Q3 2019 Earnings Call
Thank you for standby and welcome to <unk> third quarter 2019 earnings Conference call.
First time, all participants are in listen only mode.
After managements prepared remarks, there will be a cure nice Sasha.
<unk> Conference call is being recorded if you have any objections you may disconnect at this time.
I would now let's talk or what's your house, they just need Yang Investor Relations Director of Saga. Please go ahead.
Right.
Hello, everyone and thank you Johnny they'll go third quarter 2019 earnings conference call on the call I'll see always shelter, how long and our CFO , Joe Joe I'll give an overview operations and financial results in line with all practice on the previous earnings conference call. It shall tries prepared.
Mark what be meetings shall trends boys using personalized speech. It seems that this dog transfer learning technology, which was developed by the Soco voice interaction Technology Center.
I'll try to join the queue and they portion of the call in person.
Oh Man management rethinking their prepared remarks, I would like to remind you all the company Safe Harbor statement in connection with today's conference call except for historical information contained hearing the matter is disgusting. This conference call. All forward looking statements. These statements are based on a carton plants actually.
And the projection and therefore, you should not place plays out deals reliance on forward looking statements involve inherent risks and uncertainties. We caution you that a number of important factors may cause actual results could differ materially from those containing any forward looking statements.
More information about the potential risks and uncertainties. Please refer to the company's fighting with the way the Securities and Exchange Commission with that I'll now turn the call Overcharged C O shelter how long.
Thank you Jesse and Hello, everyone.
Despite continued headwinds in the macro environment and the online advertising industry, we experienced healthy growth in the third quarter.
With that Ecopetrol in Queens significant improvement, but the bullet <unk>.
<unk> was primarily driven by our cost for example, organic traffic growth and unlock the monetization potential all weakness at the.
In the corner, Oh poker revenue increased 17% year over year.
Over 2.2 billion R&D.
[laughter] quoting the impact.
The one hi, though.
In the third quarter Aplenty <unk>.
[laughter] <unk>.
Hey online advertising business.
An apples to apples basis poker revenue increase well year over year in RMB.
You regard all about them now hopefully well then topic apathy some call and continued improved operational efficiency important.
Oh, no GAAP net income increased 47% year over year.
And they <unk> pardon.
[noise] insert local maintain the vision at China second blocking.
And our search revenue continued to grow faster than the industry average.
In mobile keyboard, we recorded 454 million Yeah, you caught.
Oh working person year over year.
Reinforcing disposition.
Third largest tiny mobile app in the new according to Iresearch Bert.
With that well a recommendation Bourbon that leverages, our mobile keyboard, we have got <unk> revenue ramp up quickly in the quarter.
And this is Pat could become our second well well when Bert.
In addition, our mark hardware business because growth trajectory in the call. That's good the launch of our new <unk> Naples brought up.
Now, let me walk you through each of our core businesses.
Including third mobile keyboard and Mark hardware.
Third healthcare vertical and intelligent you and they remain our priority as we are committed to building a high quality is there that's cool.
During the third quarter, we spoken rich and Oh, it's difficult.
That's correct that the most frequently for health care query.
Why would that be the coverage of health care Encyclopedia <unk>.
These efforts resulted in better up written magic across the board.
Moving the ball is equally in the click through rate of health care first result.
We've also continued to stay ahead of fear in both the fulfillment and accuracy rate of our call Red and the result.
Meanwhile, our ever <unk> ecosystem, effectively boosted organic topic broke in the <unk>.
Oh average daily exposure of the contemplates Oh Socal Hall, our call them application platform increased significantly from the prior calls.
Turning to mobile keyboard.
Thanks to a number of industry leading product innovation.
Mobile keyboard further expanded use of based in the course.
By the end of December average daily what request made via local mobile keyboard increased by 67% year over year with Bob who 830 million requests per day.
Retaining its position as the market what that in China.
Moreover, during the call her with lunch and I I system named Mark long die within mobile keyboard.
Which recommend the user and the rate of multiple and the rest in China.
