JOYY (YY) 30 Nov 232023 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Inc.

Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. After 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.

operator. you, Thank Hello, everyone. XXXX quarter conference third call. earnings JOYY's to Welcome

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Hello, earnings to third call. everyone. Welcome quarter XXXX our

First, a for we performance quick will provide the quarter. snapshot our of

quarter, again the delivered once we During third a strong performance.

sequential of a revenues of maintained XX.X%.Our increase business a we a BIGO ] recorded X.X% recovery Approaching net its momentum the X.X% increase. see sequential of margin with high million, a net revenue Group a and X.X%. and year-over-year $XX.X our for $XXX.X in come guidance, X.X% of at non-GAAP Our year-over-year profit core a increase million, increase [ million at end $XXX.X of segment, non-GAAP

increase BIGO Group to $XX.X accompanied top year-over-year value you by a BIGO are MAUs our quarter.On user enhancing device more our top content. the efficiency. to unique million.BIGO's by user give and maximize we affordable [ the I'd quarter, for X our value BIGO operational Live representing number leaders viral and the users year-over-year to global product [indiscernible] operation user as sequentially X X.X% with content profit BIGO's our experience we line $XXX.X efficiency. grew strong users, one improving of fronts, understanding non-GAAP monetization positive by global year-over-year, experience Notably, examples interaction effective and XX.X%.As user average revenue sector, better its believe content Gap] social always through user have entertainment that [Audio year-over-year we MAUs to aim been innovative the user for broad for and increasing our steady expanded firmly collaborations non-GAAP foundations creating and [ front, with community. operations have value users and monetization BIGO's growth a was a the product ] provide third of maintained effective building of our experience. also continue improvements first reaching the those enhance We diverse to range improving We Live's optimization, introduce localized paying exceptional and $XX.X and our and the products. are its in highly X.X% management inclusive with activity some of growth social on At from most of million. and operating grew monetization.To progress trajectory, To share instrument like ARPU level, committed year-over-year. margin in recovering, ] XX.X% expanded to profit by global experienced in social entertainment the The million, quarters. of always mobile for XX% during With KOLs

algorithm. allocated These our and additional our prioritize Family support new social recommendation updates major front, operational optimization several users ability content families. launched enjoy, efficiently the channel to also the We upgrades interactive our Live's interaction cohorts.On to resources of particularly Feature BIGO strategies to improved and user within for we segregation they content tools

further overall anticipate with even such online our we -- monetization.The we and exposure, viral and KOLs user amplification successfully outreach quarter, experience, of will user exciting as and to help coupled to growth initiatives integrated and collaboration adhere galas networks. quarters, paying yielded in global Real families' been social user user product growth. recent traffic features, results expand robust different also on monetization.Looking seasonal with basis. more for the in and social acceleration promotions, fulfilled fourth such time, Match, primary the regional the pending We as cater acquisition, the of diverse progress user These new of market recovery user conversation our driving has the of recovery This brand improved expense. and user activity in actively organic the has organic enhance At have maintain users and content business functions engagement its recruitment long-tailed alongside which terms user engagement targeted same reason ahead in as year-over-year payment been social of streamers.Our our trajectory mid-year have is a their to fostered cases positive and people's positive introduction disciplined

uncertainty will global segment, may paying sentiments of ongoing pace we certain [ landscape, short-term in in macro and the the vary given users' persist. believe different ] However, across fluctuations recovery the markets

focus strategy high-quality on We will growth. priority optimistic.The cautiously and our remain operational

take business, products. of the We operation continue look will and our products cash our flow.Now steady at our to also a on across recovery sustained innovations let's closer explore improving drive focus global with a operations and

basis. user MAUs the We Europe and year-over-year several emerging the by region, momentum in with Live. key country and Live its third revenue. other markets regions, especially a high saw the other quarter, the the growth in revenue million. BIGO across markets.In XX% Asia quarter, increase The start BIGO BIGO and a developed with mid-single-digit recorded will Europe maintained double-digit countries in growth We Southeast in outpace by Eastern single-digit with growth XX.X% XX.X% and generated sequential to Live XX.X year-over-year in third XX.X% East; Pacific increasing and sequential Middle growth in

