JOYY Inc. (NASDAQ:YY) Q3 2024 Earnings Call Transcript

JOYY Inc. (NASDAQ:YY) Q3 2024 Earnings Call Transcript November 27, 2024

Operator: Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.’s Third Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the management’s prepared remarks, there will be a question-and-answer session. I’d now like to hand the conference over to your host today, Jane Xie, the company’s Senior Manager of Investor Relations. Please go ahead, Jane.

Jane Xie: Thank you, operator. Hello everyone, welcome to JOYY’s Third Quarter 2024 Earnings Conference Call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY; and Mr. Alex Liu, the Vice President of Finance. For today’s call, management will first provide a review of the quarter, and then we will conduct a Q&A session. The financial results and webcast of this conference call are available at ir.joyy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our latest Annual Report on Form 20F and other documents filed with the SEC.

Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in US dollar. I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead, Ms. Li.

Ting Li: Hello everyone, I’m Li Ting. Welcome to our third quarter 2024 earnings call. Let’s begin with a review of our overall performance during the third quarter. During the third quarter, we effectively executed our strategic priorities, maintaining a strong focus on optimizing our products, deepening our market penetration in Developed Countries, and enhancing our global operational capabilities and efficiencies. These efforts yielded solid results, in the third quarter, our group revenue reached $558.7 million. Our core business segment, BIGO, recorded revenues of $496 million, delivering a slight year-over-year increase. Our disciplined execution has led to improvements in operational efficiency at both the BIGO segment and Group level.

Our group non-GAAP operating profit came in at $34.9 million, up 16.4% quarter-over-quarter. BIGO’s non-GAAP operating profit expanded to $72.9 million, up 5.0% quarter-over-quarter, exceeding our expectations. Excluding the impact of FX losses, BIGO’s non-GAAP net profit was also up quarter-over-quarter. We briefly outlined our strategic priorities in our previous earnings call. Now, let me quickly touch on each of these. First, we continued to advance our globalization strategy, enriching user interactions and content offerings while building on our unique position as a global social platform. As we have previously mentioned, Bigo Live is a highly globalized product, offering content across 30 languages and fostering meaningful cross-regional connections.

This is particularly evident among our users in Developed Countries, who actively engage in cross-cultural interactions. What truly sets us apart is the global nature of our user community and the organic social connections that flourish across our platform, a unique value proposition that we are committed to amplifying. To further enhance our global ecosystem, we have implemented a series of upgrades to boost the creation, quality, and distribution of content on our platform. For example, we fine-tuned our content recommendation algorithms to better facilitate content sharing within same-language regions and expand cross-regional content flow between highly interactive markets, such as North and South America. We also launched global cross-regional initiatives based on user interaction patterns, such as this quarter’s BIGO’s Most Talented competition.

Organized by our North American team, the event brought together creators from the Americas, Southeast Asia, and Africa, highlighting our ability to unite diverse talent across high-engagement regions. On the technology front, we are preparing to introduce standardized global content guidelines and commence alpha testing of AI-powered real-time caption translation in select languages. These enhancements will streamline our cross-regional content delivery and better serve our users’ growing appetite for global content and social connections. Second, we are laser-focused on operational efficiency. By optimizing every aspect of our global localized operations – from user acquisition, to KOL management, to our user engagement and monetization mechanisms – we aim to comprehensively strengthen the efficiencies and capabilities of our global operations and drive steady expansion in product and group profitability.

During the quarter, we conducted comprehensive ROI analyses across products, regions, and user acquisition channels. Leveraging these insights, we optimized our resource allocation, redirecting our advertising spending from underperforming regions towards Developed Countries, and focused on the acquisition of premium users with greater monetization potential. As a result, Bigo Live has achieved consistent year-over-year and sequential user growth in Developed Countries, with overall ROI improving by double digits from the previous quarter, even with a 7.3% sequential reduction in its total user acquisition spending. In other underperforming regions, we have shifted some of our efforts from traditional advertising channels to more cost-effective user acquisition methods, such as KOL partnerships, and leveraged social features like Real Match to expand our product reach.