These innovative bumps and help evolve our mobile keyboard from the utilities book, where <unk> enable communication the system.
Now recommended multiple on the rest are you with hundreds of millions on per day on average.
The data usage number is funding quickly.
In the next that we will leverage Mark will not provide more targeted recommendation to address a variety of browsing I'm 13 emerging in cap.
Driven by this initiative in the third quarter revenue generated from our recommendation Bourbon that's lover, just mobile keyboard book a year over year increase over 70%.
Oh Mark hardware.
Hardware, a new chemo called that hit the market [noise].
Revenue generated from Mark hardware business, what's that uncle a growth trajectory during the course.
In particular, they'll volume <unk> neighborhood, Mark recall her has the best selling lid on several main thing that well and game. We're all the concern among the industry.
During the quarter, we have also partner with leading the call her manufacturer such as Tony I go and human jointly established an eye in the vis a line.
Yeah, which we open local klipsch and service.
The partner.
The line allows the capture and create number of potential users without the need to chunk glad conversation.
It also provides the opportunity to test the whatever or little bit based business model in the recorder Mako.
In addition, we have to both R&D effort to hide and I can they booked recording bought the most sophisticated youth basis.
Let's go further expand our <unk> product line.
Moving onto a high.
In the third quarter, we consolidated our language simply <unk> technology.
Well they support innovation in the third lower keyboard and smart hardware business.
In terms of technology, we continue to upgrade our voice and vocational Aberporth technology.
In particular, our general capability in Boy Rep Nation was significantly upgraded enable a more natural way, peaking.
So with all our time, an English Brad Mason capability in both it's been a near field was significantly improved by over 20 person in the third quarter.
The further reinforced socal differentiation advantage and leading position in the sector.
Impairment application that's been here a few example.
Sure I, leveraging our voice technology.
Keep learning the new generation of war referencing model.
Well go mobile keyboard equal to ask versus rate of me Chinese and English recognition by over 65 person.
These large leases all the technical issue that have been thinking the industry for a long time.
Second our pioneering personalized voice recognition technology enabled mobile keyboard and create a unique wrath of nishimoto, well each user reducing the error rate by over 40 person in the word abrasive frequently you find to be deal.
Sure well go but it's not avatar has developed into <unk> or generation and achieve a major upgrade green power the virtual avatar with realistic real time human interaction.
During the quarter with further expanded its use cases into different Becker.
We launched the world birth, interestingly, they I'd have to MCCSR, but with team I'll quickly.
Oh, my financing platform appearing on insurance.
[noise] also like to keep an update or purposes.
In October we renewed our cooperation with we chat.
Coming here vocal cord, we'll continue to be the birth search engine and we chat or third party research services.
That's the thing, though internet phone can.
Moreover, both leach pad and Fogo intent.
The partnership your your until 2020 breed as part of the overall framework agreement. That's still go an infant insert in September 18.
Finally, let me here a few thought on the rest of COVID-19.
We expect the headwind in the macro environment and the online advertising industries continue as well as the ongoing patent regulation in the internet sector.
While we anticipate short term softness as the external challenges will impact our Q4 results unmet linger into blending pumping.
We have call it that's the implied.
In third well, we'll focus on building up our high quality cert basketball and driving organic profit growth.
At the same time, we're committed to delivering positive momentum in our new growth driver, let's celebrate the overall business expansion.
We will gear up effort goes over the book with you recommendation service, leveraging mobile keyboard and that salary mark hardware growth.
We believe that April navigate environment continued to generate healthy growth and outperformed industry.
With that I will now turn the call Joel go through our financial.
[noise], saying, here's how China.
Hello, everyone.
In South Dakota, our total revenues reached as 300 and the $15 million.
As John mentioned and Apple travel basis, although total revenues increased 12% year over year in R&D terms.
The increase was driven by the faster than the industry average gross of search revenue.
So strong momentum recommendations surveys.
As well as step back on track Smile hardware revenue.
