We have also seen a gradual improvement in platform’s ecosystem. Since the beginning of this year, we have continued to strengthen the retention of core paying users to maintain stability of paying users and overall revenue. In the fourth quarter, we will reduce some platform-wide operating activities. And given the current macro environment, we expect the scale of our paying users and the revenue from the virtual gifting business to experience a quarter-over-quarter decrease. At the same time, we are working to make new breakthroughs in our innovative businesses. Thank you. Next question, please.
Operator: Our next question comes from Brian Gong with Citi. Please go ahead.
Katrina Chiu: [Foreign Language]. Thanks, management, for taking my question. This is Katrina Chiu from Citi asking on behalf of Brian Gong. Can management share with us the internal regulation policies and the related impact to your live streamers? Thank you.
Hao Cao: Thank you for your question. In our ongoing commitment to enhance compliance and regulated operations, we have implemented various measures to fortify platform management and manage user conduct. During the quarter, we clamped down on non-complaint activities across our platform, addressing under the table dealings in game profits and other items and combating cyber trolls, such as cyber violence and online rumors. We successfully pinpointed the specific streamers and users engaged in non-compliant behavior by using advanced product analysis, tech-powered identification and responsive compliant mechanisms. To uphold the integrity of our platform and ensure effective regulation, we issued warnings to streamers and the users engaging in questionable behavior and administrated disciplinary action against them.
In the event of more severe violations, we will take more stringent measures, including permanent bans. We are actively conducting day-to-day internal regulation across our platform, maintaining constant vigilance and monitoring improper conduct and taking strict disciplinary measures to address non-compliant activities on the platform. We regularly disclose these activities on the DouYu website, informing users about the measures we take to manage positive platform environment and repeatedly emphasizing the importance of complying with our platform’s rules and regulations. We will also working with our users to jointly cultivate a positive online environment. We place a significant emphasis on user guidance and education, promoting our platform’s rules and regulations to users through the DouYu classroom initiative, enhance users compliance awareness and further improving the cyber environment across our platform.
Regarding our streamers, we have consistently educated and guided them on appropriate conduct and content within the platform. Elevating their awareness of compliance on the content front, we have ensured the sustained, stable delivery of high-quality content to our users through continued content innovation and diversification. Additionally, our data tools empowered streamers with insights into content production and operational analysis. This proactive approach has in turn given streamers a better grasp of user needs and market trends, providing them with the insights they need to actively adjust their live streaming strategies, which has improved both live streaming quality and efficiency and boosted their interest in producing live streaming sessions.
Till now, the company’s operations remain normal. We believe our comprehensive platform management and guidance measures are effective and our streamers have placed trust and support in our platform. We remain committed to further enhancing compliance and fostering content innovation, ensuring that our streamers operate within a healthier live streaming environment that features greater integrating. We are also dedicated to elevating the quality of our content services and user experience. Thank you. Please, next question.
Operator: [Operator Instructions] Our next question comes from Lei Zhang with Bank of America. Please go ahead.
Lei Zhang: [Foreign Language]. Thanks, management, for taking my question. Can you give us some updates on your margin spend? Any room we can optimize in all parts, additionally, any color on the cash flow in future? Thank you.
Hao Cao: Thank you for the questions. As to profitability, in fulfilling our commitment to long-term sustainable growth, we continue to adjust our live streaming business. Here, we have successfully elevated the company of all operating efficiency by optimizing costs and emphasizing ROI. Navigating today’s complex macro dynamics, we have made significant strides in our refined operations, achieving growth in net income and adjusted net income for 3 quarters in a row. Let me walk you through how we’ve improved our operating efficiency, mainly in 2 aspects. Regarding our cost of revenues, we optimized the cost of our traditional business to counterbalance increased copyright costs and the cost of our innovative business, effectively keeping our overall cost fairly stable.
The largest component of our cost structure is revenue sharing fees. This remained at a historically low level after several quarters of actively adjusting our revenue-generating activities. And furthermore, we have significantly optimized our content costs, which mainly include streamer compensation, copyright costs and the cost of our self-produced content. We have taken steps in recent quarters to enhance efficiency and ROI of our self-produced content on multiple fronts, achieving favorable outcomes. In the third quarter, we assessed our copyright costs and the cost of our self-produced content, enabling us to better align the number of tournaments and self-produced programs. With these insights, we were able to strategically consolidate a line-up of complementary premium content offerings while achieving a well-balanced of all cost structure.
Additionally, we strengthened performance-driven assessments of streamers and optimized their compensation metrics, resulting in a sequential reduction in streamer compensation expenses. For operating expenses, we effectively optimize our expenses by implementing measures such as cutting back on channel-related user acquisition expenses and refining our organizational structure. While third quarter operating expenses increased slightly quarter-over-quarter, this was largely due to one-time expenses related to workforce optimization. With our streamlined team, we have a much firmer grasp of our overall expenses, which we expect to be more manageable in the future. In summary, amid a changing macroeconomic environment, our persistent focus on cost and expense control will stabilize the company’s overall financials.
