Going forward, despite the macro challenges, we will spare no effort in proactively refining our business strategies and building a more competitive ecosystem. We will continue to improve our core technology capabilities, while also adopting and more deeply integrating AIGC and voice AI technologies throughout business. Meanwhile, we will further streamline our operations and improve the effectiveness of resource allocation, propelling the company’s long-term sustainable development with fresh momentum. [Foreign Language] Thank you all. With that, I will now turn the call over to our acting CFO, Ms. Chengfang Lu, who will discuss our financial results in more detail.
Chengfang Lu: Okay. Thank you, Marco, and hello everyone. Our net revenues in the third quarter of 2023 were on RMB425.1 million. Despite the complex backdrop and market uncertainties and persisted, we remain steadfast in strengthening our core competitiveness through technological innovation during the third quarter. Moving forward, we remain committed to further enhancing organizational efficiency, developing globalization capability, and enhancing overall agility, positioning us to deliver enduring value to our stakeholders. Now, I’d like to provide a brief overview of our financial results for the third quarter of 2023. In this quarter, our total net revenues were RMB425.1 million compared with on RMB565.2 million in the same period of last year, primary due to the decline in average paying users and user spending on our audio entertainment products.
Cost of revenue was on RMB317.3 million in this quarter compared with on RMB376.2 million in the same period of last year. Many attributable to the decreased revenue share fees, share-based compensation expenses, payment handling costs, and other miscellaneous costs. Gross profit was RMB107.8 million in the third quarter of 2023 compared with RMB189.1 million in the same period of last year. Non-GAAP gross profit was RMB107.9 million in this quarter compared with RMB190.8 million in the same period of last year. Gross margin in this quarter of 2023 was 25% compared with 33% in the same period of last year. Non-GAAP gross margin in this quarter was 25% compared with 34% in the same period of last year. Operating expenses were RMB167.9 million in the third quarter of 2023 compared with RMB176.6 million in the same period of last year.
Research and development expenses were RMB83.8 million in the third quarter of 2023, representing an increase of 7% year-over-year, primary due to the increased salary and welfare benefits expenses, related to increased severance pay to optimize the RD efficiency, partially offset by the decreased expenses related to research and development services provided by third parties. Selling and marketing expenses were RMB59.1 million in this quarter compared with RMB71.2 million in the same period of last year, primary attributable to decreased branding and marketing expenses. The company will monitor its discretionary advertising and promotion expenses, and adjusted economy depending on marketing conditions. General and administrative expenses were RMB25.1 million in the third quarter of 2023 compared with RMB27.1 million in the same period of last year, primary driven by decreased professional service fees provided by third parties, provision for litigation contingencies, and other miscellaneous expenses.
Operating loss was RMB60.1 million in the third quarter of 2023 compared with operating income of RMB12.5 million in the same period of last year. Non-GAAP operating loss was RMB55 million in this quarter compared with non-GAAP operating income of RMB12.2 million in the same period of last year. Other expenses were RMB5.9 million in the third quarter of 2023 compared with other income of RMB1.7 million in the same period of last year, primary attributable to the remuneration fees to the deposit back in relation to the ratio change of ADF on September 20, 2023. Net loss was RMB62 million in the third quarter of 2023 compared with the income of RMB19.8 million in the same period of last year. Non-GAAP net loss was RMB56.5 million in this quarter compared with non-GAAP income of RMB27.5 million in the same period of last year.
Basic and diluted net loss per ADF were both 11.01 in the third quarter of 2023 compared with basic and diluted net income of RMB3.81 and RMB3.79 per ADF in the same period of last year. Non-GAAP basic and diluted net loss per ADF were both RMB10.07 in the third quarter of 2023 compared with non-GAAP basic and diluted net income of RMB5.29 and RMB5.26 per ADF in the same period of last year. As of September 13, 2023, we had cash and cash equivalents and restricted cash of RMB615.8 million. Okay. This concludes all of our prepared remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact LIZHI’s investor relations through the contact information provided on our website ir.lizhi.fm or Piacente Financial Communications.
End of Q&A: Thank you. This concludes the conference call. You may now disconnect your line. Thank you. Have a good day.