Bottom line wise.
non-GAAP net income grew by 46% year over year to $41 million.
Margins improved across the board.
That's way generated increasing contribution from organic traffic.
Which helps us well contend that traffic acquisition cost.
And at the same time whey protein play managed expenses and the improved operational efficiency.
Now I'll walk you through our so called her financials in greater detail.
Please know that unless otherwise noted all monetary amounts that I discussed are you guys Dallas.
I also know that I will refer to some non-GAAP numbers.
Which exclude share based compensation expenses.
You are kind of find a reconciliation of non cap took up measures our earnings release.
Total revenues in the third quarter was 300 and a $15 million.
14% he increased year over year.
Such and such related revenues was 200 and the $88 million.
13% increase yeah, what yeah.
The increase was primarily due to girls in auction based that pay for Craig services.
Okay and phase to pay for pay Axcelis is accounted for 89% of search and as such related revenues.
Compared to 83% in Carlos filing period 2018.
The number of idle or ties as for our auction pass to pay for peak service.
Approximately 92000.
Offsetting percent here a year.
The average revenue per advertiser for auction based to pay for quick service is less tools now the $800 [noise].
Up 7% yeah yeah.
I don't know revenues were $27 million.
<unk> five per se increase year over year.
The increase was primarily due to increased their revenues from sales of small hardware.
With the new models launched and the more in the pipeline, we expect hardware sales to keep the momentum put the lifestyle tiny 19.
Cost off arriving years was $189 million, a 9% increase year over year.
Traffic acquisition cost a primary driver of cost off revenues was $144 million.
6% increase year over year.
Representing 46% of total revenues.
Compared to 49% in the corresponding period in 2018.
As we continue to benefit from the increasing contribution from organic traffic.
We expect attack goes to be well contained for their lifestyle of 29 team.
Both GAAP and non-GAAP gross profit.
$126 million.
Okay, 2%, even craze compared to the Carlos funding period in 2018.
Both GAAP and non-GAAP gross margin increased to 40%.
Compared to us so they 7% a year ago.
The interface, primarily resulted from our efforts to control type acquisition cost.
Total operating expenses were $98 million, a 10% decrease year over year.
Search and the development expenses were $15 million.
Relatively stable year over year.
Representing 16% of total revenues compared to 18% in the colors funding period in 2018.
Sales and marketing expenses was $38 million.
14% decrease year over year.
Representing 12% of total revenues.
CAD to a 16% in the color Spanish at 2018.
The decrease was primarily attributable to decreased in marketing and promotional spending.
Yeah, Hey, expands its way $11 million, 71% decrease year over year.
Representing a 3% of total revenues.
Compared to a 6% in the color spanning period in 2018.
The decrease was primarily due to a decrease you expenses related to non core business.
Operating income was $27 million.
Compared to an operating loss of $7 million in the corresponding period in 2018.
non-GAAP operating income was $32 million compared to non-GAAP operating loss of $3 million in the corresponding period in an 18.
On the income net.
Was $8 million.
Compared to $24 million in the corresponding period in trying to 18.
The decrease was primarily due to an 18 million dollarss gain from went off so close equity investments black recognized in the call us probably in period in 2018.
Income tax expense was $2 million.
Compared to income tax benefit of zero point $4 million in the color spanning period in 2018.
Net income actually built out to soco was $37 million.
53% increase year over year.
Compared to net income of $24 million in the call us funding period in 2018.
non-GAAP net income attributable to soco was $41 million.
46% increase year over year.
Compared to net income of $28 million in the call us bonding period in trying to 18.
Basic and diluted earnings per adss, when nice sense.
non-GAAP basic and diluted earnings per 80 asked what 10 cents.
As of September 30, 2019.
Had cash cash equivalents and a short time investments of $1.1 billion.
Compared with $1 billion as of December So I think first trying to 18.
Operating cash inflow for the sub part of it was $20 million.
Capital expenditures for the so called or was there a point $7 million.
And lastly, turning to our outlook.
