Brian Kinstlinger: Great. Thanks so much. Just doing a follow-up to the answer you just gave on the revenue drivers, you said overseas has gone from 3% of bookings to 10%. What products that you sell or services are most being bought by these overseas customers? Is it EngageLab or is it some of your other services?
Shan-Nen Bong: Hi, Brian, this is Shan-Nen. Yes, those are 100% from EngageLab.
Brian Kinstlinger: Great. So I guess, if I understand correctly, EngageLab is a product that’s helping customers choose data storage locations. You own the networks or are these partners of yours? And then how are you acquiring customers for this product? That would be helpful. Thanks.
Shan-Nen Bong: No. Brian, the EngageLab is the push notification that will help the customers in outside of China to do the notification, the messaging, so it’s nothing to do with the storage, which means that a customer in, say, like Singapore, they have app, App, they would like to reach out to their customers or users in Southeast Asia. We help them to do the push notification in Singapore. This is exactly what we are doing since 2021 in China, just that we replicate the product overseas.
Brian Kinstlinger: Okay. And then you said you expected a recovery in subscription services. What’s driving this recovery in your view? I suspect the environment remains challenging.
Shan-Nen Bong: Yes, I think there’s a couple of things. One is, simply because the Q1 was low season, that’s a given. And right now, what we are seeing is customers are — again, people are trying to be more cost-efficient, they try to get the best view of their services, so they’re more likely to outsource to us, which is the — one of their best partners in terms of doing the push notification. So this is kind of like changing the mindset of rather for them to invest a lot of money, people, engineers to do it in-house, they are going outsourced to third-party like us. I guess, good numbers that I can share with you. Based on what we are seeing right now, in Q2, we have the April and May numbers in already, and based on this, the trajectory that we’re looking at is the Developer Service subscription business, we expect to have double-digit growth in Q2 quarter-over-quarter. So you can see the numbers are looking good and people are buying our services.
Brian Kinstlinger: Yes, and then value-added services really bottomed out you mentioned, and obviously, the advertising market is quite challenging. I don’t think that’s changing right now. So what’s the outlook for that business? Can it decline further if the market remains weak or how do you manage that business right now?
Shan-Nen Bong: Yes, based on what we are seeing, no, the value-added service remains to be fairly flat. We do not expect it to have good numbers going forward, at best try to be flat in the next quarter or so. Because if you look at what we have is we have researched some of the big — bigger app player in China, such as those likes of Tencent, Baidu, and Weibo, all of them are recording quarter-over-quarter reduction in revenue for ad spending. So we are not any better. So I think the overall environment or overall ad market in China is remain weak or has not recovered to previous good times.
Brian Kinstlinger: Okay. My last question is really a high-level question. You said customers have been challenged to close deals still given COVID. Help paint a picture or what the market is today. I mean, that was the first quarter, obviously, here we are two-thirds into the second quarter. Is COVID still a major challenge for you and what are the main obstacles in China enterprises are facing today?
Shan-Nen Bong: No, as far as COVID is concerned, lack of a better word, I think it’s almost all over. People are not shutting down or work from home because of COVID anymore, and there’s no regulation or policy that workers must work from home or cannot come to work. So COVID, per se, is over. So what we are looking is — right now is probably the recovery from the overhang of the COVID. Yes, COVID is over, that doesn’t mean that the business operation is — business activity is 100% back to where it was, but we do see recovery. As I said, the Developer Service subscription business, we have seen more double-digit growth quarter-over-quarter. So this is a very encouraging sign.
