Q3 2019 Earnings Call
Hello, Ladies and gentlemen, thank you for studying volumes for the third quarter 29, P. <unk> earnings Conference call for Inc.
Stein all participants are in the listen only mode that he's got Fritz call is being recorded I'll now turn to Colbert could this be touching company Investor Relations. Please go ahead.
Hi, everyone and welcome.
Yes, that's what I 2019 earnings Conference call. My name is financial and operational results were issued earlier today and I posted online you can also be on the earnings press release.
Our website <unk> dot.
Okay.
So called will be available on the IR website.
Okay.
On today's call will be Mr. on Jay.
Exactly what he Oh.
Yeah, and these <unk> Chief Financial Officer management will be game, which prepared remarks ended the call will conclude with Accutronics section.
We continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
These statements involve inherent risks and uncertainties.
The common is resolved maybe materially different from the views expressed today.
Information regarding these and other risks and uncertainties is leading the combination <unk>.
The other public filings as always the U.S. Securities and Exchange Commission.
The company, that's not assume any obligation to update any forward looking statements, except as required under applicable law.
Please also note that we haven't earnings press release and this conference call include discussions of on all these <unk> GAAP financial information as well as I'll detail non-GAAP financial measures.
The press release contains a reconciliation of the I don't know contain non-GAAP measures truly I'm not they teach most directly comparable GAAP measures I will now turn the call wage and hour CFO Mr., how we shot. Please go ahead.
Hello, everyone. Thank you, but join us today.
Let me read a feel remarks I'll be talking Mr. don't.
So the quota to the 19 recalled makes the another quarter of successful operation, where we beat revenue guidance continue to to sustain growth.
With me to talk to slides across our strategic initiative, you gave me value chain deployment kinda technology upgrades.
Now, let me walk you through the metrics starting from Tropic.
It was in the domestic market. It reached at 146.1 million joined the said a quarter.
It's actually a robust growth.
47, when the 6% compared with the you go period.
Impressive growth was attributable to the high season to sum up right on it you force tournament hosted and in the quarter.
Yeah addition to almost for the in large animal Gamestreamer base fabric down.
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In the U.S continually healthy growth to 63.8 million tons.
29 point to 1% year over year, and a 14.1 person quota.
No mobile imaging, which includes both PC and active users also realized a substantial growth.
<unk>, 5.9%.
The year basis, yes. This quarter, we successfully migrated a portion of non mobile user into.
Which led to a faster.
I know you.
Also benefited from our dominant position in China mobile game broadcasting space.
We are able to retain the users newly acquired from the we try to mean you program and Inking pop out of functions to be actively engaged with our mobile mobile App German peak season.
Activities.
He was a base growth trend heidrick comfort.
Reaching 5.3 million seem to compute.
Currently Q3 paying user number it's slightly better downward expectation.
At the pool of our content ecosystem.
You spoke to maintain the momentum accelerated right you view where popularity during the third quarter. We brought cost at over 110 esports tournament with the viewership nearly 560 million, including LPL, Oh, CK <unk> nine in the PPL.
Compared with 510 million viewership in a year ago pyramid.
Lighting, all compounding before counting.
Finally October we signed a strategic a partnership with riot games, the developer and you've got legend to secure the L. Teekay broadcasting, who see the tea, which we are in China became trees on your 2020, a year 2022.
At the great funding promotion.
Develop them into right across the various Chinese marketing channels for the next three years.
Fruits in partnership with these major World class told them and further demonstrates our 30 brand image and the influence in the Boston market China's.
Industry.
Our efforts to promote sports events continue to solidify our position as a leader in this space.
For instance in the reason they concluded a 2019 feeding off of what have you ship for league of legends, but no actual 2019.
Have you stoppage the comprehensive coverage.
Hobbies highpower events by all three virus viewing angle for viewers.
Such as the Jojo XT like channel and the self produced a common to reach Kindle, featuring our broadcasters and a former useful professionals.
