology, digitalize employees and improve operational efficiency.
At the same time, we actively engage in the independent research and development of our AI technologies, 56 Table of Contents including large language model ("LLM") technologies to provide AI-powered business applications for enterprise customers, enabling them to apply LLM technology, digitalize employees and improve operational efficiency.
Regulation on Tax PRC Enterprise Income Tax The PRC enterprise income tax is calculated based on the taxable income determined under the applicable Enterprise Income Tax Law, or the EIT Law and its implementation rules, both of which became effective on January 1, 2008 and were most recently amended on December 29, 2018 and April 23, 2019, respectively.
Regulation on Tax PRC Enterprise Income Tax The PRC enterprise income tax is calculated based on the taxable income determined under the applicable Enterprise Income Tax Law, or the EIT Law and its implementation rules, both of which became effective on January 1, 2008 and were most recently amended on December 29, 2018 and December 16, 2024, respectively.
SAT Bulletin 7 and 37 have replaced SAT Circular 698 in its entirety. They provide more comprehensive guidelines on a number of 82 Table of Contents issues.
SAT Bulletin 7 and 37 have replaced SAT Circular 698 in its entirety. They provide more comprehensive guidelines on a number of issues.
Subsequent to the acquisition of Beijing OrionStar, we enlarged our business to provide service robots globally to restaurants, supermarkets, exhibitions and so on. Through a full range of AI technologies, our service robots can be customized and are able to provide comprehensive solutions to optimize efficiency, improve sales, ensure service standardization and enhance customer satisfaction.
Subsequent to the acquisition of Beijing OrionStar in November 2023, we enlarged our business to provide service robots globally to restaurants, exhibitions, logistic centers and so on. Through a full range of AI technologies, our service robots can be customized and are able to provide comprehensive solutions to optimize efficiency, improve sales, ensure service standardization and enhance customer satisfaction.
Property, Plants and Equipment As of December 31, 2023, our principal executive offices were located on leased premises comprising approximately 7,689 square meters in Beijing, China. This facility accommodates our management headquarters, principal development, engineering, legal, finance and administrative activities. We also have offices overseas, mainly in Japan.
Property, Plants and Equipment As of December 31, 2024, our principal executive offices were located on leased premises comprising approximately 8,819 square meters in Beijing, China. This facility accommodates our management headquarters, principal development, engineering, legal, finance and administrative activities. We also have offices overseas, mainly in Japan.
All the software copyrights owned by the VIEs have been published between December 2012 and March 2024. Software copyrights are protected until the end of the 50th calendar year starting from the date of first publication. Trademarks . As of March 31, 2024, we had registered 2,477 trademarks in mainland China.
All the software copyrights owned by the VIEs have been published between December 2012 and March 2025. Software copyrights are protected until the end of the 50th calendar year starting from the date of first publication. Trademarks . As of March 31, 2025, we had registered 3,354 trademarks in mainland China.
Regulations that apply to advertising business primarily include: • Advertisement Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on October 27, 1994 and effective since February 1, 1995, the latest version of which became effective on April 29, 2021; • Administrative Regulations for Advertising, promulgated by the State Council on October 26, 1987 and effective since December 1, 1987; • Interim Measures for the Administration of Internet Advertisements, promulgated by the SAIC on July 4, 2016 and effective on September 1, 2016; and 64 Table of Contents • Advertisement Law and the Measures for the Administration of Internet Advertisements, promulgated by the SAMR on February 25, 2023 and implemented on May 1, 2023.
Regulations that apply to advertising business primarily include: • Advertisement Law of the People’s Republic of China, promulgated by the Standing Committee of the National People’s Congress on October 27, 1994 and effective since February 1, 1995, the latest version of which became effective on April 29, 2021; • Interim Measures for the Administration of Internet Advertisements, promulgated by the SAIC on July 4, 2016 and effective on September 1, 2016; and • Advertisement Law and the Measures for the Administration of Internet Advertisements, promulgated by the SAMR on February 25, 2023 and implemented on May 1, 2023.
Our PRC subsidiaries have obligations to file documents related to employee share options with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options.
Our PRC subsidiaries have obligations to file documents related to employee share incentives with relevant tax authorities and to withhold individual income taxes of those employees who exercise their share options or purchase restricted shares.
AI and Other Business Delivery and Reception Robots Delivery and reception robots are provided globally to restaurants, supermarkets, shopping malls, exhibitions and so on. Through a full range of AI technologies, our service robots can be customized and are able to provide comprehensive solutions to optimize efficiency, improve sales, ensure service standardization and enhance customer satisfaction.
AI and Other Business Delivery and Reception Robots Delivery and reception robots are provided globally to restaurants, exhibitions, logistic centers and so on. Through a full range of AI technologies, our service robots can be customized and are able to provide comprehensive solutions to interact with people, optimize efficiency, improve sales, ensure service standardization and enhance customer satisfaction.
In relation to our core proprietary technologies, Beijing Mobile and Beijing Network, and our other VIEs, independently or jointly owned 187 software copyrights, Zhuhai Juntian, Beijing Security, Conew Network, Beijing OrionStar and our other wholly-owned or controlled subsidiaries independently or jointly owned 480 software copyrights, and 45 software copyrights were jointly owned by our wholly-owned subsidiaries and VIEs.
In relation to our core proprietary technologies, Beijing Mobile and Beijing Network, and our other VIEs, independently or jointly owned 183 software copyrights, Zhuhai Juntian, Beijing Security, Conew Network, Beijing OrionStar and our other wholly-owned or controlled subsidiaries independently or jointly owned 473 software copyrights, and 44 software copyrights were jointly owned by our wholly-owned subsidiaries and VIEs.
Upon the completion of the investment, our equity interest in Beijing OrionStar is expected to be 72.10%, without taking into account the stake it holds indirectly through the Fund; we are expected to hold, both directly and indirectly, 73.95% equity interest in Beijing OrionStar, including the stake it holds indirectly through the Fund.
Upon the completion of the investment, 55 Table of Contents our equity interest in Beijing OrionStar is 72.10%, without taking into account the stake it holds indirectly through the Fund; we hold, both directly and indirectly, 73.95% equity interest in Beijing OrionStar, including the stake it holds indirectly through the Fund.
In 2019, our board of directors approved a special cash dividend of US$0.50 per American Depositary Share (“ADS”), or US$0.05 per ordinary share in August 2019. In May 2020, our board of directors approved a special cash dividend of US$1.44 per ADS, or US$0.14 per ordinary share paid out in July 2020.
We cancelled all the repurchased Cheetah ADSs. In 2019, our board of directors approved a special cash dividend of US$0.50 per American Depositary Share (“ADS”), or US$0.05 per ordinary share in August 2019. In May 2020, our board of directors approved a special cash dividend of US$1.44 per ADS, or US$0.14 per ordinary share paid out in July 2020.
In 2021, 2022 and 2023, our five largest customers in aggregate contributed approximately 35.6%, 46.3% and 29.2% of our revenues, respectively. In December 2018, Facebook suspended the advertising collaborations with us. The suspension does not impact our role as a Facebook advertising reseller.
In 2022, 2023 and 2024, our five largest customers in aggregate contributed approximately 46.3%, 29.2% and 30.3% of our revenues, respectively. In December 2018, Meta (then known as Facebook) suspended the advertising collaborations with us. The suspension does not impact our role as a Meta advertising reseller.
Once approved, depending on the type of patents, the patents that are in the process of application by the VIEs will normally expire 10 or 20 years after the date of application. Copyrights . As of March 31, 2024, we had registered 805 copyrights, including 712 software copyrights and 93 artwork copyrights.
Once approved, depending on the type of patents, the patents that are in the process of application by the VIEs will normally expire 10 or 20 years after the date of application. Copyrights . As of March 31, 2025, we had registered 791 copyrights, including 700 software copyrights and 91 artwork copyrights.
On 68 Table of Contents February 29, 2024, the National Information Security Standardization Technical Committee issued and came into effect the Basic Requirements for the Security of Generative Artificial Intelligence Services, which further stipulated the security of corpus, model and security measures. Regulations on Intellectual Property Rights Software Registration .
On February 29, 2024, the National Information Security Standardization Technical Committee issued and came into effect the Basic Requirements for the Security of Generative Artificial Intelligence Services, which further stipulated the security of corpus, model and security measures.
Neither Beijing Mobile nor its shareholders may terminate this agreement. 86 Table of Contents Shareholder voting proxy agreement .
Neither Beijing Mobile nor its shareholders may terminate this agreement. Shareholder voting proxy agreement .
We and our PRC citizen employees who have been granted share options, or PRC optionees, have become subject to the Stock Option Rules after we became a public company in the United States.
We and our PRC citizen employees who have been granted share options, restricted shares, other type of share incentive, or any combination thereof, or PRC optionees, have become subject to the Stock Option Rules after we became a public company in the United States.
Through a series of VIE contractual arrangements established in January 2011, Beijing Cheetah Mobile Technology Co., Ltd., or Beijing Mobile, an entity previously consolidated in Kingsoft Corporation’s group, became our VIE. We established Cheetah Mobile America, Inc. in the United States in November 2012.
Zhuhai Juntian incorporated Beijing Security as its wholly-owned subsidiary in China in November 2009. Through a series of VIE contractual arrangements established in January 2011, Beijing Cheetah Mobile Technology Co., Ltd., or Beijing Mobile, an entity previously consolidated in Kingsoft Corporation’s group, became our VIE. We established Cheetah Mobile America, Inc. in the United States in November 2012.
Accordingly, we treat them as the VIEs under U.S. GAAP and have consolidated the results of operation of the VIEs and the then subsidiaries of the VIEs in our consolidated financial statements in accordance with U.S. GAAP.
GAAP and have consolidated the results of operation of the VIEs and the then subsidiaries of the VIEs in our consolidated financial statements in accordance with U.S. GAAP.
State secrets are defined broadly to include information concerning PRC national defense, state affairs and other matters as determined by the PRC authorities. 72 Table of Contents On November 23, 2005, the Ministry of Public Security promulgated The Provisions on Technological Measures for Internet Security Protection, which became effective in March 2006, require all ICP operators to keep records of certain information about its users (including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days and submit the above information as required by laws and regulations.
On November 23, 2005, the Ministry of Public Security promulgated The Provisions on Technological Measures for Internet Security Protection, which became effective in March 2006, require all ICP operators to keep records of certain information about its users (including user registration information, log-in and log-out time, IP address, content and time of posts by users) for at least 60 days and submit the above information as required by laws and regulations.
The Foreign Investment Catalog was later replaced by the Special Administrative Measures for Access of Foreign Investment, jointly promulgated by the MOFCOM and NDRC. On December 27, 2021, the MOFCOM and NDRC jointly issued the Special Administrative Measures for Access of Foreign Investment and took effect on January 1, 2022 (the “Negative List (2021 Version)”).
The Foreign Investment Catalog was later replaced by the Special Administrative Measures for Access of Foreign Investment, jointly promulgated by the MOFCOM and NDRC. On September 6, 2024, the MOFCOM and NDRC jointly issued the Special Administrative Measures for Access of Foreign Investment and took effect on November 1, 2024 (the “Negative List (2024 Version)”).
For our AI and other business, we compete with other companies offering similar AI product-based services and compete with other companies offering similar multi-cloud management or advertising agency service globally. In addition, we compete with all major internet companies for user attention and advertising spend.
For our AI and other businesses, we compete with other companies offering similar service robots, such as PUDO Robotics, KEENON Robotics, or Yunji Technology, similar AI product-based services and compete with other companies offering similar multi-cloud management or advertising agency service globally. In addition, we compete with all major internet companies for user attention and advertising spend.
Our large user base has turned our duba.com personal start page into a hub of third-party search traffic to e-commerce companies and search engine providers. Users can click on links on the duba.com start page to access our customers’ websites or search information using their selected search engine. We charge fees to our customers mainly based on cost per impression.
It also incorporates search functions provided by our customers. Our large user base has turned our duba.com personal start page into a hub of third-party search traffic to e-commerce companies and search engine providers. Users can click on links on the duba.com start page to access our customers’ websites or search information using their selected search engine.
The 2,453 patents will expire between September 2025 and March 2042. In addition to the aforementioned patents, as of March 31, 2024, we had a total of 335 patent applications in mainland China and 8 patents applications outside mainland China.
The 1,936 patents will expire between September 2025 and March 2042. In addition to the aforementioned patents, as of March 31, 2025, we had a total of 115 patent applications in mainland China and 22 patents applications outside mainland China.
Of such total 2,453 patents,2,283 patents were either independently or jointly held by Zhuhai Juntian, Beijing Security, Conew Network, Beijing OrionStar and our other wholly-owned or controlled subsidiaries. 99 patents were either independently or jointly held by Beijing Mobile, Beijing Network, and our other VIEs, and 71 patents were jointly owned by our wholly-owned subsidiaries and VIEs.
Of such total 1,936 patents, 1,768 patents were either independently or jointly held by Zhuhai Juntian, Beijing Security, Conew Network, Beijing OrionStar and our other wholly-owned or controlled subsidiaries. 117 patents were either independently or jointly held by Beijing Mobile, Beijing Network, and our other VIEs, and 51 patents were jointly owned by our wholly-owned subsidiaries and VIEs.
Dividend Withholding Tax Under the old EIT Law that was effective prior to January 1, 2008, dividends paid to foreign investors by foreign-invested enterprises, such as dividends paid to us by Zhuhai Juntian and Conew Network, our PRC subsidiaries, were exempt from PRC withholding tax.
Dividend Withholding Tax Under the old EIT Law that was effective prior to January 1, 2008, dividends paid to foreign investors by foreign-invested enterprises were exempt from PRC withholding tax.
