JOYY (YY) 27 Nov 242024 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Inc.'s Third 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 Third JOYY's to XXXX Call. Earnings Welcome

Ting and Liu, CEO us Vice today JOYY; Chairperson Ms. are Alex Joining of Li, and of Finance. President the Mr.

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

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

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

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

Li Hello, everyone. call. XXXX Ting. quarter third I'm earnings our to Welcome

a review during third performance the of overall our with quarter. begin Let's

effectively operational quarter, These yielded maintaining in During quarter. our solid countries in penetration a our our products, executed on efficiencies. we our deepening market strategic the developed enhancing the third and strong capabilities third and focus global priorities, optimizing results efforts

revenue reached group Our $XXX.X million.

increase. slight Our core business segment, delivering of year-over-year $XXX BIGO, a recorded revenues million,

segment and execution improvements at level. to in the led group Our BIGO has efficiency disciplined operational both

operating non-GAAP exceeding million, quarter-over-quarter, non-GAAP group in up $XX.X $XX.X operating BIGO's expectations. Our came to quarter-over-quarter. our at expanded up million, profit profit XX.X% X%

priorities quarter-over-quarter. We also non-GAAP BIGO's earnings call. of briefly Excluding net FX losses, previous the outlined strategic our our was up in profit impact

of quickly touch on let these. me Now, each

social while interactions strategy, continued advance platform. as building global to a content offerings, First, globalization enriching our unique position, on we user our and

who the nature previously users languages is actively across have countries, cross-regional globalized among in mentioned, and particularly evident to we across community our committed offering fostering upgrades us a enhance highly a on and truly our global series a apart interactions. and cross-cultural is of This flourish Bigo What distribution of XX the the user social quality product, that developed implemented further to creation, we proposition set our unique have amplifying. To Live global engage boost organic ecosystem, meaningful in that are platform. connections we of As platform, content our content our connections. is value

North For flow example, cross-regional same algorithm content our we fine-tuned expand South and within as interactive better recommendation regions between facilitate content sharing and to America. highly such content markets language

global this highlighting Africa, America, together regions. launched interaction on We brought Talented American such our unite team. North engagement event talent to creators ability initiatives across cross-regional also patterns, Most high The diverse as Southeast Asia competition from user by based quarter's organized BIGO's our and

content front, connection. preparing and translation technology select the caption enhancement social for and appetite On global content delivery standardized to growing serve languages. content and we introduce the in commence of global guidelines will alpha testing are our cross-regional users' real-time streamline our better This AI-powered

every aspect optimizing to profitability. our in the group efficiencies strengthen management our and global from user comprehensively acquisition KOL of monetization Second, expansion By user steady of operations and to operational and aim we our product and we localized on focus engagement lifting mechanism, global are capabilities efficiency. operations drive to

insight, of products, the users the regions and and towards acquisition our regions from Leveraging comprehensive acquisition optimized advertising spending quarter, resource on allocation, conducted During across developed we focus greater monetization premier redirecting this with user we channels. potential. underperforming countries our ROI analyze

have acquisition in digits sequential spending. In channels in countries ROI a advertising sustainable, total user developed we experience previous As improving to cultivating of reach. its features X.X% Match content sequential shifted quality a our result, reduction year-over-year our partnerships KOL to consistent double overall Bigo efforts and like by regions, user from with quarter, while some traditional base, achieved These and monetization has the user growth from Live even leveraged drive other product social with underperforming social as high-quality cost-effective user enhance acquisition Real to such our potential. expand a commitment and simultaneously methods targeted to more initiatives underscore long-term user

our has to and both profitability. strategic currently allocated personnel have To our For leading contribute Likee, the further live resources, maintained initial achieve live in user potentially This which term. that monetization will including non-core do milestone potential, markets, social through streaming new Likee's successfully recently streaming we approach East some redirected monetization Middle in and a much product. This implementing we enabled to its on focus us Likee's core Europe and means advertising. and of optimized, unlock to Likee's monetization market to metrics in traffic towards declines be a near resources the operational further the targeted not

