Sound (SOGP) 25 May 232023 Q1 Earnings call transcript

Hello ladies and gentlemen! Thank you for standing by for Lizhi Inc.’s, First Quarter 2023 Earnings Conference Call. At this time all participants are in listen-only mode. After management's remarks, there will be a question-and-answer session. Today's conference call is being recorded.

I'll now like to turn the call over to your host, Effy Kang, Head of Capital Markets for the company. ahead. go Please

and much. first very our And to earlier welcome and online. Thank XXXX Hello earnings Inc.’s today services newswire quarter results released are conference Lizhi available operating you via everyone! they call. financial We

with include call with call Li; Marco and Zelong Founder and our Mr. Q&A Mr. prepared Li Acting the CFO, a Lu Participants Lai; will CEO, conclude COO, begin our remarks, on and will our today's Lu. will Mr. and Mr. session. Mr. Chengfang

As this is recorded. being a conference reminder,

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

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

do inherent and that these statements anticipated, could Forward-looking uncertainties update materially accuracy results a be cause and undertake impacted from of may law. actual factors many statements our or underwriters beyond The to risks any of risks its under of affiliates, except and representatives obligation are company, to as information, this projected advisors, by differ applicable involve forward-looking number business those control. required uncertainties. The which not the

discussions of measures Lizhi’s measures. a measures. financial for that earnings financial unaudited earnings unaudited this GAAP Lizhi's call press unaudited note of non-GAAP release also include as and reconciliation press Please to unaudited GAAP well release measures refer Please non-GAAP to as conference

go Li. to I our will over the now COO, ahead. Mr. Zelong turn Please call

[Interpreted]

earnings joining thank quarter first conference and you Lizhi Inc.'s everyone Hello call. for XXXX

potential, audio-based fresh enriching commercialization quarter first marked unleashing XXXX propelling competitive expansion. diversified to committed the our While building our business our program a business more and further global start, we matrix, ecosystem, a remain of

XXX million. to increased the the by company's quarter, XX% revenue first RMB year-over-year In

average monthly million. core total our and XXX.X sequentially, RMBXX.X surged year-over-year mobile our average platforms, by Our XX.X and our operational effective our and income by to net technologies technology totaled million, XXX% users and powered paying XX% by to versatile MAUs strategies, amounted thousand, supported

quarter innovating boosting the audio efficiency. them, audio as By entertainment's interact, encouraged users entertainment creators and In an drive highly up modules, to connections strengthen continued user upgrading features aiming and we product participation interactive we as our our launching and first array content of and functions, to online commercialization well between engagement.

dynamic to categories, users' we core users pay. bringing Meanwhile, through our content effectively also experiences innovative and to willingness entertainment differentiated strategies, features. our extending our operations the continued audio improved core marketing Leveraging adjustments we to

focused to refined themed have grow content regard creation implementing them a to engagement the creator to diversified improving remain our succeeded partnership available creators, content mechanism cultivating value and play giving the With on in creative creator platform. their more tools to on we creators. attracted operations management output. generate the of boosting and refining quality flourish content we and content our Furthermore, through continuously activities, while quality full we creativity our experience, help creators to operations and them, our creator ecosystem, for By

community, featuring to and more enhance For such order quality themed attract in creators followers our example, special them in interaction income. topics activities as helping to we launched sessions generate audio-centric and the trending content hosts linked the

global module networking AI launched to build the a relentlessly our technologies. an audio-based We model. leveraging remain Regarding chatbot to our product, development global innovation social ultimately February, committed we our App, promote GPT applying further our in This and platform global we aim by chatbot business. of business, core TIYA our approach

the AI-enabled module chatbot tailored chat designed for MY and of app's is MY end we experience. to the chatbot enrich online FRIEND their and version companionship users better optimized the create a unveiled The of AI experience. AI March, out newly more FRIEND upgraded to further By ideal rolled have the friends an online