For the first quarter, we expect total revenues to be India range of 200, and then my team you have enabled us to 300 and a $10 million.
Representing a 3% equates to 4% increase year over year.
Well I zero to 7% in place yeah, Yeah, Yeah I'm be terms.
The guidance takes into account the potential impact of that challenges.
You may call economy, and the online advertising into [noise].
As well as the ongoing tied to new regulatory environment in the Internet.
[noise], please know that for the first quarter to tie 19 guidance.
We have assumed a exchange rate of 7.1 on b to that Darla.
As compared to waste that actual exchange rate of approximately 6.981 RMB two that dollar for the first quarter of trying to 18.
And 6.99 on between one dollar for the so called to obtain 19.
That concludes our prepared remarks.
Thank you it yeah, operator, we'd now like to open the call for questions.
Yes. Thank you we will now begin the question and answer session.
Last question, you mean press Star then one on your Touchtone phone.
If you're using speakerphone, please pick up your handset before pressing the keys to try to your question. Please press Star then too.
At this time, we'll pass momentarily to assemble the roster.
And the first question comes from Thomas Chong with Jefferies.
Good evening and good morning.
Everyone.
Management picking my question.
A question about the Matt.
And competition.
Can management comment about which sets it affected more by met coal headwinds and which industries affected more by competition.
On the thought video sites.
And how should we think about on pricing.
Yes, Im trying to try and thank you.
Thank you Donna goals, such a unique glenshane dimension.
Hey, comps Nigel Teva Genworth Shandell.
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So you don't see listened to thousands with how does intelligent publish on what he wants funeral homes will she didn't even mentioned so she can job the yen cool shade Tivo mental health does it let's just hope on Jim Scheel conclusion, it will show.
Hi, My name is launching journeymen endorsements I'd say is indecision decision crushing quite comfortable you sell when will you will shine through he or she didn't sound who use she mentioned in shop.
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The what my animal I know, we fundamentally to the social Jinjin bundle. So congratulations Paul Paul just because youre wouldn't the fossil fuel in the event.
For the digital tools to lead nuances or say Sovaldi is critical to generate.
Between June postponements answer questions and the whole Binnington boy I'll pay two screens and that you don't like Jim.
Okay, I just to sum up Oh, there there is some changes let me see <unk> interfyl. So far all first there are some our recent our regulation I'll start to impact online AD market for San Jose ongoing Titan Europe .
Finishing thing taxes that are more or less impacted sectors ad spend.
In terms of competition in the along at market, we've seen increasing competition for AD dollars for example, advertising or anything that gaming and E. Commerce sector is tend to allocate more budget to that Shaw media platform.
And in turn something macro environment.
Oh, we think it's a relatively stable as the online advertising market, Oh content content, because I slow down a bit on that but.
I think that isn't materially accelerate.
So Tim that navigate they sat up challenging environment. All we had a solid strategy play in general Oh, we will focus on new growth drivers, including the recommendation surveys leveraging mobile keyboard to attract a new advertising budget stream from hiring offering.
Them, a diversified offset alpha ad formats.
Ending search Oh, well focus on increasing the mindshare I'll still go search among users by leveraging our Q1 night capabilities to provide knowledge base to search result.
Without a week's bad we will all whether it is an adverse conditions out there as well.
Thank you.
Thank you and the next question comes from our underwriting with Bank of America.
Hello.
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Okay.
Oh well.
Well. Thank you Wendy so just come naturally share was asked more color about the pro glass often recommendation. So this is so any useful matrix honestly areas. For example, you some matrix operational metrics and revenue matrix and and Oh, we shall we notice that the company recently learned.
Yeah like for example, I am just 10 and many programs platform in it. So go keyboard so like to get that Nijman to show you Youre thinking about this area and any you still see back on this new services and lastly, you just like treated no companies if the patient.
Target for the recommendation service in next year and in a me too long time. Thank you.
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Oh, Okay, let me first complain if Ah the first part.
Oh.
Recommendations are raising mentioned actually a mobile keyboard is becoming an important driver for four recommendation services.
