Q1 2020 Earnings Call
[music].
Hi, all participants are any listen only mode.
After managements prepared remarks, there will be acuity session. Today's conference call is being recorded and if you have any objections you may disconnect at this time.
I would now like turn the conference over to your hosts today, just <unk> Investor Relations director of so-called please go ahead.
Hello, everyone and thank you Johnny So those <unk> called <unk> <unk> earnings Conference call Uncle, <unk> C O Shotshell and our CFO, Joe Joe well give an overview of operations and financial result <unk>.
Hi, without practice on the previous earnings conference call Caltrans prepared remarks will be made in children's toys using personalized speech emphasis installed transfer learning technology, which was developed a bottle. So go watch interruption technology center shots on what you're on the Q unnamed portion Alden coal in person.
Before management begins their prepared remarks.
To remind you all the companies how safe Harbor statement.
Action with today's conference call.
Well the historical information contained hearing matters discussing this conference call. All forward looking statement. This day month up based on carbon class <unk> projections and there should not place reliance on.
Looking statements involve inherent risks and uncertainties. The caution you that a number of factors.
Actual results could differ materially.
Any forward looking statements.
More information about a potential risks and certainties. Please refer to the company's fighting with the with the Securities and exchange.
With that I'll now turn the coal coal overtime policy O'shell Trumbull.
Thank you testing in the first quarter 2025 back and the macro environment and the online advertising industry in China amid coffee <unk> tea local continue to forge ahead with a five year over year increase in total revenue.
Our fourth birds and mobile keyboard record that Neil <unk> yeah.
The third euchre demand for reliable information and tighten.
Your independent.
If you are local search wouldn't miss the traffic increased nearly 20 year over year remaining trying to second largest search engine and.
[music].
Meanwhile, local mobile keyboard further expanded D.A. <unk> by nice work that year over year Q4 hundred 82 million reporting this.
[music].
According to <unk> research.
Leveraging mobile keyboard, we continue to optimize recommendation Bourbon, while also exploring new commercial opportunity.
[music] keyboard with it you get back in the quarter.
This is.
Mark hardware business maintained steady progress bikes.
Well it depends on the highlighting the importance of the Internet suite.
The opportunity to carry out old round upgrade.
Businesses, leveraging our meeting eight I noted.
First quarter.
Dave I popped into new areas, what I could be luqman can do.
Typically do you make burger breakthrough across our language centric eight I know it.
Core competitive and boy.
The Big machine translation.
The name and continue our corporate logo keyboard mark hardware business it in an effort.
Hi threshold.
No the abetment and product innovation in the industry.
Taking our voice technology as an example, you that supported mobile keyboard industry, leading voice recognition.
And help mobile keyboard evolve into an eight I communication system.
Yeah. They just did that it has also allowed our mark hardware to establish the number of technology barrier, which contributed to the solid growth of our Mark recording product in both sales and gross margin in the quarter again, the general downtrend within the industry.
Our culinary technology. It's another good example, which has not only facilitated the upgrade local search platform, but also provided oh for technology integration.
Oh, Hi, health care for their leverage it occurred at the traffic April it.
Additionally, our.
Location, Evercore and industry, leading simultaneous interpretation solution continues.
The influence of our eight <unk> technology and grant the quarter.
The way for more application.
Now, let me walk through each of our corpus.
<unk> Birch mobile keyboard and Mark hardware.
He birch, we continue to push upgrade by integrating our intelligent fueling eight capability moving beyond the providing general information to offering valuable knowledge that that matches euchre purchase intent is the birth corridor, we focused on optimizing our knowledge graph to you.
[music] birch quality as a result.
Our high quality encyclopaedia content, leveraging knowledge graph, the click through rate increase over 30% year over year.
Meanwhile, writing on our content and services that we have accumulated in health care search we have been actively developing eight <unk> health care during depend dynamic as a result.
He healthcare search queries tripled year over year, and I'm like health care patient volume rose over seven fold compared to the normal level ward is that.
A few examples of our initiative in eight <unk> health care.
Oh I can enable income checker and intelligent you in a robot have been able to state medical record.
Actually in primary level help diffusion from handling massive and repetitive clarity about them.
In addition, we recently launched the world's first the eight I nutrition that jointly with China Nutrition Society, a nationwide nonprofit academic organization.
You call work by our knowledge computing and natural correction technology. The new forbid is able to provide personalize. The died threeq guidance, they use or health condition.
Well, we pull work, we will incorporate more cutting edge eight I technology to transform our health care urge to an acceptable and reliable service platform for everyone.
Turning to mobile keyboard, we are committed to evolving it into an eight I communication system.
