Sound (SOGP) 31 Aug 212021 Q2 Earnings call transcript

Hello, ladies and gentlemen. Thank you for standing by and welcome to the Lizhi Inc.’s Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management’s remarks, there will be a question-and-answer session. And just be advised that today’s call is being recorded. turn of over company. Capital now Effy your will Head Kang, Markets I the to call host, But for the go ahead. Please

Inc.’s are and operating Thank begin welcome via Newswire conference Hello, much. today results Participants We second and on earlier Li; Chengfang include Lizhi they Marco call. financial you the earnings conclude online. Lai; Mr. quarter will Zelong our Mr. Lu. and everyone Founder Ms. our CFO, released CEO, services XXXX and available very prepared and our to Acting call and call today’s with will session. our remarks a with Management COO, will Q&A

recorded. a this is As reminder, being conference

available earnings the of this In section replay addition, our website and presentation at highlights our the on ir.lizhi.fm. IR will webcast be of conference call

typically continue, Reform expressions. we the under Private Harbor Before will discussion note of estimate, other may, today’s intend, Act statements potential, XXXX. words Secretive please contain continue the similar believe, made forward-looking statements or will, expect, provisions contain U.S. Litigation such target, of as Safe that These

obligation involve measures as non-GAAP a Founder statements risks representatives press which a go of measures risks underwriters Forward-looking materially differ uncertainties and include our of press GAAP Marco update unaudited advisers, Please and and applicable The reconciliation projected under results to Lizhi’s this call are forward-looking to Please earnings well release I anticipated, conference to ahead. law. from any factors now call unaudited financial of and our GAAP of over the will discussions turn Mr. release this measures. measures. do actual CEO, could to number that cause contains non-GAAP information, note Lai. business the company, Lizhi’s that beyond unaudited except financial affiliates, unaudited impacted its required as maybe those and these statements of not The accuracy or as inherent by uncertainties. many undertake control.

everyone. Hello, today. joining for you Thank us

business very maintained are We our second the in of of growth quarter robust aspects pleased that all XXXX.

audio-centric dedicated to We the a base. to to bring are audio strategy globalization broader products diversified user and

efforts continuous in growth the user of total second reach user quarter, steady and technology million improve Driven base to by developments, enhancements year-over-year. in and RMBXXX rose Our advance XX% revenue XXX,XXX. average resulting commercialization another mobile optimize the a of in up high the our reached features, capability, our average paying experiences, XX.X monthly product quarter the in-house second million, to with users in has our record ongoing MAUs

during underscoring and Our of the competitiveness community on engagement solid the [ph] in second performance Matrix effectiveness user of our and the continued our to to Lizhi App younger the efficiency the increasing audio-centric appeal online audio demonstrate execution, generation market. strategy built In the quarter of quarter, to our in levels reaffirmed UGC the our interaction. high

achievement we entertainment rate of entertainment improved in our This in space paying further year. in conversion also user commercialization last to effectively the from of quarter to addition, quarter same strengthening growth audio prerecorded and revenue. brings second penetration and the XX.X% entertainment division content In in XX.X% strong the user increased audio further more driving and our capabilities of have XXXX division improve audio integration

vertical Through Podcast. creation generate podcasters. our cities podcasting younger operations of for successfully middle our and podcast live further the and devices to In accessibility, streaming Lizhi opportunities second we platform, we influence innovations increase to diverse supported podcast the On on diversify features quarter, ecosystem. the podcast our original development expected continue on to audio the base to effective we content cohorts other have by hand, user automotive higher-tier aged and expanded in leverage feature

streaming podcast platforms our unique in-car the foothold audio to leading live listening with usage several greatly include and partnered mobile Furthermore, listening are also to audio technology of our to implementation audiences. experiences have applications across in-car We optimizing programs, and market programs. the we experiences strengthen of divide These delivering exceptional in brands expedite to working efforts which and in-car terminals. a wide is expanding narrowed, with catering improve and companies collaborations the multiple companies range

the that quarter. Lizhi increased time seeing on are has We listening second users Podcast substantially in

by app XXXX. globalization our MAUs June base with social App, first over the overseas networking average more grow our MAUs rapidly XX% to representing Turning continued X.X than targeting audio-based to in of quarter TIYA increase rising in highlighted our to growing markets million a progress, user