The appropriate level of protection measures is required to be taken for each respective category of data. For example, a processor of important data is required to designate the personnel and the management body responsible for data security, carry out risk assessments of its data processing activities and file the risk assessment reports with the competent authorities.
For example, a processor of important data is required to designate the personnel and the management body responsible for data security, 73 Table of Contents carry out risk assessments of its data processing activities and file the risk assessment reports with the competent authorities.

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Item 5. Market for Registrant's Common Equity

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Under the current laws of the Cayman Islands and the BVI, we are not subject to tax on income or capital gain. Additionally, upon payments of dividends by us to our shareholders, no Cayman Islands and BVI withholding tax will be imposed. Hong Kong .
Cayman Islands and BVI . Under the current laws of the Cayman Islands and the BVI, we are not subject to tax on income or capital gain. Additionally, upon payments of dividends by us to our shareholders, no Cayman Islands and BVI withholding tax will be imposed. Hong Kong .
In certain cases, we conclude that we control the solutions and resources before they are transferred to end customers, as we integrate the cloud resources with its technical expertise to provide ongoing customized cloud-based solutions, are primarily responsible for the fulfillment, and have inventory risk before the specified solutions and resources have been transferred to the customers and revenue is recognized on a gross basis.
In certain cases, we conclude that we control the solutions and resources before they are transferred to end customers, as we integrate the cloud resources with its technical expertise to provide ongoing customized cloud-based solutions, is primarily responsible for the fulfillment, and have inventory risk before the specified solutions and resources have been transferred to the customers and revenue is recognized on a gross basis.
Sale of and rental of Robots and other AI hardware products We generate revenue from sales of Robots and other AI hardware products. We recognize revenue generally at a point in time when the robots and other AI hardware products are delivered to customers.
Sale and rental of robots and other AI hardware products We generate revenue from sales and rental of robots and sale of other AI hardware products. We recognize revenue generally at a point in time when the robots and other AI hardware products are delivered to customers.
Critical Accounting Estimates Critical Accounting Policies and Estimates Our significant accounting policies are set forth in note 2 to our audited consolidated financial statements included in this annual report. We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions.
E. Critical Accounting Estimates Critical Accounting Policies and Estimates Our significant accounting policies are set forth in Note 2 to our audited consolidated financial statements included in this annual report. We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions.
Operating Results—Taxation—Taxation in Different Jurisdictions—PRC—Enterprise income tax.” 93 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated. The year-to-year comparisons of results of operations should not be relied upon as indicative of our future performance.
Operating Results—Taxation—Taxation in Different Jurisdictions—PRC—Enterprise income tax.” 94 Table of Contents Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated. The year-to-year comparisons of results of operations should not be relied upon as indicative of our future performance.
In addition, payments of dividends from our Hong Kong subsidiary to us are not subject to any withholding tax in Hong Kong. Singapore . Our subsidiaries incorporated in Singapore were subject to Singapore corporate income tax rate of 17% for the year ended December 31, 2022 and 2023. Japan .
In addition, payments of dividends from our Hong Kong subsidiary to us are not subject to any withholding tax in Hong Kong. Singapore . Our subsidiaries incorporated in Singapore were subject to Singapore corporate income tax rate of 17% for the year ended December 31, 2023 and 2024. Japan .
These judgments include valuation methods and key valuation assumptions and estimates. Changes in these estimates and assumptions could materially affect the fair value of such investments. See Note 22 of the Notes to the Consolidated Financial Statements for information regarding method and key assumptions used for fair value measurements of such investments.
These judgments include valuation methods and key valuation assumptions and estimates. Changes in these estimates and assumptions could materially affect the fair value of such investments. See Note 23 of the Notes to the Consolidated Financial Statements for information regarding method and key assumptions used for fair value measurements of such investments.
During which, estimates used for “Allowance for credit losses”, “Fair value measurements of Non-Marketable long-term investments”, “Fair Value Determination Related to the Accounting for Business Combinations” and “Impairment Assessment on Goodwill, Long-lived Assets and Intangible assets”, require management to make difficult, subjective and complex judgments that often as a result of the need to make estimate on matters that are inherently uncertain and which is likely that materially different amounts would be reported under different conditions or assumptions.
During which, estimates used for “Allowance for credit losses”, “Fair value measurements of Non-Marketable long-term investments”, “Fair Value Determination Related to the Accounting for Business Combinations” and “Impairment Assessment on Goodwill, Long-lived Assets and Intangible assets”, “valuation allowance for deferred tax assets”, require management to make difficult, subjective and complex judgments that often as a result of the need to make estimate on matters that are inherently uncertain and which is likely that materially different amounts would be reported under different conditions or assumptions.
For long-lived and intangible assets with finite lives, we perform an impairment assessment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. These assessments primarily use future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition.
For long-lived and intangible assets with finite lives, we perform an impairment assessment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. These 103 Table of Contents assessments primarily use future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition.
Our portfolio of internet products has attracted a massive user base, which enabled us to provide online marketing services to customers worldwide as well as refer user traffic and sell advertisements on our mobile and PC platforms. We also provide value-added services for our 89 Table of Contents internet product, which mainly includes VIP membership and software subscription.
Our portfolio of internet products has attracted a massive user base, which enabled us to provide online marketing services to customers worldwide as well as refer user traffic and sell advertisements on our mobile and PC platforms. We also provide value-added services for our internet product, which mainly includes VIP membership and software subscription.
Judgment is required to determine key assumptions adopted in the cashflow projections and changes to key assumptions can significantly affect these cash flow projections and the results of the impairment tests. 102 Table of Contents Recognition of Income Taxes and Deferred Tax Assets/Liabilities We account for income taxes using the liability method.
Judgment is required to determine key assumptions adopted in the cashflow projections and changes to key assumptions can significantly affect these cash flow projections and the results of the impairment tests. Recognition of Income Taxes and Deferred Tax Assets/Liabilities We account for income taxes using the liability method.
Loans by us to our PRC subsidiaries to finance their activities cannot exceed statutory limits, See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations of Foreign Currency Exchange, Foreign Debt and Dividend Distribution” for further details.
Loans by us to our PRC subsidiaries to finance their activities cannot exceed statutory limits, See “Item 4. Information on the Company—B. Business Overview—Regulations—Regulations of Foreign Currency Exchange, Foreign Debt and Dividend 99 Table of Contents Distribution” for further details.
Our subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax rate of 16.5% for the years ended December 31, 2022 and 2023.
Our subsidiaries incorporated in Hong Kong were subject to Hong Kong profits tax rate of 16.5% for the years ended December 31, 2023 and 2024.
We believe that our cash and the anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the next 12 months. However, we may require additional cash resources due to changing business conditions or other future 95 Table of Contents developments, including any investments or acquisitions we may decide to selectively pursue.
We believe that our cash and the anticipated cash flow from operations will be sufficient to meet our anticipated cash needs for the next 12 months. However, we may require additional cash resources due to changing business conditions or other future developments, including any investments or acquisitions we may decide to selectively pursue.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2023 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions. 98 Table of Contents E.
Trend Information Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024 that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial conditions.
Accordingly, our Hong Kong subsidiaries may not be able to enjoy the 5% withholding tax rate for the dividends they receive from our PRC subsidiaries if they do not satisfy the relevant conditions under tax rules and regulations and obtain the approvals as required. PRC Value-added tax .
Accordingly, our Hong Kong subsidiaries may not be able to enjoy the 5% withholding tax rate for the dividends they receive from our PRC subsidiaries if they do not satisfy the relevant conditions under tax rules and regulations and obtain the approvals as required. 93 Table of Contents PRC Value-added tax .
Recent Accounting Pronouncements A list of recent accounting pronouncements that are relevant to us is included in Note 2 to our consolidated financial statements, which are included in this annual report. B.
Recent Accounting Pronouncements A list of recent accounting pronouncements that are relevant to us is included in Note 2 to our consolidated financial statements, which are included in this annual report. 96 Table of Contents B.
Research and development (R&D) expenses consist primarily of employee costs and rental expenses related to personnel engaged in R&D activities, design and development expenses with new technology, materials and supplies and other R&D related expenses. These expenditures are generally expensed as incurred.
Research and development (R&D) expenses consist primarily of employee costs and rental expenses related to personnel engaged in R&D activities, design and development expenses with new technology, materials and supplies, depreciation and amortization expenses and other R&D related expenses. These expenditures are generally expensed as incurred. Selling and Marketing Expenses .
Revenue from advertising agency services is recognized on a net basis at a point in time when the advertisement products are delivered by the online networks. The revenue is estimated by us based on the real-time advertising performance results provided by the online networks and the commission rates pre-determined in contracts signed with relevant online networks.
The revenue is estimated by us based on the real-time advertising performance results provided by the online networks and the commission rates pre-determined in contracts signed with relevant online networks and is recognized at a point in time when the advertisement products are delivered by the online networks.
Investing Activities Net cash used in investing activities was RMB49.1 million (US$6.9 million) for the year ended December 31, 2023, primarily attributable to net cash paid for business acquisition of RMB238.1 million (US$33.5 million), purchase of short-term investments of RMB1,176.0 million(US$165.6 million) and purchase for long-term investments RMB23.7 million(US$3.3 million), partially offset by proceeds from maturity of short-term investments of RMB1,332.5 million(US$187.7 million).
Net cash used in investing activities was RMB49.1 million for the year ended December 31, 2023, primarily attributable to net cash paid for business acquisition of RMB238.1 million, purchase of short-term investments of RMB1,176.0 million and purchase for long-term investments of RMB23.7 million, partially offset by proceeds from maturity of short-term investments of RMB1,332.5 million.
Year Ended December 31, 2022 2023 RMB RMB US$ (in thousands) PRC (1) 2,232 3,457 487 Others — — — Total 2,232 3,457 487 (1) Certain of our PRC entities are entitled to tax holiday as new software development enterprise or high new technology enterprise. For details, see “Item 5. Operating and Financial Review and Prospects—A.
Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) PRC (1) 3,457 (436) (60) Others — — — Total 3,457 (436) (60) (1) Certain of our PRC entities are entitled to tax holiday as new software development enterprise or high new technology enterprise. For details, see “Item 5. Operating and Financial Review and Prospects—A.
Our VIP membership and software subscription services are mainly sold in short term period, typically, no more than 12 months. We believe that the most significant factors affecting revenues from internet business include: • User base and user engagement in key markets .
Our VIP membership and software subscription services are mainly sold in short term period, typically, no more than 12 months. We believe that the most significant company-specific factors affecting the operation of our internet business include: • User base and user engagement in key markets .
For the year ended December 31, 2022, and 2023, our PRC subsidiaries qualified as “new software enterprise” were subject to tax holiday or a preferential tax rate of 12.5% and 15%, respectively, our PRC subsidiaries and VIEs qualified as “high and new technology enterprise” and located in Hengqin-Guangdong-Macao In-depth Cooperation Zone were subject to tax holiday or a preferential tax rate of 15%, and our remaining PRC subsidiaries, VIEs and the subsidiaries of the VIEs were subject to enterprise income tax at a rate of 25%.
For the year ended December 31, 2023 and 2024, our PRC subsidiaries and VIEs qualified as “high and new technology enterprise” and located in Hengqin-Guangdong-Macao In-depth Cooperation Zone were subject to tax holiday or a preferential tax rate of 15%, and our remaining PRC subsidiaries, VIEs and the subsidiaries of the VIEs were subject to enterprise income tax at a rate of 25%.
For contracts that are charged on the cost for performance basis, we charge an agreed-upon fee to its customers determined based on the effectiveness of advertising links, which is typically measured by clicks, transactions, installations, user registrations, and other actions.
We mainly enter into cost for performance and cost per impression advertising agreements with customers. For contracts that are charged on the cost for performance basis, we charge an agreed-upon fee to its customers determined based on the effectiveness of advertising links, which is typically measured by clicks, transactions, installations, user registrations, and other actions.
At the same time, we actively engage in the independent research and development of our AI technologies, including large language model ("LLM") technologies to provides AI-powered business solutions for enterprise customers, enabling enterprises to apply LLM technology, digitalize employees and improve operational efficiency.
At the same time, we actively engage in the independent research and development of our AI technologies, including large language model ("LLM") technologies to provides AI-powered business solutions for enterprise customers, enabling enterprises to apply LLM technology, digitalize employees and improve operational efficiency. We reported our revenues and operating profits in two segments: internet business and AI and others.
General and administrative expenses consist primarily of salaries and benefits, including share-based compensation expenses, related to our general and administrative personnel, professional and legal service fees, and other administrative expenses. Taxation Taxation in Different Jurisdictions The following summarizes the taxation in jurisdictions in which our company, significant subsidiaries and VIEs are incorporated. Cayman Islands and BVI .
General and administrative expenses consist primarily of salaries and benefits, including share-based compensation expenses, related to our general and administrative personnel, professional and legal service fees, rental expenses, provision for credit losses and other administrative expenses. Taxation Taxation in Different Jurisdictions The following summarizes the taxation in jurisdictions in which our company, significant subsidiaries and VIEs are incorporated.
This amount was primarily attributable to net loss of RMB593.9 million (US$83.6 million), (i) adjusted to add back impairment of assets of 96 Table of Contents RMB534.8 million (US$75.3 million); (iii) adjusted for changes in operating assets and liabilities that positively affected operating cash flow, primarily an increase in accrued expenses and other current liabilities RMB791.7 million (US$111.5 million), (iv) partially offset by changes in operating assets and liabilities that negatively affected operating cash flow, primarily due to an increase in accounts receivable RMB122.5 million (US$17.3 million).