Well one thing we further enhanced its eight <unk> input function to support user in a more efficient and thoughtful way.
For example to meet the input need a different user group, we launched an error rate of eight I can they both had writing function in the quarter.
Putting all complete.
<unk> Association and had dropped in multi color.
As a result, euchre forehand, writing function increased almost 30% year over year in the quarter.
Meanwhile, we continue to upgrade Mark one site and enabled it to better fit the user in various chat.
For example, we rolled out popular eight enable emoticons function, which can opt out all kinds of entertaining vicar and emotion and one quick whenever you heard <unk>, which significantly improve our euchre engagement and penetration.
As of March Mark once I have been used the 900 million times per week and on a sequential basis its corporate than usage has increased to 200%.
Moreover, mobile keyboards continued to maintain its position as China's largest the voice recognition that.
After the end of March <unk> average daily boy, the class more than doubled from a year ago with the peak at 1.4 billion requests per day.
In addition, as we continue to optimize our recommendation survey that laboratory mobile keyboard. We have also been expanding other use cases for mobile keyboard to better path into the monetization potential I'll take you through.
Oh, Mark hardware in the first quarter, we continued to upgrade <unk> offering to further booth, our product competitiveness and Brett important.
Following <unk> out of our industry, leading mark recorder in 2019.
We expanded our profit metrics by launching an app, Phil recorder category and much more complex use cases.
Such that comes with it and training.
[laughter] fully captured the interest of user with the number of I nearing tend to think that function such as <unk>, which in the large number of languages and I like in the industry mutual translation of the language. It [laughter] industry were eight I enabled noise reduction.
<unk> identification of Peaker, all called recognition as well and locker and so are driven by new hiking category. Our recording bought it continued to outperform the industry and here in the quarter.
The dampening market, they're independent topping a few mainstream E commerce platform its tail and achieving gross margin expansion going forward, we will carve out more eight I hardware categories, particularly mainstream hardware that with Burger or this in our product at eight.
That's it then to use our.
Finally, as we move ahead, we will continue to gear up our eight <unk> and big data driven business upgrade to create more value to our user.
Well I think a more robust business that present greater potential.
Birch, we maintain Betty development momentum in the quarter to call well at the same time will like to accelerate the growth of other businesses.
Bending the contribution mobile keyboard and mark hardware to our although revenue.
Looking ahead, we expect the pandemic, who continue to late <unk> or theory, hi, hyper at least that elite implement our strategy and with all our efforts in place. We believe we will return to healthy growth posted the than what the external markets normalize it.
Most importantly, our loan growth prospects remain intact.
With that I will now turn the call who chose to go through our financial.
Joe. Please go ahead.
Thank you wish to try and.
Hello, everyone.
In the first caught off 2020.
How about total revenues remained resilient in the challenging environment.
On the profitability side that was not that any impact from the kabi Nike Inc.
As I laid out.
Craze in traffic acquisition cost.
Each way had anticipated.
Looking ahead way for C ongoing pressure, our all all way dogs in the second quarter.
Asked a pandemic lingus.
Last side into second half of the yeah, we expect to drive further improvement caught up I call to impose our top and bottom line performance.
And to eventually climbed back to our house it girls trajectory Wednesday external market normalizes.
After the pen dynamic.
Now I'll walk you through our first quarter financials in greater detail.
That outcome to the guidance.
Please know that unless otherwise noted.
All monetary amounts that I discussed a U.S. dollar US also know night, a well refer to some non-GAAP members, which exclude share based compensation expenses.
You can find a reconciliation of non-GAAP took off my does <unk> earnings release.
Total revenues in the first call to what 200 and a $57 million.
2% increase year over year.
On a constant currency basis.
Total revenues in the first call to increase the 5% Yeah Oh yeah.
The agenda such related revenues.
200 under 38 million called Us.
A 1% increased yeah, Oh, yeah on a constant currency basis, such and such related revenues increased to 5%, Yeah Oh yeah.
The increase was primarily due to the gross yeah auction based the paper click services.
Which accounted for 91% of such and such related Robyn.
Compared to 87% in the corresponding period in 20 Nike.
Other revenues were $20 million, a 6% increase yeah Oh yeah.
The increase was primarily due to increased their revenues from sales of small hardware products.
Cost of revenues was 200 under $17 million.
18% increase yeah, Oh, yes.
Traffic acquisition costs.
Our primary driver of cost of revenues.
Well, it's $181 million.
I, 27% team Crazy Elway yeah.
Representing 71% of total revenues compared to 57% in the corresponding period in 29 team.
The increase was driven by increased traffic acquisition.
