Force Paradigm Announces Financial Results for First Quarter Ended March 31, 2024

Financial Highlights:

• Total revenue for the three months ended March 31, 2024 was RMB828 million, an increase of 28.5% year-on-year.
  • Revenue from 4Paradigm Sage AI Platform (hereinafter referred to as the “Sage AI Platform”) business increased 84.8% year-on-year to RMB 502 million, accounting for 60.6% of total revenue.
  • Revenue from SHIFT’s intelligent solution business was RMB 249 million, accounting for 30.1% of total revenue.
  • Revenues from the 4Paradigm SageGPT AIGS services segment were RMB 77 million, accounting for 9.3% of total revenues.
• Gross profit was RMB 341 million, up 21.1% year-on-year, with a gross profit margin of 41.2%.
• Total R&D expenditure was RMB 348 million, with the R&D expenditure ratio being 42.0%.

Highlights of the operation:

• For the three months ended March 31, 2024, Fourth Paradigm had 124 total users and 54 lighthouse users, with average revenue contribution from the lighthouse user group of RMB8.9 million, representing an increase of 64.0% year-on-year. From January 1, 2020 to March 31, 2024, the Company served a total of 1,058 users.
• 4ParadigmSage: In March 2024, a new platform for building large-scale industry-specific models, 4Paradigm Sage AI Platform 5.0, was released. Based on 4Paradigm Sage AI Platform 5.0, Fourth Paradigm has worked with lighthouse users and partners to build a number of representative industry-specific large-scale model cases in fields such as automotive manufacturing, healthcare, and disaster prevention.
• 4. Paradigm Shift: In the three months ended March 31, 2024, Fourth Paradigm released dozens of solution products for industries including finance, retail, manufacturing, energy, construction, telecommunications operators and healthcare, accelerating the expansion of the company’s business domain.
• 4Paradigm AIGS: In the three months ended March 31, FourParadigm continued to iterate and optimize its AIGS CodeX product, a generative AI-based auxiliary programming tool. The company has conducted extensive research with leading enterprises in the industry, including financial companies, operators and new energy vehicle companies, in areas such as programming development.

HONG KONG, May 28, 2024 – (ACN Newswire) –Beijing Force Paradigm Technology Co., Ltd. (“Force Paradigm” or the “Company”, stock code: 6682.HK), a leading enterprise AI software company, today announced its financial results for the three months ended March 31, 2024 (the “Period”).

During the quarter, amid the seasonal effects of the industry and market volatility, Fourth Paradigm’s core business performed well and achieved solid growth. During the quarter, Fourth Paradigm’s total revenue was RMB828 million, up 28.5% year-on-year. Gross profit was RMB341 million, up 21.1% year-on-year, and gross margin was RMB41.2%, up 41.2% year-on-year. The company continued to diversify its customer base by actively acquiring new customers, improving the digital transformation experience, and increasing the product stickiness of existing customers. During the quarter, Fourth Paradigm had a total of 124 users and 54 lighthouse users, with the average revenue contribution from the lighthouse user group being RMB8.9 million, up 64.0% year-on-year. From January 1, 2020 to March 31, 2024, Fourth Paradigm served a total of 1,058 users. The Company focuses on innovation-driven development, and its research and development expenses during the period were RMB348 million, with an R&D expense rate of 42.0%.

Core business sales up 84.8% year-on-year, large industry-specific models demonstrate significant economies of scale

During the period, 4Paradigm Sage AI Platform business revenue was RMB 502 million, up 84.8% year-on-year. Revenue from 4Paradigm Sage AI Platform business accounted for 60.6% of total revenue.

At the end of March 2024, “4Paradigm Sage AI Platform 5.0” was released. Currently, most language-based large-scale models can solve the problem of generating the next text/image/video. However, for enterprises, their core demands (i.e., strategic upgrades, performance growth, strengthening competitiveness, etc.) need to be addressed urgently. There is an increasing demand to enhance the core efficiency of enterprises through the promotion of digitalization and intelligentization. Based on the technical principle of predicting the next arbitrary modality, “4Paradigm Sage AI Platform 5.0” can build industry-specific large-scale models with data of different modalities for various industry scenes, so that the application field of industry-specific large-scale models is greatly expanded and sufficient large-scale models are supplied to enterprises.

This is the fifth production version in ten years. Over the past decade, Fourth Paradigm has been working at various stages to solve core problems in AI applications.