Essentially I, we're trying to evolve our mobile keyboard from a utility product towards service platform I'm mobile keyboard has a 416 million getting use a increase on a 14% year over year, a week or approximately 60% of market share I believe that is user base to for.
As a outgrown oh and on the product from a she was three Oh, there is I some changes and that that we would like to highlight a as we mentioned we launched a innovative feature called smart alongside a it basically changes the user engine interaction format et cetera.
I am I assistant that recommends emoticons and expressions end user Chad.
Marwan size intended to strengthen our new brand positioning Oh, we're also testing a wonderful BK baked theories in mobile keyboard Oh for now I Oh, we have just recommending you know in March comps and expression, but at the next to SAP only trying to.
Enhance its monetization capability as sogo has long sauteing language processing and sending in this whole thing I perceived as a language expert Oh wait will enrich and improve the ice or with narrations my warm cycling.
Meanwhile, we will also drive of other innovative assumptions seemed a little keyboard as such as smart recommendation to enhance the AI capabilities and create a.
Hi differentiate differentiation.
We've seen very positive feedback I from users Oh, both my long time odd we noticed that they recommended in March constant expressions I used hundreds of millions of times per day on average and the daily usage, then breeze timing very quickly.
In terms topline revenue contribution from now it comps for roughly 5% help our total revenues going forward, we expected to reach a more meaningful level over time Uh huh.
And so feel on the the per person both serving a user I services and also oh create monetization opportunities.
Thank you very much.
Thank you and the next question comes from actually trying with Goldman Sachs.
Hi, guys Huh actuals in single vehicles that any real Tony Renzi, a dual channel you should think all I know, what you really glenshee dealership gosh, what trends all Canadian helmet, Kindle socal by adding them either <unk> or do a treat your hardly any he didn't compete trial thing with santini home or things you know yeah, you can see.
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When she's answer no money through her candidates that Patriots yet on how quickly I translate the question is myself. My first question is too shall trends on this year, we have observed socal. It's about deployed it's AI technology company vertical solutions Angeles Smart hardware devices.
I'd like to ask how would you strategically position for so go for the next to just two years and can you share with us on long term growth drivers of the company I. My second question is on capital allocation. Your car business margin has been improving on the back of healthy organic traffic wells and yet you also have another 1 billion U.S.T. cash on the.
Balance sheet and any plans to deploy that cash into any aircraft the business. Thank you.
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Yes.
Yes.
Okay.
Okay. Let me ask first ask them up all our strategic initiatives. Our trashy consists of three parts.
Search mobile keyboard and a small how are we oh, we will steadily devalue the search business and mobile keyboard is becoming a important driver for recommendation service I know, we will on Ah I make oh strong preference to accelerate small hardly a girls.
In search with focus building up a high quality as such platform and I'm, not especially Oh, we would like to leverage all are trying to make capabilities to provide our knowledge base. A surge. In addition to information surge to increase in mindshare amount I users.
And it in recommendation in mobile keyboard as I mentioned, we're testing awards are for BP, a base to recommend a base to sorry onto enhance isn't my taxation capability.
I mean hockey area, we have integrated our products into a two major product line. So go AI and Timo will increase R&D investment in more advanced products to catch a leading market share a we expect to see a a very good a growth momentum I intend to try and take.
[noise] so so so.
Oh I due to all love the a strategic initiatives are we expected that in the future when we'll ramp up all the users I revenues as well as a product competitiveness.
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You know better too, yes, I guess when should we view for two months away didn't seem they will come back.
In addition to integrating AI capabilities to drive on the girls off search and mobile keyboard I, especially for example is that the health care surge and Oh diverse customer is this a model keyboard, which we had a china should be viewed oh.
Other forms solved Oh hydration fame beyond at advertising.
So turning to capital allocation Oh, we're leveraging on traffic to deepen our service offerings. In addition to search and mobile keyboard odd to generate a new gross drivers. So capture will you know be.
Allocated more to add back towards new growth in I should have.