This amount was primarily attributable to net loss of RMB593.9 million, (i) adjusted to add back impairment of assets of RMB534.8 million; (ii) adjusted for changes in operating assets and liabilities that positively affected operating cash flow, primarily an increase in accrued expenses and other current liabilities RMB791.7 million, (iii) partially offset by changes in operating assets and liabilities that negatively affected operating cash flow, primarily due to an increase in accounts receivable RMB122.5 million.
Overseas advertising agency service is to assist companies to launch advertisement on large overseas advertising platforms, such as Facebook. Subsequent to the acquisition of Beijing OrionStar, we enlarged our business to provide service robots globally to restaurants, supermarkets, exhibitions and so on.
Overseas advertising agency service is to assist companies to launch advertisement on large overseas advertising platforms, such as Meta. Subsequent to the acquisition of Beijing OrionStar in November 2023, we enlarged our business to provide service robots globally to restaurants, exhibitions, logistic centers and so on.
Primarily as a result of the foregoing, our net loss attributable to Cheetah Mobile shareholders was RMB602.9 million (US$84.9 million) in 2023, as compared to a net loss attributable to Cheetah Mobile shareholders of RMB513.5 million in 2022.
Primarily as a result of the foregoing, our net loss attributable to Cheetah Mobile shareholders was RMB617.6 million (US$84.6 million) in 2024, as compared to a net loss attributable to Cheetah Mobile shareholders of RMB602.9 million in 2023.
Beijing Mobile and Beijing Network and other companies, the VIEs or its subsidiaries, hold the requisite ICP Licenses required to operate our internet-based, including mobile-based businesses in China. We have been and are expected to continue to be dependent on the VIEs to operate our business if PRC laws do not allow us to directly operate such business in China.
Beijing Mobile and Beijing Network and other companies, the VIEs or its subsidiaries, hold the requisite ICP Licenses required to operate our internet-based, including mobile-based businesses in China. We have been and are expected to continue to be dependent on the VIEs to operate our business in China.
Material cash requirements Our material cash requirements as of December 31, 2023 and any subsequent interim period primarily include our capital expenditures, operating lease obligations, and purchase obligations. We incurred capital expenditures of RMB6.8 million and RMB9.7 million (US$1.4 million) in 2022 and 2023, respectively.
Material cash requirements Our material cash requirements as of December 31, 2024 and any subsequent interim period primarily include our capital expenditures, operating lease obligations, and purchase obligations. We incurred capital expenditures of RMB9.7million and RMB22.8 million (US$3.1 million) in 2023 and 2024, respectively.
Short-term investments consist of highly liquid investments with original maturities of greater than three months but less than 12 months and investments that are expected to be realized in cash during the next 12 months. As of December 31, 2023, we had RMB2,021.2 million (US$284.7 million) in cash and cash equivalents and short-term investments.
Short-term investments consist of highly liquid investments with original maturities of greater than three months but less than 12 months and investments that are expected to be realized in cash during the next 12 months. As of December 31, 2024, we had RMB1,833.0 million (US$251.1 million) in cash and cash equivalents.
We believe that there will not be significant changes to our estimate of variable consideration. 101 Table of Contents Allowance for credit losses We maintain an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses as an offset to assets such as accounts receivable, prepayments and other current assets and due from related parties, etc. and the estimated credit losses charged to the allowance is classified as “General and administrative” and “Other expenses” in the consolidated statements of comprehensive loss.
Allowance for credit losses We maintain an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses as an offset to assets such as accounts receivable, prepayments and other current assets and due from related parties, etc. and the estimated credit losses charged to the allowance is classified as “General and administrative” and “Other expenses” in the consolidated statements of comprehensive loss.
Our subsidiary incorporated in Japan with paid-in capital of no more than JPY100 million was subject to national corporate income tax rate of 15% on the first JPY8 million of 91 Table of Contents income earned and at 23.2% on any income earned in excess of JPY8 million.
Under Japan EIT law, companies incorporated in Japan with paid-in capital in excess of Japanese Yen (“JPY”) 100 million was subject to national corporate income tax rate 23.2% and companies with paid-in capital of no more than JPY100 million was subject 92 Table of Contents to national corporate income tax rate of 15% on the first JPY8 million of income earned and at 23.2% on any income earned in excess of JPY8 million.
A small number of advertising customers have contributed a significant portion of revenues for our online advertising services. In advertising markets, advertising platforms provide bids to APP operators for displaying advertisements on their apps, and the bid prices may fluctuate significantly depending on who are the bidders, the type of the advertising inventories, seasonality, and supply and demand balance.
In advertising markets, advertising platforms provide bids to APP operators for displaying advertisements on their apps, and the bid prices may fluctuate significantly depending on who are the bidders, the type of the advertising inventories, seasonality, and supply and demand balance.
While providing online software services, the customers do not take possession of the software. The software license and the when-and-if-available updates and related services are accounted for as a single performance obligation as the license, updates and services are inputs to a combined items in the contract.
The software license, when-and-if-available updates and related services are accounted for as a single performance obligation as the license, updates and services are inputs to a combined items in the contract.
Our income tax benefits was RMB43.8 million (US$6.2 million) in 2023, as compared to income tax benefits of RMB25.1 million in 2022. Net loss attributable to Cheetah Mobile shareholders.
Our income tax expenses was RMB47.3 million (US$6.5 million) in 2024, as compared to income tax benefits of RMB43.8 million in 2023. Net loss attributable to Cheetah Mobile shareholders.
We account for these incentives granted to customers as variable consideration and record them as reduction of revenue. The amount of variable consideration is measured based on the most likely amount of incentives to be provided to customers.
We account for these incentives granted to customers as variable consideration and record it as reduction of revenue. The amount of variable consideration is measured based on the most likely amount of incentives to be provided to customers. We believe that there will not be significant changes to our estimate of variable consideration.
We do not have any obligation, including a contingent obligation, arising out of a variable interest in any unconsolidated entity that we hold and material to us, where such entity provides financing, liquidity, market risk or credit risk support to us or engages in leasing, hedging or research and development services with us. 97 Table of Contents The following table sets forth our contractual obligations by specified categories as of December 31, 2023.
We do not have any obligation, including a contingent obligation, arising out of a variable interest in any unconsolidated entity that we hold and material to us, where such entity provides financing, liquidity, market risk or credit risk support to us or engages in leasing, hedging or research and development services with us.
We generate advertising revenues by providing mobile advertising services to our customers worldwide, as well as selling advertisements and referring user traffic on our mobile and PC platforms. We generate value-added services revenues principally from fee-based services, mainly including VIP membership, software subscription and game-related services.
We generate advertising revenues by providing mobile advertising services to our customers worldwide, as well as selling advertisements and referring user traffic on our mobile and PC platforms. We generate value-added services revenues principally from the sale of membership packages and subscriptions.
As a result of the foregoing, we had an operating loss of RMB209.8 million (US$29.6 million) in 2023, as compared to an operating loss of RMB225.6 million in 2022. Operating loss margin . We had an operating loss margin of 31.3% in 2023, as compared to an operating loss margin of 25.5% in 2022. Other income.
As a result of the foregoing, we had an operating loss of RMB437.3 million (US$59.9 million) in 2024, as compared to an operating loss of RMB209.8 million in 2023. Operating loss margin . We had an operating loss margin of 54.2% in 2024, as compared to an operating loss margin of 31.3% in 2023. Other income.
Revenues from our AI and other business mainly from multi-cloud management platform, overseas advertising agency service and sale and rental of service robots and some other AI related business. On the corporate level, our revenues decreased to RMB669.5 million (US$94.3 million) in 2023 due to the revenue decrease of our online advertising and gaming services.
Revenues from our AI and other business mainly from multi-cloud management platform, overseas advertising agency service and sale and rental of service robots and some other AI related business. 89 Table of Contents On the corporate level, our revenues increased from RMB669.5 million to RMB806.9 million (US$110.5 million) in 2024.
We generate revenues primarily by providing utility-related business, including advertising services and premium membership services worldwide. We also provide multi-cloud management and overseas advertising agency service.
Operating Results Overview We are a China-based IT company with a commitment to AI innovation. We generate revenues primarily by providing utility-related business, including advertising services and premium membership services worldwide. We also provide multi-cloud management and overseas advertising agency service.
As a result of these contractual arrangements, we consolidate the VIEs as required by ASC 810-10, Consolidation: Overall. Revenue recognition We generate revenues primarily through internet business, AI and others. Pursuant to ASC 606-10-32-2A, we also elected to exclude sales taxes and other similar taxes from the measurement of the transaction price.
As a result of these contractual arrangements, we consolidate the VIEs as required by ASC 810-10, Consolidation: Overall. Revenue recognition We generate our revenues primarily through internet business, AI and others.
In 2023, approximately 24.3% of our revenues from internet business were generated from advertising while the rest of its revenues were generated from other sources, such as providing premium membership services and software subscription services. AI and others . Revenues from AI and others increased to RMB219.4 million (US$30.9 million) in 2023 from RMB186.7 million in 2022.
In 2024, approximately 35.7% of our revenues from internet business were generated from advertising while the rest of its revenues were generated from other sources, such as providing premium membership services and software subscription services. 95 Table of Contents AI and others .
Net cash provided by investing activities was RMB189.1 million for the year ended December 31, 2022, primarily attributable to proceeds from maturity of short-term investments of RMB1,111.5 million and proceeds from disposal of long-term investments of RMB153.5 million, partially offset by purchase of short-term investments of RMB1,005.1 million and purchase of long-term investments RMB69.6 million .
Investing Activities Net cash used in investing activities was RMB34.1 million (US$4.7 million) for the year ended December 31, 2024, primarily attributable to net cash paid for purchase of short-term investments of RMB1,084.7 million (US$148.6 million) and purchase for long-term investments of RMB37.0 million(US$5.1 million), partially offset by proceeds from maturity of short-term investments of RMB1,085.4 million(US$148.7 million).
If a promised good or service does not meet the criteria to be considered distinct in the context of contract, it is combined with other promised goods or services until a distinct bundle of goods or services exists. We provide sales incentives to customers which entitle them to receive reductions in the price.
Consideration is allocated to each performance obligation based on its standalone selling price. If a promised good or service does not meet the criteria to be considered distinct in the context of contract, it is combined with other promised goods or services until a distinct bundle of goods or services exists.
Upfront payment is generally required and upon the receipt of membership fees and software subscription fees, we recognize the excess of payment received as compared to the recognized revenue as deferred revenue in “Accrued expenses and other liabilities” and revenue is recognized ratably over the membership period or the subscription period as services are rendered.
Upfront payment of membership fees and software subscription fees are recognized as deferred revenue in “Accrued expenses and other liabilities” and revenue is recognized ratably over the term or the expected service period of the respective service contracts as the services are provided.
We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business. We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties.
Purchase obligations primarily consist of minimum commitment for purchase of cloud services. We intend to fund our existing and future material cash requirements with our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.
(513,475) (602,898) (84,916) (1) Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows: Year Ended December 31, 2022 2023 RMB RMB US$ (in thousands) Cost of revenues 686 370 52 Research and development 1,580 580 82 Selling and marketing 1,899 509 72 General and administrative 3,698 32,095 4,520 Total 7,863 33,554 4,726 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Revenues .
(602,898) (617,557) (84,604) (1) Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows: Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) Cost of revenues 370 81 11 Research and development 580 1,924 264 Selling and marketing 509 (662) (91) General and administrative 32,095 24,758 3,392 Total 33,554 26,101 3,576 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenues .
This increase was primarily due to business growth from multi-cloud Management service and overseas advertising agency services as well as the acquisition of controlling stake in Beijing OrionStar. 94 Table of Contents Cost of revenues . Our cost of revenues decreased by 8.2% from RMB252.6 million in 2022 to RMB231.9 million (US$32.7 million) in 2023.
Revenues from AI and others increased by 32.1% to RMB289.7 million (US$39.7 million) in 2024 from RMB219.4 million in 2023. This increase was primarily due to the increase of sale of service robots as the acquisition of controlling stake in Beijing OrionStar, as well as business growth from our multi-cloud Management services. Cost of revenues .
The following table presents our revenues disaggregated by revenue source: Year Ended December 31, 2022 2023 RMB RMB US$ (in thousands) Revenues: Internet business Online advertising 355,289 109,339 15,400 Internet value-added services 342,098 340,795 48,000 AI and Others Advertising agency services 83,111 89,275 12,574 Multi-cloud Management Services 77,956 87,747 12,359 Sale and rental of robots and other AI hardware products 5,289 22,034 3,103 Technical consulting service and others 20,323 20,313 2,862 Total consolidated revenues 884,066 669,503 94,298 99 Table of Contents Internet business Online advertising Online advertising revenue is primarily derived from displaying advertisements for our customers on its online platforms including duba.com and other websites, browsers, PC and mobile applications, and to a lesser extent, on third-party advertising publishers’ websites or mobile applications.
The following table presents our revenues disaggregated by revenue source: Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) Revenues: Internet business Online advertising 109,339 184,655 25,298 Internet value-added services 340,795 332,533 45,556 AI and Others Advertising agency services 89,275 78,036 10,691 Multi-cloud Management Services 87,747 87,242 11,952 Sale and rental of robots and other AI hardware products 22,034 111,577 15,286 Technical, AI application services and others 20,313 12,834 1,758 Total consolidated revenues 669,503 806,877 110,541 Internet business Online advertising Online advertising revenue is primarily derived from displaying advertisements for our customers on its online platforms including duba.com and other websites, browsers, PC and mobile applications.
Traffic acquisition costs represent the amounts paid or payable to third-party advertising publishers who distribute our customers’ paid links through their advertisement products.