These targeted initiatives underscore our commitment to cultivating a sustainable, high-quality user base while we simultaneously enhance content quality and social experiences to drive long-term user monetization potential. For Likee, we have maintained a strategic focus on our core markets in the Middle East and Europe, successfully implementing monetization through both livestreaming and advertising. This targeted approach has enabled us to achieve our initial milestone of profitability. To further unlock Likee’s monetization potential, we recently redirected some of its operational resources, including personnel and traffic, toward a new social livestreaming product. This means that the resources currently allocated to non-core markets, which do not contribute much to Likee’s monetization, will be further optimized, potentially leading to declines in Likee’s user metrics in the near-term.

However, we believe this adaptive strategy will accelerate our new product development, strengthen our position in Likee’s core markets, and ultimately enhance Likee’s monetization potential in the long run. Third, we have continued to cultivate long-run initiatives that will further diversify our revenue streams. In the third quarter, our group non-livestreaming revenue grew 13.1% sequentially to $119.2 million, representing 21.3% of group revenue. BIGO’s non-livestreaming revenue, primarily generated from advertising, increased 15.5% quarter-over-quarter to $78.2 million. This growth was fueled by strong momentum in Europe and North America, underscoring our strategic initiatives and commitment to expanding our footprint in these markets.

Building these new initiatives into meaningful revenue streams requires patience and sustained investment. We remain committed to nurturing these opportunities to realize their full potential. We sustained our positive operating cash flow in the third quarter, generating $61.1 million at the group level. Supported by our strong cash flow and healthy financial position, we actively advanced our shareholder return initiatives. In the third quarter, we accelerated our share repurchases, buying back an additional $117.8 million worth of our shares. With $283 million remaining unutilized under our repurchase program, we will continue to actively execute share buybacks to reward our shareholders’ ongoing support. Now, let’s take a closer look at our products, starting with Bigo Live.

In the third quarter, we sharpened our operational strategy by prioritizing our advertising investments and operational resources toward Developed Countries and premium users. This targeted approach yielded strong results in Developed Countries, where MAUs grew 3.4% year-over-year and paying users increased 9.1% year-over-year. We also saw encouraging momentum in the Middle East, where Bigo Live’s revenue increased 5.6% sequentially. During the quarter, Bigo Live successfully organized the third season of BIGO’s Most Talented, featuring categories including music, dance, and beauty. The event attracted outstanding creators from around the world. Building on previous seasons, we introduced a more comprehensive judging system incorporating key audience engagement metrics.

This allowed a seamless merger of interactive livestreaming with traditional talent show elements. The season culminated in a grand finale broadcast from Los Angeles on October 16, captivating a global audience. The event resonated strongly with viewers, amassing an impressive 5.79 million audience votes, highlighting the high level of engagement surrounding the competition. We also strengthened bonds with our business partners and our user community through a series of mid-year galas across Saudi Arabia, Vietnam, Thailand, and the Philippines. These gatherings brought together the cornerstone members of our ecosystem; top creators, users and partners, to celebrate their achievements and vital contributions to our progress in the first half of the year.

Throughout the quarter, we further developed Bigo Live’s social engagement features, prioritizing improvements to Real Match and messaging functionality. These upgrades drove deeper user connections and more efficient Follow conversions. Notably, Real Match’s average DAU penetration rate increased significantly to 23.4%, while the number of direct chat messages rose by 15.9% from the previous quarter. We also saw a 4.3% rise in average new follows per user, indicating stronger community building. By directing traffic to premium hosts and upgrading interactive features, we saw broader creator [participation] (ph) and user engagement in multi-guest rooms. We achieved a 3.9% sequential increase in the penetration rate of users hosting a live session in multi-guest rooms, alongside a 3.6% sequential increase in the overall rate of users going live as guest speakers.

Next, moving to Likee. Our strategy for Likee remains rooted in the Middle East and European markets, where we continue to build momentum and enhance monetization across both livestreaming and advertising. As a result, Likee’s advertising revenue grew 33.4% year-over-year in the third quarter, and Likee maintained its profitability. During the quarter, we elevated Likee’s user experience across its core markets through enhanced content quality, interactivity, and community engagement. A standout community-building initiative was our August music festival tour across five European cities, which brought together Likee’s top creators — from music bloggers to dance groups – alongside established performers and celebrities. This unique event delivered an unprecedented interactive experience for the Likee community.

