Lizhi Inc. (NASDAQ:LIZI) Q3 2023 Earnings Call Transcript

Lizhi Inc. (NASDAQ:LIZI) Q3 2023 Earnings Call Transcript November 30, 2023

Lizhi Inc. beats earnings expectations. Reported EPS is $0.03, expectations were $-0.05.

Operator: Hello, ladies and gentlemen. Thank you for standing by for LIZHI INC.’s Third Quarter 2023 Earnings Conference Call. Please note, all participants are in a listen-only mode now and today’s conference call is being recorded. I’ll now turn the call over to your host, Effy Kang, Head of Capital Markets for the company. Please go ahead.

Effy Kang: Thank you very much. Hello everyone, and welcome to the LIZHI INC.’s third quarter 2023 earnings conference call. We released our financial and operating results via Newswire services earlier today, and they are available online. Participants on today’s call will include our Founder and CEO, Mr. Marco Lai; and our Acting CFO, Ms. Chengfang Lu. Management will begin with prepared remarks, introducing business development and financial performance in the third quarter. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the IR section of our website at ir.lizhi.fm. Before we continue, please note that today’s discussions will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995.

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These statements typically contain words such as may, will, expect, target, estimate, intend, believe, potential, continue or other similar expressions. Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, many of which factors are beyond our control. The company, its affiliates, advisers, representatives and underwriters do not undertake any obligation to update these forward-looking information except as required under the applicable law. Please also note that LIZHI’s earnings press release and this conference call includes discussions of unaudited GAAP financial measures as well as the unaudited non-GAAP financial measures.

Please refer to LIZHI’s earnings press release for reconciliation of unaudited non-GAAP measures to unaudited GAAP measures. I will now turn the call over to our Founder and CEO, Mr. Marco Lai. Please go ahead.

Jinnan Lai: [Foreign Language] Hello everyone, thank you for joining LIZHI INC.’s third quarter 2023 earnings conference call. [Foreign Language] In the third quarter of 2023, we further strengthened the execution of our online audio-centric globalization strategy, leveraging our long-term technological assets. We consistently empowered domestic business innovation, while steadily advancing our global business, fostering a vibrant and diversified ecosystem. In the third quarter of 2023, our revenue reached the RMB425 million. Our total average mobile MAUs amounted to 42.1 million, and our average monthly paying users totaled 402.6 thousand. Despite macro-headwinds, we steadfastly pursued the course we had charted, reinforcing our commitment to our long-term vision.

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Q&A Session

During the quarter, we continued to reduce costs and increase operating efficiency to improve organizational efficiency and agility, while also reinforcing our globalization capabilities to better support the development of our diverse spectrum of businesses. Now let me go over our business developments during the third quarter. [Foreign Language] In terms of our audio entertainment business, we remain committed to building a healthy and sustainable product ecosystem. Through proactive optimization of our operating strategies and meticulous refinement of our mechanisms for expanding and nurturing our content creator base, we have enhanced the creator quality and increased the scale of our creator base, while also solidifying our platform’s competitive edges.

During the quarter, in addition to the continuous optimization of our content creator platform, we launched the Starlight Challenge [ph], a strategic initiative designed to cultivate mid and long-term content creators and motivate our top tier contributors. This program empowered content creators to showcase their distinctive vocal talents for the unlocking their creative potential, while also elevating the platform’s appeal to the content creator community. [Foreign Language] In addition, we strove to improve the user experience and attract more high-quality users through enriched content offerings and product innovations. During the quarter, based on user preferences, we added a suite of carefully curated modules to enrich our content genres, providing our users with more diverse and engaging content options.

Furthermore, we continue to iterate our product design and cultivate new product features and engagement tools, harnessing cutting edge technologies to introduce innovative audio-based interaction experiences. We sustain active user participation through a diverse array of marketing programs and themed events, augmenting both user sickness and engagement. [Foreign Language] As for our global innovative business, we are deeply invested in delighting our users with next-generation social networking products. By integrating advanced features including cross device functionality, real-time capabilities, AIGC technologies and more, we continue to refine our product interface and functionality. We leverage advanced technologies to empower product innovation capturing to diverse user needs.

Meanwhile, we endeavor to improve user experience — user engagement by enhancing the network effect of our offerings, thereby fostering organic user growth. Organizational wise, as we continue to boost our localization capabilities across product development, operations and other key areas, we have also taken a collaborative cross team approach to product innovation to increase innovative productivity. Moving forward, we will continue developing international markets reinforcing globalization capabilities and ultimately accelerating the expansion of our global footprint. [Foreign Language] With respect to technological advancement, we continue to strengthen our R&D capabilities to provide more customized product support. This internally empowers product innovation and drives progress across our global business.

We have also consistently deepened the integration and development of multi-model AIGC technologies into our innovative business framework. Through motion-enhanced model training and algorithm optimization, we are fortifying our AI assets unlocking vast opportunities for ongoing product innovation. On voice technologies, we have been constantly improving the stability and performance of automatic speech recognition and text to speech ASR and TTS for both Chinese and English languages, adapting them for diverse scenarios. We have also achieved the breakthroughs in AI voice changing technology, including a seamless integration to DOREME, our in-house RTC platform for real-time audio and video streaming. In the meantime, we further enhance the quality of information transmission on our IM platform, VoderX, empowering our business with high performance, low latency and scalable customized instant messaging capabilities.

In terms of our versatile technology platform construction, we further improve the data analytics and data management systems and apply the AI technology to marketing and other fields. Collectively, these initiatives have improved overall operating efficiency. In general, we believe technological advancements are the cornerstone of business development. We remain committed to pursuing industry-leading technological standards and continually fortifying our core technological capabilities to empower the business development. [Foreign Language] We are delighted to announce that last month the company was awarded as one of China’s top 100 internet companies by the Internet Society of China. This marks the fifth consecutive year that we have received this honor, representing powerful recognition of our comprehensive capabilities by the Internet Society of China and the broader industry.