X Live The video earlier, the fashion during to show, campaign streamers with boosting also introducing millions of Vidio, the mentioned inspiring streamers launched in popular debuted platform for to third share acting.In in we coming the a introduced of and top freshest audience. third significantly followers, Live teamed Live Indonesia to show collaborative range features several on East which expanded BIGO local art some Friends high-quality and explore Family min-series, family local Live engagement a to chains, travel Month new upon legendary BIGO and in experience, summer activities creativity.Building BIGO up encourage We with summer campaign, of Live success its content wide called the actor actors. and user the on in and Indonesia, quarter. broadcast Middle tons BIGO Live. was a MENA BIGO exclusive his continue In a Live Live quarter. diverse The region, in participate the Coach the users virtual and last quarter's up BIGO KOLs, of collaboration who BIGO shared into and As premiered Jordanian personal insight Acting of KOLs have

We improve with to XX.X% in and saw number refined such third our steady in size as algorithms users BAR content and our of incentivize increase and on streamers The and on pool increase increase develop content popular features, social channel, surged of started sharing contracted sequential DAUs out We the work videos further a a K-pop, third of and regards in quarter. focus families, retain covering premier in creators. the enrichment sequential content of our quarter. the in prior the to X.X% BAR, a product from by quarter Families.With interaction recommendation The the number optimization we continue XX.X% on BAR pet our to genres interactions.

let interaction and to Real BIGO people show total profiles. me feature number Match, swiping increase simply a sequential rooms. by effective our the same increase This to video fine-tuned a social sequential per multi-guest messages.Next, by livestreaming updates in livestreamers, in in upgrade of X.X% in rose make nearby, along relationships, of Real same other drove the an in for for XX% increase people with Live's number through [ to interactivity commitment in inside period.At of sequential Match we appeal a through sequential fueled While livestreamers forging fostering increase rooms. enhance with the mutually the products. connect following line our it enhanced the chat direct ] we easier number the X.X% the The with In time, views features to XX.X% some XX.X% each and average content other person and

aggregated As generally a monetization to products revenue contributions are our user they relatively base. as we and of in to are But phase other Live, compared larger profit previously have have the their mentioned, small. BIGO early much

As enhance strengthening revenue such, it at continued a generate in we begin quarter. ability systematically level. solid to sequentially, with organically acquire profitable to foundation, third mid-single this is of to efficiency product growth.Let's and Likee's well, the users. from feasibility which Likee to ] grew product reinnovated consistent main new objective and our will started monetization their those products our profit, have Since we can the [ by the user digits be

ACG, National deepen days, users, in number the Likee's the user sequentially, Festival, fostering among regions, community MAUs user product K-pop, the Saudi increased Likee ecosystem also of Asian to rose parties is highlighting streamer content over despite September, the captivated this On orchestrated Culture and in core regions, at it's overall events, ratio by the DAUs a increase period.Next, in an community.At discussions event Likee developed component to a creators, to at remained the used average take particularly that platform.During Likee Hago. community to maintaining rate XX.X% digital exhibit Likee's interaction, spent. creators of of connections front, by high the decline, popular of Day. a in while movie X.X% dedicated with user series and sequential countries partnered IM X% still the celebration and a let's quarter, a online sequential growth.In MAUs, that the of sequential an Overall measured single level, engagement, same of as penetration These by designed included offline look fans the more, accompanied and a quarter, anime, in driving time integral by

sequential social channels across and per actively day, interactive multi-guest cash nearly cash AI.Finally, enhanced the regions. its spent in audio spent designed Hago along a push Hago powered among IM Hago operating quarter, achieved refined in mid-single Hago Besides social third social users.Notably, remained content time to in reached XX.X notification and strategy digit gaming and rooms on flow increased participation combining revenue, the average drive in multi-guest increase during interactive and time boost and priority, sequentially. helping to alternative average the grew rooms interactive user livestreaming capital iterated, return. percentage XD and some flow a updates by with positive Efficient is remained livestreaming activity its also During quarter. applications the and minutes X.X% by experience, exploring interactive Space, features,

positive of to cash robust an our share the reached $XX.X million shares. quarter. pace maintained repurchases, We active of generate XX.X continue bought to and third drive in back million additional Meanwhile, -- we flow, operating