In September, Likee served as the official media partner for Phygital Games 2024, providing eight days of livestreaming coverage to immerse users in the competitive prowess of top athletes in digital football, basketball, laser shooting, and simulated dance. Our expanded premium content offerings and content diversity drove a 12.3% quarter-over-quarter increase in users’ video time spent. Finally, turning to Hago. In the third quarter, our targeted incentive strategy across different paying user segments drove improved monetization metrics. We saw positive momentum in Hago’s paying users and ARPPU, with its total revenue growing 6.1% quarter-over-quarter. Hago’s operating losses further narrowed from the previous quarter, and its operating cash flow remained positive.

Hago’s social engagement metrics remained strong in the third quarter. Average time spent in social channels increased 2.5% quarter-over-quarter to 105.8 minutes, and next-day retention rates showed sustained improvement. These positive trends underscore the success of our engagement strategy and reflect our commitment to enriching user experiences while advancing monetization efforts within the platform. Looking ahead, our strategic roadmap continues to center on three core priorities; strengthening our position as a distinctive global social platform through enhanced user experiences, developing diverse revenue streams to drive sustainable growth, and advancing excellence across our global operations. Anchored by our strong cash flow and solid financial footing, we are dedicated to driving profitable growth and creating enduring value for our shareholders.

I will now turn the call over to Mr. Alex Liu, the Vice President of Finance, to provide our financial updates.

Fuyong Liu : Thanks, Ms. Li. Hello, everyone. Before I go into the details, we would like to remind you that despite the latest development in the sale of YY Live, to the date of this press release, we have not obtained control over YY Live and therefore have not consolidated the business. The financial results presented in our press release and this conference call primarily consisted of BIGO and All other segments, excluding YY Live. I will now provide a recap of some key financial highlights for the third quarter. Our total net revenues were $558.7 million in the third quarter, compared with $567.1 million in the same period last year. Revenues from BIGO segment were $496 million, up slightly year-over-year. In particular, BIGO’s non-livestreaming revenues were $78.2 million, which was up substantially year-over-year, primarily due to the increase of advertising revenues.

BIGO’s livestreaming revenue was down year-over-year, mainly due to our proactive actions to optimize Bigo Live’s content and user acquisition costs, and adjustments to BIGO’s non-core audio livestreaming product in certain markets. We believe these changes, in turn enhanced our margin profile and contributed to long-term business sustainability. Geographically speaking, as we prioritized to allocate our operational resources towards Developed Countries and the acquisition of premium users with greater monetization potential, our group revenues from Developed countries and regions was up by 21.6% year-over-year, with revenues from Middle East back to sequential growth of 2.1%. Cost of revenues for the quarter decreased by 2.1% to $350.5 million, primarily driven by a decrease in cost of revenues of our all other segment, which was consistent with its revenue trend, partially offset by increase in cost of revenues of BIGO.

BIGO’s cost of revenues were $312.6 million, which was up by 4.5% year-over-year, mainly driven by increased traffic acquisition costs paid to third-party partners in relation to our advertising business. Gross profit was $208.1 million in the quarter, with a gross margin of 37.3%. BIGO’s gross profit was $183.4 million, with a gross margin of 37%. BIGO’s gross margin was lower year-over-year due to a shift in our revenue mix, which saw an increased contribution from our lower-margin Audience Network advertising revenues. However, during the third quarter, our disciplined execution has significantly improved the operational efficiency of BIGO’s livestreaming business, effectively offsetting the dilution impact on BIGO’s gross margin.

As a result, we observed a meaningful sequential improvement in BIGO’s gross margin during the quarter. Our group’s operating expenses for the quarter were $192 million, compared with $191.3 million in the same period of 2023. Among the operating expenses, sales and marketing expenses decreased to $83.5 million from $92.5 million in the same period of 2023, primarily due to our reduced spending on user acquisition through advertising as we continued to focus on ROI and effectiveness of user acquisition. General and administrative expenses increased to $36.1 million from $27.1 million in the same period of 2023, primarily due to increases in salary and welfare expenses. BIGO’s total operating expenses for the quarter were $120.7 million, decreased from $126.7 million in the same period of 2023, primarily due to decreased in sales and marketing expenses.

