JOYY (YY) 28 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Inc.'s Second Quarter 2024 Earnings Call. [Operator Instructions] 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.

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

President Ting and Li, CEO us the and today JOYY; Chairperson Ms. are Vice Liu, Alex Xueling Joining of Li, Mr. and Mr. Finance. of Director; Co-Founder David

on replay For also conference of quarter, website today's at call our a session. are and review and be results A conduct the The will available call, financial few first of we webcast a a will hours. will Q&A management available this provide call then of in ir.joyy.com. this

Before you cause we to forward-looking are to differ continue, risks I would current results subject actual that statements, like remind our inherently may make we from may that to and uncertainties expectations. which

to documents annual and For Form XX-F with on filed our latest the detailed please discussions of other report SEC. risks the and refer uncertainties,

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

to you David, and joined all. with Hello, invite call. David, to Welcome you. are I few our This over you to call. quarter earnings time pleased XXXX Today I first to my is words JOYY's we Ting. I'm our a excited ideas founder would say by be who connect truly to to like to Chairperson kick-off and as Li am our CEO. second everyone. share addressing

Ting. Li you, Thank everyone. Welcome,

August navigating been regional an the management played and carefully underscores we chapter. Li approval, to role our have opportunities. With our has operational important milestone experience offering the Board person next forward oversee leadership In continuity as momentum, and hands. To team, Board. to look our and as an the we complete the I growth. involved phases. this our makes integral I that, our confidence in strategic its role leadership remain a ]. driving corporate As to I to daily since and team growth the pleased this her and and leadership X, to to ideal to commitment have governance transition and YY baton XXXX, capable planned company's business part has will strategic resigned officially organizational like lead actively to as member our to into Chairman back COO current her I'd announced to in transformations as earlier and long-term JOYY's the Li the am our of prudently passing my marks from Ting capacity, operations. This Ting capabilities foster I Ting entrust ensure explore with management Li strengthen long-term JOYY company's as Her hand of an of and I Li guidance the month, development. of Board's maintain supporting sustainable, -- enhancing to Ting instrumental our [ It CEO key call

technology. the foundation cash near importantly, while lives of globally. future, long-term And, focusing flows. balance a these strategy spend strong foundations globalization enriching are term our scale. David. in top a established exploring apps According on and your Under our among our have corporate building on strike look we've a consumer which empowers continues the business robust our remarkable prospects. We you achieved I to support for uphold Thanks, business our between growth worldwide trust. Okay. to our forward our for us core social on strong the laid. and mission flagship by grateful has leadership, David's products Data.AI, growth lay your to to through Together, I'm strategy, ranked generate

global First, strategy. we strategic Moving remains our on and consistent: our focus committed executing clear forward, remain to

global to innovation, been We drive optimizing to approach one, growth inclusive, of we social capabilities and global healthy user in a expansion and see strong dedicated community. advance diverse we interactions an user-centric our our day user leverage product on continuous global significant and will satisfaction. to community. From potential with We experience product enhance business, user content building will focus our have

and platform. To content with boundaries, our Our global the our platform ability Today, their unique transcends preferred nature apart to connect, community value, platform's and from our users across we're global interact, to our sets geographical the meaningful widespread allowing social different users connections form of truly us what user relationships. fully cultures connections. our leverage sharpening match diverse and cross-regional is

recommendation Our constantly they engage our content with. better algorithms users understand to our finetunes R&D team and the

they goal more people between love. to and and create is content the connections precise Our effective

our rounds Match's year, rate enhancing months, registration, users strengthen to enhance After their core DAU part space nearly experience. has goal competitive Take user payment directly and overall Real conversion, exceeding This past a experience recommendation features how ripple in it's a meet algorithms such it the XX%. focused Bigo remain crucial, just now of While our had X as has innovative Match moving forward. feature, ROI. Enhancements Launched approach. and Live's one for optimization, on our success example. We're on creates impact interact and a user Match of also Real penetration edge, our doubled is Live's new effect, our will several last users optimizing that boosting platform people. for Real Bigo

balancing expansion growth profitability. drive in Second, efficiency and product to laser-focused operational with group on steady we are

