CLSA has released a research report following a recent investor call with Z.AI (02513), during which management detailed its latest operational status after concluding a strategic financing package worth US$5 billion. The firm has lifted its year-end Annual Recurring Revenue (ARR) guidance from US$2.4 billion to US$3 billion, with an "Outperform" rating maintained on the stock.

The strategic financing comprises a mix of H-share placement and convertible bonds, totaling US$5 billion. Management highlighted that following these two funding rounds, computing capacity is no longer a near-term constraint on achieving ARR targets. The company has also forged partnerships with both domestic and international cloud service providers, which is expected to unlock greater global monetization potential.

During the call, management disclosed that recent ARR has surpassed US$1.8 billion, prompting the upward revision of the year-end ARR target to US$3 billion. This optimism is fueled by robust demand in programming applications and the rapid expansion of its "cowork" segment. Based on current computing capacity multipliers, management projects that the US$5 billion investment in compute resources can translate into at least US$2.4 billion in revenue.

Since the launch of GLM-5.3 a month ago, the cowork solution has already secured over RMB 1 billion in orders, which are expected to be recognized over the next one to two years. Furthermore, more than 100 enterprises have integrated GLM into their cybersecurity products and workflows. Meanwhile, the user base for Zcode has surpassed 2 million, positioning it among the top three programming agents in China.