Cost of Revenues Cost of revenues primarily consist of traffic acquisition costs, bandwidth and cloud service costs, personnel costs, channel and sharing costs, depreciation of equipment, and cost of robots and other products sold. Traffic acquisition costs represent the amounts paid or payable to third-party advertising publishers who distribute our customers’ paid links through their advertisement products.
AI and others revenues mainly include revenues from our AI related business, such as business of multi-cloud management service, overseas advertising agency service, sale and rental of our service robots, as well as providing technical consulting services to third parties and related parties.
AI and others revenues mainly include revenues from our AI related business, such as business of multi-cloud management service, overseas advertising agency service, sale and rental of our service robots, as well as providing technical, AI application services to third parties and related parties. 90 Table of Contents We believe that the most significant company-specific factors affecting the operation of our AI and others business include: • Our ability to increase sales volume and maintain relationships with customers.
Our capital expenditures were primarily attributable to purchase of computers and servers related to research and development activities and expenditures in our service robots leasing services . As our AI business expands, we may incur more capital expenditures for our AI business in the future.
Our capital expenditures were primarily attributable to purchase of computers and servers related to research and development activities and expenditures in enhancing our manufacturing capacity for our service robots products.
This amount was primarily attributable to net loss of RMB520.7 million, (i) adjusted for gains on disposal of investment RMB32.5 million; (ii) adjusted for impairment of assets RMB261.8 million, foreign currency exchange losses RMB95.4 million, depreciation of property and equipment RMB49.2 million; (iii) adjusted for changes in operating assets and liabilities that positively affected operating cash flow, primarily an increase in accrued expenses and other current liabilities RMB236.3 million, (iv) partially offset by changes in operating assets and liabilities that negatively affected operating cash flow, primarily due to an increase in prepayments and other current assets RMB447.2 million and an increase in accounts receivable RMB103.6 million.
This amount was primarily attributable to net loss of RMB601.6 million (US$82.4 million), (i) adjusted to add back impairment of goodwill of RMB152.9 million (US$20.9 million); (ii) adjusted to add back impairment of assets of RMB120.6 million (US$16.5 million); (iii) adjusted for changes in operating assets and liabilities that positively affected operating cash flow, primarily an increase in accrued expenses and other current liabilities RMB287.7 million (US$39.4 million), (iv) partially offset by changes in operating assets and liabilities that negatively affected operating cash flow, primarily due to an increase in prepayments and other current assets RMB388.8 million (US$53.3 million).
For discussion of 2021 items and year-over-year comparisons between 2022 and 2021 that are not included in this annual report on Form 20-F, please refer to “Item 5.
For discussion of 2022 items and year-over-year comparisons between 2023 and 2022 that are not included in this annual report on Form 20-F, please refer to “Item 5. Operating and Financial Review and Prospects” found in our Form 20-F for the year ended December 31, 2023 that was filed with the Securities and Exchange Commission on April 18, 2024. A.
Other income was RMB96.8 million (US$13.6 million) in 2023, which was primarily due to gains from disposal of certain assets and long-term investments. Other expense. Other expense was RMB574.1 million (US$80.9 million) in 2023, which was primarily due to fair value change and impairment of certain long-term investments. Income tax benefit.
Other income was RMB52.1 million (US$7.1 million) in 2024, primarily due to upward fair value change in certain long-term investment. Other expense. Other expense was RMB191.8 million (US$26.3 million) in 2024, which was primarily due to fair value change and impairment of certain long-term investments. Income tax expense.
Net cash used in operating activities for the year ended December 31, 2022 was RMB424.2 million.
Net cash provided by operating activities for the year ended December 31, 2023 was RMB550.5 million.
The table below sets forth a breakdown of our cash by currency and location as of December 31, 2022 and 2023: As of December 31, 2022 2023 (in thousands of RMB) Cash located outside of the PRC —held by Company and Subsidiaries in US dollars 990,373 1,371,328 —held by Company and Subsidiaries in RMB 127,678 13,104 —held by Company and Subsidiaries in others 49,474 62,539 —held by VIEs in US dollars 2,459 16,744 —held by VIEs in others 567 1,438 Cash located in the PRC —held by Company and Subsidiaries in RMB 116,802 271,966 —held by Company and Subsidiaries in US dollars 9,740 125,109 —held by Company and Subsidiaries in others — 2,637 —held by VIEs in RMB 218,697 155,318 —held by VIEs in US dollars 9 8 Total cash and cash equivalents 1,515,799 2,020,191 The table below sets forth a breakdown of our short-term investments by location as of December 31, 2022 and 2023: As of December 31, 2022 2023 (RMB in thousands) Short-term investments located outside of the PRC —Time deposits located outside the PRC 69,796 1,023 Short-term investments located in the PRC —Wealth management products located in the PRC 86,386 — Total short-term investments 156,182 1,023 The following table sets forth a summary of our cash flows for the years indicated: Year Ended December 31, 2022 2023 RMB RMB US$ (in thousands) Net cash (used in)/provided by operating activities (424,249) 550,462 77,530 Net cash provided by/(used in) investing activities 189,052 (49,061) (6,909) Net cash used in financing activities (4,866) (6,778) (955) Effect of exchange rate changes on cash, cash equivalents and restricted cash 171,851 9,073 1,278 Cash, cash equivalents and restricted cash at the beginning of year 1,584,707 1,516,495 213,594 Net (decrease) increase in cash, cash equivalents and restricted cash (68,212) 503,696 70,944 Cash, cash equivalents and restricted cash at the end of year 1,516,495 2,020,191 284,538 Operating Activities Net cash provided by operating activities for the year ended December 31, 2023 was RMB550.5 million (US$77.5 million).
The table below sets forth a breakdown of our cash by currency and location as of December 31, 2023 and 2024: As of December 31, 2023 2024 (in thousands of RMB) Cash located outside of the PRC —held by Company and Subsidiaries in US dollars 1,371,328 1,139,320 —held by Company and Subsidiaries in RMB 13,104 858 —held by Company and Subsidiaries in others 62,539 71,632 —held by VIEs in US dollars 16,744 43,416 —held by VIEs in RMB — 107 —held by VIEs in others 1,438 1,098 Cash located in the PRC —held by Company and Subsidiaries in RMB 271,966 242,673 —held by Company and Subsidiaries in US dollars 125,109 105,091 —held by Company and Subsidiaries in others 2,637 1,440 —held by VIEs in RMB 155,318 227,388 —held by VIEs in US dollars 8 8 Total cash and cash equivalents 2,020,191 1,833,031 The table below sets forth a breakdown of our short-term investments by location as of December 31, 2023 and 2024: As of December 31, 2023 2024 (RMB in thousands) Short-term investments located outside of the PRC —Time deposits located outside the PRC 1,023 318 Short-term investments located in the PRC —Wealth management products located in the PRC — 17 Total short-term investments 1,023 335 97 Table of Contents The following table sets forth a summary of our cash flows for the years indicated: Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) Net cash provided by/(used in) operating activities 550,462 (238,323) (32,649) Net cash used in investing activities (49,061) (34,090) (4,670) Net cash (used in)/provided by financing activities (6,778) 69,113 9,469 Effect of exchange rate changes on cash, cash equivalents and restricted cash 9,073 16,140 2,209 Cash, cash equivalents and restricted cash at the beginning of year 1,516,495 2,020,191 276,765 Net increase (decrease) in cash, cash equivalents and restricted cash 503,696 (187,160) (25,641) Cash, cash equivalents and restricted cash at the end of year 2,020,191 1,833,031 251,124 Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was RMB238.3 million (US$32.6 million).
For the years ended December 31, 2022 and 2023, our subsidiary incorporated in Japan with paid-in capital in excess of Japanese Yen (“JPY”) 100 million was subject to national corporate income tax rate 23.2%.
For the years ended December 31, 2023 and 2024, our subsidiaries incorporated in Japan are all with paid-in capital of no more than JPY100 million, and were subject to national corporate income tax rate of 15% on the first JPY8 million of income earned and at 23.2% on any income earned in excess of JPY8 million.
Years Ended December 31, 2022 2023 RMB % of revenues RMB US$ % of revenues Internet business 697,387 78.9 450,134 63,400 67.2 AI and others 186,679 21.1 219,369 30,898 32.8 Revenues 884,066 100.0 669,503 94,298 100.0 Internet business Revenues from internet business accounted for 78.9% and 67.2% of our revenues in 2022 and 2023, respectively.
Years Ended December 31, 2023 2024 RMB % of revenues RMB US$ % of revenues Internet business 450,134 67.2 517,188 70,854 64.1 AI and others 219,369 32.8 289,689 39,687 35.9 Revenues 669,503 100.0 806,877 110,541 100.0 Internet business Revenues from internet business accounted for 67.2% and 64.1% of our revenues in 2023 and 2024, respectively.
As of the date of this annual report, our PRC subsidiaries and VIEs are subject to VAT at a rate of 3%, 6%, 9% or 13% VAT rate on the services we provide and related surcharges. 92 Table of Contents Effect of Different Tax Rates in Different Jurisdictions The following table sets forth our income (loss) before income tax and the effect of differing tax rates in different jurisdictions on our income tax expenses in each applicable jurisdiction, for the years ended December 31, 2022 and 2023.
As of the date of this annual report, our PRC subsidiaries and VIEs are subject to VAT at a rate of 3%, 6%, 9% or 13% VAT rate on the services we provide and related surcharges.
Financing Activities Net cash used in financing activities was RMB6.8 million (US$1.0 million) for the year ended December 31, 2023. Net cash used in financing activities was RMB4.9 million for the year ended December 31, 2022.
Financing Activities Net cash provided by financing activities was RMB69.1 million (US$9.5 million) for the year ended December 31, 2024, primarily attributable to net cash received by Beijing OrionStar during its equity financing in January 2024. Net cash used in financing activities was RMB6.8 million for the year ended December 31, 2023.
Payment due by period Total Less than 1 Year 1-3 Years 3-5 Years More Than 5 Years (In thousands of RMB) Operating lease obligations 32,498 14,426 18,072 — — Purchase obligations 197,578 67,522 130,056 Total 230,076 81,948 148,128 — — Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2023.
Payment due by period Total Less than 1 Year 1-3 Years 3-5 Years More Than 5 Years (In thousands of RMB) Operating lease obligations 26,994 14,697 10,679 1,618 — Purchase obligations 138,067 72,028 66,039 — — Total 165,061 86,725 76,718 1,618 — Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of December 31, 2024.
Our operating lease obligations consist of the commitments under the lease agreements for our office premises, which include all future cash outflows under ASC Topic 842, Leases under Note 10 to our audited consolidated financial statements. Purchase obligations primarily consists of minimum commitment for purchase of cloud services.
As our service robots and AI business expands, we may incur more capital expenditures for our these businesses in the future. 98 Table of Contents Our operating lease obligations consist of the commitments under the lease agreements for our office premises, which include all future cash outflows under ASC Topic 842, Leases under Note 11 to our audited consolidated financial statements.
Other revenue recognition related policies For arrangements that include multiple performance obligations, we would evaluate all the performance obligations in the arrangement to determine whether each performance obligation is distinct in the context of contract. Consideration is allocated to each performance obligation based on its standalone selling price.
For performance obligations satisfied over time, we recognize revenue over time by measuring the progress toward complete satisfaction of a performance obligation. For revenue arrangements that include multiple performance obligations, we evaluate all the performance obligations in the arrangement to determine whether each performance obligation is distinct in the context of contract.
Years Ended December 31, 2022 2023 (in thousands, except percentages) RMB % of revenues RMB US$ % of revenues Operating income and expenses Research and development (180,957) (20.5) (178,207) (25,100) (26.6) Selling and marketing (476,853) (53.9) (242,511) (34,157) (36.2) General and administrative (214,337) (24.2) (229,549) (32,331) (34.3) Other operating income, net 15,051 1.7 2,867 404 0.4 Total operating income and expenses (857,096) (96.9) (647,400) (91,184) (96.7) Research and Development Expenses .
Years Ended December 31, 2023 2024 (in thousands, except percentages) RMB % of revenues RMB US$ % of revenues Operating income and expenses Research and development (178,207) (26.6) (243,391) (33,344) (30.2) Selling and marketing (242,511) (36.2) (342,421) (46,911) (42.4) General and administrative (229,549) (34.3) (244,385) (33,481) (30.3) Impairment of goodwill — — (152,890) (20,946) (18.9) Other operating income, net 2,867 0.4 637 87 0.1 Total operating income and expenses (647,400) (96.7) (982,450) (134,595) (121.7) Research and Development Expenses .
Year Ended December 31, 2022 2023 RMB RMB US$ (in thousands) Cayman Islands and BVI Income (Loss) before income tax (171,383) (307,996) (43,380) Income tax expenses (benefits) computed at the PRC statutory tax rate of 25% (42,846) (76,999) (10,845) Income tax expenses computed at Cayman Islands statutory tax rate of 0% — — — Effect of differing tax rates in different jurisdictions 42,846 76,999 10,845 Hong Kong Income (Loss) before income tax (81,036) (71,816) (10,115) Income tax expenses (benefits) computed at the PRC statutory tax rate of 25% (20,259) (17,954) (2,529) Income tax expenses (benefits) computed at the Hong Kong statutory tax rate of 16.5% (13,371) (11,850) (1,669) Effect of differing tax rates in different jurisdictions 6,888 6,104 860 Singapore Loss before income tax (6,908) (14,298) (2,013) Income tax benefits computed at the PRC statutory tax rate of 25% (1,727) (3,575) (504) Income tax benefits computed at the Singapore statutory tax rate of 17% (1,174) (2,431) (342) Effect of differing tax rates in different jurisdictions 553 1,144 162 PRC Loss before income tax (261,306) (251,578) (35,434) Income tax benefits computed at the PRC statutory tax rate of 25% (65,326) (62,895) (8,859) Income tax benefits computed at the PRC statutory tax rate of 25% (65,326) (62,895) (8,859) Effect of differing tax rates in different jurisdictions — — — Others Loss before income tax (25,147) 8,038 1,132 Income tax benefits computed at the PRC statutory tax rate of 25% (6,287) 2,010 284 Income tax benefits computed at the statutory tax rates of such other jurisdictions (7,294) 1,849 260 Effect of differing tax rates in different jurisdictions (1,007) (161) (24) Total Loss before income tax (545,780) (637,650) (89,810) Income tax benefits computed at the PRC statutory tax rate of 25% (136,445) (159,413) (22,453) Income tax benefits computed at the statutory tax rate of different jurisdictions (87,165) (75,327) (10,610) Effect of differing tax rates in different jurisdictions 49,280 84,086 11,843 The following table sets forth the effect of tax holiday and preferential tax treatments on our income tax expenses in each applicable jurisdiction, for the years ended December 31, 2022 and 2023.
Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) Cayman Islands and BVI Income (Loss) before income tax (307,996) (179,588) (24,603) Income tax expenses (benefits) computed at the PRC statutory tax rate of 25% (76,999) (44,897) (6,151) Income tax expenses computed at Cayman Islands statutory tax rate of 0% — — — Effect of differing tax rates in different jurisdictions 76,999 44,897 6,151 Hong Kong Income (Loss) before income tax (71,816) 1,490 204 Income tax expenses (benefits) computed at the PRC statutory tax rate of 25% (17,954) 373 51 Income tax expenses (benefits) computed at the Hong Kong statutory tax rate of 16.5% (11,850) 246 34 Effect of differing tax rates in different jurisdictions 6,104 (127) (17) Singapore Loss before income tax (14,298) (14,874) (2,038) Income tax benefits computed at the PRC statutory tax rate of 25% (3,575) (3,718) (509) Income tax benefits computed at the Singapore statutory tax rate of 17% (2,431) (2,529) (346) Effect of differing tax rates in different jurisdictions 1,144 1,189 163 PRC Loss before income tax (251,578) (382,509) (52,404) Income tax benefits computed at the PRC statutory tax rate of 25% (62,895) (95,627) (13,101) Income tax benefits computed at the PRC statutory tax rate of 25% (62,895) (95,627) (13,101) Effect of differing tax rates in different jurisdictions — — — Others Loss before income tax 8,038 21,153 2,899 Income tax benefits computed at the PRC statutory tax rate of 25% 2,010 5,287 725 Income tax benefits computed at the statutory tax rates of such other jurisdictions 1,849 5,049 692 Effect of differing tax rates in different jurisdictions (161) (238) (33) Total Loss before income tax (637,650) (554,328) (75,942) Income tax benefits computed at the PRC statutory tax rate of 25% (159,413) (138,582) (18,985) Income tax benefits computed at the statutory tax rate of different jurisdictions (75,327) (92,861) (12,721) Effect of differing tax rates in different jurisdictions 84,086 45,721 6,264 The following table sets forth the effect of tax holiday and preferential tax treatments on our income tax expenses in each applicable jurisdiction, for the years ended December 31, 2023 and 2024.
Channel and sharing costs consist fees paid to distribution platforms and payment channels and revenue sharing with application publishers. 90 Table of Contents Operating Income and Expenses Our operating income and expenses consist of (i) research and development expenses, (ii) selling and marketing expenses, (iii) general and administrative expenses, and (iv) other operating income and expenses.
Channel and sharing costs consist fees paid to distribution platforms and payment channels and revenue sharing with application publishers.
Year Ended December 31, 2022 2023 RMB RMB US$ (in thousands) Selected Consolidated Statements of Comprehensive loss: Revenues 884,066 669,503 94,298 Internet business 697,387 450,134 63,400 AI and others 186,679 219,369 30,898 Cost of revenues (1) (252,561) (231,940) (32,668) Gross profit 631,505 437,563 61,630 Operating income and expenses Research and development (1) (180,957) (178,207) (25,100) Selling and marketing (1) (476,853) (242,511) (34,157) General and administrative (1) (214,337) (229,549) (32,331) Other operating income, net 15,051 2,867 404 Total operating expenses, net (857,096) (647,400) (91,184) Operating loss (225,591) (209,837) (29,554) Other income (expenses) Interest income, net 35,710 60,978 8,589 Foreign exchange losses, net (95,434) (11,421) (1,609) Other income 101,265 96,765 13,630 Other expense (361,730) (574,135) (80,866) Loss before income taxes (545,780) (637,650) (89,810) Income tax benefits 25,089 43,781 6,166 Net loss (520,691) (593,869) (83,644) Less: net (loss)/income attributable to noncontrolling interests (7,216) 9,029 1,272 Net loss attributable to Cheetah Mobile Inc.
Year Ended December 31, 2023 2024 RMB RMB US$ (in thousands) Selected Consolidated Statements of Comprehensive loss: Revenues 669,503 806,877 110,541 Internet business 450,134 517,188 70,854 AI and others 219,369 289,689 39,687 Cost of revenues (1) (231,940) (261,682) (35,850) Gross profit 437,563 545,195 74,691 Operating income and expenses Research and development (1) (178,207) (243,391) (33,344) Selling and marketing (1) (242,511) (342,421) (46,911) General and administrative (1) (229,549) (244,385) (33,481) Impairment of goodwill — (152,890) (20,946) Other operating income, net 2,867 637 87 Total operating expenses, net (647,400) (982,450) (134,595) Operating loss (209,837) (437,255) (59,904) Other income (expenses) Interest income, net 60,978 44,422 6,086 Foreign exchange losses, net (11,421) (21,726) (2,976) Other income 96,765 52,059 7,132 Other expense (574,135) (191,828) (26,280) Loss before income taxes (637,650) (554,328) (75,942) Income tax benefits 43,781 (47,258) (6,474) Net loss (593,869) (601,586) (82,416) Less: net income attributable to noncontrolling interests 9,029 15,971 2,188 Net loss attributable to Cheetah Mobile Inc.
Our net loss attributable to Cheetah Mobile shareholders was RMB602.9 million (US$84.9 million) in 2023, compared to a net loss attributable to Cheetah Mobile shareholders of RMB513.5 million in 2022. Historically, we have invested heavily in research and development and selling and marketing to grow our businesses.
Our net loss attributable to Cheetah Mobile shareholders was RMB617.6 million (US$84.6 million) in 2024, compared to a net loss attributable to Cheetah Mobile shareholders of RMB602.9 million in 2023. Selected Statement of Operations Items Revenues We generate revenues from internet business and AI and others.
The fee arrangements with these significant customers and the mix of these arrangements can have a significant impact on our revenues, and some of these impact may be beyond our control. • Ability to provide targeted advertising. We believe that data analytics is a key factor affecting our online advertising revenues.
The fee arrangements with these significant customers and the mix of these arrangements can have a significant impact on our revenues, and some of these impact may be beyond our control. AI and Others Revenue from AI and others accounted for 32.8% and 35.9% of our revenues in 2023 and 2024, respectively.
Our revenues decreased by 24.3% from RMB884.1 million in 2022 to RMB669.5 million (US$94.3 million) in 2023. Internet business . Revenues from internet business decreased by 35.5% from RMB697.4 million in 2022 to RMB450.1 million (US$63.4 million) in 2023. The year-over-over decrease was primarily due to the strategic downsizing of our online advertising business and gaming business.
Our revenues increased by 20.5% from RMB669.5 million in 2023 to RMB806.9 million (US$110.5 million) in 2024. Internet business . Revenues from internet business increased by 14.9% from RMB450.1 million in 2023 to RMB517.2 million (US$70.9 million) in 2024. The year-over-over increase was contributed by increase from our online advertising business.
Internet value-added services We generate value-added services revenue principally from fee-based services, mainly including VIP membership, software subscription, and game-related services. (i) VIP membership and software subscription. We offer various online software as well as on-promise software such as anti-virus, security protection, immediate communication and others to individual and enterprise customers.
Internet value-added services We provide a range of online and on-premise such as anti-virus, security protection, desktop beautification, immediate communication and others for both individual and enterprise customers.
Our gross margin decreased to 65.4% for the year ended December 31, 2023 from 71.4% for the year ended December 31, 2022. Operating expenses . Our operating expenses decreased by 24.5% from RMB857.1 million in 2022 to RMB647.4 million (US$91.2 million) in 2023 mainly due to our decreased marketing and promotion expenses on user acquisition for our internet business.
Our operating expenses increased by 51.8% from RMB647.4 million in 2023 to RMB982.5 million (US$134.6 million) in 2024 mainly due to impairment of goodwill, our increased marketing and promotion expenses on user acquisition for our internet business, as well as the increase of employee costs and amortization expenses of the intangible assets as the acquisition of controlling stake in Beijing OrionStar.
Cost of Revenues Cost of revenues primarily consist of traffic acquisition costs, bandwidth and cloud service costs, personnel costs, channel and sharing costs, depreciation of equipment, and cost of robots and other products sold, including direct materials, external processing fee, depreciation and amortization of assets associated with the production.
Cost of robots and other products sold include direct materials, external processing fee, depreciation and amortization of assets associated with the production. 91 Table of Contents Operating Income and Expenses Our operating income and expenses consist of (i) research and development expenses, (ii) selling and marketing expenses, (iii) general and administrative expenses, and (iv) other operating income and expenses.
This decrease was primarily due to decreased marketing and promotion expenses related to user acquisition for our internet business. General and administrative expenses . Our general and administrative expenses increased by 7.1% year over year to RMB229.5 million (US$32.3 million) in 2023, which mainly resulted from share-based compensation expenses for our key employees. Operating loss .
Our selling and marketing expenses increased by 41.2% year over year to RMB342.4 million (US$46.9 million) in 2024. This increase was primarily due to increased marketing and promotion expenses related to user acquisition for our internet business, as well as the increased employee costs as the acquisition of controlling stake in Beijing OrionStar. General and administrative expenses .
In particular, a large and engaged user base is crucial for the sustainability of our product and related services. We plan to further improve our products and introduce more products to increase users’ engagement with our products. • Fee arrangements with our significant customers.
A large and engaged user base is crucial for the sustainability of our product and related services, our advertising revenue is driven by the size of our user base and our VIP membership revenue depend on our ability to convert more users to paying users.
This decrease was primarily due to lower costs related to our advertising and E-coupon vending robot business. Gross profit . As a result of the foregoing, our gross profit decreased by 30.7% from RMB631.5 million in 2022 to RMB437.6 million (US$61.6 million) in 2023. Gross margin .
Our cost of revenues increased by 12.8% from RMB231.9 million in 2023 to RMB261.7 million (US$35.9 million) in 2024. This increase was in line with increase of our revenue. Gross profit . As a result of the foregoing, our gross profit increased by 24.6% from RMB437.6 million in 2023 to RMB545.2 million (US$74.7 million) in 2024. Gross margin .

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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His main research interest includes managerial accounting, corporate governance and information disclosure. He received his bachelor’s degree from Renmin University of China in 1998, two master’s degrees from Yale University in 2002 and a Ph.D. degree from Yale University in 2004. He began serving as our independent director since September 2020.
His main research interest includes managerial accounting, corporate governance and information disclosure. He received his bachelor’s degree from Renmin University of China in 1998, two master’s degrees from Yale University in 2002 and a Ph.D. degree from Yale University in 2004. He began serving as our independent director since September 2020. B.
The following table summarizes, as of March 31, 2024, the restricted shares that we granted to our current directors and executive officers and to other individuals as a group under our 2011 Plan, 2013 Plan, 2014 Plan and 2023 plan, and which remained outstanding.
The following table summarizes, as of March 31, 2025, the restricted shares that we granted to our current directors and executive officers and to other individuals as a group under our 2011 Plan, 2013 Plan, 2014 Plan and 2023 plan, and which remained outstanding.
Subject to the rules of NYSE and disqualification by the chairman of the relevant board meeting, a director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of our directors at which any such contract or transaction or proposed contract or transaction is considered.
Subject to the 108 Table of Contents rules of NYSE and disqualification by the chairman of the relevant board meeting, a director may vote in respect of any contract or transaction or proposed contract or transaction notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of our directors at which any such contract or transaction or proposed contract or transaction is considered.
The plan administrator has the sole discretion to determine the participants to receive the awards, the number and types of awards to be granted to each participant, and the terms and conditions of each award grant. 105 Table of Contents Award Agreement .
The plan administrator has the sole discretion to determine the participants to receive the awards, the number and types of awards to be granted to each participant, and the terms and conditions of each award grant. 107 Table of Contents Award Agreement .
We may also terminate 107 Table of Contents a senior executive officer’s employment without cause at any time by giving one month’s prior written notice, and we shall provide severance payments to the officer as expressly required by the applicable law of the jurisdiction where the officer is based.
We may also terminate a senior executive officer’s employment without cause at any time by giving one month’s prior written notice, and we shall provide severance payments to the officer as expressly required by the applicable law of the jurisdiction where the officer is based.
Vesting Schedule . The plan administrator determines the vesting schedule, which is set forth in the award agreement. Transfer Restrictions . An award may not be transferred or assigned by the participant in any manner other than by will or by the laws of descent and distribution, unless otherwise determined by the plan administrator. Termination .
Vesting Schedule . The plan administrator determines the vesting schedule, which is set forth in the award agreement. 106 Table of Contents Transfer Restrictions . An award may not be transferred or assigned by the participant in any manner other than by will or by the laws of descent and distribution, unless otherwise determined by the plan administrator. Termination .