to global term, in operations. this a capabilities efficiencies the are and our of payment we acquisition, comprehensively initiatives. and operations ecosystem bandwidth aim user infrastructure, encompassing monetization to strengthen and the link chain global Our every management, In KOL marketing optimize complex long and

further our will cultivating long-run keep and growth. create initiatives will that sustainable diversify we Third, revenue

meaningful XXXX. segment's bearing of effort in the role Our recovery fruit, playing increasingly with in years in driving an BIGO advertising revenue are advertising

the currently However, we new that small. is of scale must acknowledge relatively streams our monetization still

and maximize them nurture potential. continue and will to and taking a develop their are We long-term view,

we advance worth million additional $XX.X second shares. to of In continue an repurchased will our we Finally, shareholder quarter, the returns.

continue We for reward share shareholders will actively to support. repurchase utilize long-term our to their

was the quarter, net increase million, our $XX at the came second group review XX.X% Group overall a profit in non-GAAP quarter. X.X%. let's second quarter-over-quarter. Now, revenue $XXX.X of up our performance million, In year-over-year during

We group healthy at cash level, generating also to flow operating continued million. the a record $XX.X positive

Our operating core sustaining million, increased BIGO's segment BIGO's business revenues the BIGO recorded of up top Notably, trend recovery X.X%, $XXX.X its XX.X% reached for quarter. of revenues sequentially. a year-over-year. advertising $XX.X increase substantially non-GAAP profit year-over-year line fourth consecutive million,

the look Next, recovered Bigo X.X% million. Live's let's closer quarter, by MAUs to XX.X at our take starting a In Live. with second Bigo products, quarter-over-quarter

budgets operational resources regions XX.X% in particularly Bigo paying revenue. saw with reallocating and countries. countries, advertising XX% X.X% Our potential paid MAUs, in high to Live developed monetization growth of in and targeted in of strategy these off, users, In year-over-year

to with Live also with While suite experience Bigo in laying MLBB, in to streaming innovative with injected showcase United the players. In new global uncertainties series and performance to Live's user These was we its and quarter, e-sports Live prioritize paying local Bigo participated enhancements energy diverse Live's in in macro the we for and marketing VidCon, Bigo line more live brought Bigo example offering top further tailored to of allowed We directly persist, Live's users streamers, and users immersive to into us dynamic reach of gaming EWC fresh, This Free expand engagement seamless partnership live. our States. and an propel groundwork the all events, user platform American broadcast event X.X% recovery. In a July. second numbers the launched community. X.X% live PUBG of content professional unique opportunities of growth ecosystem the Mobile upgrades held boost to interact drove XXth and number June, content initiatives and increases Fire, A the vibrant Bigo of Bigo cross-room June Live from creator including experience standout will markets. the Live's going its preferences, high-quality and to which key in top elevated emoji streaming ROI cutting-edge user a sequential features interactions and Bigo features. customs creators, to

Finally, products. at our let's other look

and As we other currently profit. to discussed, our contribute revenue modestly previously products

strict to develop profitable. Meanwhile, operational these Sequential we on products, achieve remained inventory our optimization and features for as maintain year-over-year their growth to increase Our markets DAU revenue. main discipline Likee fundamental and value propositions. In Europe their quarter, core second the in objective advertising efficiency, monetization in focused advertising the a these to at and XX.X% Likee's unique level. contributed enhance product products remains strategy profitability is cost

results, This quarter, leading and higher-quality and creators filters content effects. with driving adding fan strategic of to spent. Likee to toolkit of enhancements the yielding upgrades by we introduced Fest, June, and and fantasy creators with fans. interacted strengthened hosted engaging Likee enhanced outstanding ties user Europe, experience retention. in Likee the Fantasy with Held a their the event community to initiatives platform. time enabled videos, DAU their average positive its events provided content where advanced in features, centered took music, of Likee stage with increase a festival, launched music first is their film, Likee's sequential regional animation, creation These evolving AI-powered around has and diverse base. commitment creator-centric deeply interactive live These video and users more helping series local into a our core connections a underscore love gaming. This approach X.X% deepen In significant

cash Hago. flow. the Hago quarter, In at Finally, operating let's second positive sustained its look

engagement the of We Hago customized summon new Hago's increased ranking live rate. per paying collection screen accompanied innovated positive gifts, tools along Family with front, Average enhance The by retention activity on games into campaign time features. a total members sequentially delivered upgrades also in users. and was major to to on launching improvements a interactive spent that user to monetization continued the rooms and in minutes, with hit, featured second quickly more XX% channels These bullet than live voice next-day quarter. including user features, steady social impact in engaging Hago this XXX visual during product's sessions.

