Technology
Youdao Reports Second Quarter 2024 Unaudited Financial Results
Published
2 years agoon
By
HANGZHOU, China, Aug. 22, 2024 /PRNewswire/ — Youdao, Inc. (“Youdao” or the “Company”) (NYSE: DAO), an intelligent learning company with industry-leading technology in China, today announced its unaudited financial results for the second quarter ended June 30, 2024.
Second Quarter 2024 Financial Highlights
Total net revenues were RMB1.3 billion (US$181.9 million), representing a 9.5% increase from the same period in 2023.
– Net revenues from learning services were RMB643.8 million (US$88.6 million), representing a 5.5% decrease from the same period in 2023.
– Net revenues from smart devices were RMB166.7 million (US$22.9 million), representing a 25.0% decrease from the same period in 2023.
– Net revenues from online marketing services were RMB511.2 million (US$70.3 million), representing a 68.4% increase from the same period in 2023.Gross margin was 48.2%, compared with 47.0% for the same period in 2023.
“In the second quarter, our financial performance was robust, with operating cash inflow reaching an all-time high and operating loss narrowing significantly year-over-year. Leveraging our advanced large language model capabilities and data advantages, we upgraded our college admission consultation services in Youdao Lingshi to AI-based College Admission Advisers, enhancing both the timeliness and personalization of our services. Driven by RTA (Real-Time API) and AI tools advertising, our online marketing services achieved record net revenues of RMB511.2 million in the second quarter, an increase of 68.4% year-over-year. AI-driven subscription services continued to expand, with the introduction of new applications, including Mr. P AI Tutor, marking a nearly 200% year-over-year increase of total sales in the second quarter. Overall, in the first half of this year, our strategic focus on digital content services, online marketing services, and AI-driven subscription services has yielded significant results, with major financial indicators showing year-over-year improvement,” said Dr. Feng Zhou, Chief Executive Officer and Director of Youdao.
“Looking ahead, with our teams’ continued execution and barring unexpected market changes, we expect the business to achieve full-year positive operating income in the near future. Youdao’s strength lies in our unique ability to advance AI empowerment across business lines, combining technical strength with operational excellence. The rapid development of our online marketing and AI subscription services proves this and will continue to drive our growth. Our online courses, underpinned by high-quality content and differentiated services, are another pillar of our future growth. In the long term, the future of AI + education looks incredibly bright and we will strive to lead the charge,” Dr. Zhou concluded.
Second Quarter 2024 Financial Results
Net Revenues
Net revenues for the second quarter of 2024 were RMB1.3 billion (US$181.9 million), representing a 9.5% increase from RMB1.2 billion for the same period of 2023.
Net revenues from learning services were RMB643.8 million (US$88.6 million) for the second quarter of 2024, representing a 5.5% decrease from RMB680.9 million for the same period of 2023.
Net revenues from smart devices were RMB166.7 million (US$22.9 million) for the second quarter of 2024, representing a 25.0% decrease from RMB222.2 million for the same period of 2023, which was mainly attributable to the decreased unit price due to the change of product mix.
Net revenues from online marketing services were RMB511.2 million (US$70.3 million) for the second quarter of 2024, representing a 68.4% increase from RMB303.6 million for the same period of 2023. The year-over-year increase in revenues from online marketing services was primarily due to the increase in the sales of performance-based advertisements through third parties’ internet properties, which was driven by our continued investments in cutting-edge AI technology.
Gross Profit and Gross Margin
Gross profit for the second quarter of 2024 was RMB636.8 million (US$87.6 million), representing a 12.3% increase from RMB567.2 million for the same period of 2023. Gross margin was 48.2% for the second quarter of 2024, compared with 47.0% for the same period of 2023.
Gross margin for learning services was 60.0% for the second quarter of 2024, compared with 57.4% for the same period of 2023.
Gross margin for smart devices was 30.3% for the second quarter of 2024, compared with 35.8% for the same period of 2023. The decrease was mainly attributable to a lower revenue base of smart devices.
Gross margin for online marketing services was 39.1% for the second quarter of 2024, compared with 31.9% for the same period of 2023. The increase was mainly attributable to the improved gross margin profile of performance-based advertisements through third parties’ internet properties compared with the same period of last year.
Operating Expenses
Total operating expenses for the second quarter of 2024 were RMB709.3 million (US$97.6 million), compared with RMB856.3 million for the same period of last year.