Okay. Thank you.
And the next question comes from I'm, not sure with JP Morgan.
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Sure.
So I have a two questions number one is regarding the partnership and cooperation with the reach of search a you guys I'm mentioning the prepared remark that you just renewed a contract with a return to such that you will continue to provide the general search within reach.
Would you be able to share with us today, two thoughts on reach our general search monetization and then secondly can you talk about Oh youre committed positioning in the United base to small small hardware market. We understand there are a lot of competitors are we done a lot of similar products.
What is your condemned competitive advantage.
And we wouldn't be how do we think Oh I see a one position roadmaps for you I used to how were caught up in.
The next a couple of years. Thank you.
So the minutes ago, you didn't go vision channels symbol for you.
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Okay, Oh, the weekend agreement is extension our previous partner shape, we're continuing that partnership on the same faces as before so continue to visa preferred third parties search engine and we chatted says a internet content.
Bose, we chat and sounds like intend to extend agreement year to year until I attended to mystery as part of the overall a framework, so, though and Tencent entered a tender tiny 18.
We are in discussion to expand our business cooperation for example in the future when they provide additional high search I read [noise].
Such as image search and our dozens collaboration on now focuses on the product to fraud and again.
We have we Ah it actually increases user activity only Chad we test search platform the exposure and safer through rate of Sogou search result, on which has continued to increase and a chat safe generated its also on the right.
But as you know a we had been focusing on that product fraud, and there's no timeline for monetization yet.
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Financeable did you do you want to tell you the notion of Ohio don't normally come up with him on the Gulf border to those assets out of was told as usual I'll go to hold them Council because you don't bother to go to the foster I wish the from the government even in general puzzled by the actual do them, though obviously hotels, how difficult feelings of at <unk>.
People may want really.
Just one simple meals <unk> dollars to now we wish him. That's I mean, if I'm backing them Kimball to go on the enemy hooks hunting with your hurdle.
Oh, so in terms of Islam, our hardware I think Oh, we have very strong phone call language Chick AI technologies, and we have excel in all boys computer vision translation I am sure when they technologies come to constantly try product.
Oh upgrade we have leveraged our oh realm that Oh natural interaction and knowledge computing.
And apply on these core competences into our AD products to Buda about about competitive edge innovation and enhance the influence office Sogo AI technology and a one off our key product thing can see 19 years, he I have a quarter and we.
Because of the success of our AI technologies, we have pot managed to partner with leading the quarter manufacturers to jointly establishing an AI innovation that lines, which allowed us to capture potential users and also a test in order for his service Oh based on business model.
And the intend to south.
Application scenarios, Oh, we have excellent use cases for Oh, AI technology, because people you have job search and in mobile keyboard to one is on the information I'll quickly or the other is information input and by leveraging our AI capabilities. These can be.
Gradually you bought from <unk> to a from a assistant <unk> systems like surveys to Hartley oriented a services that captures a voice in nature that kind of data or a lot of people believes that speaker is a future small help with that actually we don't see.
So a speaker is only a gateway, but Ah Ah the AI. How quick we are looking at is to create more mobility oriented services. So we believe oh in the future under the Enbrel out off so go Hey, I products.
Oh, well focus on March boys interaction products, Oh, we want our AI products to gradually evolving to her show virtual personal assistant.
[noise] [noise] <unk>. Thank you and once again. Please press Star then one if you would like to ask your question.
And the next question comes from Alicia Yap with Citigroup.
Hi, I'm good evening management. Thanks for taking my question I had my follow up question regarding the macro comments that marriage made me so I wonder could get a little bit more clarity on can you elaborate a bit.
Under challenging macro out when you compare in a false quadrant a worse just treat you do you think that fourth quarter is actually getting worse than what you have seen in the quarter.
And then also on our night gaming is that made me your comment.
To the competition is proper shop deal and the gaming not necessary.
The tightening regulation right, a and then lastly on the health care body called a if management can share a bit a collar a income somewhat east <unk> growth the vertical growth in the quarter on your search Robin you add the ago revenue contribution.