Our disciplined execution has driven enhanced operational efficiency at both the group and BIGO segment. Our group’s GAAP operating income for the quarter was $16.4 million, up by 623.5% quarter-over-quarter. Our group’s non-GAAP operating income for the quarter, which excludes SBC expenses, amortization of intangible assets from business acquisitions, gain on deconsolidation and disposal of subsidiaries, as well as impairment of goodwill and investments, was $34.9 million in this quarter, up by 16.4% quarter-over-quarter. BIGO’s GAAP operating income for the quarter was $62.7 million, and BIGO’s non-GAAP operating income was $72.9 million, up by 5% quarter-over-quarter. Our group’s GAAP net income attributable to controlling interest of JOYY in the quarter was $60.6 million compared to $72.9 million in the same period of 2023.

GAAP net income margin was 10.8% in the third quarter of 2024, compared to 12.9% in the same period of 2023. Our GAAP net margin was lower this year due to larger foreign currency exchange losses and lower net interest income due to the decreased net cash balance after we fully repaid our CB in the second quarter. BIGO’s GAAP net income in the quarter was $63.3 million, compared to $70.2 million in the same period of 2023. BIGO’s GAAP net margin was lower this year due to foreign currency exchange losses of $10.3 million in the third quarter of 2024. Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $61.2 million, compared to $81.2 million in the same period of 2023. The Group’s non-GAAP net income margin was 10.9% in the quarter, compared to 14.3% in the same period of 2023.

BIGO’s non-GAAP net income was $67.1 million, compared with $81.9 million in the same period of 2023. BIGO’s non-GAAP net margin was 13.5% in the quarter, compared with 16.6% in the same period last year. For the third quarter of 2024, we booked net cash inflows from operating activities of $61.1 million. Our balance sheet remains healthy with a strong net cash position of $3.3 billion as of September 30 of 2024. In the third quarter, we continued to enhance returns to shareholders, repurchasing an additional approximately $117.8 million worth of our shares. During the first three quarters of 2024, we have altogether repurchased 7.31 million of our ADSs for a total of $243.7 million, which was approximately 12% of our outstanding ADSs as of December 31, 2023.

Turning now to our business outlook. As mentioned previously, we are fully dedicated to strengthening the efficiencies and sustainability of our global operations. We have taken some proactive actions to optimize our content costs, and introduced certain adjustments to BIGO’s audio livestreaming product to enhance risk control in recent quarters. We anticipate such adjustments might negatively affect BIGO’s top-line in Q4. At group level, we expect our net revenues for the fourth quarter of 2024 to be between $546 million and $563 million. This implies that for the full year of 2024, BIGO is still positioned for moderate topline growth. Looking forward, we will remain dedicated to our strategic priorities, enhancing our unique value proposition as a global social platform, exploring diverse growth revenues, and actively driving operational efficiency at all levels.

Supported by our strong cash flow and healthy financial position, we are well-positioned to deliver sustainable, profitable growth and create enduring value for our shareholders. That concludes our prepared remarks. Operator, we would now like to open up the call to questions.

Q&A Session

Operator: Thank you. [Operator Instructions] Your first question comes from Thomas Chong with Jefferies. Please go ahead.

Thomas Chong: [Foreign Language] Good morning thanks management for taking my question. My question is about 2025 outlook. Can management comment about the trend in user, as well as our revenue? On top of that, can management also comment about the trend in operating expenses and profit? Thank you.

Ting Li: [Foreign Language] Thank you, Thomas, for your question. I will take your first question first. And first of all, I’d like to add a few more comments regarding our performance in the third quarter. You can see that in Q3, BIGO’s non-live streaming revenue continued to grow substantially year-over-year, while our live streaming revenue experienced a year-over-year decline. And we’ve mentioned the reasons behind the decline of our live streaming revenues, which reflects a combination of two factors. First, we have optimized content costs in certain regions of Bigo Live. And second, we have made proactive adjustments to the features of BIGO’s non-core audio live streaming product in Q3 to enhance compliance and also for sustainable — for building up a sustainable ecosystem.