A director will be removed from office automatically if, among other things, the director (1) becomes bankrupt or makes any arrangement or composition with his creditors; (2) dies or is found to be or becomes of unsound mind; or (3) without special leave of absence from the board of directors, is absent from meetings of the board for three consecutive meetings and the board resolves that his office be vacated. 109 Table of Contents D.
A director will be removed from office automatically if, among other things, the director (1) becomes bankrupt or makes any arrangement or composition with his creditors; (2) dies or is found to be or becomes of unsound mind; or (3) without special leave of absence from the board of directors, is absent from meetings of the board for three consecutive meetings and the board resolves that his office be vacated.
The following paragraphs summarize the key terms of the as amended 2011 Plan. Types of Awards . The 2011 Plan provides for the award of our ordinary shares subject to certain terms and conditions that our board of directors may determine in its absolute discretion. Plan Administration .
The following paragraphs summarize the key terms of the as amended 2011 Plan. 105 Table of Contents Types of Awards . The 2011 Plan provides for the award of our ordinary shares subject to certain terms and conditions that our board of directors may determine in its absolute discretion. Plan Administration .
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Shengwu Wu, and Dr. Yi Ma and is chaired by Dr. Yi Ma. Our board of directors has determined that Shengwu Wu and Dr. Yi Ma both satisfy the “independence” standards under applicable NYSE corporate governance rules.
Nominating and Corporate Governance Committee Our nominating and corporate governance committee consists of Wu Shengwu, and Dr. Yi Ma and is chaired by Dr. Yi Ma. Our board of directors has determined that Wu Shengwu and Dr. Yi Ma both satisfy the “independence” standards under applicable NYSE 109 Table of Contents corporate governance rules.
The audit committee is responsible for, among other things: • selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; • reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; • reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; • discussing the annual audited financial statements with management and the independent registered public accounting firm; • reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of any material control deficiencies; • annually reviewing and reassessing the adequacy of our audit committee charter; • meeting separately and periodically with management and the independent registered public accounting firm; and • reporting regularly to the board. 108 Table of Contents Compensation Committee Our compensation committee consists of and is chaired by Shengwu Wu.
The audit committee is responsible for, among other things: • selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; • reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; • reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; • discussing the annual audited financial statements with management and the independent registered public accounting firm; • reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of any material control deficiencies; • annually reviewing and reassessing the adequacy of our audit committee charter; • meeting separately and periodically with management and the independent registered public accounting firm; and • reporting regularly to the board.
Our board of directors has determined that Shengwu Wu satisfies the “independence” standards under applicable NYSE corporate governance rules. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
Compensation Committee Our compensation committee consists of and is chaired by Wu Shengwu. Our board of directors has determined that Wu Shengwu satisfies the “independence” standards under applicable NYSE corporate governance rules. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers.
The 2013 Plan Under the 2013 Plan, the maximum number of our ordinary shares that may be issued is 64,497,718 ordinary shares, and the 2013 plan has terminated upon its expiration in January 2024, and the remaining 706,618 forfeited and unvested restricted shares that have not been granted are cancelled.
The 2013 Plan Under the 2013 Plan, the maximum number of our ordinary shares that may be issued is 64,497,718 ordinary shares, and the 2013 plan has terminated upon its expiration in January 2024. As of March 31, 2025, the remaining 805,060 forfeited and unvested restricted shares that have not been granted are cancelled.
Compensation Compensation of Directors and Officers For the fiscal year ended December 31, 2023, we paid an aggregate of approximately RMB 24.8 million (US$ 3.5 million) in cash to our executive officers and directors (excluding independent directors), and an aggregate of approximately RMB1.5 million (US$0.2 million) in cash to our independent directors.
Compensation Compensation of Directors and Officers For the fiscal year ended December 31, 2024, we paid an aggregate of approximately RMB18.2 million (US$2.5 million) in cash to our executive officers and directors (excluding independent directors), and an aggregate of approximately RMB1.5 million (US$0.2 million) in cash to our independent directors.
The following is a summary of the key terms of the 2023 Plan. Types of Awards . The 2023 Plan permits the awards of options, restricted shares and restricted share units. Plan Administration . Our board or a committee of our board duly authorized for the purpose of the 2023 Plan will be the plan administrator of our 2023 Plan.
The 2023 Plan permits the awards of options, restricted shares and restricted share units. Plan Administration . Our board or a committee of our board duly authorized for the purpose of the 2023 Plan will be the plan administrator of our 2023 Plan.
Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable.
Disclosure of A Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable. 110 Table of Contents
As of March 31, 2024, 81,770,931 restricted shares (excluding those that have been forfeited) had been granted under the 2014 Plan. The following is a summary of the key terms of the 2014 Plan. Types of Awards . The 2014 Plan permits the awards of restricted shares and restricted share units. Plan Administration .
As of March 31, 2025, 91,438,986 restricted shares (excluding those that have been forfeited) had been granted under the 2014 Plan. The following is a summary of the key terms of the 2014 Plan. Types of Awards . The 2014 Plan permits the awards of restricted shares and restricted share units. Plan Administration .
Prior to that, Mr. Ren had worked at KPMG for five years. Mr. Ren holds a bachelor’s degree in economics from Renmin University of China. He is a certified public accountant in China and the United States, and a chartered professional accountant in Canada.
From 2005 to 2014, Mr. Ren served as Renren Inc.’s senior finance director. Prior to that, Mr. Ren had worked at KPMG for five years. Mr. Ren holds a bachelor’s degree in economics from Renmin University of China. He is a certified public accountant in China and the United States, and a chartered professional accountant in Canada.
Ren also served as the chief financial officer of Kaixin Auto Holdings (NASDAQ: KXIN) from September 2015 to August 2019. Kaixin Auto Holdings was a subsidiary of Renren Inc. Prior to rejoining Renren Inc., Mr. Ren was the chief financial officer at Chukong Technologies. From 2005 to 2014, Mr. Ren served as Renren Inc.’s senior finance director.
Ren served as the chief financial officer of Renren Inc. (NYSE: RENN) since September 2015. Mr. Ren also served as the chief financial officer of Kaixin Auto Holdings (NASDAQ: KXIN) from September 2015 to August 2019. Kaixin Auto Holdings was a subsidiary of Renren Inc. Prior to rejoining Renren Inc., Mr. Ren was the chief financial officer at Chukong Technologies.
Yun Zhang 47 Independent Director Edward Mingyan Sun 41 Senior Vice President Sheng Fu has been our Chairman of the Board since March 2018, and our chief executive officer and director of the Board since November 2010. Since September 2009, Mr. Fu has been the chief executive officer and chairman of Conew Network. Prior to that, Mr.
Yun Zhang 48 Independent Director Sheng Fu has been our Chairman of the Board since March 2018, and our chief executive officer and director of the Board since November 2010. Since September 2009, Mr. Fu has been the chief executive officer and chairman of Conew Network. Prior to that, Mr.
Our directors also owe to our company a duty to act with skill and care. It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.
It was previously considered that a director need not exhibit in the performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.
With over two decades of experience in the information and communication technologies (ICT) field, Mr. Wu possesses extensive industry management experience. Mr. Wu received his bachelor’s degree in engineering and master’s degree in laws from Tsinghua University, and a Ph.D. degree in administration from Huazhong University of Science and Technology. Dr.
Wu possesses extensive industry management experience. Mr. Wu received his bachelor’s degree in engineering and master’s degree in laws from Tsinghua University, and a Ph.D. degree in administration from Huazhong University of Science and Technology. Dr.
Employees We had 851, 713 and 845 employees as of December 31, 2021, 2022 and 2023, respectively. The following table sets forth the number of our employees, categorized by function, as of December 31, 2023: Function Number of Employees Operations 81 Research and development 336 Sales and marketing 205 General and administrative 223 Total 845 E.
D. Employees We had 713, 845 and 934 employees as of December 31, 2022, 2023 and 2024, respectively. The following table sets forth the number of our employees, categorized by function, as of December 31, 2024: Function Number of Employees Operations 112 Research and development 377 Sales and marketing 256 General and administrative 189 Total 934 E.
The plan administrator has the sole discretion to determine the participants to receive the awards, the number and types of awards to be granted to each participant, and the terms and conditions of each award grant. Award Agreement .
The plan administrator has the sole discretion to determine the participants to receive the awards, the number and types of awards to be granted to each participant, and the terms and conditions of each award grant. Award Agreement . Awards under the 2013 Plan are evidenced by an award agreement that sets forth the terms and conditions for each grant.
Directors and Executive Officers Age Position/Title Sheng Fu 46 Chief Executive Officer and Chairman of the Board of Directors Tao Zou 48 Director Thomas Jintao Ren 45 Chief Financial Officer and Director Shengwu Wu 50 Independent Director Dr. Yi Ma 51 Independent Director Dr.
Directors and Executive Officers Age Position/Title Sheng Fu 47 Chief Executive Officer and Chairman of the Board of Directors Thomas Jintao Ren 46 Chief Financial Officer and Director Edward Mingyan Sun 42 Director Bo Peng 46 Director Wu Shengwu 51 Independent Director Dr. Yi Ma 52 Independent Director Dr.
The 2023 Plan We adopted the 2023 Plan in April 2023. The maximum aggregate number of shares which may be issued pursuant to all awards under the 2023 Plan is 145,000,000 ordinary shares. As of March 31, 2024, 103,270,550 restricted shares (excluding those that have been forfeited) had been granted under the 2023 Plan.
The maximum aggregate number of shares which may be issued pursuant to all awards under the 2023 Plan is 145,000,000 ordinary shares. As of March 31, 2025, 101,559,650 restricted shares (excluding those that have been forfeited) had been granted under the 2023 Plan. The following is a summary of the key terms of the 2023 Plan. Types of Awards .
Upon approval of our board of directors, the validity term has been extended to April, 2029. All restricted shares granted prior to the completion of our initial public offering under our share incentive plans entitle the holders to our Class B ordinary shares, while all restricted shares granted thereafter entitle the holders to Class A ordinary shares. 4.
All restricted shares granted prior to the completion of our initial public offering under our share incentive plans entitle the holders to our Class B ordinary shares, while all restricted shares granted thereafter entitle the holders to Class A ordinary shares. 4. The 2023 Plan We adopted the 2023 Plan in April 2023.
Fu was the product manager of 3721 Internet Real Name and 3721 Internet Assistant. Mr. Fu received a bachelor’s degree in economics from Shandong Institute of Business and Technology in China in 1999. Tao Zou has been our director since December 2016. Mr.
Fu was the product manager of 3721 Internet Real Name and 3721 Internet Assistant. Mr. Fu received a bachelor’s degree in economics from Shandong Institute of Business and Technology in China in 1999. Thomas Jintao Ren has been our chief financial officer since January 2020 and has been our director since November 2022. Prior to Cheetah Mobile, Mr.
We may grant awards to the employees, director or consultant of our company, Kingsoft Corporation or its affiliates. Term of Awards . The term of options and share appreciation rights awarded under the 2013 Plan shall be determined by the plan administrator, subject to a maximum term of ten years after the date of grant.
The term of options and share appreciation rights awarded under the 2013 Plan shall be determined by the plan administrator, subject to a maximum term of ten years after the date of grant. The term of other share-based awards shall be determined by the plan administrator. Lapse of Option Awards .
Number of Restricted Shares Outstanding Purchase Price (US$/Share) Date of Grant Sheng Fu 42,831,800 N/A June 22, 2023 Edward Mingyan Sun * N/A May 1, 2017 * N/A October 1, 2017 * N/A April 1, 2018 * N/A June 22, 2023 Thomas Jintao Ren * N/A June 22, 2023 Individuals as a group * N/A — Total * Less than 1% of our total outstanding Class A and Class B ordinary shares.
Number of Restricted Shares Outstanding Purchase Price (US$/Share) Date of Grant Sheng Fu 42,831,800 N/A June 22, 2023 Edward Mingyan Sun * N/A June 22, 2023 Thomas Jintao Ren * N/A June 22, 2023 Wu Shengwu * N/A September 22, 2023 Yi Ma * N/A June 22, 2023 Yun Zhang * N/A June 22, 2023 All directors and executive officers as a group 57,693,400 N/A Various dates between June 22, 2023 and September 22, 2023 * Less than 1% of our total outstanding Class A and Class B ordinary shares.
From 2014 to 2017, he was a Professor and the Executive Dean of the School of Information and Science and Technology, Shanghai Tech University, China. From 2009 to early 2014, he was a Principal Researcher and the Research Manager of the Visual Computing group at Microsoft Research Asia.
He served on the faculty of UIUC ECE from 2000 to 2011, the principal researcher and manager of the Visual Computing group of Microsoft Research Asia from 2009 to 2014, and the Executive Dean of the School of Information Science and Technology of ShanghaiTech University from 2014 to 2017.
Duties of Directors Under Cayman Islands law, our directors have a fiduciary duty to act honestly, in good faith and with a view to our best interests. Our directors must also exercise the powers that are vested in them for the purpose for a proper purpose, and not for any collateral purpose.
Our directors must also exercise the powers that are vested in them for the purpose for a proper purpose, and not for any collateral purpose. Our directors also owe to our company a duty to act with skill and care.
Shengwu Wu has held the position of global executive vice president at Tsinghua Unigroup and chairman of the board of the directors of Xiamen Education Technology Group Co., Ltd (SZSE: 000526) since 2019. Additionally, he currently serves as chairman of the board of the directors and chief executive officer of Unic Memory Technology Co. Ltd.
Prior to joining Rongxin Semiconductor, he held the position of Global Executive Vice President at Tsinghua Unigroup and Chairman of the Board at Xiamen Xueda Education Technology Group Co., Ltd. (SZSE: 000526). Mr.