Sales and marketing expenses for the second quarter of 2024 were RMB515.7 million (US$71.0 million), representing a decrease of 12.2% from RMB587.7 million for the same period of 2023. This decrease was attributable to the reduced marketing expenditures and outsourcing labor service fees in learning services in the second quarter of 2024.
Research and development expenses for the second quarter of 2024 were RMB153.0 million (US$21.1 million), representing a decrease of 25.4% from RMB205.1 million for the same period of 2023. The decrease was primarily due to the decreased headcount for research and development employees, leading to payroll savings in the second quarter of 2024.
General and administrative expenses for the second quarter of 2024 were RMB40.6 million (US$5.6 million), representing a decrease of 36.1% from RMB63.6 million for the same period of 2023. The decrease was primarily due to decreased expected credit losses on our accounts receivables, as well as the decreased headcount for general and administrative employees, leading to payroll savings in the second quarter of 2024.
Loss from Operations
As a result of the foregoing, loss from operations for the second quarter of 2024 was RMB72.6 million (US$10.0 million), compared with RMB289.1 million for the same period in 2023. The margin of loss from operations was 5.5%, compared with 24.0% for the same period of last year.
Net Loss Attributable to Youdao’s Ordinary Shareholders
Net loss attributable to Youdao’s ordinary shareholders for the second quarter of 2024 was RMB99.5 million (US$13.7 million), compared with RMB299.2 million for the same period of last year. Non-GAAP net loss attributable to Youdao’s ordinary shareholders for the second quarter of 2024 was RMB96.0 million (US$13.2 million), compared with RMB283.6 million for the same period of last year.
Basic and diluted net loss per American depositary share (“ADS”) attributable to ordinary shareholders for the second quarter of 2024 was RMB0.85 (US$0.12), compared with RMB2.45 for the same period of 2023. Non-GAAP basic and diluted net loss per ADS attributable to ordinary shareholders was RMB0.82 (US$0.11), compared with RMB2.32 for the same period of 2023.
Other Information
As of June 30, 2024, Youdao’s cash, cash equivalents, current and non-current restricted cash, time deposits and short-term investments totaled RMB568.5 million (US$78.2 million), compared with RMB527.1 million as of December 31, 2023. For the second quarter of 2024, net cash provided by operating activities was RMB250.2 million (US$34.4 million), capital expenditures totaled RMB3.8 million (US$0.5 million). Youdao’s ability to continue as a going concern is dependent on management’s ability to implement an effective business plan amid a changing regulatory environment, generate operating cash flows, and secure external financing for future development. To support Youdao’s future business, NetEase Group has agreed to provide financial support for ongoing operations. As of June 30, 2024, Youdao has received various financial support from the NetEase Group, including, among others, RMB878.0 million short-term loans, and US$126.5 million long-term loans with maturity dated March 31, 2027 drawn down under the US$300.0 million revolving loan facility.
As of June 30, 2024, the Company’s contract liabilities, which mainly consisted of deferred revenues generated from Youdao’s learning services, were RMB1.0 billion (US$142.9 million), compared with RMB1.1 billion as of December 31, 2023.
Share Repurchase Program
On November 17, 2022, the Company announced that its board of directors had authorized the Company to adopt a share repurchase program in accordance with applicable laws and regulations for up to US$20.0 million of its Class A ordinary shares (including in the form of ADSs) during a period of up to 36 months. This amount was subsequently increased to US$40.0 million in August 2023. As of June 30, 2024, the Company had repurchased a total of approximately 7.5 million ADSs for around US$33.8 million in the open market under the share repurchase program.
Conference Call
Youdao’s management team will host a teleconference call with simultaneous webcast at 6:00 a.m. Eastern Time on Thursday, August 22, 2024 (Beijing/Hong Kong Time: 6:00 p.m., Thursday, August 22, 2024). Youdao’s management will be on the call to discuss the financial results and answer questions.
Dial-in details for the earnings conference call are as follows:
United States (toll free):
+1-888-346-8982
International:
+1-412-902-4272
Mainland China (toll free):
400-120-1203
Hong Kong (toll free):
800-905-945
Hong Kong:
+852-3018-4992
Conference ID:
8395069
A live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.youdao.com.
A replay of the conference call will be accessible by phone one hour after the conclusion of the live call at the following numbers, until August 29, 2024:
United States:
+1-877-344-7529
International:
+1-412-317-0088
Replay Access Code:
8395069
About Youdao, Inc.