Additionally, we align with four out of 16 participating teams have worked with 2019, including on Chee.
And Tim liquid.
Exclusive streaming partnership.
For the fourth.
Participant in teams <unk> 2019, who the RMG Pxs G R F and team liquid if with exclusive streaming.
How did the shifts in China, the broadcasting content up as those top teams Oh, we're thoughtful.
We're going to be a effective treiber in terms, some you'd acquisition and tungsten and Oh outcomes in the sector. In addition to broadcasting mobile game.
Blockbusters that we have already.
Besides the broadcasting the about major what Clos tournament, which generated a significant who viewership.
We have also been proactively producing all with self organizing overnight the tournament and foods a compound accompaniments the viewing spirit, okay meetings with Yahoo.
During the quarter, we've successfully hosted a city a self organized appointments with viewership of over 76 million compared to 20 events with a 49 million viewership in a year ago Pureed, notably average daily viewership Yeah, you BG definitely cop 2019 was almost.
Oh, the compared it to definitely come spring season last year.
Well I'm, especially on those.
Our self overnight events covered the only top tier game games like Oh, no putting all people be cheap, but also long held the games to meet the virus game as preference.
Now, let's talk about the continent diversification efforts as discussed in previous earnings calls nearly half of our active user opt for non gaming content. We think we ask thoughtful and non gaming content accounted for around 45% Upstreaming revenues.
That's why we incorporated a continent diversification you know a long term strategy, while keeping our waking gaming content and the usable.
Among the diversify their challenges that we I had a cultivated it's non gaming effective.
And commit comic content has been a essential kinda degree give his overlapping demographic with gaming content.
In this quarter enemy and the comics category continues its 100% year over year growth a beauty hours, thanks to our ever improved in enemy and comic con kind of production capability exemplified by our life comic video series quota. Please.
Like me, Yeah, that's a pen team into categories. Our production hybrids PGC shows continued to optimize the viewers Oh you why experience.
<unk>, we I see them full of cost like a lot of spending a wolf game show.
<unk> Golden College, and although reality show a focusing on campus life and reducing their music how does show engaged with the mouse, who we are broadcasters.
Diversifying our revenue stream has always been a mission Oaks <unk> management team I'd imagine that previously you had a piping distribution platform that we launched the organs that has been receiving positive feedback from either the high Oh by the prices, especially in game and divide out of it highly nearly half of.
Came at a high says we are placed advertising orders through the platform. In addition, as well a pre Lehman leave I intend to end game publishing business, we published a remedies action adventure game called control in South Southeast Asia, Hong Kong and I want a region.
Interest in December .
If the T stop being for me walk treaties in the upstream of gaming value chain.
I was talking about expanding the company's overseas footprint. The October we officially established a depressed houses Nimo TV, Argentina and affairs extended the operation in the Spanish language Beacon reaches out to launch in Mexico.
Our overseas I mean, you with reached about the 17 minutes into sort of quota.
<unk> expansion plan, well under way to hits to 20 million and they use targeted for overseas markets I end up this year. We aim to continue geographic expansion for Nimo TV and increase the game HEICO coverage to include them all types of games on platform.
A wireless for me overseas monetization opportunities in the Meanwhile, lots of another list we have never stopped at exactly the advancement of our technology under the vision, two and the school openness of yeah.
Most recently in November we I hope they selected conference lunch and up we are open platform to engaging and empower so the party IDE application developers and a development we asked many program.
Including a broadcaster software interactive features and the marketing tools. We believe we are open platform will reshape the interactions between broadcasters and the users with innovative phone and that dynamic features.
Return upgraded the interaction with well strengths and user stickiness and the money that fishing ability of broadcasters and how did the agencies.
For example, we now have some many programs of interactive games in the open platform that allows <unk> to influence game results through ritual gifting, while broadcasters are playing the game.
We estimate to match the approximately 1 billion RMB, whereas some resources under Capstone supporting I'll open platform strategy with the next three years.
