Fourth Paradigm Announces 2023 Annual Results
Paradigm Ecology was unveiled in November 2023.
Total Revenue Increased By 36.4% to RMB4,204 Million
Generative AI Accelerates Innovation
Maintains the Leading Position in China�s Enterprise AI Software
Industry
HONG KONG, Mar 20, 2024 - (ACN Newswire) - A leading enterprise AI
software company-Beijing Fourth Paradigm Technology Co., Ltd.
("Fourth Paradigm" or the "Company", Stock Code: 6682.HK) today
announced the consolidated annual results for the year ended
December 31, 2023 (the "Reporting Period").
Financial Highlights:
In 2023, the total revenue amounted to RMB4,204 million,
representing a year-on-year growth of 36.4%
- The revenue of the 4Paradigm Sage AI Platform (the "Sage AI
Platform") business grew by 68.0% year on year to RMB2,506 million,
accounting for 59.6% of the total revenue
- The SHIFT Intelligent Solutions business recorded revenue of
RMB1,283 million, accounting for 30.5% of the total revenue
- The revenue of the 4Paradigm SageGPT AIGS Services segment
amounted to RMB416 million, accounting for 9.9% of the total
revenue
Gross profit amounted to RMB1,980 million, representing a
year-on-year increase of 33.2% and a gross profit margin of
47.1%
The total R&D expenses further increased to RMB1,769.0 million,
with a R&D expense ratio of more than 40%
The adjusted net loss* declined by 17.6% year-on-year. The Company
reduced losses year-on-year since 2021
Operation Highlights:
In 2023, the Company maintained the leading position in China's
enterprise AI software industry, and has been ranked No. 1 by IDC
in terms of the Chinese machine learning platform market share for
five consecutive years since 2018.
In 2023, the Company continued to expand its customer base. The
total number of users increased to 445, with 139 lighthouse users,
representing a year-on-year growth of 33.7%. The average revenue
from lighthouse users was RMB18.38 million, and their NDER (net
dollar expansion rate)* was 115% in 2023
The Company has established three major business segments:
4Paradigm Sage AI Platform (4ParadigmSage), SHIFT Intelligent
Solutions (4Paradigm SHIFT), and 4Paradigm SageGPT AIGS Services
(4Paradigm AIGS):
- 4ParadigmSage: Currently, the number of models built on the Sage
AI Platform exceeds 10,000. The Company is about to release version
5.0 of the Sage AI Platform to further promote the extensive use of
AI technology by the end of March 2024
- 4Paradigm SHIFT: During the Reporting Period, the Company
released dozens of solution products, which are widely used in key
industries such as finance, energy and power, telecommunications
and transportation, driving the digital transformation of
enterprises and industries; Paradigm Ecology was unveiled in
November 2023. The first batch of more than 40 partners joined
Paradigm Ecology, with applications in dozens of industry
scenarios.
- 4Paradigm AIGS: In April, the Company formally announced SageGPT
3.0. SageGPT positioned as a software development platform built
upon large model capabilities, and put forward AIGS (AI-Generated
Software: Refactoring enterprise software with generative AI)
technical strategy. In 2023, the large model business enhanced
generative related services for hundreds of enterprises and
partners. The SageGPT large model has already been registered in
accordance with the Provisional Administrative Measures for
Generative Artificial Intelligence Services.
* Adjusted Net Loss: the Company defines adjusted net loss as loss
for the year adding back share-based compensation, interest expense
on redemption liabilities and listing expenses, the same below.
* NDER (net dollar expansion rate) reflects customer stickiness and
willingness to pay. In this announcement, the denominator is the
revenue contribution of lighthouse users in 2022, and the numerator
is the revenue generated by the retained lighthouse users in 2023,
the same below.
In 2023, Fourth Paradigm continued to expand its customer base and
increase the average revenue of customers, recorded robust growth
in total revenue and have reduced losses year-on-year since 2021.
During the reporting period, the Company recorded robust growth in
total revenue, up by 36.4% year on year to RMB4,204.1 million,
which was mainly driven by the significant increase in revenue from
Sage AI Platform. The revenue of the 4Paradigm Sage AI Platform
(the "Sage AI Platform") business grew by 68.0% year on year to
RMB2,506 million, accounting for 59.6% of the total revenue. The
SHIFT Intelligent Solutions business recorded revenue of RMB1,283
million, accounting for 30.5% of the total revenue. The revenue of
the 4Paradigm SageGPT AIGS Services segment amounted to RMB416
million, accounting for 9.9% of the total revenue. The Company's
gross profit amounted to RMB1,980 million, representing a
year-on-year increase of 33.2% and a gross profit of 47.1%. The
total number of users increased to 445, with 139 lighthouse users,
representing a year-on-year growth of 33.7%. The Company insists on
creating value for customers. During the reporting period, the
average revenue from lighthouse users was RMB18.38 million, and
their NDER (net dollar expansion rate) was 115% in 2023. The
Company emphasized technology investment. The total R&D
expenses further increased to RMB1,769.0 million, with a R&D
expense ratio of more than 40%. The Company has set a clear goal of
profitability. Full-year adjusted net loss reduced by RMB88.88
million or 17.6% year-on-year. The Company reduced losses
year-on-year since 2021.