Youdao, Inc. (NYSE: DAO) is an intelligent learning company with industry-leading technology in China dedicated to developing and using technologies to provide learning content, applications and solutions to users of all ages. Building on the popularity of its online knowledge tools such as Youdao Dictionary and Youdao Translation, Youdao now offers smart devices, STEAM courses, adult and vocational courses, and education digitalization solutions. In addition, Youdao has developed a variety of interactive learning apps. Youdao was founded in 2006 as part of NetEase, Inc. (NASDAQ: NTES; HKEX: 9999), a leading internet technology company in China.
For more information, please visit: http://ir.youdao.com.
Non-GAAP Measures
Youdao considers and uses non-GAAP financial measures, such as non-GAAP net income/(loss) attributable to the Company’s ordinary shareholders and non-GAAP basic and diluted net income/(loss) per ADS, as supplemental metrics in reviewing and assessing its operating performance and formulating its business plan. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Youdao defines non-GAAP net income/(loss) attributable to the Company’s ordinary shareholders as net income/(loss) attributable to the Company’s ordinary shareholders excluding share-based compensation expenses and impairment of long-term investments. Non-GAAP net income/(loss) attributable to the Company’s ordinary shareholders enables Youdao’s management to assess its operating results without considering the impact of these items, which are non-cash charges in nature. Youdao believes that these non-GAAP financial measures provide useful information to investors in understanding and evaluating the Company’s current operating performance and prospects in the same manner as management does, if they so choose.
Non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. Non-GAAP financial measures have limitations as analytical tools, which possibly do not reflect all items of expense that affect our operations. In addition, the non-GAAP financial measures Youdao uses may differ from the non-GAAP measures uses by other companies, including peer companies, and therefore their comparability may be limited.
For more information on these non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of GAAP and non-GAAP Results” set forth at the end of this release.
The accompanying table has more details on the reconciliation between our GAAP financial measures that are mostly directly comparable to non-GAAP financial measures. Youdao encourages you to review its financial information in its entirety and not rely on a single financial measure.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.2672 to US$1.00, the exchange rate on June 28, 2024 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.
Safe Harbor Statement
This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Further information regarding such risks, uncertainties or factors is included in the Company’s filings with the SEC. The announced results of the second quarter of 2024 are preliminary and subject to adjustments. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.
For investor and media inquiries, please contact:
In China:
Jeffrey Wang
Youdao, Inc.
Tel: +86-10-8255-8163 ext. 89980
E-mail: IR@rd.netease.com
Piacente Financial Communications
Helen Wu
Tel: +86-10-6508-0677
E-mail: youdao@thepiacentegroup.com
In the United States:
Piacente Financial Communications
Brandi Piacente
Tel: +1-212-481-2050
E-mail: youdao@thepiacentegroup.com
YOUDAO, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(RMB and USD in thousands)
As of December 31,
As of June 30,
As of June 30,
2023
2024
2024
RMB
RMB
USD (1)
Assets
Current assets:
Cash and cash equivalents
454,536
500,811
68,914
Time deposits
277
282
39
Restricted cash
395
1,719
237
Short-term investments
71,848
62,501
8,600
Accounts receivable, net
354,006
393,111
54,094
Inventories
217,067
195,726
26,933
Amounts due from NetEase Group
26,117
68,104
9,371
Prepayment and other current assets
175,705
176,881
24,340
Total current assets
1,299,951
1,399,135
192,528
Non-current assets:
Property, equipment and software, net
70,906
59,513
8,189