We've got allows to the party developers to leverage <unk> coal technologies and capabilities imaging technology based on the speech recognition movement to detect patient and a they've intelligence.
There will also be a <unk>, we are platform, which we believe will yield the income for the mini program developers.
Conclusion, how robust is sort of course of performance across the operating and financial metrics. Once again illustrates our strong execution capability.
The station, we as a proven track records of outstanding performance.
Having delivered a six quarters rope, beating management revenue guidance I'm confident that we our sustained growth of core business of live streaming which views a solid function foundation for us to explore more business opportunities over the long term.
Now, let's move onto the financially sound.
We are delighted to to deliver another strong momentum in revenue growth in <unk> to.
To break down revenues and the drivers behind Outgrows lives. If you mean rent revenue grew by 77.2% year over year, demonstrating solid a growth trajectory you know a core business.
Tend to buy increasingly hence the user engagement and this quarter, we achieved a sequential growth in both average you the spending and the paying user base.
I'd like to highlight that we were making product upgrade in the previous quarter. We have a carry ons approved into strategy. Your monetization since then.
We were pleased to see they're paying user number has the reinvigorated in our core services and products since the beginning of the sort of quarter.
Increased our confidence in driving long term sustainable growth with our strategic focus on creating valuable content and enhancing the vibrancy gaming community to sit on the streamers and the gamers.
The other hand.
Typing and other revenues growth momentum continue with a 81 point is 3% year over year increase and a 22.5 quarter over quarter increase.
Thanks to an increasing number of advertisers encouraged by our newly launched advertising distribution platform and higher spending from branding and of houses boosted by we are seeing has that brenda awareness and market position in the quarter, 36% of Cotwo advertisers have placed.
Hi, summoned orders through the new distribution platform.
We believe our advertisement to Clapham can create more value for our clients through further optimization.
We achieved a significant margin expansion into quota with gross margin be improved to 18.3% on non-GAAP basis from 15.5% in a year ago period under 16.9% sequentially.
Thanks to leverage improvement improvement across the continent costs and the bound with utilization.
In addition, non-GAAP operating margin increased to 66.25% from 5.8% a sequential basis.
And by operating leverage and exercise of the Iowa oriented and marketing expenditures strategy in the overseas markets.
During the third quarter, we granted a new batch of employee share awards under the existing 2017, she incentive plan to the amendment team and a key employees.
Isn't unique rented a share was impacted us so the quota to a partial and and we expect that they will have full quota impact SBC expenses in the following quarters stocking from Q4.
[noise] going forward, we're confident that I will faster growing user base.
High quality content the value that we have created and almost since into competitive position through compelling John teachers will remain as our drivers of a strong topline growth and our efforts to eat efficiently manage cost by leveraging our gross go both of which well continue to serve as crucial.
He loves to generating healthy cash flows.
No. Let me briefly let me briefly go over to financial results for the sort of quarter.
Total net revenues for the stood a quota of 2019 increased by 77.4% to RMB 2260, 5.1 million from RMB 1270.
6.6 million in the same period of 2018.
Livestream in revenue increased by 77.2% to RMB 2156, 0.1 minute instead of quota of 2019 from RMB 1000, 216.5 million in the same period of 2018.
From an read through to the increase in both the average spending puppy use it at a number of paying users Oh platform.
<unk> increased the average spending per paying user was primarily driven by the enhancement of continent attractiveness.
The improvement in user experience.
Optimization on product features.
The increase in number of paying users was primarily driven by almost flattish diversification I'm counting the offerings and the continued efforts in promotion activities under converting active users into paying users.
Advertising and other revenues increased by 81.3% to RMB 109 million understood a quota of 2019 from RMB 60.1 million in that same period I'm trying to 18.
The growth was mostly driven by increasing demand from gaming at a prices I'm a newly launched advertising distribution platform.
For the recognition of a we ask Brendan name in Chinas online I think monkey.
