DouYu International Holdings Limited (DOYU) 21 Nov 222022 Q3 Earnings call transcript

Good morning and good evening ladies and gentlemen. Thank you and welcome to DouYu International Holdings Limited Third Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] Please note today’s event is being recorded. I will now turn the call over to the first speaker today, Ms. at Director IR Kong, DouYu. Lingling ma’am. Please go ahead,

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

Joining are Officer; Officer; Mr. Cao, us Chief President Mingming and today Vice Su, Mr. Shaojie Chief Finance. Strategy of and Hao Chairman Mr. Chen, Executive

our You financial results at quarter on can third XXXX IR our refer website to ir.douyu.com.

few a IR our website. check replay when also on this can call becomes hours it You of available in a

statements. company in call statements, and for not statements may and be the the from the or these forward-looking company’s Before filings Private company are expectations SEC. contain and cautionary the All by statements update current and with The qualified we under known unknown that forward-looking start, materially Act cause undertakes expressly to provision that please made control, forward-looking risk results, factors revise Chen. based of Reform conference now any entirety Safe company’s the the call. no by on implied will other details may Litigation performance which and statements or this to our Harbor These statements events expectations the performance the note Securities pursuant factors, observations XXXX. on forward-looking or actual for or of Shaojie are circumstances of after different risks, I involve results, uncertainties, to duty speak of behalf this CEO, selected Mr. the Chairman date of forward-looking achievements management’s their

stabilize base quarter content, rate each new by innovate services optimizing ones. segment's cost revenues existing During a current our controls We our and basis retain enhancing optimize we and improving of attracting the as by We achieved and second content quality, of new augmenting our users game revenue an on adjusted while user model. profitability consecutive value-added expenses. return launching to quality both game while continued high we operational our developing optimizing second quarter, and

numbered XX.X MAUs were billion. revenues quarter, million RMBX.X This total and

user adjusted X.X quarterly million. million count RMBXX.X reached Our and paying was net profit

MAUs year-over-year million, mobile average X.X% our X.X% were quarter, increase decline of a a XX.X This quarter-over-quarter. but

Our that the steady absorbed. selective quarters growth negative been corporate consecutive impact our strategy two procurement has for in of demonstrate MAUs

MAUs quarter, factors. two third the on by changes in back was driven Looking

First, selective led from a to in traffic eSports users copyright the beginning our quarter led execution a This tournaments MAUs of year-over-year strategy primarily our to fourth procurement this in who year. platform. loss of the on viewed decline

and and stabilize to investment platform us has combination able our attract increasing traffic streamer content new content users self-produced existing of in were we tournament-related helped retain quality However, the our on content by high ones. and

League users, our launch was investing For self-produced top Legends streamer and a of in segment the instance, content. the potential showcase our in in demonstrated of tournament event the September gaming of for

avenue our membership with to an Together of as continue of Second, in emphasizing innovate exploring we their series initiatives a procurement our shift these monetization of offset caused impact content services the for opportunities partially outside by negative policies. decline MAU the activities, value gifting. virtual promotional

quarter introduced platform. and past specific gamers' services By motivated our been attract and game platform-wide integrating game to viable membership features package, traffic revisit a this inactive membership into service as have our users memberships We service and our new upgrading well. needs

We offerings. video, Turning game streamers, community to offerings, content our third integrated discussions. line content augment opportunities games. users organize including other the shows and updates. brought of interaction graphic tournament, enriched to well as content and we content initiatives as by of on and on healthy consistently diverse and us streamers our their long-term centric produced providing see and ecosystem. this between create popular our features offerings as content, users content product In content game enhanced to offered distributors further huge We needs, for This content we quarter. a community eSports, our tournaments unique endeavor and together games part to quarter, quality our streaming, saw the further growth a comprehensive high and this live user vibrant innovative custom, of and and for and based individual developers, of almost Based strategy base XX eSports create gaming

provided [our official typical [ph], with genuine and a tournaments, our events [ph] professional [term and commentators experience] events. [amateur During experience] features to [indiscernible] CS:GO. featuring pro our games, offerings] [ph] host integrated inviting and Kings Honor our in we organizing leveraging of the into We including of users

and of recruitment with segments. both increases, gaming provided increased we increased with As community series of to CS:GO, And opportunities. games tournaments in CrossFire-Naraka engagement and Overall, exposure female tournaments features user users Bladepoint. a also game exclusive the produced base [indiscernible] tournaments female in combined and system the the the training This and levels streamer our our expanded our the engagement these respective users.