Prior to joining Tsinghua Unigroup, Mr. Wu served as the deputy director of the Department of Electronic Information at the Ministry of Industry and Information Technology of the People’s Republic of China from 2016 to 2019, district head of Haishu District, Ningbo, China from 2011 to 2016, and director of Ningbo Information Industry Bureau from 2006 to 2011.
Wu served as the Deputy Director of the Electronic Information Department at the Ministry of Industry and Information Technology of the People’s Republic of China, as well as the Mayor of Haishu District in Ningbo and Director of the Ningbo Information Industry Bureau. With over 20 years of experience in the Information and Communication Technology (ICT) industry, Mr.
Awards may not be transferred in any manner by the recipient other than by will or the laws of descent and distribution, except as otherwise provided by the plan administrator. 106 Table of Contents Termination of the 2014 Plan . The 2014 Plan has a validity term of 10 years and was due to terminate in 2024.
Vesting Schedule . In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Transfer Restrictions . Awards may not be transferred in any manner by the recipient other than by will or the laws of descent and distribution, except as otherwise provided by the plan administrator. Termination of the 2014 Plan .
For the fiscal year ended December 31, 2023, we contributed an aggregate of approximately RMB0.8 million (US$0.1 million) for pension, retirement benefits or other similar benefits for our executive officers and directors. 104 Table of Contents Share Incentive Awards Share Incentive Plans We adopted a share award scheme in May 2011, as amended in September 2013 and November 2016, or the 2011 Plan, a 2013 equity incentive plan in January 2014, or the 2013 Plan, a 2014 restricted shares plan in April 2014, or the 2014 Plan, and a 2023 share incentive plan in April 2023, or the 2023 Plan.
Share Incentive Awards Share Incentive Plans We adopted a share award scheme in May 2011, as amended in September 2013 and November 2016, or the 2011 Plan, a 2013 equity incentive plan in January 2014, or the 2013 Plan, a 2014 restricted shares plan in April 2014, or the 2014 Plan, and a 2023 share incentive plan in April 2023, or the 2023 Plan.
He received his Bachelors' degree in Automation and Applied Mathematics from Tsinghua University (Beijing, China) in 1995, Master of Science degree in EECS in 1997, Master of Arts degree in Mathematics in 2000, and PhD degree in EECS in 2000, all from the University of California at Berkeley.
Yi received his two bachelor’s degrees in Automation and Applied Mathematics from Tsinghua University in 1995, two master’s degrees in EECS and Mathematics in 1997, and a PhD degree in EECS from UC Berkeley in 2000.
Awards under the 2013 Plan are evidenced by an award agreement that sets forth the terms and conditions for each grant. Exercise Price . The exercise price, grant price, or purchase price of any award shall be determined by the plan administrator at its sole discretion. Eligibility .
Exercise Price . The exercise price, grant price, or purchase price of any award shall be determined by the plan administrator at its sole discretion. Eligibility . We may grant awards to the employees, director or consultant of our company, Kingsoft Corporation or its affiliates. Term of Awards .
Edward received his college degree and continued his post-graduate studies at the University of Science and Technology of China. B.
Edward received his college degree and continued his post-graduate studies at the University of Science and Technology of China. Bo Peng has been our director since July 2024. Ms. Bo Peng is currently an assistant president and the legal director of Kingsoft Corporation Limited (HKEx: 03888). Ms.
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Zou was appointed to be our director by Kingsoft Corporation Limited, at which he serves as an executive director and the chief executive officer. Mr.
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Peng joined the legal department of Kingsoft Corporation Limited in 2004 and since then has been fully responsible for its legal affairs. In September 2013, she became the assistant president of Kingsoft Corporation Limited. At present, Ms.
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Zou also serves as a director of Seasun Holdings, Chairman of Kingsoft Office (SSE STAR Market: 688111) and vice chairman of the board, executive director and acting CEO of 103 Table of Contents Kingsoft Cloud (Stock Code: 03896 and NASDAQ: KC). Mr. Zou joined Kingsoft Corporation in 1998 serving various management roles. Mr. Zou graduated from Nankai University in 1997.
Added
Peng is mainly responsible for legal compliance, intellectual property, supply chain, administrative management of Kingsoft Corporation Limited and she has extensive experience in these areas. At the same time, Ms. Peng serves as a supervisor of Kingsoft Office (SSE STAR Market: 688111) and the secretary-general of Beijing Kingsoft Foundation. Ms.
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Thomas Jintao Ren has been our chief financial officer since January 2020 and has been our director since November 2022. Prior to Cheetah Mobile, Mr. Ren served as the chief financial officer of Renren Inc. (NYSE: RENN) since September 2015. Mr.
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Peng graduated from the University of Science and Technology Beijing in 2001 with a bachelor’s degree in law. 104 Table of Contents Wu Shengwu has served as the Chairman of Rongxin Semiconductor Technology Co., Ltd. since 2024.
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Yi Ma currently serves as a Professor at the Electrical Engineering and Computer Sciences ("EECS") Department of the University of California at Berkeley. He is also a Chair Professor in the Musketeers Foundation Institute of Data Science (HKU IDS) and Department of Computer Science at the University of Hong Kong.
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Yi Ma is a Chair Professor in Artificial Intelligence, the inaugural director of the School of Computing and Data Science and the Institute of Data Science of the University of Hong Kong since 2023. His research interests include computer vision, high-dimensional data analysis, and integrated intelligent systems.
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From 2000 to 2011, he was an Associate Professor at the ECE Department of the University of Illinois at Urbana-Champaign. His main research interest is in computer vision and high-dimensional data analysis.
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He was on the faculty of UC Berkeley EECS Department from 2018-2023, where he continues to be a visiting professor. He has published over 65 journal papers, 150 conference papers, and three textbooks on 3D vision, generalized PCA, and high-dimensional data analysis. He received the NSF Career award in 2004 and the ONR Young Investigator award in 2005.
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He is an IEEE Fellow since 2013 and an ACM Fellow since 2017. He is ranked as the World's Highly Cited Researchers by Clarivate Analytics of Thomson Reuters since 2016 and ranked among the Top 50 of the World's Most Influential Authors in Computer Science by Semantic Scholar, according to the Science Magazine 2016. Dr.
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He also received the David Marr prize in computer vision from ICCV 1999 and best paper awards from ECCV 2004 and ACCV 2009. He has served as the Program Chair for ICCV 2013 and the General Chair for ICCV 2015. He is a Fellow of IEEE, ACM, and SIAM. Dr.
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The term of other share-based awards shall be determined by the plan administrator. Lapse of Option Awards .
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For the fiscal year ended December 31, 2024, we contributed an aggregate of approximately RMB0.7 million (US$0.1 million) for pension, retirement benefits or other similar benefits for our executive officers and directors.
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Vesting Schedule . In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement. Transfer Restrictions .
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The 2014 Plan has a validity term of 10 years and was due to terminate in 2024. Upon approval of our board of directors, the validity term has been extended to April, 2029.
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Duties of Directors Under Cayman Islands law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly and a duty to act in what they consider in good faith to be in our best interests.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Employment Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements.” Share Incentive Plans “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Awards—Share Incentive Plans.” Other Transactions with Certain Directors and Affiliates See “Item 6. Directors, Senior Management and Employees—B. Compensation—Compensation of Directors and Officers.” C. Interests of Experts and Counsel Not applicable. 114 Table of Contents
Employment Agreements See “Item 6. Directors, Senior Management and Employees—B. Compensation—Employment Agreements.” 114 Table of Contents Share Incentive Plans “Item 6. Directors, Senior Management and Employees—B. Compensation—Share Incentive Awards—Share Incentive Plans.” Other Transactions with Certain Directors and Affiliates See “Item 6. Directors, Senior Management and Employees—B. Compensation—Compensation of Directors and Officers.” C. Interests of Experts and Counsel Not applicable.
Fu under our 2011 Plan, and (iv) 1,016,210 Class A ordinary shares and 2,574,010 Class B ordinary shares that have vested to Mr. Fu under our 2013 Plan. Kingsoft Corporation have delegated approximately 37.8% voting power of our company held by Kingsoft Corporation to Mr. Sheng Fu, effective October 1, 2017. For further details, see “Item 4.
Fu under our 2011 Plan, and (iv) 1,016,210 Class A ordinary shares and 2,574,010 Class B ordinary shares that have vested to Mr. Fu under our 2013 Plan. Kingsoft Corporation have delegated approximately 37.4% voting power of our company held by Kingsoft Corporation to Mr. Sheng Fu, effective October 1, 2017. For further details, see “Item 4.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders The following table sets forth information with respect to the beneficial ownership of our shares as of March 31, 2024 by: • each of our current directors and executive officers; and • each person known to us to own beneficially more than 5% of our shares.
Item 7. Major Shareholders and Related Party Transactions A. Major Shareholders The following table sets forth information with respect to the beneficial ownership of our shares as of March 31, 2025 by: • each of our current directors and executive officers; and • each person known to us to own beneficially more than 5% of our shares.
For the years ended December 31, 2021, 2022 and for the period ended November 30, 2023, we recognized total revenue of RMB3.9 million, RMB2.6 million and RMB2.4 million (US$0.3 million), respectively. In 2021, we provided a convertible loan of RMB100.0 million at an annual simple interest rate of 8% with 2 years maturity to Beijing OrionStar.
For the years ended December 31, 2022 and for the period ended November 30, 2023, we recognized total revenue of RMB2.6 million and RMB2.4 million, respectively. In 2021, we provided a convertible loan of RMB100.0 million at an annual simple interest rate of 8% with 2 years maturity to Beijing OrionStar.
Shares Beneficially Owned Ordinary Shares Beneficially Owned Voting Power Class A Ordinary Shares Class B Ordinary Shares %(1) %(2) Directors and Executive Officers**: Sheng Fu (3) 31,012,650 100,722,938 8.8 47.6 Tao Zou (4) — — — — Thomas Jintao Ren * * * * Shengwu Wu (5) — — — — Dr. Yi Ma (6) * — * — Dr.
Shares Beneficially Owned Ordinary Shares Beneficially Owned Voting Power Class A Ordinary Shares Class B Ordinary Shares %(1) %(2) Directors and Executive Officers**: Sheng Fu (3) 31,012,650 100,722,938 8.6 47.1 Bo Peng — — — — Thomas Jintao Ren * * * * Wu Shengwu (5) * — * * Dr. Yi Ma (6) * — * * Dr.
(1) Percentage ownership is calculated by dividing the number of Class A and Class B ordinary shares beneficially owned by a given person or group by the sum of (i) 1,500,061,785 ordinary shares and (ii) the number of Class A and Class B ordinary shares that such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 31, 2024.
(1) Percentage ownership is calculated by dividing the number of Class A and Class B ordinary shares beneficially owned by a given person or group by the sum of (i) 1,534,534,235 ordinary shares and (ii) the number of Class A and Class B ordinary shares that such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after March 31, 2025.
As of March 31, 2024, to our knowledge, on the same basis of calculation as above, 462,819,310 Class A ordinary shares represented by ADSs, or approximately 30.85% of our total outstanding ordinary shares were held by one record shareholder in the United States, namely The Bank of New York Mellon, the depositary of our ADS program.
As of March 31, 2025, to our knowledge, on the same basis of calculation as above, 487,819,310 Class A ordinary shares represented by ADSs, or approximately 31.79% of our total outstanding ordinary shares were held by one record shareholder in the United States, namely The Bank of New York Mellon, the depositary of our ADS program.
Organizational Structure—Contractual Arrangements with the VIEs.” Transactions and Agreements with Kingsoft Corporation Kingsoft Corporation is one of our principal shareholders, with beneficial ownership and voting power of 45.0% and 25.0%, respectively, of our outstanding Class A and Class B ordinary shares on an as-converted basis as of March 31, 2024.
Organizational Structure—Contractual Arrangements with the VIEs.” Transactions and Agreements with Kingsoft Corporation Kingsoft Corporation is one of our principal shareholders, with beneficial ownership and voting power of 44.0% and 24.8%, respectively, of our outstanding Class A and Class B ordinary shares on an as-converted basis as of March 31, 2025.
For the years ended December 31, 2021, 2022 and for the period ended November 30, 2023, we recognized total cost of RMB3.8 million, RMB0.3 million and RMB2.3 million (US$0.3 million), respectively. 113 Table of Contents From 2018, we entered into several service agreements with Beijing OrionStar, pursuant to which we provide technical and multi-cloud management services to Beijing OrionStar.
For the years ended December 31, 2022 and for the period ended November 30, 2023, we recognized total cost of RMB0.3 million and RMB2.3 million, respectively. From 2018, we entered into several service agreements with Beijing OrionStar, pursuant to which we provide technical and multi-cloud management services to Beijing OrionStar.
Such licenses automatically terminated upon October 1, 2017. We and Kingsoft Corporation entered into a new Trademark Licensing Contract in 2018, under which we are licensed with certain selected trademarks of Kingsoft Corporation and its relevant subsidiaries; • Miscellaneous services .
Kingsoft Corporation granted licenses to use, among others, certain technologies, trademarks and software products. Such licenses automatically terminated upon October 1, 2017. We and Kingsoft Corporation entered into a new Trademark Licensing Contract in 2018, under which we are licensed with certain selected trademarks of Kingsoft Corporation and its relevant subsidiaries; • Miscellaneous services .