innovate proposition. as enhance long-term our the user core shareholders. we strategy strengthen Looking will value at to for create and deliver and products, sustainable growth Operational will value excellence ahead, and our we our experience, and our remain global our we iterate globalization community approach of adhere as our unique

VP our provide the updates. Alex Mr. Now, Liu, Finance, to let's of financial welcome

Thanks, Ms. Xie. Hello, everyone.

will and second consolidated of highlights provide the the date remind our the therefore, presented for Live. I in some this sale latest to control other all financial not into results YY primarily consisted in the go excluding the over this of YY obtained Live, would you release have have we a the financial not now despite to I press conference quarter. key YY call segments, The and press of of development business. recap details, release, that BIGO like Before Live,and we

advertising XX.X%. Revenues from million, year-over-year. due were with mix margin segment speaking, a contribution Audience resources Network Our X.X% XX.X%. was increased were paid for to revenues profit year-over-year. BIGO's million our revenues with X.X% year-over-year streaming million, particular, fees up year-over-year, the $XXX.X was acquisition of increased operational was with in gross profit to increase to up developed were allocate costs substantially increased our content revenues $XXX.X countries which relation year-over-year, by BIGO total a margin regions. Cost outperforming costs up higher net In all change BIGO's quarter, mainly $XXX.X countries, was year-over-year, of business. Gross BIGO non-live as to gross from which cost was to we the second the of $XXX.X revenue prioritized in million, in other developed of revenue-sharing the which BIGO's quarter, million, $XXX.X advertising primarily our partners of million. $XXX.X driven gross of revenues. Geographically double digits were lower of million, revenues. million BIGO's among by by up quarter margin to gross $XXX.X third-party revenues to due advertising our was $XX.X up and traffic revenues by towards

$XXX.X and operating expenses million Group's the expenses primarily the Among million were to to of from due were $XX the period operating equity period in for primarily welfare $XX.X $XX.X and to compensation same decreased expenses. million, of million, losses impairment in and in R&D decreased from expenses and decreased million, sales the Our total decreased same primarily $XXX.X same from expenses, quarter XXXX, increased expenses million in marketing $XXX.X salary to with period for administrative of investments. due expenses. General $XXX million BIGO's the compared share-based quarter to $XX.X XXXX. operating million XXXX, due of the

quarter Our GAAP was Group's the for operating $X.X million. income

goodwill representing subsidiaries, expenses, disposal and Our investments, impairment quarter, of excludes acquisitions, operating for Group's as assets in non-GAAP income for $XX of deconsolidation income and income from million operating income and was this operating was BIGO's intangible the gain with which on XX.X%. operating amortization as non-GAAP SBC million, non-GAAP was well of business of the $XX X.X%. BIGO's $XX.X quarter million, quarter, non-GAAP of operating a margin margin GAAP income a

GAAP the same compared controlling XXXX. quarter JOYY was of to XX.X% Group's net same Our quarter in the period period $XXX.X XXXX. XXXX, margin income to in was X.X% of attributable GAAP the in million million of income compared $XX.X interest in net the second to of