] advertise in new our product ultimately position the will development, core and strategy our strengthen However, potential market Likee's enhance monetization run. Likee's we this accelerate [ in believe long

the buying actively million by expanding further meaningful $XX.X third position, commitment with Third, our our grew streams. that to shareholder cash return streams the Building $XXX.X sustained $XX.X level, non-live Europe million these sequentially strong requires supported market. by shares, investment. generating revenue. BIGO's at footprint This the long-run potential. We strategic our program. in cash to streaming operating nurturing remain XX.X% accelerated share diversify and to quarter, $XXX.X cultivate quarter, In committed in XX.X% streaming third our will we patience In quarter-over-quarter remaining initiatives group North we initiatives. continued these group XX.X% the flow our of revenue increased advanced revenue revenue growth under have group non-live of financial underscoring realize our this third our revenue, primarily initiatives momentum to worth We to in quarter, million, $XXX and flow and fueled opportunities our additional healthy unutilized repurchase, our million. generated strong advertising, sustained million America, representing full we new our repurchase and initiatives from to their back was positive into

reward to share execute our ongoing buybacks to actively continue support. will We shareholders'

take Now, look year-over-year. with strategy results X.X% developed and operational the closer paying X.X% prioritizing towards and developed grew our Bigo users users. quarter, This in advertising Live. In operational starting by sharpened resources premium we a approach countries, strong countries investment at product, our our year-over-year and MAUs let's where yielded increased targeted third

We sequentially. Bigo also encouraging revenue momentum increased X.X% the where Middle saw East, Live's in

culminated dance on successfully introduced previous During a a creators metrics. strongly more allowed outstanding This competition. The we amassing elements. Los impressive the merger of with BIGO's world. of X.XX The beauty. streaming event with broadcast highlighting surrounding Angeles live Bigo third an level million XX, including around of audience the captivating October judging The the the seasons, quarter, from in incorporating talent final comprehensive grand Building traditional key attracted audience Most high Live viewers, categories, featuring season music, audience. a and votes, interactive event system resonated organized a on show seamless Talented, engagement the from season global engagement

top and XX.X%, the of together the also our quarter, across contributions engagement celebrate first users of DAU efficient functionality. and prioritizing through penetration bonds Philippines. user gatherings the year. Throughout Thailand we progress in upgrades ecosystem, half the community and increased Live's significantly brought members more Notably, cornerstone conversions. Match Arabia, connections and galas Saudi partners our number our We business to while to achievements partners improvements rate features, Real previous their to creators, the Real user social direct of the with Bigo from messages the Vietnam, Match's rose midyear developed and drove a XX.X% These to deeper These chat of series messaging further by strengthened and quarter. our follow vital average

saw a X.X% user a upgrading the X.X% We traffic multi-guest guest live sequential live, rooms, in increase in achieved the broader of in speakers. premium per multi-guest of users alongside session follows also new hosting increase rate building. By We X.X% as rise saw in overall indicating a features, community stronger interactive creator user a participation penetration and rooms. rate user, sequential going and average engagement to hosts in directing we

Next, moving to Likee.

European both Likee enhance strategy and to advertising. momentum for Middle market, the we Our across and rooted East and streaming where build remains live monetization continue in

result, the quarter third and maintained grew a revenue profitability. in Likee its XX.X% advertising year-over-year Likee As

top coverage for During event community laser engagement. Phygital to This user and quality, Games we as to experience an across standout Likee's users days partner alongside shooting A X elevated brought groups, celebrities. creators and dance enhanced of through music unprecedented competitive Likee prowess the the across athletes official simulated of building live in providing bloggers X was interactivity from quarter, dance. content XXXX, September, the its our which football, established European initiative together delivered and core festival interactive streaming community markets and tour Likee's for top performers cities, media served music digital unique experience the immerse basketball, Likee community. In August

Our users' expanded a content offerings increase time content premium in drove video XX.X% quarter-over-quarter diversity and spent.

sustained revenue strategy minutes. to channels metrics And platform. paying to its saw positive operating quarter-over-quarter. positive These user turning improvement. segments commitment ARPPU We previous Average X.X% experiences, the its to third strategy trends day, operating the quarter Finally, different quarter-over-quarter of quarter, advancing monetization within social incentive showed engagement in monetization from increased total In Hago's across our user social targeted efforts strong success Hago's improved with the third remained quarter. positive. Hago's further enriching metrics. growing our spent in remained Hago. our paying rate reflect in flow and cash XXX drove [ retention ], while engagement the next the users underscore time X.X% momentum losses narrowed and and

now social continues our revenue strong our financial to of to ahead, developing our and creating a Mr. position, cash Vice global to financial our to operations. enduring and by strengthening Looking turn driving Anchored President Liu, map drive are across flow platform streams growth and for road value will sustainable experiences, as priorities: update. X through dedicated our diverse call growth, on enhanced advancing profitable Alex the footing, to distinctive center core excellence global shareholders. I Finance, over Thank our provide strategic user we the solid you.

Thanks, Hello, everyone. Li. Ms.