It's a body car and what is your expectation into the fourth quarter. Thank you.
[noise] [noise], okay. So if you're comparing Q4 were versus Q3.
Basically the.
Oh, I don't like hard.
[noise], where we do see in cuisine impact from macro economy slow down Oh and Thats. It.
So as I mentioned such as.
You commerce and the franchise.
So for example, typically in Q4 is hot Pixie them for for E Commerce by wait and see a different trend this year in Q4 and for the increasing competition a about it.
Such as the increasing competition from short radio regarding gaming in it you Thomas.
For health care, it's still Oh, Wow, the top five lodging sector.
Right.
[noise] <unk> for all our service business.
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Can I get a bit follow up so how far to use their house cat growth.
And Uh huh.
Have you guys mean, taking some shares.
Jumped here.
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[noise] Liu from works is just Washington's any though that's in Oklahoma.
Yes, I didn't know who can some of food number one common CNG U N G. You some policies from the recent equal.
Yeah, well multifamily quizzle nutritional pencil.
[noise] <unk> in terms of I have care I, just want to add that too we are trying to tap the opportunities all service oriented business model. In addition to advertising business model, Oh, well, there's an opportunity to connect to a hostile hospitals and doctors.
Also we are going out beyond advertising.
I see the and he can can I follow up in Kansas, or how should I be young girls and picking up market share from our peers.
Oh I see this oh, yeah, yeah for health care, otherwise, having basically if you see Atlanta way saw all girls so away they don't see a.
Secondly, if they tend to a monkey share increase in health care this quarter.
Okay. Thank you.
Thank you and then next question comes from Natalie Wu see I see.
[noise] [noise] right. Thanks for taking my question.
Sure, Yes definitely regarding the other type is a incomes outside because I get your day basis, well pad sites like I said, which one needs to go and each one Jackson the most I feel such customers.
Or the lopsided luggage and among those North Dakota, which Oh, we Todd band you expect good which one do you think that can be more described the assisting Nicole and watch why it's no I relate to the with structural and kept the why it's a regarding the topic.
Okay switching costs I, just wonder if they if they if any if rents chance. It's what's left in the industry level makes me.
What's in that same shot by not wood chipping once you actually not like each deal I just shoot that social Gudger Damiano mentioned, you teach side gentleman that show that's not really tough month number that thank you Jack I am not officially been job. That's a whole lot you I should say lots on the hold true.
Yes, yes, yes, yes nailed that down here should change on that just either got JV, how I'm not sure should thinking shop Chintan Joshi from the outside of last year. She had a challenging should thoughts you got the now where that she got Oh, Geez Central California way I shall we say that I just.
Either way.
Yes. Good question why each I want them doesn't know chimbonda bottom yet it seems on me I'm No bunch I know you Jeff how are you assuming they are yeah.
Sure.
Okay. So first for our top sector has yes deal you come as how could I can't pay me.
Well I shared services and the business services.
Oh from that or education is around a a fast south Korean sector in all Oh, such Adler pets.
So if you are comparing Q4 was us chemistry or the.
Days.
Seasonality.
Because they there was some on location chemistry, so a after that or say for travel education training and gaming.
They they.
Have a sequential decrease in Q4.
[noise] so far of attack.
First AFFO for Q3.
Oh.
Close way drive our organic traffic. So if you look at attack as percentage of total revenue.
The but the ratio has been trending down in the first called freshness, we apologize of 29 team.
So going forward or.
It's how about strategy to drive up the organic traffic and to push for what a recommendation services. So you know for a recommendation surveys or Florida.
Monetization its tax free so if you're looking into Q4 2019, and the next year pack has percentage to a total revenue well continue to trending down.
Got it thank you.
Thank you.
Just how I would like to return to afford a management for any closing comments.
Thank you everyone for joining today's call for your continued support for Sogo, we look forward to speaking to you can't into future.
Thank you you conference has now concluded. Thank you for attending today's presentation may now disconnect your lines.
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