• The 4Paradigm Sage AI Platform version 1.0 significantly expands model parameters through a high-dimensional, real-time self-learning framework to replace enterprises’ traditional expert, rule-based decision-making engines.
• 4Paradigm Sage AI Platform version 2.0 sees the release of the HyperCycle low-threshold development tool based on automated machine learning, significantly lowering the barrier to model development and enabling customers to build large-scale industry-specific models on their own.
• 4Paradigm Sage AI Platform version 3.0 defines full process standards to accelerate AI application scenarios, reduce enterprise data governance time by 95%, significantly improve the efficiency of AI applications, and enable efficient application of industry-specific large-scale models.
• 4Paradigm Sage AI Platform version 4.0 sets out a “North Star Metric”1 to identify high-value business scenarios for enterprises, enabling large-scale industry-specific models to contribute to a company’s core competitive edge.

1. A North Star Metric is a business metric that is deeply linked to a company’s core values ​​and helps the company focus on the most important growth drivers, such as revenue growth, profit improvement, and market share expansion, and guides decision-making and resource allocation.

During this period, along with the massive development of its core business, 4Paradigm’s other two businesses, SHIFT Intelligent Solutions and 4Paradigm SageGPT AIGS service segments, expanded steadily, effectively improving the company’s business scope and technological development efficiency.

During the period, SHIFT’s intelligent solution business achieved sales of RMB 249 million, accounting for 30.1% of total sales. During the period, Fourth Paradigm released dozens of solution products for major industries such as finance, energy, construction, telecommunications carriers and transportation, accelerating the expansion of the company’s business domains.

During the period, 4Paradigm SageGPT AIGS service division achieved sales of RMB 77 million, accounting for 9.3% of total sales. During the period, 4Paradigm iterated and optimized its AIGS Code X product, a generative AI-based auxiliary programming tool. The product covers the entire research and development process of enterprises and provides one-stop services including code rewriting, annotation generation, code correction, code reconstruction, unit test generation, etc. Build a standardized “application production line” and comprehensively improve organizational efficiency. As of March 31, 2024, 4Paradigm has been conducting in-depth investigations with many leading enterprises in the industry, such as financial companies, operators, and new energy vehicle enterprises, in areas such as programming development.

Advances in large-scale model business applications: Industry-specific large-scale models effectively improve production and operation efficiency in multiple industries

During the quarter, 4Paradigm has built a number of typical industry-specific large-scale model cases with lighthouse users and partners in the fields of automobile manufacturing, healthcare, disaster prevention, etc. based on “4Paradigm Sage AI Platform 5.0”. We will continue to promote the practical application of generative AI technology and large-scale model products, not only significantly improving the efficiency of our core business, but also contributing to the sustainable development of society and the economy.

During the period, Force Paradigm partnered with domestic smart manufacturing enterprises to achieve full integration of factory operation data through artificial intelligence. This intelligent platform has increased the factory’s production efficiency by 11.4%. In the healthcare industry, Force Paradigm is improving the quality and efficiency of healthcare services through artificial intelligence technology and industry-specific large-scale model capabilities, reducing the burden of disease and improving consumer health. Force Paradigm worked with the Standardized Metabolic Disease Management Center to develop a large-scale model of chronic disease management. The model can assess the risk of five common and prevalent chronic diseases, including cardiovascular, cardiovascular, stroke, diabetes, and hypertension, over a three-year period, with a three-fold improvement in accuracy.

The large-scale flood control model can deploy flood control works in advance to respond to the summer flood season. During the period, Fourth Paradigm worked with the water conservancy department to build a large-scale intelligent flood control model to respond to the summer flood season. This large-scale flood control model optimizes emergency response and resource allocation through real-time monitoring and prediction of flood risks, provides early warning, reduces disaster losses, protects residents’ lives and property, and enhances the disaster resilience of the whole society.

Dr. Dai Wenyuan, Chairman of the Board, Executive Director, CEO and General Manager of Beijing Fourth Paradigm Technology Co., Ltd., said: “In the era of artificial intelligence, our company is committed to using artificial intelligence to improve the core business of enterprises and help them enhance their core competitiveness. As of March 31, 2024, our company has launched the “4Paradigm Sage AI Platform 5.0”, which uses the capabilities of generative AI to build customer-specific basic large-scale models, further lowering the entry barrier for enterprises to develop large-scale models. We are pleased to see the application of industry-specific large-scale models playing a role in the core business of more and more industries. “

Topic: Press Release Summary
sauce: Beijing Force Paradigm Technology Co., Ltd.
Category: Daily Finance, Daily News
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