content, effort our gaming a accessible it the in competitive audience. value to entertainment add We to to professional making more wider also put

entertainment new live and For resonance held the streamers. users. and gamers gaming tournaments gaming re-engaging top type its skilled users programmers team and in well up which attracting acclaim and oriented to as segments, in-active anchors, This professional with in garnered partnership team gameplay Serving and streaming in streamers top LoL other compete enhances of sessions, content instance, these engagement attention. spread we in invited in segment featuring eSports community players

now Let's to copyrighted turn content.

and retail official variety content. launched experience a years diversified and official cooperating for related as to activities new stickiness we This streaming game same tournament user live At promotional and live user time, export of models tournament enhance format tournaments, across in with IP videos, content so we formats. developers include engagement. streaming, the of to our game During graphics

developers [game leveraging for new collaborated of and game feature] Honor KPL viewers services to the Incorporating For growth. tournament instance, user KPL, contributed the sharing game established this during well to partial provide summer we was tournament, the membership in previous [ph] received we quarter. exclusively partnership of KPL the Kings data with service

In by resources operating as operations. utilizing innovation, content. [ph] initiative to conducting to developers joint continue this addition improve such our to copywriting costs game to for we [ROI] Thanks manage and

Now, turning monetization. to

third dynamically average rational Our total quarterly an paying as maintained users. for count to canceling promote activities modified RMBXXX we operations, we low consumption in the and fine-tuned ARPU of X.X functions quarter was efforts platform's including ROI million user promotional paying new our and with our teaching

paying count of a these As our result user changes, declined.

quarterly high and users sustainable our basis, stable revenue on overall more behaviors. co-paying of a rational the with stickiness However, our demonstrating remained spending

of in gifting improving we and revenue quality. revenue. gifting progress our revenue importantly, in to structural quarter, our We made improve made non-virtual adjustments More the starting the second quality enhanced virtual

First, have its year. at the wide major platform beginning updating been we our membership this since of services upgrade

privilege membership members with like are in system completion upon actual enjoy streamers and The During of the the platform display upgraded quarter, member can between the entitled certain streamers activities and streaming on rewards benefits enhances and we their where to further experience service the our members. channels. platform interactive

developers. time, the potential models in seen user fee and by same explored renewal fans progress achieved our have in the development stickiness value-added of service. high encouraging of membership We the with the game new rate further At improvements loyal monetization collaborations the demonstrating with we meaningful of our the

the earn few platform on features service. our by innovative then by in based for platform. for of game ecosystem items tasks value our began receive a they live During points can on game points] exchange purchase select to rewards unique the Users the completing who reflecting are platform. provided [extra and membership activities, which channels. and game games enhancing on in we stickiness basis while game streaming gamers' specific or platform assigned user This platform can DouYu promotional cumulative specific our quarter, centric demand, [ph] launching our point our Users memberships

opportunities. and explore game Going features expand closely of further will users and different based forward, the to on we continue commercialization developers models with to and collaborate needs game discover

In and improve experience we community. development, a and our foster terms of centric innovation users' viewing continued game product to

During to live users Upon users streaming a eSports a [VR] Stadium We where in interactive special to team, including games of can showed of enjoy modes, during channel, the VR through stadium users the Tencent can our livestream Cloud [ph] create the cheer collaborated regular we and tournament platform VR the features, viewing gifting. feature watch and participating. quarter, the and great enthusiasm ability this participating EPL for tournaments. in implemented effect CS:GO entering and wider with support

within We our we operations. creating investing up user enhancing sustainable experience, will engagement refine innovating Overall, further viewing unique development and further and continue to upgrade virtual by experience, our community. streaming our execute live self-produced of strategy in forms content, our and our to continue new game users' and

offerings. same exploring content healthy the ensure development of a and we We The commitment game our efforts of structure, our centric these At ecosystem collaborations game improving actively our of build also models while by stream. improve remained our the new developers time, monetization revenue revenue supported to our to remain interactive financial stability our deep maintaining and traditional the engaging current committed performance combination stable will with business. by to

operating will We Finance, controls long-term over Mr. efficiency President go our of optimization Hao improve the our quarter. that, to now With sustainable to through in call the to financial through will cost our turn continue our details realizing expense the platform's I performance overall of for and growth. potential Cao Vice

business, stable while financial we performance In to continuing execute everyone. and Hello, controls. effective Lingling. streaming of maintained our expense you, Thank quarter, live the cost core the third