Yes, yes confined to their homes spend more time online go into Kabi night <unk> sake.
Looking into the second quarter.
As people are increasingly turning to work.
And as we are proactively managing our traffic acquisition activity.
Given the challenging in Maryland.
We expect to try to acquisition cost took randomly dropped back to normal level, whereas sequential decrease both in absolute amount and as percentage of total revenues.
Girl's property and the non-GAAP gross profit what both $40 million.
Oh, sorry, 41% decrease yeah, Oh, yeah.
Both GAAP and non-GAAP gross margin was 16%.
Compared to 27% Yeah go.
Well take place primarily resulted from the girls of traffic acquisition cost outpacing that off revenues.
Total operating expenses was $83 million, a 3% increase year over year.
Research and development expenses were up $47 million.
15% increase yeah, Oh, yeah.
Representing 18% of total revenues.
Compared to 16% into college spawning period in 2019.
The increase was primarily attributable to increases in personnel related expenses.
Sales and marketing expenses, what $29 million.
I told her Sunday Crazy about yeah.
Representing 11% of total revenues.
Actually flat west a corresponding period in 29 team.
Yeah, Hey expenses was $7 million.
Oh, 29% decrease year over year.
Represented his ray Percentof total revenues.
Compared to 4% in the corresponding to Red ink tiny my team.
The decrease was primarily due to decreased expenses related to the combination noncore businesses.
Operating loss was $42 million.
Compared to a loss of $12 million in the call us Bonnie view it in trying to 19.
Non-GAAP operating loss was $42 million.
Compared to a loss of 11.
All those in the corresponding period in 29 team.
Other income net.
Yes tool point was $7.2 million compared to $8.7 million seemed a corresponding period [noise].
In 2019, the decrease was primarily due to all a charitable.
Donations of $1.9 million associate at West stuff Kabi 19 outbreak.
Income tax benefit was $1 million.
Compared to income tax benefit I'll leave a point $2 million.
In the corresponding period in 2019.
Net loss not you built out to SOPO was $72 million compared to a net loss of $3.9 million into college spawning period in 2019.
Non-GAAP net loss attributable to Sokol was $71 million compared to a net loss of $2.7 million in the corresponding period in time 19.
Both GAAP and non-GAAP basic and diluted loss per adss was eight cents.
As of March 31st at 2020.
We had cash cash equivalence and short on me last mens off $1.2 billion.
Compared to $1.1 billion as of December 31st that 2019.
Net operating cash inflow for the first caught off 2020.
Plus $26 million.
Capital expenditures for the first quarter was $3.8 million.
And lastly, turning to our outlook.
What a sudden caught off tiny tiny.
We expect total revenues to be India range of $260 million to 200, and a $18 million.
Representing a decrease of 8% to 14% Yeah Oh yeah.
Well I dig craze of four to 11.
Her son, Yeah, Oh, Yeah, Yeah RMB times.
This momentum guidance takes into account the expected continued impact of the Corona allow us outbreak.
And the resulting contraction that Chinese economy.
As well as other challenges into my colleague environment, and the all lie and what how the industry.
Hi side on the bottom line.
We expect our losses to narrow in the second quarter.
That's really anticipate try to acquisition cost well take place the sequentially.
And well continue into a stringently and manage our cost and expenses.
Please know that but the second quarter tiny tiny guidance way have presumed I exchange rate of 7.07 to that Darla as compared with the actually exchange rate of approximately.
6.8 tool to that dollar for the second caught off tiny 19.
And 6.98, so that dollar for the first quota of 2020.
That concludes our prepared remarks.
Thank you Joe operator, we'd now like to open the call [noise].
[noise]. Thank you we will now be getting the question answer session.
Asking question you May Press Star then one on your Touchtone. So if you are using a speakerphone. Please pick up your handset before passing the keys to withdraw your question. Please press Star then to.
At this time, we will pause momentarily to assemble our roster.
First question today comes from Thomas Chong of Jefferies. Please go ahead.
Hi.
Friends management.
I've a question about second half given the fact that.
To be.
<unk>.
In the Q1 in the second quarter.
The acquisition cost just trying to <unk>, how should we think about the second half.
Hi, good friends.
Oh.
As well.
<unk>.
The profitability in the second half.
That's my first question and my second question My second question about.
And that's in public cloud much.
Yes, I can you talk about B.
Trends in comes off the profitability all piece business and how we should think about.
The timing.
Moving to fundamentals.
<unk>.
Thank you.
[noise], Okay I'll take the first question regarding the second half.
Oh, yes, it up and dynamic you know a kind to lay the visibility for the second half if not why I.