Our margin margin margin foreign same attributable of XX.X% income with in Non-GAAP Group's same year quarter of compared was non-GAAP period net $XX.X in was non-GAAP of margin higher GAAP margin quarter, was million, compared due income in to $XX $XX.X same net quarter gains million, in period XX.X% foreign the last million. BIGO's currency disposal interest period to same million. net the to to equity $XX.X the quarter, the year with in non-GAAP the from year. currency in in of net non-GAAP $XX.X of $XX XX.X%. The $XX.X compared $XX.X net was income in million, was income million of net XX.X% period XXXX. controlling million net JOYY of a of was exchange last the higher GAAP net XXXX. of gains the compared to with GAAP BIGO's last BIGO's was XXXX. BIGO's certain realized exchange due and the gains XX.X% investments the million

shareholders, million. an operating We healthy a of of we as strong the additional For billion the cash position sheet quarter, cash $XX.X $XX.X remain we activities approximately returns from our continued shares. to booked second of of of to XXXX. In XXXX, a quarter and balance of $X.X with June net million inflows XX repurchased second worth of enhance

date repurchase shares till which upon Our program may period authorized the we its to end under up November our of million another XX-month existing Board expiry to our $XXX share repurchase also has extend XXXX. for original of

our Turning business now outlook. to

we cause control. the be global and near might preliminary live introducing efficiencies streaming to We are operational views $XXX fully proactive taken for fluctuation BIGO's dedicated to some costs, product BIGO's adjustments our operations, some enhance content to As are adjustments sustainability anticipate actions we strengthening optimize risk to market are of have XXXX and reflects we subject we gradually between audio our conditions, $XXX revenues to At changes. of million and third term line. expect and This Group of our million. level, the to the forecast which our top net quarter on such

Looking optimizing priorities, forward, our and we for dedicated our strategic globalization create to will remain innovating adhering users to and our products operations value to strategy, shareholders. our

questions. up ROI-oriented our deliver to to prepared profitable, continue to Operator, strategy will remarks. the call order execute like concludes a in We our sustainable to open growth. That we'd operational

[Operator Jefferies. Instructions] Your first with the from question of Thomas is line Chong

question Should recent my we about as management second is [Interpreted] as half outlook. trend My share the second after the well the first geographies? about across change? And in company's changes will be different any question the the in is future. BIGO strategy trend revenue Can expect the management about the there the

[Foreign Language]

question, you, your This will Thank Alex [Interpreted] question. answer then is I Thomas. answer and your Li. Ting second can first

For the our priorities we through in and part. elaborate remain think in my remarks first I this the will question, quite I go will following that consistent prepared strategic

actually watch have social our platform users strengthen content XX second, demonstrated in Live And specifically regarding over interactions. product global users our as product and a we take continue they strategy. consumption will highly unique operations, To content And truly languages. globalization proposition a enjoy committed social actually it's remain Bigo cross-regional a example, our to platform. where an our globalized we will First, to value to itself, in can our

you at around go if actually other example, gifts from our XX% XX% U.K. U.S., creators For other of to users look from or developed to virtual countries, their regions.

to and content of going matching demand forward, their and operational higher will effective current thirdly, will we we the social social will our phase efficiency. the across of continue environment, cultivation an and improvement the a our their further activities localized next of on of network. And demand regional our users pattern to operations, given So also basing sophistication operating optimization macro our be over ensure have

a profitability of we continue to development. explore Currently, are will to we new early goal of businesses. And young profit do early streams Our revenue achieve lastly, our is have in they our growth some stage an steady core streams. but and new still relatively development in businesses, and

them, while will and We continue health continuously and view improvement year. their every for merger will to take in long-term economic we financial push a

Thank the the a sustainable develop to and growth. you. And for multi-tier Group's growth answer question. sustainable Alex is goal long-term Our will second engine

Language] [Foreign

And [Interpreted] second global quarter, maintained still users in the your that take our products second -- paying the a will X it's recovery, behind growth we second actually a has positive look BIGO's of if core maintained live is our the streaming I our year-over-year. Alex. high growth. on from revenue main driver, This question. is single-digit Based has which revenue driving the performance growth