Cost of revenues increased by 71.7%.
The 1000 858.8 million instead of quota of between 19 from RMB 1080, 2.9 million in the same period I'm trying to 18, primarily attributable to the increase in revenue sharing fees and accounting costs.
Bandwidth costs advise the increase you head count personnel involved in the operation companies Sophos.
Revenue sharing fees and accounting costs increased by 78.8% to RMB 1000, 508.9 million instead of quota I'm trying to 19, I'm I'm be 844 million in the same period I'm trying to 18.
Increase was due to increase the virtual item revenue sharing fees in relation to higher live streaming volume and continue to spending useful counting and it comes into creators in both domestic and overseas markets.
Finally, offset about benefits from economics of scale.
Bandwidth costs increased by 21% RMB 210.5 million instead of quota off to a 19 from RMB 174 million in the same period, obviously on the 18 prime and made through to the increase in bandwidth usage.
The results of the increase the user base.
From an enhanced.
I streaming video quality, partially offset by improved efficiency in bandwidth utilization through continued deployment of new technologies Inc. content and distribution gross profit increased by 109.7% to RMB 400, and the 6.3 million instead of course the opportunity.
Team from RMB 193.7 million in the same period, obviously on the 18 I such by excluding share based compensation expenses non-GAAP gross margin increased to 18.3% understood a quota to 19 from 15.5% in a year ago.
On a 16.9% sequentially increase non-GAAP gross margin was driven by the leverage in the cost paid telecom to the creators and improve efficiency in bandwidth usage.
Research and development expenses increased by 80.9% to RMB 135 million for the sort of quota of 2019 from RMB 74.6 million.
Got a quarter of 2018.
Mainly attributable to increases in headcount of R&D personnel and a share based compensation expenses relate to the today show was newly granted in the city quota of 219.
Sales and marketing expenses increased by 98.2% to RMB 122.3 million for the stood a quota of a two in 19 from RMB 61.7 million for the so the quota of a 2018 the increase was primarily attributable to increased magazines.
This is associated with it promoting our product and a brand name in both domestic and overseas monkey.
Including summer promotion activities for youth sports events and cooperation with various marketing channels.
General and administrative expenses increased by 35.3% to RMB 96.3 million for the third quarter 2019 from RMB 71.2 million for the stood a quota of trying to 18, meaning due to increased headcount and the improvement.
In composition of our general and administrative personnel.
Operating income was on the 60 point, 63.9% Oh, sorry, operating income was RMB 63.9 million for the sort of quota of 2019 compared with an operating loss of RMB 2.7 million in the same period opportune 18.
non-GAAP operating income, which excludes share based compensation expenses increased by 139% to RMB 147 million for the sort of quota over 2018 from RMB 61.5 million in the same period I'm trying to 18.
Operating margin was 66.5% in that so the quota of guns and 19 compare there was a 5.8% in the second quarter, two nine team and the 4.8% seem to set a quota I'm trying to 18.
Income tax expenses was RMB 77.9 million for the city quota of two of 19 compared with income tax benefits of RMB 8.6 million in the same period of 218 net income attributable to inc. for the sort of quota up to 19 increase the bye.
At 117.1% to RMB 123.2 million from RMB 56.8 million in the same period I'm trying to 18 GAAP net margin reached 5.4% in deficit for sort of quota up to 19 compared with 6.1% in the second.
Quota, often 2019 and a 4.4 in the city quotes in 2018.
non-GAAP net income attributable to <unk>. Thank you mr. the quota of 2019, which excludes the share based compensation expenses increased by 70.5%.
The 206.4 million from RMB 121 million during that same period of 2018, mainly driven by the improved gross profit thanks to the leverage in counting costs and improve the efficiency in bandwidth usage.
non-GAAP net margin was 9.1% in a sort of quarter over 2019 compared to five point.
Compared with 8.5% in the second a quota up to 19 and 9.5% from the same period last year.