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

year-over-year, speaking, were and in turn particular, to million and changes from adjustments as year. were BIGO's the product same BIGO content revenues developed regions XX.X% in optimize the million, BIGO's operational streaming sustainability. Geographically quarter substantially markets. in and were We from costs, decreased of were to driven for growth business advertising partially our million with enhance to monetization revenues. BIGO's our premium saw mainly and $XXX.X acquisition revenues increase in was XX.X%. increased live in traffic partners to certain Our due gross to gross of of with by cost up was to million, other profit sequential the primarily East paid was offset user was contributed $XXX.X to was revenues business. Gross to Bigo costs of last group $XXX was in by our primarily up these million segment, of of long-term the margin of XX%. total BIGO's increase BIGO. In net were margin potential, year-over-year up segment to advertising Live's network countries towards streaming prioritized Middle the by streaming we by to decrease $XXX.X $XXX.X acquisition allocate which mix, revenue acquisition profile great non-live lower by which relation a profit X.X% year-over-year, cost due revenues an the BIGO's lower-margin in advertising mainly cost by quarter margin of driven in consistent revenues million, our revenues non-core due slightly believe actions of in and year-over-year, revenue audience million, a audio which increased X.X%. Cost revenues of our $XX.X margin third-party resources a shift X.X% developed countries trend, with with gross our All contribution live $XXX.X of period our a users its up $XXX.X from which revenues with from million BIGO's was quarter revenues. our with year-over-year, to compared revenues year-over-year. gross third down Revenues back proactive

our dilution execution margin. effectively quarter, on third BIGO's has efficiency disciplined However, BIGO's live significantly impact operational the during of business, gross the improved the offsetting streaming

during sequential a gross we improvement observed the margin in As a quarter. BIGO's result, meaningful

marketing of user increased to and the $XX.X expenses expenses. BIGO's million, quarter operating the the the group's period and continued $XXX.X decreased to marketing through to for XXXX, primarily Our on ROI effectiveness the operating welfare and we the sales due million of expenses expenses. same decreased decreased of in with million period acquisition. expenses operating for user General in of spending in million as same and focus million $XXX in $XXX.X same from primarily period to increase period due from expenses, in and million total administrative were from to quarter $XX.X the advertising, compared $XXX.X XXXX, reduced expenses on $XX.X million in our sales of XXXX. same $XX.X Among salary acquisition XXXX, primarily due the were million to

disciplined execution at has and BIGO enhanced operational efficiency driven group the both Our segment.

quarter GAAP income quarter-over-quarter. by for Our $XX.X group's XXX.X% operating up the million, was

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

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

compared with same quarter. BIGO's currency $XX.X interest attributable same non-GAAP in Our quarter in BIGO's net foreign GAAP repaid in net was controlling CB due year group's XXXX. Non-GAAP [ income in of the JOYY to after million quarter the the to third million due the was compared net margin XXXX. to margin in compared the period $XX.X second million compared net in $XX.X to ] the interest XX.X% XX.X% exchange income year of and cash due million net currency to margin net to million period was income of lower this was $XX.X The same we non-GAAP quarter margin net balance period was of XXXX. income net of million in income $XX.X the larger in lower the foreign quarter BIGO's same decreased to million this our period year. of the exchange losses XX.X% GAAP with XXXX. of same GAAP the quarter losses in $XX.X BIGO's $XX.X net compared was lower was XX.X% the XXXX. period last in non-GAAP the in fully

cash third net $XX.X quarter the we activities For inflows from booked million. of operating of XXXX,

our enhance XXXX. In $XXX.X shares. position healthy remains of with strong continued of of we Our shareholders, net balance quarter, as $X.X worth cash additional to XX sheet September of a billion, approximately an million returns third the repurchasing to

X altogether total $XXX.X ADS our [ as approximately have ] of of first X.XX our quarters which XXXX. ADS, for the During XXst, December a XX% repurchased was of million of million, of we outstanding XXXX,

our business Turning now outlook. to

we dedicated previously, to strengthen global efficiency mentioned of fully the and As sustainability our operations. are

negatively control adjustments net affect is for in We some be audio year At million. XXXX, to implies risk live revenues for million we moderate the proactive the that certain our group for costs line of growth. of $XXX streaming XXXX taken QX. top such BIGO's our quarter enhance still level, $XXX optimize and between We positioned to might expect and have quarters. to BIGO line This fourth full product anticipate adjustments recent BIGO's to in top content actions introduced

we to prepared call up dedicated value our will platform, strategic we financial to unique would profitable strong our our remarks. proposition, questions. a healthy we enhancing our and to diverse and to exploring Supported sustainable, as priorities, deliver shareholders. That open Operator, for all positioned growth revenues forward, cash Thanks. and like levels. at the value position, concludes social well efficiency remain our actively flow global enduring operational now are growth by Looking driving create