and As believe On been will market premium new more net operations. content this, our a an changing with second for our monetization a result, that channels. to environment exploring forms healthy in we write-out consecutive We the flexibility top quarter. investing financial us we new status in of adjusted enable profit have of generated

as Total long-term RMBX.X the decrease the platform. to continued were billion The XX.X% financial look year-over-year operating from RMBX.XX prioritizing in billion, and Live by of performance XXXX. decrease such related development of XX.X% now billion. more adjustments our certain prudent detail. to a Let's decreased our implementation of period revenues of in of the efforts to XXXX RMBX.XX strategies was features in at third healthy streaming due the quarter net interactive revenues same

paying balanced seek low as base. paying we canceled this doing revenue for provided quarter In structure, this intentionally a new on core we maintaining promotional a starting users so, some user focus As ROI. more campaigns our we

that decreased to demand XXXX. a commercialization as otherwise same of year-over-year period X.X% other As in in from specific increase macro advertising in under the and soft same with a ARPU the RMBX.XX attributable Revenue traffic weak a same monetized, XXXX million XXXX. primarily RMBXXX, billion continued was increase of The the XX.X% Cost decrease new and compared quarter last costs of in same use decrease by in advertising RMBXXX partially with a XXXX, economy. of exploration fees of well services. have was could offset as which for the driven sharing quarterly the content factors. contributed of users, which was to RMBXXX.X RMBXX.X decreased revenues of portion the directly the RMBX.XX period in XX.X% was billion of by third billion, year. decrease million, the from billion the were RMBX.XX revenues other been number two revenues game models, result the brand RMBX.XX Advertising period compared of The by our of was period paying membership

the our efficiency result revenue strategies. This improvements decrease continue sharing execute outpaced revenues the ratio. prudent in First, as decrease a ongoing as revenue to share streaming to we live our fees operating demonstrated lower of in

third decreased copyright by [ph] RMBXXX.X million efficiency acquiring costs from to well period quarter bandwidth a for contributed decrease the to of XXXX compared primarily as Bandwidth bandwidth margin quarter two overpriced eSports to mainly due XX.X% to third quarter The [we allocation. the seized] in decrease Gross of from costs. bandwidth costs in with profit in through XX.X% the in by expanded Gross RMBXXX.X decreased in XXXX. XXXX RMBXXX.X dynamic selective the in achieved copyright year-over-year tournaments. content of to factors. third of peak million was the XXXX. RMBXXX due the strategy Meanwhile, reduction XX% higher same the for bandwidth of usage same XXXX, million, Second, of copyrighted the significantly in was quarter period result procurement million our also

of acquiring copyrighted significant the we a as for first was tournaments. content percentage The as copyright the decrease ceased in eSports overpriced costs revenues

quarter in RMBXXX.X expenses. representing expenses. and marketing This XX.X% quarter XXXX significant of the XXXX. XXXX, share-based sharing investments, ratio, majority third of expenses of and period sustainable lower XXXX. operations fees. the million decrease period to the was Net quarter administrative in Research the due in RMBXX the RMBXXX.X operating of and of third the of were was investments from plans strategy. a quality equity XXXX share-based improved and adjusted decrease were revenue our the and in were both loss same XXXX. quarter million, with was million XXXX, loss well of in RMBXXX.X Sales Adjusted adds shares XXXX and income narrowing XXXX. as of compensation well were gross revenue due of XX.X% the excludes and quarter mainly second of in same for expenses from decreased in in of million by period improvement This loss third The the acquisition million RMBXXX.X development losses. period General RMBXX.X which loss period compared third expenses, of of XXXX. margin RMBXX.X with adjusted was was branding fully million, in decrease the third professional share-based in same in the our user which of RMBXX.X attributable net service with million, expense compared incentive decreases The expenses decreased in was as to XXXX. impairment RMBXX.X from in share The was the a expenses RMBX.X as of in primarily combined million as benefited consecutive compensation XX.X% compensation a operating same share marketing and led primarily which the expenses from XXXX three compared of same same loss RMBXX.X to vested, decrease back of Adjusted million period million to method million, in RMBX.X from of expenses, million, third loss the quarters dropping in net have personnel-related decreased controls quarter

income ADS XXXX, RMBX.XX diluted of respectively. were diluted net basic basic RMBX.X and For loss and at RMBX.XX adjusted quarter and RMBX.XX third net while per and were respectively, ADS