Operating lease right-of-use assets, net
89,022
89,252
12,281
Long-term investments
51,396
77,469
10,660
Goodwill
109,944
109,944
15,129
Other assets, net
44,976
46,196
6,357
Total non-current assets
366,244
382,374
52,616
Total assets
1,666,195
1,781,509
245,144
Liabilities, Mezzanine Equity and Shareholders’ Deficit
Current liabilities:
Accounts payables
159,005
110,644
15,225
Payroll payable
282,679
194,622
26,781
Amounts due to NetEase Group
82,430
74,164
10,205
Contract liabilities
1,052,622
1,038,676
142,927
Taxes payable
52,781
47,482
6,534
Accrued liabilities and other payables
591,770
743,511
102,310
Short-term loans from NetEase Group
878,000
878,000
120,817
Total current liabilities
3,099,287
3,087,099
424,799
Non-current liabilities:
Long-term lease liabilities
49,337
42,265
5,816
Long-term loans from NetEase Group
630,360
905,553
124,608
Other non-current liabilities
16,314
16,879
2,323
Total non-current liabilities
696,011
964,697
132,747
Total liabilities
3,795,298
4,051,796
557,546
Mezzanine equity
37,961
38,532
5,302
Shareholders’ deficit:
Youdao’s shareholders’ deficit
(2,186,736)
(2,329,034)
(320,486)
Noncontrolling interests
19,672
20,215
2,782
Total shareholders’ deficit
(2,167,064)
(2,308,819)
(317,704)
Total liabilities, mezzanine equity and shareholders’ deficit
1,666,195
1,781,509
245,144
Note 1:
The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB7.2672 on the last
trading day of June (June 28, 2024) as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
YOUDAO, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(RMB and USD in thousands, except share and per ADS data)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
June 30,
2023
2024
2024
2024
2023
2024
RMB
RMB
RMB
USD (1)
RMB
RMB
Net revenues:
Learning services
680,920
717,996
643,762
88,585
1,413,341
1,361,758
Smart devices
222,157
181,198
166,722
22,942
434,906
347,920
Online marketing services
303,557
492,665
511,237
70,348
521,657
1,003,902
Total net revenues
1,206,634
1,391,859
1,321,721
181,875
2,369,904
2,713,580
Cost of revenues (2)
(639,459)
(710,356)
(684,942)
(94,251)
(1,200,879)
(1,395,298)
Gross profit
567,175
681,503
636,779
87,624
1,169,025
1,318,282
Operating expenses:
Sales and marketing expenses (2)
(587,651)
(455,440)
(515,711)
(70,965)
(1,152,856)
(971,151)
Research and development expenses (2)
(205,076)
(146,723)
(152,987)
(21,052)
(387,906)
(299,710)
General and administrative expenses (2)
(63,579)
(49,416)
(40,634)
(5,591)
(113,185)
(90,050)
Total operating expenses
(856,306)
(651,579)
(709,332)
(97,608)
(1,653,947)
(1,360,911)
(Loss)/Income from operations
(289,131)
29,924
(72,553)
(9,984)
(484,922)
(42,629)
Interest income
2,154
975
917
126
4,448
1,892
Interest expense
(17,087)
(20,334)
(20,816)
(2,864)
(32,850)
(41,150)
Others, net
5,730
2,892
(909)
(125)
12,108
1,983
(Loss)/Income before tax
(298,334)
13,457
(93,361)
(12,847)
(501,216)
(79,904)
Income tax (expenses)/benefits
(4,890)
1,028
(7,053)
(970)
(8,091)
(6,025)
Net (loss)/income
(303,224)
14,485
(100,414)
(13,817)
(509,307)
(85,929)
Net loss/(income) attributable to noncontrolling interests
4,065
(2,053)
939
129
5,795
(1,114)
Net (loss)/income attributable to ordinary shareholders of the Company
(299,159)
12,432
(99,475)
(13,688)
(503,512)
(87,043)
Basic net (loss)/income per ADS
(2.45)
0.11
(0.85)
(0.12)
(4.12)
(0.74)
Diluted net (loss)/income per ADS
(2.45)
0.10
(0.85)
(0.12)
(4.12)
(0.74)
Shares used in computing basic net (loss)/income per ADS
122,247,009
118,317,220
117,173,272
117,173,272
122,257,874
117,745,253
Shares used in computing diluted net (loss)/income per ADS
122,247,009
118,928,848
117,173,272
117,173,272
122,257,874
117,745,253
Note 1:
The conversion of Renminbi (RMB) into United States dollars (USD) is based on the noon buying rate of USD1.00=RMB7.2672 on the last trading day of June (June 28, 2024)
as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.
Note 2:
Share-based compensation in each category:
Cost of revenues
1,049
778
727
100
2,308
1,505
Sales and marketing expenses
2,416
1,136
337
46
3,547
1,473
Research and development expenses
5,618
3,503
939
129
10,403
4,442
General and administrative expenses
3,261
2,479
1,506
208
6,582
3,985
YOUDAO, INC.