Users functions of customization may generate by AI FRIEND’s tailored and leveraging dedicated profiles create FRIEND’s. MY the AI

launch the see time. of MY willing app significantly the upgraded are With peers, FRIEND to more that version, users pleased the engagement share and are improving we their new AI with to usage enhancing

company's with MY technical recently function, AI we Building the in upon strong users differentiated tested aiming voice to chat AI FRIEND’s experience. a audio field, voice the more capabilities provide

Going into and integrate provide upgrade FRIEND support and effectively usage MY social AI more chatbot users enrich scenarios, companionship. AI as AI forward, we aiming and original optimize chatbot valuable, with our will our our to further features, well protocols as networking emotional

our development establishing the pursue of we the globalized principle capabilities, global follow we our localized organization. always operations As across of

As teams. have the we on our establishing enhanced management such, operations business by localized effectively ground operational

intend progress company's technology made with chatbots. and innovation, years networking of of power AI the in field explore expertise coupled other technological ASR, experience, have areas. companionship, with R&D further voice technologies upon the the breakthroughs building the to we We voice-based strong and capabilities, of Technology-wise, core application our product social operational to of TTS and online in self-developed audio-based fully AI

our users. committed bringing online remain also experience a We more to companionship differentiated to

all quarter achieved across In first solid growth summary, Lizhi segments. of XXXX business in the

our power to innovation Looking actively while through development advancing ahead, positioning. we global product will technology continue

you turn I results Chengfang that, financial With more in our call now Ms. the CFO, over to our will who detail. will Thank discuss all. Lu, Acting

[Interpreted]

hello Zelong, and you, Thank everyone.

million. the XXXX increased We first new in XX% a are by revenue to see our of year-over-year to delighted quarter that of high RMBXXX

RMBXX.X with net year-over-year. we sequentially XXX% addition, million, up In profitability income XX% and of ongoing achieved

will to operating efficiency. improve our Looking ahead, continue we

and a represented to first activities themed first year-over-year, user In of the by quarter, through the our optimization of entertainment like in total strategies. the Now, due RMBXXX results average our of quarter marketing audio for spending overview XXXX. primarily the revenue driven provide an brief XX% financial of I’d net increase our growth on to diversified products, million

an mainly partially bandwidth attributable year-over-year, costs. we decline handling our XX% was quarter, increase increase expanded to by the revenue miscellaneous in in a of offset payment Cost as an content our to sharing of business, costs fees RMBXXX.X million first other revenue costs representing in creators, and

profit was of gross million million XXXX RMBXXX.X period quarter with in RMBXXX.X first of the the gross last of XX% margin million was same year. of first quarter year. the XX% Non-GAAP XXXX in RMBXXX.X period first compared compared XX%, the Non-GAAP XXXX last RMBXXX.X Gross same of margin last profit quarter with compared the last for in period year, quarter for the with year. the in XX% with Gross compared was of in was first year. in of this same the of first million quarter

expenses the last with were XXXX, salary development expenses first Operating Research the in RMBXXX.X period year, to million to expenses third of with quarter share-based the RMBXX.X compared RMBXX.X increasing were in due last services provided million partially development compared parties. first and a same year. welfare million quarter the expenses, decline compensation in XXXX, quarter in of expenses research of in of primarily benefits million and and and by related first offset by RMBXXX.X

RMBXX.X and marketing on offset company promotion discretionary depending attributable increased expenses. branding first accordingly the first partially year, compared in will monitor were and in RMBXX.X expenses, expenses to of marketing primarily the by and XXXX, and and The quarter salary advertising the expenses last of million our conditions. market quarter decrease welfare adjust Selling million the with in benefits

in fees, the professional year. and a RMBXX.X contingencies General RMBXX.X in litigation by service in XXXX, in last Operating quarter partially for million in compared quarter, and provisions increase million decrease RMBXX.X first the year, of with to compared expenses. other driven administrative million same expenses first in of were the the was offset first miscellaneous million quarter by RMBXX.X period income of the last mainly

million Non-GAAP million of of income in XXXX, of in compared in RMBXX.X income the same Net million with million in quarter income period of non-GAAP XXXX, net of with of period was year. compared in first million RMBXX.X same RMBXX.X last the year. was was RMBXX.X million And year. operating quarter the last period quarter the RMBXX.X first same with last compared XXXX, in first the the RMBXX.X