and September with of short-term had and As as of cash, XX, long-term of cash the XXXX. XX, XXXX, bank December cash compared billion, deposits company RMBX.XX equivalents, restricted RMBX.XX

deliver Going continue to costs quality in to improving order forward, focus sustainable optimizing revenue and will we profitability. on

ready ROIs Operator, We and for development to to concludes will questions. we are overall continue to improve capabilities enhance take long-term support This our monetization our of today. our platform. the remarks prepared now

of Lei our America. from [Operator ahead. first Instructions] come And question will Please go Zhang of Bank

our question. Language] a Thanks was first My we which my plan [Foreign for business notice this adjustments is management that question margin some [indiscernible], taking made content and we improvement. year, changed

you Thank at us So, quarters Q-on- should the impacted look the trend that in what notice this? for next Secondly, current strategic focus for plan are have can with how two year? improvement MAU, going we a business share your and our And we MAU forward? drivers our mobile you.

system. we [Foreign have the years centric Since ago, content two game comprehensive strategy our consistently a of development towards Language] updating executed

past cultivating the current last content healthy, an operations have ecosystem. operational since we our our integrated In a line in and highly economic Internet operating while system, refining focus. [ph] game-focused calls, innovating in the this have communicated changing environment] been content we services, [excellent capacities, earnings short-term average complex companies and year. of building positive, has As includes adjusted

business. structure relying adjustment overpriced We services strategy copyrighted and financial far, adopted on tournaments. overpriced Language] sustainable quarters As two innovative our traffic to results. [Foreign for MAUs in delivered through from has content consecutive premium and operating continued self-produced optimize stability investment this grew for cost mobile have such, positive a we content pre-actively and operational our cease acquiring more So ensure our without

copyright to performance consecutive of based income on our for of purchase Peacekeeper streamlining revenue two was ROI improving our early managed game. resources relative achieve decision year, segment, of now by based of evaluating the low quarters cost example, Elite this ROI implementing also positive to this In the also our the and quality, operating strategies operations, We Language] We adjusted League by adjusted altering segment. on practices. and [Foreign management stringent controls. dynamically spring each refined Peacekeeper our internal net allocation the We our the tournament for

and content our game tournament. our the This our understanding from to tournament timing maintaining prudence. industry, the the Peacekeeper the building. At with advantages stream content that We refine our allows traffic operating developers develop us traffic remain the Language] [Foreign concluded in operations operating of deep operations collaborations game of a high experience and summer centric developers well regain community game and the content operational of game gaming copyright activities, League as was of we ecosystem. positive we our have use in time, As our purchase promoting Leveraging and improved will right deepen games cooperation to continue ROI by leading healthy well platform and advantages resources. self-produced with these in will we we and stabilized same invest and strengthen as more the quality to Elite and

new to platform, our will business that which overpriced controls procurement [Foreign As When growth. high lose quality By copyrighted communicated included and efficiency use incentive revenue have models, based optimization. our game by deepening with of we realize our this, on before, our we The content providing selective maintain This to centric increasing of implemented tournaments we some meet of long-term boost strategy. have users. creation introduced DouYu forward, streamers content retains expanded our engage. and consumption end Going operating users' explore offerings needs and self-produced gradually operational a demands the fostering investment overall to platform tournaments content. innovating of so, improve high of attracts game developers. users quality and we and diverse strategy, content will traffic primarily game users who and our we is means our lack to collaborations sustainable continue self-produced centric stabilize doing we effective several to cost copyright some our in expected Language] order expense strategies Recognizing potential will analysis and and for our We through quality the platform towards less the official content MAUs, operations in users.

this operations patients, they and regulations all and laws the on services content in by game strategies terms In game see emphasized with with data conducting commercialization. achieved and for. our joint collaboration designing pay users of innovative deliver we [tens] sharing of We [ph] and to developers compliance wish with for developers further

As user our a LoL has for a users did we the platform Language] quarters. steadily LPL. tournaments of Let's who take result, our look at grown purchase count two segment, some we consecutive closer gaming In [Foreign official not segments. mainly watched typical lost copyright as on the

as also However, based user to user well platform, game improved new built introduced interactions users' as healthy traffic of operations. driven segments have users, This engagement. self-produced and [Foreign premium a need. has and on user our non-copyright those stabilized the resources community operational and and new the greatly streamer attracting stable remained traffic adjustments, three and only improved content. This premium drove of of our membership self-produced of our have the recovery thanks we but Language] innovative specific and our measures base, quarters we interactive on Following features certain segments, game's gaming content, each In sequentially. content quality not was by our services

attract users, Championship. Operator, of will the will copyright our quarter, centric ignore the best of question cultivate more all please. enhance impact traffic. turbines keep ecosystem. of next we without we we core stable of In our to LoL try and cannot scale on the forward, you. gaming our Nevertheless, continue World traffic Thank Going users, fourth the the to large engagement

next Please of The from comes Chong Thomas go Jefferies. question ahead.