UNAUDITED ADDITIONAL INFORMATION
(RMB and USD in thousands)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
June 30,
2023
2024
2024
2024
2023
2024
RMB
RMB
RMB
USD
RMB
RMB
Net revenues
Learning services
680,920
717,996
643,762
88,585
1,413,341
1,361,758
Smart devices
222,157
181,198
166,722
22,942
434,906
347,920
Online marketing services
303,557
492,665
511,237
70,348
521,657
1,003,902
Total net revenues
1,206,634
1,391,859
1,321,721
181,875
2,369,904
2,713,580
Cost of revenues
Learning services
290,155
264,759
257,482
35,431
568,280
522,241
Smart devices
142,544
122,060
116,274
16,000
271,132
238,334
Online marketing services
206,760
323,537
311,186
42,820
361,467
634,723
Total cost of revenues
639,459
710,356
684,942
94,251
1,200,879
1,395,298
Gross margin
Learning services
57.4 %
63.1 %
60.0 %
60.0 %
59.8 %
61.6 %
Smart devices
35.8 %
32.6 %
30.3 %
30.3 %
37.7 %
31.5 %
Online marketing services
31.9 %
34.3 %
39.1 %
39.1 %
30.7 %
36.8 %
Total gross margin
47.0 %
49.0 %
48.2 %
48.2 %
49.3 %
48.6 %
YOUDAO, INC.
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(RMB and USD in thousands, except per ADS data)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
June 30,
2023
2024
2024
2024
2023
2024
RMB
RMB
RMB
USD
RMB
RMB
Net (loss)/income attributable to ordinary shareholders of the Company
(299,159)
12,432
(99,475)
(13,688)
(503,512)
(87,043)
Add: share-based compensation
12,344
7,896
3,509
483
22,840
11,405
impairment of long-term investment
3,240
–
–
–
3,240
–
Non-GAAP net (loss)/income attributable to ordinary shareholders of the
Company
(283,575)
20,328
(95,966)
(13,205)
(477,432)
(75,638)
Non-GAAP basic net (loss)/income per ADS
(2.32)
0.17
(0.82)
(0.11)
(3.91)
(0.64)
Non-GAAP diluted net (loss)/income per ADS
(2.32)
0.17
(0.82)
(0.11)
(3.91)
(0.64)
View original content:https://www.prnewswire.com/news-releases/youdao-reports-second-quarter-2024-unaudited-financial-results-302228349.html
SOURCE Youdao, Inc.
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About Haloid Solutions Research
Haloid’s Starlink poll drew on respondents to its LMR brand loyalty study, which measures radio administrators’ sentiment toward the ownership and after-sales experience. Haloid’s LMR research is sponsored by investors in the mission-critical communications space.
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SOURCE HALOID SOLUTIONS
Technology
Newborn Town and Viggle Launch AI-Powered 3D Interactive Game, Bringing World Models to Social Gaming
Published
34 minutes agoon
October 26, 2026By
HONG KONG, Oct. 26, 2026 /PRNewswire/ — Recently, Newborn Town’s game-oriented social platform TopTop has launched “Slap Showdown”, an AI-powered 3D interactive mini-game developed in collaboration with Viggle, a company specializing in physics-native world models. The launch brings world model technology into social gaming, offering users a more personalized and engaging interactive experience.
Developed by TopTop and powered by Viggle’s self-developed Joint Space-Time (JST) world model, “Slap Showdown” lets users turn uploaded photos into customized 3D characters and take them straight into the game.
Launched in September, “Slap Showdown” has gained particular traction in Japan, among Spanish-speaking users in North America, and across the Middle East. It is now available in multiple countries and regions worldwide.
From Better Gameplay to a Richer Ecosystem: How World Models Could Redefine Social Gaming on TopTop
In terms of gameplay, “Slap Showdown” combines AI-generated 3D characters with multiplayer interaction. Players can simply upload a photo from their phone and generate a personalized 3D character in around 30 seconds, whether it’s an anime protagonist, a cyberpunk cyborg, or a LEGO minifigure. They can then bring their custom characters into the game and face off against other players in fun, interactive battles.
As players use controls such as press-and-hold, tap, and drag, the 3D characters respond with realistic, physics-based movements. This takes AI-generated characters beyond visual customization, integrating them directly into the gameplay experience.
According to TopTop’s operations team, “Slap Showdown” has attracted a growing base of highly engaged, high-spending-potential players in its first month since launch. The game has recorded a 97% match completion rate, while its game-start rate has also exceeded the platform-wide average.