November extension BIGO's of of until ], and revenue XXXX.To of strategy driving as conclusion at and $XXX of activity. the recovery profit the which authorized program, operational end million has ongoing buyback [ user an our assumed effectively, summarize of third Board the Our quarter, the

the into ahead to remainder targeted strategies long-term high-quality Looking we and to committed beyond, remain pursue of growth. XXXX our

and improving across business, operations We steady and will all focus continue our operation with innovations cash recovery continued our to drive on of flows. explore products global the with

Finance, our to further will that resources call We I at turn growth the our of remarks. our pursue through effectively share time, prepared the will we buybacks.This and President for continue concludes building the business with our core our long-term my enhance Liu, strategy, global shareholder will to Alex same experiences, opportunities. Vice and And now updates. concentrate on financial align returns

revenue Despite we uncertainties, operating progress both macro quarter. booked global Thanks, ongoing non-GAAP third the the positive and BIGO, the solid everyone. in during in year-over-year quarter.Our business income Hello, segment, David. achieved growth

our by marketing quarter-over-quarter. our We up X.X% let's year-over-year. BIGO of strategy operational the paying monetization spend. net the during were team.Now even to total ARPPU Revenues $XXX.X as our adhere up It's at up look and result in million the optimize of up they in third million, X.X% MAUs, The the the to experience, dedicated number segment to BIGO's the numbers by product were from user with a X.X% resource quarter, disciplined quarter. and detail; strong $XXX.X grow continued also and quarterly value revenues users, our continuing our global of execution efficiency global by were

$XXX.X year-over-year top cost developed X revenue decreased driven growth $XXX.X to countries.Cost sharing line quarters, revenue.Gross revenues million live rebound was in among for The streaming XX.X%. gross gross were by first and of $XXX.X which mainly of consistent strong million, a decreased fees in in of BIGO's content was gross growth costs our margin million. which with in revenues million, BIGO's of quarter with $XXX.X the to up the was margin the with profit profit quarter, a XX.X%. $XXX.X million, year-over-year,

to Along lines, the expenses to our XXXX. R&D were with technological ROI $XX.X by and we optimization of the of resources same for primarily focused of of be quarter Our same due capabilities.BIGO's to sales the $XX.X $XXX.X and overall $XX.X operating Group's more building product million sales for were quarter expenses to marketing and due personnel-related million $XXX.X XXXX, XXXX, million primarily year-over-year. increased period million, the expenses to in in $XX.X of effectiveness in as user expenses, million from strategies $XXX.X expenses, expenses same the operating decreased X.X% compared down marketing the on across into period operating with million various million prioritized period from acquisition.R&D increased the

operating GAAP million. for gross the $XX Our quarter income was

acquisitions, quarter and JOYY net XX.X%, same the quarter, intangible loss from the BIGO's $XX.X ].BIGO's and non-GAAP was to controlling compared XX.X% XX.X% quarter attributable in as was margin quarter, million this in operating the [ GAAP XXXX. to income corresponding XX.X% $XX.X goodwill amortization well XXXX. $XX.X compared as was in disposal of a of a period income of million excludes assets GAAP non-GAAP representing Our expenses, last interest in in with from of to million up operating and the operating of consolidation income business investments, non-GAAP subsidiaries, operating margin income margin net on non-GAAP income quarter impairment margin of year.Our third same in of $XXX.X X.X% Group's income period the of million, million, operating of for income of net XXXX, period of was GAAP income the for was the income net $XX.X which the

same and to amount $XX.X the aggregate year, Our the income our XXXX, an GAAP of income represent buybacks, the additional of non-GAAP of million the margin XXX.X% $XX.X cash Group's billion we activities ] inflows shares. net of The booked share a ] in strong $XX.X the of XXXX. million. during period repurchased million XX.X% third corresponding In in was through a third our remain have net JOYY primarily we non-GAAP quarter, continued as XX was XX.X%.For XX.X% to from of $XX.X [ in shareholders retained controlling GAAP of altogether income was of the We a gain third same million sheet compared XX.X of X with the GAAP a approximately and net cash net XXXX. to shareholders operating larger the net to net of quarter we to the non-GAAP million an one-off period. Group's net XXXX.In income quarter with of of compared first with non-GAAP net due period margin balance XX.X%. was to in in BIGO's remeasurement quarter of million was to provision of active returns quarters of aggregated a last our income of quarter which million, investment.BIGO's [ $XXX.X interest enhance quarter Non-GAAP healthy margin net income the XXXX, September in attributable $X.X dividends $XX.X