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

[Foreign user, revenue? Language] is as management operating outlook. that, expenses My can well trend On as management profit? in the our in about and trend Can of also comment about XXXX about comment top the question

[Foreign Language]

first. your your Thomas, you, Thank first to more question of like comments I quarter. for third [Interpreted] question. will And first the regarding performance all, take our I'd a few add in

our of our substantially non-live reflects grow a live X while revenue of You behind revenue see streaming in decline revenues, that the a BIGO's streaming experienced year-over-year, which combination the live factors. we've to QX, year-over-year can mentioned streaming decline. And reasons continued

These costs First, also second, proactive up we Live. non-core we fluctuation to sustainable adjustments our been in the have and been in of for in believe QX the enhance in streaming content we already quarter. audio to and QX, -- streaming live short-term taken would optimized product has a continue current which compliance BIGO's to -- into QX, building in together did And have certain ecosystem. it live sustainable in regions revenues adjustments guidance for of Bigo likely in led BIGO's fourth have revenue made features account a

growth we BIGO's a for operating also margin, model quarter, mentioned healthier the products in we've for are and we've sequential adjustments outcomes gross and our these already from including seen at these developing now QX, in positive profit as However, profit. proactive ecosystem that are last some aimed [Technical building making a in adjustments ROI Difficulty] sustainable also improvements

Language] [Foreign

would to the allocate. that growth of resources our operating still to we the for year, as that ahead be varied on intend are and next the process we detailed plans the 'XX, looking estimated And in operational [Interpreted] -- believe expected we based year formulating XXXX

a like few So to first. I'd key share trends

Language] [Foreign

believe 'XX. the we of both 'XX, start been implemented series the BIGO already and year throughout adjustments for poised [Interpreted] With a fresh year JOYY is that have for a

countries operating acquisition For we of will premium users. concentrate resources developed our the BIGO segment, on and continue to

expect believe We 'XX, can compared to growth drive and return even with [ sequential BIGO's we to a to the paying which ARPPU previous the stabilizing revenue on trajectory a will a user year together live BIGO be year-over-year back growth gradually in streaming of ], year.

the double-digit of to will expect streaming continue revenue we maintain non-live BIGO growth year-over-year. segment Additionally,

BIGO's certain 'XX, However, the streaming in half base to when some the still line just mentioned. exert adjustments which positive just whole could live high segment. non-core momentum consider its segment, product other non-live we on first non-live for still possibly the to now, mentioned that you streaming year as top expect would growth growth the we of All the BIGO's of offset grow, rate, impact a negative driving we the of to streaming audio particularly overall continue revenue And

our is As under believe past areas limited you for of can of I MAU, resources current due our observe fluctuation some this the optimizing resources towards and primarily and long-term potential. to quarters, that group premium direct with away monetization it's X strategically been while and developed users, core proactive strategy from our users over some countries

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

Language] [Foreign

Alex. is This [Interpreted]

amount our the non-GAAP percentage up by QX, margin and execution the X.X%, by points XX.X% has quarter-over-quarter. operational XX.X%, operating enhanced disciplined X group's gross nearly which non-GAAP margin percentage absolute by was compared also QX third increased is XX.X% non-GAAP group's level up and So points and profit was which level. of was to segment profit its to efficiency compared The in at quarter, both the operating X.X group driven in

operating improved due to to by expanding to Live by non-GAAP quarter, from in optimized other in gross mainly and you of percentage spending. And expenses, non-GAAP $XX with to particularly look the XX.X%, And particularly recovery. expanded at the percentage up the up percentage and our in XX.X% in by to gross points in expenses, If at BIGO QX, a and was operating and operating we X.X cost quarter, our mainly compared the a compared is to acquisition by segments, QX from XX.X%, operating a also which as of amount BIGO's segment, of X% points in QX Bigo narrowing that non-GAAP absolute sequential was of expenses effective X look due control, if of in was saw was marketing All non-GAAP profit up QX, up is quarter, X.X QX, margin to you revenue margin X.X% loss now revenue. savings that by million non-GAAP quarter-over-quarter, mainly XX.X% and which also our content an the sales user margin R&D the QX, our a -- steady XX% percentage substantially points quarter-over-quarter decline our was during due

[Foreign Language]