The depth of user engagement is further illustrated by individual player activity. One player in Japan completed 1,041 matches over 22 days, reaching a daily peak of 151 matches and averaging one match every 9.5 minutes. Another particularly avid player in Eastern Europe completed 735 matches in just 11 days, averaging 66.8 matches per day and peaking at 126 matches in a single day.
For a UGC-driven social gaming platform such as TopTop, mini-games serve as entry points and traffic drivers, while social features underpin retention and monetization. Personalized 3D avatars add another dimension to that experience. Beyond their visual appeal, they give users new ways to express themselves, interact with friends and share memorable moments. In turn, richer gameplay and more meaningful social interactions can help improve retention, attract new users and strengthen engagement across the platform.
“Slap Showdown” marks a successful step in TopTop’s efforts to deepen its application of AI technology, as well as a starting point for using world models to enhance gaming and social experiences. TopTop’s operations team said future game releases could make greater use of AI-powered 3D generation, extending beyond avatars to include customized environments. Existing games could also be revitalized by the introduction of new gameplay features, potentially driving stronger retention and user acquisition.
Beyond enriching gameplay, world model capabilities could also reshape social interaction itself, enabling more immersive, face-to-face experiences in virtual spaces. “We’re constantly exploring how AI can transform gaming and social interaction, while bringing new energy and capabilities to our UGC ecosystem,” TopTop’s operations team said.
Viggle Unveils Physics-Native Model JST-2, Setting Its Sights on Becoming the Infrastructure Layer for Physical AI
The world model technology powering “Slap Showdown” is provided by Viggle.
Founded in 2022, Viggle has focused on developing physics-native world foundation models. Its self-developed JST model can generate 3D characters, motion and environments directly, providing a foundation for gaming and a growing range of AI applications.
Viggle previously attracted widespread attention with Meme Maker, its AI-powered video creation product. The tool enables users to animate static characters and generate videos by applying specified movements, making AI character animation and video creation more accessible. In August 2024, Viggle raised USD 19 million in a Series A funding round led by Silicon Valley venture capital firm Andreessen Horowitz (a16z).
However, video creation was an early application of this technology. Viggle’s longer-term ambition is to make JST a foundational technology for AI-powered experiences across gaming, social platforms and other applications.
Viggle is now further expanding its technological boundaries. On 19 October, Viggle launched JST-2 in full, likening its significance for world models to GPT-2’s role in the evolution of language models.
Unlike many world models that infer physical structure indirectly from pixels, JST-2 is built around a physics-native architecture designed to learn the structure and dynamics of the 3D world directly. Its underlying representation consists of units resembling digital “atoms.” Each has a defined position in three-dimensional space, along with physical properties such as material, color and mass, and information describing how it moves and responds to forces. This allows the model to do more than generate convincing images. It can represent and generate 3D characters, motion and scenes with an underlying understanding of their physical properties.
To support this approach, Viggle has developed an integrated technology stack spanning tokenization, model architecture, data engine, pre-training and post-training. After four years of research and development, JST-2 can generate characters, motion and scenes within a single unified architecture.
Compared with other approaches, JST-2 also demonstrates cost efficiency. JST-2 can generate a 3D scene in seconds, at an inference cost of less than one US cent. Once created, the content can be rendered locally without repeatedly running the foundation model to generate each frame.
It is noteworthy that world model technology remains at an early stage, but Viggle is already working toward more advanced capabilities.
Its next-generation model, JST-3, is intended to become a comprehensive world simulator. Such a system could underpin future game and graphics engines, while also serving as a virtual training environment for robotics and other forms of physical AI.
The longer-term goal is for JST-3 to learn the physical rules governing its simulated world directly from data, rather than relying on rules explicitly written by developers.
For Newborn Town, its investment in and partnership with Viggle represents an important step in exploring how advanced AI can reshape social gaming, promoting a deep integration of AI technology with its business operations.
As a leading global social entertainment company, Newborn Town has continued to deepen the use of AI across key areas in recent years, including product R&D, social recommendation systems, intelligent operations, safety and risk management, and marketing and user acquisition, supporting ongoing business growth.
Meanwhile, the company also continued to invest across the AI ecosystem, backing projects in areas including world models, AI companionship, AI Agents and AI interactive gaming. These investments have further enriched its AI application ecosystem, with Viggle among the AI companies previously backed by Newborn Town.
“Slap Showdown” represents an early step in bringing world models into social gaming. For Newborn Town and Viggle, the next challenge is to turn increasingly sophisticated AI capabilities into experiences that users find genuinely engaging — and compelling enough to keep coming back.