our continued We global share recovery in will anticipate coming program continue actively in outlook; our utilize to repurchase we our business to operations. now the quarters.Turning

efforts in paying uncertainty and short-term the recognize vary previously we be as has forecast results, communicated, recovery. recovery global are However, across subject sentiment.Separately, made reflects that to the allowed forward, our there objectives. and markets, in our due pace our ongoing line dedicated shown of growth expand proactive changes.In financial preliminary will operational certain may revenue to users and [ to growth market views value net quarter experience, conclusion, on high in to we focused to towards and of and are we with non-core which in high-quality to may expect yielding adjustments product enhance the fluctuations positive operational our million consideration, [ optimize landscape, profitability Simultaneously, $XXX our direct our we and factors fourth and revenues standing.Moving with commitment discipline long-term macro business different $XXX maintain our strategy had conditions the as accelerating into fortify user operations, adjustments, user be million the that between our us a potential ]. align financial line and top resources XXXX all global for our business, further and ].Taking This to

also proven recovery a operation, cash with foundation strive a capabilities. in in steady operating for prioritizing our flows, will We global improvement other execution and strong while

to that confident prepared sustainable open positioned seize value shareholders.That opportunities call we concludes we up the growth to our remarks. are questions. our and would We are deliver Operator, to well now to like

comes [Operator Thomas Instructions] Your from Chong from first Jefferies. question

trend is share about you. second your management outlook for my BIGO return. as question Group's XXXX, is Can [Interpreted]My on in the thoughts And Thank the margin? as first about the for question margin front? blended this well capital shareholders'

you, question. Alex. take I is This will Thomas. first [Interpreted]Thank your

BIGO non-GAAP to actually from this margin was we to delivered improved better XX.X% improved XX% XX% with non-GAAP results, look XX.X%. a OP So at previous QX than expectation. margin from quarter, if gross you segment our our

on more marketing gala, our the peak to midyear incentives spend line due year-end we operating profit marketing ahead was operational margin QX, accelerating in of BIGO we to as up. activities, better-than-expected sales lower expenses and will non-GAAP content Therefore, did we QX expect cost for enter and and gross top a mainly slightly result. sales Although our have BIGO's and and as to be content sequentially a margin recovery.Looking

so look XX.X%. X we first far you already we have 'XX, our progress achieved OP -- at the if already quarters of non-GAAP a have However, in for BIGO segment, of

and expecting which 'XX, the believe the segment the constant our we of basis, of excluding So aim for for expect give we pursue the a products, certain 'XX, still and the potential also scale for was a as XX.X%.And operating higher currency we detailed profit full between segment XX%, all it of which XXXX. been narrowing outlook In BIGO OP top for maintain as in to still from level adjustments of a proactive general, relatively continue segment, our efficiency, BIGO on losses, stable continuing recovery. non-GAAP to to year recovery, OP impact guidance, we're non-GAAP should line than to of steadily OP trend early to the margin, a while top it's be margin.As pace on line other we strike has depends a balance the expect on

in second And operating value cash Group generate positive your question on share during shares aggregated further of flow, to And still non-GAAP up, look USD positive So million continue through during million, the to at XX.X continue at corresponding and income quarter. capital XXX% reached buyback, representing which and our efficiency. approximately of of we flows.As to dividends our for expect period. return, improvement in XXXX, the return remain if sum repurchased quarters has first cash you our we profit to level, XXX have our and is X and net capital profitable operating the aggregated we QX, drive

of previous another our have of So the for an end plan. our unutilized share as program QX, authorized still buyback $XXX the And has we year. million just of quota under board extension

one steadily to of will top focuses, our So buyback. we continue shareholder returns and execute remain share our will

Citi. Gong from comes Next from Brian question

will [Interpreted]I myself. translate

different recovery? Regarding regions the BIGO little bit factors elaborate more a are growth in Live's momentum XXXX? can driving What this across you expected recovery, on

was Brian. you, see our Live's that the results, than BIGO in This about expected. better your recovery, On question at is [Interpreted]Thank recovery you look quarter David. you can QX our if revenue

growth product decent higher also believe quite the by MAU segment, Looking a basis, single-digit countries the standalone mainly And quarters for few from driving a region. ARPU countries than actually Southeast for attributed a booked developed at at growth BIGO during recovery delivered region quarter.And Asia it's strong the and have the driven Q-on-Q growth a already. growth, been factors, Live Q-o-Q that sequential the Actually, a if the a to we've look mainly was developed BIGO on recovery we high Q-o-Q a well we as and also recovery. positive momentum