TIYA, this XXX% increased by more rooms the In as this terms and product groups number more In well features. on strategy June, activeness improving number interactive of from as TIYA increased and through user of engagement our user operational optimization to of enrichment of integration March. this for from by active of we the committed are continued and March active chat than XXX% than

that seeing core amount focused more and In users is also platform are second and capabilities. on on a driver business crucial join effect. interest expanding, networking of our to platform We the enhancing empowerment the advancing topics Technological effectively rigorous diversity social for increasingly bringing quarter, we network and the development. remain technology our groups new the are TIYA’s

of our in-car are the systems in-house solution, with compatible developed example, performs. operating For more DOREME, striving audio to we vehicles Internet and make technology

goal for across to Our ensure different interaction. and is superior real-time satisfy demand audio in-car quality user systems audio

driving support refine we a also businesses, overall a Alongside driving our will devices. social technology battery content multiple audio platform. AI various actively also to personalized mechanism Our enabling business recommendation further responsibility as a effective of the and community we experience across delivering execution and including our business development, strategic is In undertake growth. growth robust and corporate technologies the empower core our future,

programs through film Disability we have See creators vocal Ears documentary of audio the Day, highlight through who National the on creating content a titled released example, stories their World physical audio Lizhi the For short disabilities, with App. on showcased to talents

physical to hoping with platform. our more people also disabilities the via of are value to create young help through voices influence We

pleased platform, quarter In growth. this showed through audiences year, power addition, our rescue respect experience creators the we a leveraging see staff content delivering wider content encourage In voices for during laying initiatives summary, launched our through second announced all technological publish in to counseling relevant Lizhi’s a a our and solid various range various we strong of in of to the content [indiscernible] we support and global to voice the of content last the educational features, business advantages rallies are audio through long-term continued channels to emergency also measures that promotes supporting the – we of for month heartwarming of rescue to the science voice. foundation growth podcast,

steadfast commitment to the of in further our remain forward, Going effective development we operating globalization business and domestic strategies. through promoting potential our strategy, commercialization unleashing will the

our for our will audio bringing create users. will experience the business providing market, a explore explore diverse progressively and social audio base. an usage We markets various podcast In podcast will development even innovative continue overseas to experiences further our and committed Meanwhile, as possibilities applicable overseas turn to we the to COO, advance better more networking we products optimizing scenarios everyone. are capabilities. will broader Li our user ecosystem business our details. sustainable long-term Furthermore, in-house to of continue over now that, we growth more Mr. core will to development development With I achieve we global Thanks in building call our competitive to long-term business. our discuss to a Zelong advance audio technology more who social

joining thank you today. for everyone us Hello, and

I we am second with maintain of the As Marco more a our strong quarter, a operating to in happy achievements. discussed share set solid momentum operating with and you results. bit growth on financial

audio and experiences in creation user engagement improved audio of First, persistent audio products overall increasing terms App, our our and entertainment on activeness in in stimulated audio Lizhi user creation. community content a tools user efforts optimizing

average monthly During X.X the platform from the reached second billion. total interaction quarter, users

June penetration audio have which conversion. interaction. unleashed the These cumulative users content pieces which in XXX in platform campaigns encourage potential our to content further attracted user conducted audio drawing XX, various paying reached our reflected to our million. of user creation, operational audio division, turn to business of entertainment creators entertainment entertainment audio rate, the more to audio commercialization audio by As we entertainment In growing participate uploaded drives real-time

other our generations through session younger the the and to higher effectively positioning, effective emulsion commercialization continue operation ACG-centric on and strengthened of in further to our capability as audio the pay and commercialization user we based market company potential such strategy to entertainment On content have content hand, interface enhance develop user categories ecosystem we catering programs, content leading willingness division. towards increased

based optimizing which become friends meet on increased. TIYA product connected, hobbies. an launched our terms social various interests In of helps audio needs as and generation’s of social Functions, with has users global focused users on of platform. platform in The platform the keeps enjoy the March number interest groups XXXX, on our In significantly we to features TIYA’s on common interactions the real-time active Group targeting younger younger generation, audio business be

as theme In users crush sharing promoting and Ludo interaction demands. and chat meet mini and communication with introduced of conjunction function effective as that user addition, we gaming we games rooms live launched the such among game into in a more and