questions. for Thanks taking Language] management [Foreign my

more Just management our in very to a talks operations source. operations content plans want the crucial and perspective for in from [severity] traffic, key terms side? in just now, of Thank you. are reason maintaining I color and the in the management get about terms and the content which is progress some [ph] of traffic

This from quality on generated collaboration streamer's based [indiscernible], and gaming content is our our is better gradually game content for developers. a developed feedback. user Certainly with

[indiscernible] is high clients core platform [payments] quality most attract of content our and to As high more continue users, the [indiscernible], to are our our [ph] business. drawn

the ecosystem continue and meet main added diversify top As and to content healthy refinement. to through contends such, our that community of and having based our we operational to [indiscernible] center. upgrade On quality leaders to high the create opportunity and market have enrich continue of form evolving of our content poster we and demand content a gaming videos

existing base. We core further users our long the [ph] [refined] content excluded coverage] same order and and our [indiscernible] to we stabilize [internal base. our our also gaming to user in of [ph] strengthened At operation the expand overall have time, user tail

improve content, to continue quality We professional automotive the in of investing our [indiscernible]. key and the projects sales

[ph] [indiscernible]. of interest segment, users and on continuing directed to experience in towards and efforts headwinds. For users [indiscernible] supported teams] launched of [private producing gaming well received provide our professional content Meanwhile, continued our presentation game as [ph], subsequently We upon the a the significant increased initiatives streamers more in XX from our concentrated by successfully performance such by interactions our were [ph] streamers and tournament, We and our our developers acknowledged content gamers. between content] October to users and of our production the we gaming] quarter we and our segment] our tournaments. Based enhancement and LoL that relevant on [indiscernible]. were [all by for effectively recommendation, without dealers. producer and were with the teams also were on a [games on [ph] consumer strong our precise sales received improved users. each major we a [similar Based this hardcore This

regulation. also commercialization In instance begun collaborations for evolved And game [publishing events. in with a This collaboration entire [ph]. where core a a flow, membership step our [ph], to increase income to that work we all service from [ph], supply, sharing] comparatively within launched basic our in-depth to in and collaboration collaboration value-added better launched [indiscernible] users our into the the Besides diversified Providing experience development membership segments in [indiscernible] users. game explore we our development. where digital we rewards value-added based a continue with on in has game we We both depend operation, opportunities for content on on developers our platform. persistently than cycle] the our planning our enhanced transit. service unique viewing other terms strengthening segments crucial gaming By [chain and was sensitive lines we services of [Now a game gaming and other of we games further game features to have throughout and [indiscernible]. game This data, providing content cash segment] multiples to platform. users' [indiscernible] now with

we creating ecosystem existing of more our indirect content a on table dedicated Going system. game to are forward, top

you. Our the Please users question. demand. consensus, is gaming next Thank best provide gaming our goal and with to experience, experience platform. regards to gaming on In

from question Please of Raphael BOCI. The comes ahead. next Chen go

for paying myself. user my decline, on could the on comment for underlying question. Language] going users. users? this noticed you. quarterly My We quarter-over-quarter the share experienced translate [Foreign quarter I contributors? And management can management trends the will main forward regarding that Thanks taking and paying is more Thank color question

analysis, decision user Based increasing activities was consistent the our ROI efficiency. strategy our to low for count new in As lowering [ph]. we our explained paying remarks, costs keep on was cancel operating has decision the operating users users. ROI new with in [record to to business] prepared This and promotion for of paying of promotional our due change briefly activities

One paying into interactions new effective less converting activities of followed ongoing paying have user record users. and are promotion don't users that at streamer up

groups started to we such, improve user revenue to in our order quality. paying As manage better

have promotion of ROI reduced started improving users. activities and overall for We paying focus quality gradually on to the

in are streams improving our ways. and We developing two revenue

on paying our core users utilize to core focus we First, maintaining business.