Diluted net income for eight years was RMBS, you're reporting to 52 for the third quarter of 2019 compared with the diluted net income for eight years of RMB Zero point 26 for the same period of 2018, which each eight yes. It presents a while one class a often the ratio.
non-GAAP diluted net income for eight years was on the zero point 87 for the <unk>. So the quota over 2019 compare that with these you reported 55 for the same period of 2018.
Now turning to our balance sheets any cash flows.
As of September six.
The September 32019, the company how to cash cash equivalents shut them deposit and short term investments of RMB 9500, and a 37.2 million net cash provided by a pretty activities was RMB 302.2.
Million for the third quarter of 2019, compared with RMB 237.7 million in the same period 2018.
This is outlook for the fourth quarter of 2019. We are currently expected total Rami that's revenues to be in the range of RMB 2300, and a 40 million try and be 2400, 20 million, representing a year over year growth between 55.5% and Sixtyv.
0.8%. This forecast reflects our current and preliminary views on the marketing and accretion conditions, which are subject to change.
This conclude our prepared remarks, we'll now open the call into question operator. Please go ahead.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone and wait till you need to be announced if you wish to get somebody or requests. These press dalbar heskey.
That's actually the please limit your questions to do.
Also if you ask the Chinese these translate in English after thank you.
Yes.
Yes. It is from Thomas Chong from Jefferies. Your line is open. Please go ahead.
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But competitive edge.
Hi.
Friends management for taking my question and congratulations on a strong sets off be solved.
Yep.
My first question about our content strategy can management comments about.
Our strategy game and on game settlement and the long term potential as well at the time span and be content mix between came at a lot games that blends going forward.
My second question about.
Oh the seat.
Given oh demonstrate quite small solid execution Angel walkable expansion.
<unk> comments about our competitive edge at as well.
Okay in overseas markets. Thank you.
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Hi, Tom has asked the translation for your question regarding our strategy in future.
I mean content will keep how our alfredo she'll improve our differentiation I saw that way, making more market share and we will keep pounding last seen a tier legal mask the east West Wunderman Tanami TGP shows and also I might have hard has the last my will be spent on the old.
It is in terms of be Ah lisanti overseas broadcasters yanked out I am why is was 209 spark patent life only non gaming side I'm more efforts will be realized that aim diversify our content stream, especially the kind of categories have a outdoor and.
Me and also music.
To come and say that Mr. dong sensors for the overseas is strategist actually was to adhere to our localization and the mobilization strategy into overseas markets.
First we believe it that's a mobile game brought live broadcasting will have a good chance in those emerging markets and secondly, I think our competitors will be majorly the twitch and the you tube game. So oh, another coming of age that's what we're trying to use the native speaker and a.
Local broadcaster gamers to serve the local user needs.
Yes.
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Thank you Gotta next question is from Hillman Chan. Your line is open. Please go ahead.
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Thank you Mary Beth came by question also to follow on the open the expansion.
You shed more color on the inside that I'd, including content cost marketing dollar and at that age Trotsky going forward.
How should we think about you monetize monetization of that May you help us use my cat because it's China No had occupancies and my second question is on the committee or close as quite so how are you seeing the competitive landscape evolving in the past one to two autos and going forward. These thank you very much.
Hey, thanks.
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Hi, Human FX translation for your question regarding our only says.
For the quarter on financing we have achieved the average I know you have 570 million and on top of thing.
In addition, our first went that we have put out so far.
Also a improve all right and a lot in the monetization site and from management's perspective, where now the existing regions that we have established operation all please ask and like that southeast Asia countries and Oh countries in the South Africa, South America, we wait.
She will have a.
Your Riyadh break even point in that second half of five times, when he and does that and see what has an expectation for now for your question regarding the competition, which Paschal Oh, we don't really know I show.