These adjustments together did have led to a short-term fluctuation in BIGO’s live streaming revenues in Q3, which we believe would likely continue in Q4, and it has been — already been taken into account in our current revenue guidance in the fourth quarter. However, as we’ve mentioned in the last quarter, these proactive adjustments that we are making now are aimed at developing a healthier profit model for our products and also for building a sustainable growth ecosystem [Technical Difficulty] we’ve already seen some positive outcomes from these adjustments in Q3, including sequential improvements in BIGO’s gross margin, ROI and also operating profit. [Foreign Language] And looking ahead to the year 2024 — ’25, as we are still in the process of formulating detailed operational plans for the next year, and we believe that our expected growth would be varied based on the estimated operating resources that we intend to allocate.

So I’d like to share a few key trends first. [Foreign Language] With a series of adjustments have already been implemented throughout the year ’24, we believe that both BIGO and JOYY is poised for a fresh start for the year ’25. For BIGO segment, we will continue to concentrate our operating resources on developed countries and the acquisition of premium-users. We expect BIGO’s paying user will gradually return to sequential and even year-over-year growth in the year ’25, together with a stabilizing ARPPU, which we believe can drive the live streaming revenue of BIGO to be back on a growth trajectory compared to a previous year. Additionally, we expect the non-livestreaming revenue of BIGO segment will continue to maintain double-digit growth year-over-year.

However, as we mentioned just now, the adjustments to BIGO’s non-live streaming non-core audio live streaming product would still exert certain negative impact on BIGO’s overall growth rate, particularly when you consider the high base in the first half of year ’24, which could still possibly offset some of the positive momentum that we just mentioned. And for the All other segment, we expect its non-live streaming revenue to continue to grow, driving a top-line growth of the whole segment. As for our group MAU, I believe you can observe that it’s been under some fluctuation over the past two quarters, and this is primarily due to our current proactive strategy of optimizing resources towards core developed countries and premium-users, while strategically direct some of our resources away from areas and users with limited long-term monetization potential.

While this strategy might have a short-term negative impact on our overall MAU, we believe that by focusing on high-quality premium users, we would be able to drive and also an ROI-driven growth strategy would be able to enhance our user [equality] (ph) and monetization efficiency, and therefore laying a more solid foundation for our long-term sustainable growth. And Alex will take your second question.

Fuyong Liu: [Foreign Language] This is Alex. So in the third quarter, our disciplined execution has driven enhanced operational efficiency at both segment level and also the group level. The group’s non-GAAP gross margin was 37.3%, which is up by nearly 2 percentage points compared to 35.3% in Q2, and the group’s non-GAAP operating profit margin was 6.2%, which was up by 0.9 percentage points compared to Q2 and its absolute amount of non-GAAP operating profit increased by 16.4% quarter-over-quarter. If you look at BIGO segment, in Q3, we saw a non-GAAP gross margin of 36.9%, which is up by 1.4 percentage points from 35.5% in Q2, and BIGO’s non-GAAP operating margin was now expanded to 14.7%, up by 1 percentage points compared to Q2 with an absolute amount of non-GAAP operating profit expanding by 5% quarter-over-quarter, and that was mainly due to optimized content cost of Bigo Live and also savings of our sales and marketing expenses, particularly our user acquisition spending.

And if you look at All other segments, the non-GAAP gross margin was also substantially improved in the quarter, up from 34.5% in Q2 to 40% in Q3, which is up by 5.5 percentage points in the quarter, and that was mainly due to a sequential quarter-over-quarter revenue recovery. And the operating — the non-GAAP operating loss was $38 million during the quarter, narrowing by 3.7% compared to Q2, mainly due to our effective expenses control, particularly a steady decline in our R&D expenses, as a percentage of our revenue. [Foreign Language] So looking ahead to the fourth quarter, for BIGO segment, we anticipate Bigo Live’s profit contribution to remain relatively stable. However, due to the adjustments that we made to our non-core audio livestreaming product, together with this seasonality impact, as our sales and marketing expenses might increase in the end of the year, we expect a slight decline in our — in BIGO’s non-GAAP operating profit as compared to Q3.

For All other segments, we expect its non-GAAP operating loss amount to further narrow in Q4. Looking ahead for the year ’25, we will continue to execute an ROI-oriented operational strategy, persistently optimizing content cost and user acquisition strategies within BIGO segment. We anticipate the profit margin and absolute amount of profit contribution from Bigo Live to likely increase in the year ’25. Nonetheless, due to the adjustments that we just mentioned that we made to the non-core audio livestreaming products under the BIGO segment, which we believe will have a negative impact on the segment’s profit. Considering the above-mentioned two factors together, we expect that the overall non-GAAP operating profit for BIGO segment will likely remain stable with certain potential for growth for the new year.