[ph] have been always [streamers paying a user For example, high fan] quality base.

utilizing memberships. wide and addition In our specific effectively commercialized membership game to platform

to a and frequent over fans among participation, pass] with pain feature. cultivating regular interactions space were [indiscernible] where fans long streamers habits along launched gradually fans period the Activities a is record in We the completed [gross of promoting designed non-monetized their also This streamers. future clients. and [ph] be

Second, developing business wide games our business] We our well improved we is on service developing on and are features. mix. has [tapping provide membership other focused model the revenue The and services platform already based traditional model. value-added than [ph] new unique streamers' upgraded to service characteristics

to opportunities for and We segments. specific memberships several also monetization launched work identify further across game gaming

Looking leverage the and will Thank competitive models. in-depth ahead, ecosystem to of new we much. our our very advantage innovative you to of continue gaming business potential explore centric

go of question HSBC. The comes next from Ritchie Sun Please ahead.

you. that [Foreign Language] for potential well Thank on as our management, as on future? is why can and questions. you, membership taking What platform my elaborate you progress Thank talk the Could more specific you game services. out monetization in the

me answer Let question. your

model. monetization determined service membership positive components our of our non-keeping As

interaction on tool led We operating segments. to users. membership opportunity engagement more between game-specific an This between their subscription, interact to games have to platform. and platform-wide [indiscernible] revenue. a our rates techniques renewal upgraded members sales [employment and has suit three access single [ph] our workload to We to monthly an special quarter. needs. of our Platform carrying our increase and refined plan in with in this we streamers and value-added handling needs increase Leading launch to the membership service. significant in members months gifting gamers and based expenses, customized maintain services. a membership the section] to our user Examples and with wide membership In line dedicated important different are this actively include With membership streamers is within services different kept returned [indiscernible] high to in previously the games increased team,

with stake magazine launched in-game based As games also take the a spend items game news and we [indiscernible]. nature that way for on to of we experiment membership monetization,

X%. and service increased amount achieved explore streamers can great have far. segment channel good to promotion] to our to the [market results games out and rolling in [pro service this top forma] are We their by be currently so what through traffic months certain XX% [ph] [ph] Three

number inactive [and game the protect strategy gaming [indiscernible] fans of content segment. significant to retain] new attracted secure participate and membership. allows the [ph] users both our Our us in in This ecosystem new promoting to galvanize were users

and continue exploring can Going gaming to meaning game and and channels richer revenue on segments. ecosystem. explore at you. game-specific question. commercialization a opportunities to build will play of existing streamline based diversified this forward, experience time, unit services, our Thank Please demand launch to provide further our users platform And gamers game gaming initiative with platform. we to of the their we on continued more supplement our membership consistent same also promote games new centers exemption By more in more next our

next of Morgan ahead. The Please go comes Cathy question from Stanley. Tang

translate help Language] I'll future [shipping should you Also, understand shipping how taking the margin] in myself. behind margin my third Could year? [Foreign for a about about this drivers quarter [ph]? little questions. saturation Thank actually bit management you. more we Thanks to think

to Thank steady [revenue increase mainly sequentially, you for of First, three gifting your of development ratio for managed our due long-term in quarter-over-quarter to we thanks The cost business. strategy our and stabilize slight virtual factor: [ph] adoption question. revenues share] was to our

improving while reduced revenue streams lower quality. our those ROI also We revenue with

fine remain overall at only and We revenue will slight revenue as we expect healthy with level share between the adjust operations. our that fluctuations our further ratio quarters current tune generating

in content costs a partially by were and increased content payroll. due This increases self-produced to the streamer quarter. was mainly in which our reduction copyright Second, costs, offset sequentially during

In copyright costs, of purchased slight regarding EL] terms [ph] in previous to increase compared a the quarter. we of copyright copyright [Peacekeeper costs,

front, to we content innovative Our content continue formats. explore self-produced

and initiatives content promoted During costs. content updates new we versions a to increase of in new the quarter, leading for sequential games platform launched our

streamer resources of payroll. continuously optimizing decrease to overseas also business a quarter-over-quarter We been our in leading streamer have

our margin scale you. evaluate Looking At quality our large content. continue for procurement slightly XXXX will time, tournaments we In increase we high our expect a prudently payroll summary, the for forward, we self-produced structure. year-over-year Thank gross improve on decisions our to in and optimize to same streamer investment will basis.

the That's Thank questions. management over will for now have call back to you. turn all time closing for the I remarks. we

speaking to for quarter. everyone with We you On call. behalf forward joining the our next management of team, thank look

Thank now you for the you. disconnect. That attending today. call and may you concludes Thank everyone