Exactly playing the game live streaming by we have a notice that they have obtained this time Nazi broadcasting rights I said, he's much women's and they have signed is among the top rock has changed all that we know we also know he is at the college no matter. It's for the amount of for east West one of mines or pipes.
I would categorize is quite limited so for now we can see at given our strong capabilities in the teachers Tnmps UGC, we remain confident about patients expansion into the game last stream.
Yeah, a human to clarify so for the overseas, but it is we're still in the investment stage a the company does a invest and oh constant or production aside the channel by from the overseas marketing channels and Oh for next year, we're trying to achieve that Rick ebay by excluding those that I called Cushing expenses.
On the GP margin level for the overseas, but.
I think for <unk> for the next or several months about how to stronger that visibility on disappoint.
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Oh, hi, when he asked the translation that yeah, Youre correct away out our Tech conference a few days ago, and we have lunch and if we open platform. The platform is aimed to connect and engage third party application developers I'm sure you're happy many programs and then.
Many programs can engage how could include rock hats or software and a interactive features at market inches and all of those will empower is a broadcaster to create more and better outcomes any factors like.
For the a two to support the open platform, we will we will.
Then I, we will the road.
Well I know our R&D way, so if I raised washes and capitalize on how and where they will also open our core technologies and fundamental capabilities to those said probably application developers that in cool I image technologies. His resignation speech recognition movement detection chooses to them out.
And all of those will helps and to create better feature is <unk> and we will also establish a app store to host to out to host tenders play that many programs.
So that when they generate income flightless everybody application of outpaced and as Rami memory macro perspective, we think the era actually a solid and outside thousands of HM.
Broadcasters that is that actually Oh, there's never a massive amounts have <unk> broadcasters that is actually I accept flavor stream websites everyday and we have oh calming longtime means from Dan as those Ah demands are actually quite person that personalized way ways by opening up.
Last one will help those Rob has changed but will help those third party application developers to meet the wants and needs of separate I'll catch it. So that we can create accuracies template m. dramatically eight content and.
Diversify our content offerings and so that we can also improved the user and sticky knees hadnt user interactive knees and all those guy will as a result, yeah to help has improved the use of monetization.
Yeah, that's it.
Oh, Wendy I will help to provide some reference points for.
User activities and they use a matrix for the sort of quota. So actually I think we'd have the meeting was a very good quarter because of the <unk> of that you've booked activities in the summer holidays. So I would have the seem to use a due to time stand up her every day part D.A. you every day as type more than 100 minutes in this quarter.
Which is a larger that you might or slightly higher than our original patient and the second is the Oh, we're stuck in the mountains retention rate for those users there's more than like 70%, which also satisfy all what ICA investment the in those content and the benefit of return for the continent creation like on the creators.
Also have you seen happily the paying user numbers had the reaccelerated in this quarter to 5.3 million paying user numbers, which is slightly above our original expectation.
Announced they all went last earnings call.
Just have a Ah that's though it was a matrix if a reference thanks.
Your next question is from Xpoone from M.S. Your line is open.
Thanks, Nick I don't I mean, I know, it's on a constant being a hobby yet he won't be lumpy. So when you see on a rule budget or children.
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Inside the CEO suck somebody called the <unk> I'll translate my question. My first question its regarding the and they use sequential growth you mentioned that portion of the EMEA gross sequential group, it's coming from conversion from non mobile devices to mobile devices.
We strip out these portion how much in.
The new E mobile user growth sequentially.
Im sorry, compared to Q2 and also compared to last Q3 hold my second question.
How is management balancing top line growth and margin expansion at the same time it looks like there opex in China domestic pushing it's not a route loved really growing oh, it looks a little bit satish. Thank you.
I will discuss come back later so.
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Hi, Alex assets shall we believed that the east West Ward and hand, the gaming content are.
As a major channel for us to generate the new year's day.
Apart from that weighs deal I, we also see that enemy assuming assay in fact, if switch why for agile part any of this as well and Oh I sat data Lizzie open platform now we recently launched yet we believe it hasnt middle and she'll outperform matter in time sounds like.