And in terms of the All other segment, we expect improving under the assumption of improving monetization, disciplined spending with our R&D expenses, as a percentage of our revenue continue to likely decline in the new year. We foresee a potential further narrowing of non-GAAP operating losses in the year ’25 compared to ’24. Therefore at group level, we believe that our non-GAAP operating profit amount will continue to show an improving trend in the year ’25. All-in-all, we believe that efficiency optimization requires ongoing efforts. Therefore, we’ll continue to optimize every aspect of our global localized operation, enhance our operational efficiency in order to drive the sustainable profitable growth of our business.

Jane Xie: Next question, please.

Operator: Thank you. Your next question comes from Raphael Chen with BOCI Research. Please go ahead.

Raphael Chen: [Foreign Language] I will translate myself. Thanks management for taking my question. Could management share the general monetization trends across different key regions in fiscal year 2025? Thank you.

Ting Li: [Foreign Language] This is Li Ting. I will take your question. At group level, the developed countries region continues to provide momentum of growth. In the third quarter, revenues from developed countries increased by 21.6% year-over-year, outperforming all other regions with its revenue contribution to the group increasing to 54.9%. In terms of sequential trends, the group’s revenues from the Middle East region grew by 2.1% quarter-over-quarter, showing signs of rebound. Looking at the long-term, as we continue to execute on our ROI-oriented operational strategy and prioritizing operational resources towards regions with high monetization potential, we expect that both the developed countries and also the Middle East will remain our top priority.

Jane Xie: Thank you. Next question, please.

Operator: Thank you. Your next question comes from Derek Fei with Morgan Stanley. Please go ahead.

Derek Fei: [Foreign Language] I will translate myself. Thank you management for taking my questions. My question is, could you give us a little bit more color on the progress in capital return? Should we expect the company to fully utilize the repurchase program in ’25? Thanks.

Fuyong Liu: [Foreign Language] Thank you, Derek, for the question. This is Alex. I will answer your question. So if you look at our full year’s execution, so far, we’ve been very, very active in our shareholder return initiatives throughout the year. And in Q3, we repurchased an additional of $118 million worth of our shares. And for the first three quarters of the year, we have in total bought back 7.31 million ADS for a total of $244 million, which accounts for an impressive 12% of our total shares outstanding, as of the end of last year. While looking ahead to the year 2025, we will continue to consider shareholder returns, as one of our strategic priorities and continue to create value for our shareholders.

Jane Xie: Next question, please. And due to the limited time, I believe this will be our last question.

Operator: Thank you. Your next question comes from Yiwen Zhang with China Renaissance. Please go ahead.

Yiwen Zhang: [Foreign Language] So thanks for taking my question. Can management discuss the outlook for our advertising and other new initiative business into 2025? Thank you.

Ting Li: [Foreign Language] Thank you for the question. This is Li Ting. I will take your question. In the third quarter, BIGO’s advertising revenue remained robust growth, which significantly increased its contribution to the segment’s total revenue, now reaching 15.8%, among which the advertising revenue from our own social platform, Likee delivered a year-over-year growth of 33.4% and a sequential growth of 8.9%. Revenues from our advertising platform, BIGO Audience Network continue to show strong momentum with sequential growth exceeding 20%, primarily driven by Europe and North America. Notably, the operating profit and OP margins of BIGO’s Audience Network business have been improved sequentially during the quarter. Well, so far, the growth in our revenue — advertising revenue from our own social platforms such as Likee is mainly attributed to optimization of our ad inventory and our bidding strategies.

Future sustained growth will be dependent on the expansion of its own DAU, while the growth of our advertising platform or BIGO Audience Network has been driven by multiple factors, including the expanding network DAU pool, entering into new markets or the exploration of new vertical or new clients. However, it always takes time to accumulate scale in order to drive further profit growth. In order to drive further growth, we will again take a long-term view, continue to explore and refine our operations and drive a steady increase of our market share over time.

Jane Xie: So that’s the end of our questions, and thank you so much for joining our call. We look forward to speaking with everyone next quarter. Thank you.

Operator: This conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.