Yun Zhang (7) * — * — Edward Mingyan Sun * * * * All directors and executive officers as a group 37,687,320 106,340,288 9.6 48.2 Principal Shareholders: Kingsoft Corporation Limited (8) 11,800,547 662,806,049 45.0 25.0 Tencent Holdings Limited (9) 15,031,120 220,481,928 15.7 21.0 Sheng Global Limited (10) 29,996,440 97,563,128 8.5 9.5 Notes * Less than 1% of our total outstanding Class A and Class B ordinary shares. ** Unless otherwise indicated in the notes below, the business address for our directors and executive officers is Building No. 11Wandong Science and Technology Cultural Innovation Park No.7 Sanjianfangnanli, Chaoyang District, Beijing 100024, People’s Republic of China.
Yun Zhang (7) * — * * Edward Mingyan Sun * * * * All directors and executive officers as a group 37,040,470 115,012,738 9.9 48.5 Principal Shareholders: Kingsoft Corporation Limited (8) 11,800,547 662,806,049 44.0 24.8 Tencent Holdings Limited (9) 15,031,120 220,481,928 15.3 20.8 Sheng Global Limited (10) 29,996,440 97,563,128 8.3 9.4 Notes * Less than 1% of our total outstanding Class A and Class B ordinary shares. ** Unless otherwise indicated in the notes below, the business address for our directors and executive officers is Building No. 11Wandong Science and Technology Cultural Innovation Park No.7 Sanjianfangnanli, Chaoyang District, Beijing 100024, People’s Republic of China.
From 2019, we entered into several service agreements with Live.me, pursuant to which we provide technical, multi-cloud management and other services to Live.me. For the years ended December 31, 2021, 2022 and 2023, we recognized total revenue of RMB11.7 million, RMB33.3 million and RMB35.0 million (US$4.9 million), respectively.
From 2019, we entered into several service agreements with Live.me, pursuant to which we provide technical, multi-cloud management and other services to Live.me. For the years ended December 31, 2022, 2023 and 2024, we recognized total revenue of RMB33.3 million, RMB35.0 million and RMB27.5 million (US$3.8 million), respectively. Transactions with Pixiu.
For the years ended December 31, 2021, 2022 and 2023, we recognized aggregate fees of RMB19.1 million, RMB15.2 million and RMB14.2 million (US$2.0 million), respectively, to Kingsoft Corporation and its subsidiaries for the services they provided to us.
For the years ended December 31, 2022, 2023 and 2024, we recognized aggregate fees of RMB15.2 million, RMB14.2 million and RMB12.2 million (US$1.7 million), respectively, to Kingsoft Corporation, its subsidiaries and their respective associates for the services they provided to us.
Information on the Company—A. History and Development of the Company”. (4) The business address of Mr. Zou is c/o Kingsoft Corporation Limited, Building D, Xiaomi Campus, No.33 Xierqi Middle Road, Haidian District, Beijing, People’s Republic of China. (5) The business address of Shengwu Wu is Building No.6, Zijinzhuangyuan, Haidian District, Beijing, People’s Republic of China.
Information on the Company—A. History and Development of the Company”. 111 Table of Contents (4) The business address of Ms. Peng is c/o Kingsoft Corporation Limited, Building D, Xiaomi Campus, No.33 Xierqi Middle Road, Haidian District, Beijing, People’s Republic of China.
Accordingly, transactions between us, our subsidiaries and the VIEs, on the one hand, and Kingsoft Corporation or any of its subsidiaries (excluding us and our subsidiaries and VIEs), on the other hand, were “connected transactions.” Under the Hong Kong Listing Rules, all connected transactions must be carried out on normal commercial terms, and if the value of a connected transaction exceeds the applicable thresholds, it was subject to the approval of the independent shareholders of Kingsoft Corporation.
Accordingly, transactions between us, our subsidiaries and the VIEs, on the one hand, and Kingsoft Corporation or any of its subsidiaries (excluding us and our subsidiaries and VIEs), on the other hand, were “connected transactions.” Under the Hong Kong Listing Rules, all connected transactions must be carried out on normal commercial terms, and if the value of a connected transaction exceeds the applicable thresholds, it was subject to the approval of the independent shareholders of Kingsoft Corporation. 112 Table of Contents Services received from Kingsoft Group Historically, we have entered into various transactions including promotion services, licensing services, cloud services etc.
For the years ended December 31, 2021, 2022 and 2023, we recognized total revenues of RMB40.3 million, RMB12.5 million and RMB9.6 million (US$1.3 million), respectively, from the Tencent Group, and recognized aggregate fees of RMB32.6 million, RMB20.5 million and RMB13.3 million (US$1.9 million), respectively, to the Tencent Group.
For the years ended December 31, 2022, 2023 and 2024, we recognized total revenues of RMB12.5 million, RMB9.6 million and RMB6.7 million (US$0.9 million), respectively, from the Tencent Group, and recognized aggregate fees of RMB20.5 million, RMB13.3 million and RMB19.4 million (US$2.7 million), respectively, to the Tencent Group.
On July 1, 2022, we entered into a cloud service agreement with a subsidiary of Kingsoft Corporation, pursuant to which, Kingsoft Group provide us with cloud and relevant technical support services for an initial term until August 1, 2023, and upon expiration of the initial term the agreement was automatically renewed for one year pursuant to its terms.
We also purchase cloud services from Kingsoft Group. On July 1, 2022, we entered into a cloud service agreement with a subsidiary of Kingsoft Corporation, pursuant to which, Kingsoft Group provide us with cloud and relevant technical support services for an initial term until August 1, 2023.
(6) The business address of Dr. Ma is ECS Department, 333A Cory Hall#1770 University of California, Berkeley, CA 94720-1770, USA. (7) The business address of Dr. Zhang is 6402 Middleburg Ln, Bethesda, MD 20817, USA.
(5) The business address of Wu Shengwu is No. 599, Changjiang East Road, Huaiyin District, Huai'an City, Jiangsu Province (6) The business address of Dr. Ma is ECS Department, 333A Cory Hall#1770 University of California, Berkeley, CA 94720-1770, USA. (7) The business address of Dr. Zhang is 6402 Middleburg Ln, Bethesda, MD 20817, USA.
Percentage of beneficial ownership is based on 1,500,061,785 total issued and outstanding ordinary shares as of March 31, 2024, representing the sum of 493,104,900 Class A ordinary shares and 1,006,956,885 Class B ordinary shares of our company. 110 Table of Contents Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Percentage of beneficial ownership is based on 1,534,534,235 total issued and outstanding ordinary shares as of March 31, 2025, representing the sum of 518,104,900 Class A ordinary shares and 1,016,429,335 Class B ordinary shares of our company. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Our company has certain common directors and officers with Kingsoft Corporation. As of the date of this annual report, Mr. Tao Zou, one of our directors, is also the chief executive officer and director of Kingsoft Corporation.
Our company has certain common directors and officers with Kingsoft Corporation. As of the date of this annual report, Ms. Bo Peng, one of our directors, is also the assistant president and the legal director of Kingsoft Corporation.
History and Development of the Company.” Kingsoft Corporation’s business address is Building D, Xiaomi Campus, No.33 Xierqi Middle Road, Haidian District, Beijing, People’s Republic of China. 111 Table of Contents (9) Represents (i) 745,410 Class A ordinary shares and 14,285,710 Class A ordinary shares represented by ADSs held by THL E Limited, a British Virgin Islands company wholly owned by Tencent Holdings Limited, and (ii) 220,481,928 Class B ordinary shares held by TCH Copper Limited, a British Virgin Islands company wholly owned by Tencent Holdings Limited, as reported on the Schedule 13D jointly filed by TCH Copper Limited, Tencent Holdings Limited and THL E Limited on May 19, 2014.
(9) Represents (i) 745,410 Class A ordinary shares and 14,285,710 Class A ordinary shares represented by ADSs held by THL E Limited, a British Virgin Islands company wholly owned by Tencent Holdings Limited, and (ii) 220,481,928 Class B ordinary shares held by TCH Copper Limited, a British Virgin Islands company wholly owned by Tencent Holdings Limited, as reported on the Schedule 13D jointly filed by TCH Copper Limited, Tencent Holdings Limited and THL E Limited on May 19, 2014.
We and Kingsoft Corporation mutually provided promotion services through their own products and websites for the sale of the other party’s products, including but not limited to pre-installation, bundle promotion, joint operation and publishing online advertisement; 112 Table of Contents • Licensing services . Kingsoft Corporation granted licenses to use, among others, certain technologies, trademarks and software products.
This agreement governs the following transactions between our company and Kingsoft Corporation: • Promotion services . We and Kingsoft Corporation mutually provided promotion services through their own products and websites for the sale of the other party’s products, including but not limited to pre-installation, bundle promotion, joint operation and publishing online advertisement; • Licensing services .
In November 2023, we acquired an aggregate of 35.17% equity interest of Beijing OrionStar from certain of the existing shareholders of Beijing OrionStar with an aggregate cash consideration of RMB268.7 million (US$37.8 million). Upon completion of the transaction, our equity interest in Beijing OrionStar increased to 72.91% and consolidated the financial results of Beijing OrionStar since November 30, 2023.
In November 2023, 113 Table of Contents we acquired an aggregate of 35.17% equity interest of Beijing OrionStar from certain of the existing shareholders of Beijing OrionStar with an aggregate cash consideration of RMB268.7 million (US$37.8 million).
Services received from Kingsoft Group Historically, we have entered into various transactions including promotion services, licensing services, cloud services etc. From time to time with Kingsoft Corporation, its subsidiaries and their respective associates, or collectively the Kingsoft Group. We entered into a cooperation framework agreement with Kingsoft Corporation on December 27, 2013 for an initial term until December 31, 2016.
From time to time with Kingsoft Corporation, its subsidiaries and their respective associates, or collectively the Kingsoft Group. We entered into a cooperation framework agreement with Kingsoft Corporation on December 27, 2013 for an initial term until December 31, 2016. Upon expiration of the initial term, the agreement was automatically renewed for three years pursuant to its terms.
Subsequent to the amendment, we own 49.6% equity interest of Live.me and deconsolidated Live.me as we are no longer a majority shareholder of Live.me.
Subsequent to the amendment, we own 49.6% equity interest of Live.me and deconsolidated Live.me as we are no longer a majority shareholder of Live.me. In February 2025, Live.me ceased to be a related party of ours when Live.me redeemed all of our shares in Live.me, and we no longer holder any equity interest in Live.me.
Consequently, transactions with Beijing OrionStar should no longer be considered as related party transactions from that date onwards. From 2018, we entered into distribution and several AI robots purchase agreements with Beijing OrionStar.
Upon completion of the transaction, our equity interest in Beijing OrionStar increased to 72.91% and consolidated the financial results of Beijing OrionStar since November 30, 2023. Consequently, transactions with Beijing OrionStar should no longer be considered as related party transactions from that date onwards. From 2018, we entered into distribution and several AI robots purchase agreements with Beijing OrionStar.
Kingsoft Corporation have delegated approximately 37.8% voting power of our company held by Kingsoft Corporation to Mr. Sheng Fu, effective October 1, 2017. For further details, see “Item 4. Information on the Company—A.
Kingsoft Corporation have delegated approximately 37.4% voting power of our company held by Kingsoft Corporation to Mr. Sheng Fu, effective October 1, 2017. For further details, see “Item 4. Information on the Company—A. History and Development of the Company.” Kingsoft Corporation’s business address is Building D, Xiaomi Campus, No.33 Xierqi Middle Road, Haidian District, Beijing, People’s Republic of China.
From December 2018, we entered into several commissioned development and service agreements, with Beijing OrionStar, pursuant to which Beijing OrionStar agrees to provide technical and promotion service to us.
For the years ended December 31, 2022 and for the period ended November 30, 2023, we purchased products from OrionStar of RMB1.1 million and RMB1.0 million, respectively. From December 2018, we entered into several commissioned development and service agreements, with Beijing OrionStar, pursuant to which Beijing OrionStar agrees to provide technical and promotion service to us.
On February 16, 2017, Kingsoft Japan entered into an exclusive licensing agreement with a subsidiary of Kingsoft Corporation, pursuant to which Kingsoft Group granted Kingsoft Japan the exclusive right to use certain office software within Japan and to sub-license such software to original equipment manufacturers in Japan solely for their self-use and sale of products and services.
On February 16, 2017, Kingsoft Japan entered into an exclusive licensing agreement with a subsidiary of Kingsoft Corporation, pursuant to which Kingsoft Group granted Kingsoft Japan the exclusive right to sell, or authorize any third parties to sell, conduct marketing or promotion, and provide services to the end-users of the Japanese version of the office software developed by Kingsoft Group, within the territory of Japan.
For the years ended December 31, 2021, 2022 and 2023, we recognized total revenue of RMB9.6 million, RMB0.4 million and RMB1.0 million (US$0.1 million), respectively.
Inc From 2017, we entered into several service agreements with Pixiu. Inc, pursuant to which we provide technical, multi-cloud management and other services to Pixiu. Inc. For the years ended December 31, 2022, 2023 and 2024, we recognized total revenue of RMB0.4 million, RMB1.0 million and RMB1.2 million (US$0.2 million), respectively.
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Upon expiration of the initial term, the agreement was automatically renewed for three years pursuant to its terms. This agreement governs the following transactions between our company and Kingsoft Corporation: • Promotion services .
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Since then, the agreement has been renewed annually and c urrently remains in effect with an expiration date of August 1, 2025.
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We also purchase cloud services from Kingsoft Group.
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For the years ended December 31, 2021, 2022 and for the period ended November 30, 2023, we purchased products from OrionStar of RMB40.3 million, RMB1.1 million and RMB1.0 million (US$0.1 million), respectively.
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In 2020, we disposed an internet related business to Live.me with total consideration amounted to RMB11.1 million. Transactions with Pixiu. Inc From 2017, we entered into several service agreements with Pixiu. Inc, pursuant to which we provide technical, multi-cloud management and other services to Pixiu. Inc.

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