Three Major Business Segments Develop Cooperatively, SageGPT
Industrial Large Model Makes Breakthroughs in Commercialization in
Multiple Domains
Currently, the Company has established three major business
segments: 4Paradigm Sage AI Platform (4ParadigmSage), SHIFT
Intelligent Solutions (4Paradigm SHIFT), and 4Paradigm SageGPT AIGS
Services (4Paradigm AIGS).
The Sage AI Platform is Fourth Paradigm's platform for developing
AI models. As the core of all 4Paradigm businesses, the Sage AI
Platform greatly reduces the threshold of AI model building,
produces standardized models and efficiently reuses them via
powerful AI infrastructure, which reduces the average model
building cycle from half a year to days, and facilitates the
extensive AI applications. Currently, the number of models built on
the Sage AI Platform exceeds 10,000.
The SHIFT Intelligent Solutions are a series of intelligent
solutions for various industries developed based on the underlying
AI capabilities of 4Paradigm and the industry practice experience
of 4Paradigm and its partners. It aims to empower the digital and
intelligent transformation of many industries with leading AI
capabilities to enhance the core competitiveness of enterprises.
During the Reporting Period, the Company released dozens of
solution products, which are widely used in key industries such as
finance, energy and power, telecommunications and transportation,
driving the digital transformation of enterprises and industries.
Paradigm Ecology was unveiled in November 2023. Paradigm Ecology is
committed to providing end-to-end solutions for various industries
based on the Company's definition of the future direction of the
industry (the "North Star System") and the Company's core technical
capabilities, in partnership with the Company's ecological
partners. The first batch of more than 40 partners joined Paradigm
Ecology, with applications in dozens of industry scenarios.
In February 2023, the Company was the first to release "SageGPT"
1.0, a self-developed platform product for developing industrial
large model, which was among the first commercialized large model
products in China. SageGPT large model is in the global leading
position in terms of technical indicators like understanding,
reasoning and generative capability. In 2023, it was selected as
one of the first 7 model partners in Beijing, and then selected as
one of the first "2023 Trusted AI Cases - Excellent Cases of Large
Model R&D Application and Tool Platform" by the China Academy
of Information and Communications Technology. The SageGPT large
model has already been registered in accordance with the
Provisional Administrative Measures for Generative Artificial
Intelligence Services in China. In addition to building first-class
large model products, the Company has also injected considerable
R&D resources to make large models more "intelligent" in
multimodality, copilot and Chain-of-Thought (CoT).
In April 2023, along with the release of SageGPT 3.0, the Company
first proposed its AIGS (AI-Generated Software) strategy to
refactor enterprise software with generative AI and positioned the
Company's products as a new development platform based on
multi-modal large models to enhance the experience and development
efficiency of enterprise software.
In 2023, the Company's large model business was widely expanded to
such fields as finance, manufacturing, healthcare, retail, real
estate brokerage, education and energy, enhancing generative
related services for hundreds of enterprises and partners. In the
past year, "SageGPT" built a network operation platform intelligent
assistant for a telecommunication client to empower its frontline
employees, co-built a large model of real estate brokerage together
with a leading real estate brokerage firm, refactored the
industrial designing software of a transportation manufacturer,
enabling the search and automated assembly for 3D parts through a
large model. Such case was listed in the MIT Technology Review as
an "Advanced Application Case of China's Large AI Model".
Implementing Forward-looking R&D Investments and Talent
Strategies
Fourth Paradigm recognizes that talent and innovation are the core
drivers of sustainable growth, so the Company is committed to
implementing forward-looking R&D investments and talent
strategies. The Company reinvest a significant percentage of the
annual revenue in R&D areas that drive long-term strategic
value. In 2023, the Company's R&D spending exceeded RMB1.7
billion, with a R&D expense ratio of more than 40%. These
investments are made not only in research and development of new
technologies, but also in the continuous enhancement of existing
products and solutions to ensure that the Company remains at the
forefront of the industry and maintain competitive advantages.
In 2023, Fourth Paradigm made significant breakthroughs in many
cutting-edge technologies, received numerous recognitions from
academia and industry, and had 25 papers accepted by top-class AI
conferences and journals. The Company's biocomputing technology was
featured in a sub-journal of Nature.
In terms of Strategic Outlooks, Dr. Dai Wenyuan, Chairman of the
Board, Executive Director, Chief Executive Officer and General
Manager of Beijing Fourth Paradigm Technology Co., Ltd. said, "In
the era of AI, enterprises need to be empowered by new
technologies, and thus need AI software companies. This is Fourth
Paradigm's opportunity in the era: AI technology will breed a new
generation of new forces and new giants in enterprise software.
What does Fourth Paradigm want to become? We want to become an
enterprise software company that can empower thousands of
industries in the era of AI. Over the past nearly 10 years, we have
been insisted on innovation-driven development and have achieved
breakthroughs in key technologies. Since 2018, we have been ranked
No. 1 in terms of the Chinese machine learning platform market
share for five consecutive years. With competitiveness and brand
power, our AI products have won a stronger integration force of
ecological resources. In the next decade, for Fourth Paradigm,
challenges and opportunities coexist. We will always adhere to
technology investment, from large models, automatic machine
learning, Agent, to robots, etc., leading the development trend of
'AI +'. We will also take advantage of our industry influence to
work with ecological partners to empower the intelligent
transformation of industries with AI technology."
Source: Beijing Fourth Paradigm Technology Co., Ltd.
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