TIYA. users gaining Our of from the we a invitations product engagement. user are friends in improved on efforts our and number user effectively experience optimization continuous And from spontaneous new growing

XX, As TIYA of increased March. number XXX% by the of connections June this friendship user based from

more business. that to business to Looking as bring globalization overall strategy executing believe social growth ahead, of the remain we we will for potential the is our networking able audio-based committed development

of user programs committed streaming podcast features through and interaction. and content, competitive terms including of to our In podcast development differentiating series business, are live advantages of a the innovation our of increase podcast activeness we to

outbound streaming first Migratory in on For collaboration we of feature live project, nonstop XXX-hour and comprehensively a dialing podcast. streaming voice the events live live of audio online showcases industry, XXX the activities mix pioneering built with Aranya integration our Festival, and China’s broadening the launched to clear Theatre practitioners. interactions. These in in which recordings, lovers approach audio into Radio dialogues, theater Birds-Live for streaming communication the live horizon streaming example, in featured spotlight This June, session merge time

we available Additionally, our platform. on and sessions to create exclusive this that edition podcast session leveraged highlight prestigious

podcast Week forum topics number of stimulating first During trending podcasts, interactions renowned streaming we the live quarter, discussing streamed and on Forum, among event listeners. the technology. variety streaming Technology to Online Science China’s hosted a live a through featured second podcast science speakers and This of Voices greatly also of

accessible listening apps spanning synergies solutions a can podcast with wider through also product In more internet only the click. increase usage availability addition variety we of experience. recently automakers of and supported Mode the content a audio have strategic of users formed our and with popularity of terminals and offerings devices podcast app to to Podcast in innovation ensure in enabling diverse build introduced multiple podcast leading believe our distribution podcast platforms, by including We more in recommendation across features, content vehicle vehicles and WM AI-powered in to further mechanism, same the influence bring platform, of range IoV better to user podcast multiple collaboration our and to mobile Motors, At cooperation for broader enjoy enhance content features providing optimize mobile in-car personalized Li encompassing content, the Auto, worked that podcast a more a WeScenario, to in-car Lizhi podcast to base. users PATEO continue to to Tencent experience and it we we a industry. one audio We scenarios the time, Car make

through in innovation to who Going and into everyone. forward, now efforts financial Lizhi build that, call leading Thanks on the continuous discuss business our to technology more audio Acting our worldwide committed Ms. advancements. global a mission the and will Chengfang our results of I to the development our detail. we platform to over remain audio will CFO, With to turn Lu, driving

overview everyone. Hello, you. provide I second quarter now will XXXX. our financial the an of Thank of results for

and trajectory capabilities. forward and financial with quarter our the our we expansion operational for demonstrate second our our to strong move continued strengthened performance growth commercialization strategy, As

are alongside year-over-year strong points quarter. pleased We of line top basis see the margin XXX also to expansion gross growth our during

base quarter, and technological we ahead, operational will bolster an In million the our the growth. to due second remain on in our RMBXXX.X revenue net Looking our of from second and RMBXXX.X costs, of to sharing ecosystem was XX% which our XXXX, second total was RMBXXX.X our our increase in of million million paying the global of creators, attributable sustainable strategy growth. in audio increase handling increase increase in costs users user in million, quarter focused cost globalization mainly growing the in business in representing deliver capabilities are the was spending of year-over-year long-term line XXXX, entertainment an audio increase and and representing improving of our revenue XX% to and of payment to second fees generally products. RMBXXX.X XXXX. our content with quarter The our quarter revenue mainly And bandwidth our from energy