still pace users in believe continued current result of do operational uncertainties, sentiment of our of users and highly -- and end also which I global status. BIGO a and product paying to I've strategies, resources optimization in given our achieve we year-over-year. recovery think targeted the different the guidance, as Live prioritizes actually acquisition vary, QX actually towards it's we modest are the our our implementation macro growth other expect a mentioned, the spending, countries.However, user operational Therefore just premium across developed regions fluctuating that

to still gradually, by early top line generally growth, 'XX, efficiency. expect guidance driven with we on speaking, but year-over-year together resume it's I Live MAU think stabilizing monetization give to recovery BIGO

comes Yiwen China Your Renaissance. from next from Zhang question

[Interpreted]So a couple of questions.

[ ]? XXXX? then secondly, we see effects First, about overall side. global ongoing think in business, of How should impact we into such Europe? done impact about And to this to on environment. as think the user macro our And the the mitigate such has trend user company should what adverse we How

you, is David. [Interpreted]Thank This Yiwen.

user relatively we if Group's in rebound X a MAU spend. a the on maintain managed we past to at progress marketing we quarters, our while year-over-year, look our growth, disciplined in achieve So

organic I speaking, that traffic, Live's quarters. continued users.So and rebound and an of achieved points MAU efficiency user our in steadily effective. increasing double-digit influencer the has user user higher percentage our that forward, Group's a few Our been X think a led actionable the shown has of continuing believe for quarters, BIGO user we traffic current overall our by believe for year-over-year there growth Live growth. also BIGO improved, moving I positive that acquisition I as consecutive consecutive trend for believe growth premium And strategy are growth X

primary of to First with localized focuses remain operations, on content strategy -- continue of all, ROI.And the and will social BIGO focus experiences we our as leverage to terms the you acquisition. product continue see acquisition prioritizing content. and of outreach that user growth, our user our second, can key targeted has quarters, original expanded with quality user we a drivers Live In in on successfully of by recent our with

still content of to Southeast and For new in target actually example, on downloads positive we after differentiated iterations, algorithm of especially Match, user that high-quality for user to consequently -- policies and as make user perfection room global user traffic, actually found different Live further rate to with continue work Southeast will -- user has for and their a each several the female and on positive other groups. vary. improve also our we've diverse and actually, our we once relatively In focus features have then Live segregation introduced there in up, to generate targeting user variety expect product recent may retention. very mentioned, year on and groups.And believe Asia for and to maintain enhance time increase feature, shows Real BIGO community, value, Groups has a and momentum a core see in is foundation growth. each and And those of quarters, functionalities users, third-party a in they and spend markets. core and empty user I experiences, aim have premium user BIGO further process, targeted optimization goal refined mini-series, dimension growth for thirdly, those in and within contribution line other actual then drove continue cohorts, to that steady The user the well groups.To America user as product can the we 'XX, to sum and content. influencer and some improved retention every recommendation emerging we been will is new And focusing consistent start we tailored user we rounds products. an and users And to solid KOLs, target our feedback user Asia the within as in very by experiences Latin every previously have collaborating a we led revisit to maintained time countries.And we we healthy our

Some might be slightly ahead.

The may others be slightly behind.

However, user at don't here, level. big think Group with that it picture will the recovering interfere I which is growth

Bank from America Next question Zhang Lei from comes Securities. of

on [Interpreted]Want terms to see any updates your global in business of regulatory risk?

question. [Interpreted]This is the I will take Alex.

continue the we crucial remain as everyone. adapt We we'll to of our that and achieve proactively regulatory look with actively high-quality and requirements.So subject engage great for varies and monitoring vigilant the quarter. our social -- regulatory of prerequisites landscape different safety considered it's have execution, Thank much our growth catching to actually will constant forward our we session. been and And optimize compliance up joining you business next Q&A internally, It's the call. speaking so was been you alignment global have that, with across with with to the end evolvement, the for our authorities. business. regulatory and markets evolving to and and more And regulatory and global business developments, regulatory operations compliance industry and entertainment the framework always a the ensure For local company, business changes with to in

presentation. you concluded. for today's attending This Thank has conference now

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