Sometimes <unk> in terms of content creation, Ana eat a rate of basis.
Yeah actually dance, if our data shows that mobile user Max a mouse retention rates stabilize that 70% and for your question regarding the Nonmobile show the mobile as a collaboration we have not his unless I kind of quarterly did a hum.
I see show with end game publisher Wisdom game developers and we have seen that then newly acquired detracted from that has been successfully converted to the mobile traffic.
Mm.
So.
Okay, Onyx I'd be happy to answer a second of questions. So actually for the company I think it we're still not to emphasize the profit gross but are still very emphasized and this do focusing on the topline growth I feel as though to EMEA gross stuff for the next two years.
That this is Phil classrooms.
Your next question is from the Jain from Bank of America Merrill Lynch. Your line is open.
Oh, Hi runs Oh, that's one lots of business or what's your Okunski sounds no quarter on what do you want to kind of well you woman ill turn the song and dance that analysis Salomon, So kind of Oh Gee, what can you handle Honda.
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Oh, no milatuzumab, okay. So sound out attempt that myself congrats on the strong quarter on my first question about content cost once you know the China, China going forward and let's say a the Chrysler extension game, Oh industry may impact so content.
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Second delay I know Tyler there then probably some big nice Oh in coming quarters. Thank you.
Okay and play I will help to answer your questions I'll go first questions about the.
The broadcasters has a contract with us.
That's numbers reflect that seem to 4002 5000 broadcasters with us.
And the most on the almost everyone with us like those the 5.2 5000 was the exclusive contract with us and we pay them like the relatively fixed salaries alone according to data.
Complements about their <unk> all their terms with US thing that's for your first question and though for the next one we do believe that's a season because of the competition for the top typical Casas husky mouth down since the beginning of this year.
Have you seen some leverage <unk> from the cost to pay a to be pay off the two dose of broadcasters generated revenues with us. So that's why as you can see our GP margin has these likely or the or improve the in this quarter because of the language on this side I know this either because of it that with your type issue.
For your second question about the like a the impact of the from the question classroom actually was to another very clear about to their game like broadcasting strategy at this stage.
But a business frontier team Oh, so hasn't the or don't they'll have like a lot of like though the information like there movements on the signing those top tier <unk> all competing for those talking about cousins. Those we also don't see aside from these Ah angle. So that's though for the second question and the for Us.
The question about a game publishing or actually a we'd happy stopping publishing a one on a adventure game quote a a controlled in the greater China region in Hong Kong, South Asia and tie one yeah. We would have you reconsider it's a great the trial a internally and.
You know the publishing of gaming products, so well also be or where we feel optimistic on this new business and a expected that we're bringing the.
The revenue in the future, but I think that will be for the next years before this year, we're trying to running through all the process and established a publishing teams I think we have already achieve our first about go and for the next year, we're trying to do more to build up a walk in publishing pipeline for 10 to 20.
That answers for questions.
Your next question is from Daniel Chan from JP Morgan. Your line is open. Please go ahead.
Total hawk lines or I should say, hey, dollarstwenty or do you want to use acquire woman size here says Gonzales toward that I went T. Reg cells can judge or are quite culture that is it depends on so for the long ago yours.
Yes, I went out in the woman's Antidumping blends Dave in your mail some are called down to two that people from the use of course, I manage sometimes which could be on team.
Yeah, one heater sure choir woman named a finalist aboard they'd be I'm sure that went out to 52 cents. You'll know talk shows that I do you're saying look they say well she to find it or the board they'd be in the whole woman your mail kinda larger cities I.
So keeping tight you're talking to 70 last eight Honda eating out then as a showtime's aboard they've yet or sometimes the fit on a go tell me that went well maybe kind of stuff I mean, there because I think some to the yodlee.
I would translate myself or my question I have two questions first question anything related to our lower tier cities.