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SOURCE Newborn Town
Technology
HKICEC Launches First-Ever Global Mobile Exchange Pavilion at Mobile Electronics Show
Published
34 minutes agoon
October 26, 2026By
Charting a New Milestone with Outstanding Achievements
HONG KONG, Oct. 26, 2026 /PRNewswire/ — The Hong Kong International Communications Electronic Chamber (HKICEC) made a landmark debut at the Global Sources Mobile Electronics Show, held from October 18-21, 2026, with the inaugural launch of the HKICEC Global Mobile Exchange Pavilion. Spanning 600 square meters, the pavilion brought together nearly 60 industry leaders from mainland China, Hong Kong, India, Japan, the UAE, the US and the UK. As the largest themed pavilion in the mobile electronics sector and a premier highlight of the exhibition, this event marks a new developmental milestone for HKICEC. The pavilion underscores the chamber’s dedication to bridging global markets and serving the communications and electronics industry, injecting vital new momentum into the synergy between Hong Kong’s technology sector and international trade.
The grand opening ceremony on October 18 marked the official launch of the first B2B pavilion in Hong Kong and Asia dedicated exclusively to mobile communications equipment. The milestone event was officiated by a distinguished lineup of devices global business, including Dr. the Hon. Starry Lee Wai King, GBS, JP, Member of the Standing Committee of the National People’s Congress and President of the Legislative Council; Mr. Zhu Xiaodong, Director of the Kowloon Affairs Department of the Liaison Office of the Central People’s Government in the HKSAR; Dr. the Hon. Horace Cheung Kwok Kwan SBS JP, Deputy Secretary for Justice, HKSAR; Mr. Liu Maozhou, Level 1 Bureau Rank Official, the Economic and Financial Department II, Liaison Office of the Central People’s Government in the HKSAR; Mr. Ho Lap Ki, Denny, JP, District Officer (Kwun Tong), Home Affairs Department; Mr James Liu, CEO of Global Sources; and Mr. Jacky Tse, Chairman of HKICEC, alongside HKICEC Management team. Together, they witnessed the official launch of the first B2B pavilion in Hong Kong and Asia dedicated to mobile communications equipment. The ceremony drew over a hundred political and business leaders, industry representatives, international exhibitors, and major media outlets, reflecting the event’s importance and the industry’s green trading development. Following the inauguration, officials toured the pavilion for high-level discussions with global exhibitors, signaling robust institutional backing for the industry and HKICEC’s strategic expansion.
During the four-day exhibition, the pavilion experienced a continuous flow of visitors. Communications and electronics suppliers and global buyers from overseas visited specifically for business matchmaking and negotiations, unlocking numerous commercial opportunities. Notably, the pavilion also featured a retrospective exhibit of 16 classic mobile phones, tracing the industry’s evolution from early ‘brick’ devices to Mainland China’s first official Apple release, the iPhone 3GS. The historical display proved to be a standout attraction, gathering large crowds throughout the event.
Beyond the exhibition floor, the chamber partnered with Global Sources to co-host an international forum on October 19. Under the theme ” From New Devices to New Life: Building a Global Mobile Device Lifecycle Ecosystem”, the event gathered experts from ecoATM, PCS Wireless, Cenwood, Our Hong Kong Foundation, and the Global Mobile Association. They engaged in profound discussions on cutting-edge topics including the global economic landscape, inventory management, ESG development, the circular ecology of new and used devices, and AI technology. Attended by over 200 international representatives, the forum successfully catalyzed cross-border collaboration and established a new standard for sustainability discourse in the global mobile industry.
As a capstone to the comprehensive four-day events, HKICEC convened over 500 industry leaders, VIPs, and exhibitors for a high-profile networking banquet designed to accelerate cross-border business alliances. The gathering provided a premier platform for delegates to solidify collaborative ties and exchange strategic insights initiated from the pavilion. Ahead of the exhibition’s conclusion, a special ” Pearl Of The Orient • Victoria Harbour Cruise Party” was organized to showcase Hong Kong’s unique charm as a cosmopolitan city to global guests, providing a memorable networking experience against Hong Kong’s iconic skyline to formally cap off the week’s successes.
High-resolution images: https://bit.ly/3WqHMxu
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SOURCE The Hong Kong International Communications Electronic Chamber (HKICEC)
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