Live's profit [Interpreted] looking anticipate segment, the Bigo So we for fourth relatively stable. remain quarter, to to contribution BIGO ahead

BIGO's we as in However, expenses that compared slight in the audio -- to decline non-GAAP expect together this impact, and to we the product, QX. non-core marketing adjustments with our the in live a as profit our operating due year, end seasonality to streaming sales of increase might our made

QX. narrow For loss to non-GAAP operating All amount its we other in segments, expect further

segment, the monetization, of with will in as believe we for likely segment, of Therefore, profit profit overall we factors X our impact the BIGO other continue -- efforts. a potential the expenses together, terms Considering global in operating adjustments segment's year within profit. persistently non-GAAP the absolute margin level, new that we All likely BIGO in optimizing improving expect will anticipate non-core we We for operating the at ahead localized potential the streaming will 'XX, Live group we under an further Nonetheless, the optimize the will that to spending of under 'XX to 'XX. narrowing segment increase certain continue non-GAAP optimization to ongoing R&D operating non-GAAP assumption profit growth the believe sustainable segment. the All Looking strategy, the and year in new on expect of to the for losses the of efficiency continue with amount content profit operational year. And we growth aspect foresee in BIGO trend year. revenue order the and mentioned in live amount an from show disciplined our negative that our to to believe products acquisition we just 'XX. made ROI-oriented have We in operational cost audio that improving due Bigo of we'll our year to improving efficiency of decline the compared for a a we contribution drive believe which Therefore, strategies business. execute continue profitable we every that user all, 'XX. year the percentage remain requires to operation, enhance likely our our to above-mentioned stable

Next question, please.

Research. with Chen next question Raphael Your from comes BOCI

[Foreign Language] Could trends myself. key different in year XXXX? translate across I will monetization the general regions fiscal management share

Language] [Foreign

revenues revenue the I take In group developed outperforming other the countries with by provide your At momentum Li the question. is This to from year-over-year, to contribution XX.X% third XX.X%. increased continues region of its increasing [Interpreted] growth. Ting. developed countries group to will level, regions all quarter,

signs showing terms the East revenues group's the from quarter-over-quarter, of trends, In X.X% rebound. sequential by region of Middle grew

regions we both remain high towards also strategy the expect top operational resources monetization as with operational countries the and ROI-oriented term, Looking and on prioritizing our continue East priority. that execute at potential, developed to our the will Middle long we

Next question, please.

Your Morgan next with question Stanley. comes from Derek Fei

on myself. a [Foreign is, translate fully return? utilize in My to give expect bit we company in progress could us 'XX? more Should little color program you will capital repurchase question the Language] I the the

Language] [Foreign

answer Derek, the Alex. question. [Interpreted] I Thank will This is your question. you, for

if very total worth our the for so the active end QX, year, of initiatives for of first $XXX additional which the So year's last an total our our X.XX of million the year. in execution, total full of accounts ADS $XXX have we quarters an repurchased been far, of our bought in And million, at as outstanding, we in look XX% throughout very, you of shareholder for And shares. return X of year. back million impressive we've a shares

While looking XXXX, create continue ahead consider of strategic shareholders. we year for one shareholder to continue will our to value our priorities to as the returns, and

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

next comes question Zhang Your Yiwen Renaissance. from China with

[Foreign Can other for new advertising into XXXX? Language] the discuss our management outlook and initiative business

[Foreign Language]

so the the with platform advertising own for sequential far, or dependent driven network ad mainly remained attributed expansion growth quarter, exceeding from Future factors, sustained of DAU, driven pool, inventory BIGO's revenue own new [Interpreted] social -- question. business Audience growth, now of entering our of platform, show and social be advertising momentum growth quarter. Well, vertical our advertising the Likee the new sequentially BIGO bidding own I Audience our growth Network in revenue our optimization platforms improved and significantly your the revenue reaching third will a advertising advertising platform, Network Likee XX%, primarily and operating the profit is XX.X%, Li This America. which continue Ting. Thank you In take and segment's to delivered revenue, its year-over-year robust revenue XX.X% the question. of which strong North by margins total a Notably, sequential from growth Europe to among increased X.X%. Revenues from the OP BIGO's as during to growth been is of DAU have our markets our such BIGO exploration multiple including clients. the or by or contribution while growth Audience of the new the expanding has Network into on of its will been strategies. our

continue scale view, growth. However, we to and of it In accumulate further explore steady always in long-term drive will take our drive operations again market order a order time increase to to takes refine further growth, time. a and drive to profit over our share

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

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

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