XXXX. XXXX. RMBXXX.X from Our year-over-year were quarter quarter development in of to second and And million from second RMBXX.X increase XXXX, in in to in the year-over-year RMBXX.X XX% representing offset and Operating XXXX. in million loss RMBXX expenses margin gross decrease of XXXX million XX% in year-over-year. the our second in due to RMBXX.X second year-over-year RMBXX RMBXXX.X year-over-year the RMBXX increased of RMBXX.X marketing XXXX of compared million welfare were XX% of Non-GAAP was partially to of was of loss due the second Selling for research XXXX gross for of related General the decrease Operating the second of gross in expenses increase was second by by XXX% salary other RMBX.XX XXXX RMBX.XX due the increase our And name. and non-GAAP second was Basic RMBX.X And in ADS profit the of to of XX% XX% expenses of branding million of quarter net compared RMBXX.X expenses the our second number operating of professional XX% in expenses. second of RMBXXX.X in million margin an higher of and investment mainly were in the gross increase fee XXXX. a to of from Research represent million XX% was in quarter second increase XXXX compared the from second X%. XX% of ADS quarter million administrative quarter the the to diluted and quarter was the million decrease million million quarter to in diluted second from expenses XX% and per XXXX. XXXX, of primarily increased staff. loss non-GAAP in welfare in a RMBXX.X basis in services by second of quarter second quarter loss of million quarter marketing in XXXX. an profit was quarter up to the RMBXXX.X and by salary were The loss brand in representing XX% quarter million XXXX. of per in second for RMBXX.X compared primarily the Net the the second XXXX. XXXX. of quarter million second per our net quarter the and of in products an and the second to up million net quarter XXXX, in the of the quarter non-GAAP of And the second XXXX, quarter million XXXX representing increased ADS of development RMBX.XX of Non-GAAP XXXX the loss quarter and million million quarter the representing quarter XXXX, increase XXXX. a quarter the were second of to benefit second RMBX.XX grew benefit in

As cash XX, of million. and well equivalents, total as we RMBXXX.X June cash XXXX, of cash as have investments restricted

remarks prepared Now, this concludes our today.

call will ahead. to Operator, please the now questions. We open go

the we But a Instructions] question [Operator you. queue. on have Thank

first from Company. to will Needham & go Vincent So Yu I

your question, Vincent. ask please So,

my strong three results. management congrats taking quarterly for question have the I and you for Thank you questions. and thank

question is think And second or have rollout the have the company’s is management a is, so how And continues the like us, or – The of management any Lizhi’s changed the increased or like sense? industry, with on Podcast one on app? impact the is question into on Lizhi to myself reopen? apps use and big operational App streaming communicating who economy Lizhi as share we as in base the expectation it streaming any third results? for decreased size Mandarin. material themselves, company like us the user see the been of TIYA overall Lizhi for And So, so question will recreation or first the is sense and hours can I the with Podcast in maintained user been can in the change I terms the car on the recreation give of we of get behavior on side, regulators overall can translate does

for I translate Marco. will

Marco COO, and questions. answer answer Mr. Zelong two will our the the So, first other will question Li

some So, live Marco’s industry, had like, great the regulations answer is entertainment on sustainable the recent which relative pressures regulatory in streaming online long-term company’s for believe regulatory is we can impacts do may years, But development Title policies importance the authorities put always to regulating operations, have industry. entire sound the good the some and have that that for including business industry. standardize the short-term. business of the

conducting the As the always have communicating Meanwhile, information has policies. been proactively meet relevant committed our of and regulation. few out tremendous audio the business think solutions regulators the also in promoting regarding have prioritized mechanism on already long-term, last we regulatory to are of to and healthy audio we I security have to have have data examinations and guidelines stable the and self In and is operations the the an sound we requirements. effectively development. accurate a measures our growth In company reported our and come industry the years online relatively regulatory some requirements. still and earnestly regulatory experiences potential quarters, to to ensure online compliance some we industry, that understanding we with compliance Lizhi the internal have comply Based of have with