So we see quite so actually tried a lot of east for audience in those regions. So wondering what's our strategy. These front.
My second question is related to non gaming pellets that payment can parents. So wondering what's the revenue contribution.
For non gaming content. This quarter and are also I've seen competition from a shadow performs a essay seems quite aggressive intend to solve the pet and showed I broke Hakim organization for example, offering very high revenue share a ratio. Thank you.
Then you have whose questions actually.
We're having to see a major difference between the user behavior.
Our platform I mean between does so the tier one tier three tier force. It he uses and tier one tier twos. It uses these a demographic and the user behavior to use the attention to what kind of the content. Our platinum there's no huge difference between each project and the I seem to always to focus the.
On the operation and the continent creation, our platform in both skinny and non gaming, but we don't we do not have divided the users into like a tier 123 cities that we will have a different into your accretion strategy, but I believe I do believe that so looking forward to I think than we were trying to do something to provide a more customized.
In content.
If they have to the needs to be if they have different demands. We were trying to provide the related to content for them to help them to stay with us and to include the user engagement from a different areas from users from different areas.
For a second the question about the depend payments. So then as we discussed the as we Oh prepared remarks, we disclose that the non gaming content studio contribution to more than 40, 45% of the total revenue off the total streaming revenue in this quarter.
According to your question. So we haven't to a feeling strongly from the competition from the short video platforms in China, but the we do believe data showed a video has the advantage in user engagement and they use acquisition with relatively low cost bateau streaming is quite different approach.
Dr from the short videos and a streaming has a more like a real time interaction and a higher you. The retention how you the engagement with our core users and the core payers from this angle, we still believe that that we do have some added announcement.
This point a they so anxious for a question.
Your last question is from Alex <unk> from China or license.
I just open.
Oh, hi, she's anyway, so we haven't seen its equipment Kevin Keyes.
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Then she shops and chassis for sure.
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You should say fashion show El Cubo quotes you sure warm.
Yeah sure.
The strategic cooperation.
Okay.
Hello shale to offset your ITSM shortened the chicken.
According to help out yet, but what is happening well likes on two separate called new Chico torture, but it's only on shakes up without trying to eventually.
Lifting costs, how what portion that you know, California <unk> seven.
You got them to sounding a thoughts helping the city fairly simple Shannon so actually that's each of the true for Patrick if that's what kind of helps me so I'll try to myself so.
Tencent has options to increase the voting power yeah.
At their discretion basically.
And just wondering how how that's the magic I think about.
Possibility I'll, just ask cooperation or what I said.
All that stuff, whether there Chris sick or not.
Next I want to three years second.
Oh, I'm going to 10 links to the coupon Doug when they go out and have doses either sort of fit under the U.S. He knew he wants them safe and well underway Glenn So and then see one and go tissue, they're going to achieve a you see needle.
Good to this is bull nonferrous faster than that come in to Cook and since then so the issue there too long tails that times was again.
Bill Clinton said, it's a good changing your she neighborhoods figure who has a booking nice on me and then go to most of those who you're seeing the signs.
They stand alone and then when commute cheaply to goods living pain and go the way this year.
He gets you there can you send money gets you. There same was there you go you go you can pencils.
Hi, Alex asset translation.
So well aware that has changed.
Established is getting the Guinea marchand whenever that Oh, my God and a wasting <unk> going forward I'm, giving that has has a strong gaming content provider I wish you up with them and Saf roll ranch vaccine, including gaming and content.
Jamie and East was just wondering is all of that as a whole it'd be the direction for a future collaboration.
How's that we will also be in close contact with tens and she will explore more opportunities to real life to see floor and new business model for us to what together in terms of a game watching.
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We don't have any other questions just a moment for sensors. Please continue.
Thank you again for joining us today and way Oh, we look forward to speaking with you in the next quarter.
Thank you everyone. Thank you sit here.
Ladies and gentlemen that does conclude that calls for today. Thank you for participating in the all disconnect.