While our streaming to live has ARPU -- fluctuate. ARPU continued has our

regions, the performances in in regions, past quarters. countries year-over-year consistently and different at the developed Looking terms have outperformed of growth among other sequential both rates

to might users seeing -- to sequentially. expect active period to -- East. more growth likely looking the enter the operating While of year, activities, increase. into to be And Therefore, revenue be elevated to half Middle seeing activities likely the a that's and their already while some return the we're to second positive regions of what we in second the ahead quarter streamers we and

cost. And content QX. audio live gradually to and global have some we streaming also, the proactive starting products on efficiency adjustments in some BIGO's taken business, Live's we Bigo of to additional our improve to making optimize non-core sustainability However, actions enhance are

revenue, we'd fluctuation single-digit year adjustments commitment healthier ecosystem. the such already our of account mainly segment guidance the And for to growth business. And taken and a these achieve revenue long-term aiming we've We full that are making momentum. global growth short-term the QX. our growth affect fluctuations has revenue today continuously our these streaming which not our for profit will But business given to of when that the business a for drive adjustments we deliver live like maintained sustainable lastly, We the strong emphasize building short-term current profit the revenue that year BIGO's of a those BIGO long-term year. we model to into and for of refining at advertising our expect full to still 'XX, expect

Next question, please.

Your next the comes Bank Lei of line of from with Zhang question America.

[Interpreted] Just in group want get trend to BIGO the margin second for the color half? more and on

[Foreign Language]

[Interpreted] [ will question. Alex. ]. This Lei Thank Zhang I you, is your answer

at details And Q-o-Q due up second to within profit XX.X% the look net achieved XX.X% segment's a let's optimization Live's Bigo that, mainly of non-GAAP in our BIGO operating First, the Group's The profit growth. non-GAAP profit was side, sequentially, by also requirement primarily due reduced BIGO's costs, to margin. due meaningfully and an on acquisition our drove to Q-on-Q, down on in improvement higher spending marketing sales content the on ROI. expenses gross And our quarter. user which BIGO's were operating expense

ahead user even strategy, remain a margin to costs or Live's second to content deliver increase. optimize and to we acquisition our the expect we as Looking continue stable Bigo year the slight of half our profit

year. total operating the on compared However, to year to the profits, streaming profit decline all also other the product, absolute we're considering year. for full we BIGO's segment's we last the amount narrow live this segment, slightly expect amount last of to operating negative audio the for to impact loss the modestly And expect our expecting non-GAAP of compared to non-GAAP adjustments accumulated BIGO's made we non-core of that

Next question, please.

from the of Your Morgan line ] with Stanley. next Fay comes [ Derek question

share be, program latest us your for question and return would My repurchase you future? [Interpreted] share progress with the your outlook the capital the could of in

[Foreign Language]

Thank is Ting will I question. Li. [Interpreted] you. This answer your

the have remain of consideration million unutilized of repurchased our which of quarter, which our committed Regarding we X.X X.X% has for share of value an of additional just altogether to In repurchase authorized to QX. extension under second return, our total of the Board represents shares. $XXX our million, end our we up an a And of program capital may USD shareholders. ADS we return the our XX.X as of million outstanding ADS repurchase to

reward our Last We long-standing the will and repurchase to support program shareholders. remain executing active share question, our of continue please.

line Gong question Citi. of last with Brian Your the is from

[Interpreted] management comment business. I ad your have for business our on business? and quick thoughts trend on ad question a on the Could outlook

Language] [Foreign

question. is Ting This [Interpreted] Li. your take I will

at our has -- you the in BIGO growth second a see revenue can Looking business maintained that strong maintained BIGO's has performance momentum. advertising quarter, advertising

revenue looking increased revenue, to year-over-year. XX.X% contribution And revenue advertising by contributed increased XX.X% primarily of now revenue BIGO's streaming Likee's XX.X% to audience Specifically, has by quarter-over-quarter. advertising non-live network The BIGO revenue traditionally sequential revenue. And of peak a total half on to ahead continue basis. expecting advertising, for for is season year, advertising segment grow our we're second to the the a which

margin, noting BIGO a long-term and Network, grown has continue And continue has past worth to over operations of view in differentiated quite it's further to drive operating to that takes However, Audience value -- and our a proposition time. margin steadily accumulate our positive it's an take of refine We it substantially achieve products of development still a that still growth. it's to managed stage years. new development. to gross It our aim the drive market business. further and scale But advertising a and early few already our to under explore share to in still although us find improvement for time profit and adventure it the

Okay.

and speaking So thank We joining everyone that with quarter. question, to next was for you forward you. Thank the our look call. last

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

marked that transcript on now by the may spoken [Interpreted] lines. [Portions an are disconnect present this call.] your live interpreter were You of