Basic and net RMBX.XX year. quarter Non-GAAP RMBX.XX per with in income diluted the the XXXX period and quarter respectively of same ADS in diluted of RMBX.XX the net first compared RMBX.XX in of were income respectively were basic of with XXXX, year. and first first last quarter per RMBX.XX ADS in last the and RMBX.XX compared

of XXXX XX, we cash restricted short-term As million. and investments March have equivalents, RMBXXX.X cash cash and of

call our this and concludes for questions. I now Okay, remarks go the open please Operator, ahead. of all will prepared today,

you. Thank Wei of Vicky from comes Please the question first the ahead. line Now Citi. of go [Operator Instructions]

year think live notice scale in Language] audio is, taking streaming second have of I how question of any monetization products evening, investment in change overseas Thank environment does this two we of management the And for management. question. the stage? on [Foreign is, regulatory Thanks sector? my small my you. One the questions. Good should

[Interpreted]

Thank Vicky. you,

The first translate is him. I by question and for answered Marco will

The monetization the is products. first about question scale the of Vicky of overseas

mostly we monetization Users Regarding the And certain access subscription. for some in monetization early products, launched are can products, monetization of we the models with have still models in testing. services of overseas actually the subscription those of the the currently and now. stage the value-added

continue the models, on market and the will revenue-generating user including and monetization feedback functions based the and services. we So research, optimizing subscription

generally year smaller our further a to our are revenue business and We optimize this and some we still in make proportion early is and will operations validate And see investments marketing models. overseas we overseas our its business expected in and stage, to the to plan of and products localized still uncertainties. continue there scale

is question the about in second sector. the The environment regulatory live-streaming

facing Regarding the with that were regulatory the that some have recently, standards noticed have regulations. and we strengthened efforts monitoring regulations, been peers and regulatory noticed industry stricter we live-streaming have some

content priority. this, for security, Ensuring of management etc. the compliance our overall systems, the content including and we is actually and the management, internal security and safety reinforce top will the So safety

meet conduct So accordance with to self-examinations regular the we in latest the policies compliance overall requirements. will

[Operator question. no for call to Instructions]. questions, are pardon. If the – next moment beg like your One I’d now I further back turn there the

China from Serena from Lee the your have We a question ask of question. Please Securities. line

for my and Thanks matrix, and Thanks. of the as and Language]. full of more shall about user [Foreign well for share business, progress the the question management for taking some the outlook overseas business as operational year? overseas including the the level the

Language]. [Foreign you. Thank

we the multiple currently is experience Friend business steadily AI quarter on first with companionship the functions, launch and launch of function noticed of characters upgrades enriched experience. user focused TIYA and recent the including iterations. developing are of optimization the And enhancing and side, product the been we users chatbot the AI online have in increase the an continuously this engagement. user to the year, preset the we relevant overseas in provide in have Our on App MY Since

also are on latest experience App. We voice-based the can now and the upgrades of users working the iterations on TIYA functions

We have commercialization. launched the monetization models for

are international We these marketing capabilities effective global our building will improving and models support operations to optimizing keep teams more additionally, for localized focusing and aspects. And we product other by on our validation.

be in will will growth. the also remain our we business, it in step a So in it line but general, will with overseas within well-managed up investment And range. business

Okay, you. thank

you. Thank

no I’d As there company remarks. the to now questions, further back for to like call are closing turn the

Well, thank today. once you joining for again us

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

concludes This conference you. Thank the call.

line. disconnect your now Thank you. may You