will translate Mr. third second questions. for and I Zelong for Li the

for range products actually then of collaborations leading base. audio So, are second the expand companies and make in-car working our in in broader to user reach vehicles our strategy, we wider question, of accessible more with a audio to terms in-car

progress significant on Podcast systems. operating companies have We our auto have co-operations with launched made Lizhi recently more audio in-car and in

audio Podcast have Audi’s companies, in-car mentioned have automakers. we launched now, year platform. the of total have streaming operating on Besides live through and As been collaborations over a vans XX exclusive with now systems our has like podcasts been have through in-car for Lizhi of well we and earlier, also operating established those IoV episodes. performed products half podcast a and our innovations podcast

of shows effectively XXXX, second user increased daily the have of the time average the with and spent improved the Podcast systems. XX operational to compared user continue and thickness. Lizhi Lizhi user of by spent effectiveness We in-car the previous increase which development will of into the business strategies boost our improved popularity and we future, in-car quarter In on our also integrating time Lizhi on Podcast minutes quarter, the per In around more audio the by the Podcast. Podcast average Lizhi

Lizhi compared innovative Lizhi moment, small deliver user continue We and enrich to our improve content, more and users relatively the for of demand base with interest overall at Podcast Podcast in scenario But audio to user will user base. this in-car podcast thickness. is the to the meets also offerings features content

scale. to grows We more that certain when a data will share business

lasting still lot question is we brought in changes COVID-XX by pandemic. most the are for about user behavior activities gradually third although are the normalcy, but TIYA lifestyle of The to App, a people’s the seeing returning social

its the social are strong popularity TIYA quarter. For example, momentum online networking gaining and online widespread second entertainment growth in maintained and

quarter. increase on increase user of chat also connections. continued TIYA’s of spent features, online becoming improved social satisfying integration optimize product the active networking social users user Also, an of is time the number differentiated activeness The people a to networking from continue we the From and social rooms TIYA’s As to compared in innovative activities reflected by form to of more the networking the number friendship we previous needs. user audio in socialize. believe a networking the social into their long-term and a an perspective, perspective of way trend provides TIYA

continue more will voices. product optimize Going the users TIYA’s concludes forward, connecting for This features we questions. answers to Needham’s through

Language] [Foreign you. Thank

Thank you.

Our from from question Wei next comes Vicky of Citi. line the

So, please ask your question Vicky.

taking and morning on my solid quarter. good congrats questions So, for management. Thanks the

share ratio peers some revenue industry management hosts sharing live will about with continue in audio So, you. as Thank to streaming? color invest

have comprehensive Thanks structure. strong quarter, around for are our achieved diverse representing revenue decline different profit stages. revenue, for effectively improvement the divisions our of measures balance year, between driving overall keep also revenue line total growth, margin. policies different also In the of In top growth. sharing gross content content second year-over-year, we looking creators implement we revenue question our to points from and the income this of while of percentage Vicky. of creators creators creators improved business our ahead, our And across sharing content will margin and quarter about we our platform this set XX% at by we sharing a the accounting growth on a which of progressively adjusting content revenue Actually, for a X calculate

attractive among strategies, platform. followers traffic creators creators, and and wider our incentive creation to policies success content attract increase on the content including will popularity to recommendations, support, others, AI-driven various adopt their For in enable content and we operational more to

to and the believe willingness refine users’ platform remains structure. side, revenue. our further pay promoting we experience engagements, a revenue conversion user increase I user with a subsequently, creators on will good On sharing this momentum our increase will will allow in continue to user paying to our income. focus corresponding growth increase And us to as improving overall our

will long-term overseas opportunities higher to potential new to model Thanks. and our and growth new growth for we create addition, sustainable innovate business more explore with profitability. continue In markets, with

you. Thank

questions further no are There now.

company So, I remarks. to would for closing like over the turn back call to the

Thank for joining you us again today. once

you. Investor Relations provided or through information contact ir.lizhi.fm questions, Piacente Group our further please If website Investor Relations. you on the free Lizhi’s feel Thank The contact at to have

and for does Ladies call. Thank today’s that you gentlemen conclude participating. again

all disconnect. may you. You now Thank