Well take a shot with you know some mild trend for the second half.
So basically Oh [noise].
For outlets, having arriving meal.
Well, you improved quarter over quarter from Q2 Q4.
And as well how about keyboard.
Way Happing looking ahead to I Love you had some on position lender. So well continue to do that so together lays the continuous expansion that's up [noise].
And [laughter] until value.
After a mother art, so it's Robin Hill country.
Well continue to.
Spend during the second Uh huh.
And then I'll ask if he is organic traffic.
So most of the incremental robbinsville southgobi into [noise].
And the four small hardware.
Sales calls well accelerate into second half.
Driven by solid sales momentum for your models I'll follow a existing products say team I'll watch and Eric corridor.
And as well as a real products took a long stay in the second half.
So waste.
Implemented revenue side.
For the profitability post the.
And then make our profitability well they tend to meaningful profit level.
So basically fall for such Weston such related revenue will grow called I'll call to and.
Hi.
Well be trending down.
Right.
In the second half, so oh profitability as well, so thats, what I'd had destiny as well.
In cool.
And the way, it's the incremental revenue and.
Profit from their mobile keyboard.
And whereas the acceleration of cells.
And the how cecos marketing, often smile hardware business, well see strong girls of gross profit.
That's my hardware business into second half.
And last but not at least a well remain stringent Tom cost and expense control and the continued to improve how about operating efficiency.
So with all that profitability, a well in pool caught although quota and are in the second half he 12 <unk>.
<unk> climb back to a meaningful profit level.
[noise] bought it.
That's why didn't you handle genconn engine, yes, one of those punchy the tone to it.
Sometimes they will all know what teachers know she won't keep who can do that he I could let jonathan.
None whatsoever.
Policies.
So your engine Laguna Niguel, Saddam them. All you do you hold woman closings as shown on foot locker seemed to me.
So that's on dealer each individual tied into whole diesel he didn't get a shutdown hopefully your thought on.
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No. It's you know how did you see I must look away I'm going to us yet she tool when she she's or what else is going into the who owns them you're talking about or did you say giada ameche Sentinelle woman done cool Oh, sometimes she assumes a sales force on the legal soon teaching <unk>.
I was little too so.
So turning trail question off more heavily on <unk> as you know we all small hardware you saw a long term.
Definitely a strategy all we're trying to facilitate AI to them product to integrate odd to integrate I I, Oh, well on that show interaction technologies to create higher Suresh, how cheerful Oh technology, a barrier and stuff all competitors also.
So all we use that a strategy we have seen our sales and gross margin I have seen expanding.
For the past quarters, and if you look at it you can do catch all the current market for small hardly a actually due to the Kobe 19, a actually is the industry has seen some [laughter]. Some some downtrend, but so goes I mean I Oh my.
Well, yeah has booked a nice grows into first quarter and we'll continue to record a year over year gross profit was 30% in second quarter.
Happy to it to return to a rapid growth in the second half off this year.
And.
And.
Yeah, we'll continue on to leverage all the strong Oh, yeah technology to further strengthen our part of the matrix and pipeline, all but two product lines, including socially I'm chemo.
Typically I like in Kansas, VPA positioning and make each that personal intelligent boys interaction hardware.
So timo will focus on children education, the how a house.
And we will invest <unk> R&D and <unk> are there.
The other necessary investments to facilitate no problems ups my heart with business and we expect a loss we narrowed down yeah, Oh, we've oh accelerated revenue growth in the second half.
[noise] bought it thank you.
Your next question today comes from L.C. Chang of Goldman Sachs. Please go ahead.
Thank you management for taking my question I know what she will go away. There are no Oh Gee why it's so much money shall awesome job you pins, you're not going to be sure claim woman to slow down the kitchen account sign me aren't huge which when people go to announce Intralinks Ginger are sure cooking, Matt Jewish I'll try.
<unk> you know should actually be much on top of course local that clearly be concurrent ctr. She won't change only companies like what kind of Lumpiness you know when she joined them then from Black <unk> Jabaliya team drinking two things I guess O'connor Lumpiness and intelligent puts you.
I can't go once you know I should my social finally, I'm gets yes, you should actually be on each of which usually <unk> syndrome, how surgeries I shouldn't passion and let the geological Abbas Apatorsen in Wisconsin, well finally, trying to keep yet female which will help sexual functioning she sounds I.
I know well publicized on my first questions I'm trying to monetize he shouldn't we we've got like a you know 20% <unk> traffic within a quarter with increased traffic healthcare vertical and higher see chart encyclopaedia side, just small on so can management share a little bit more color I thought seemed monetizing the topic on that.
For how to like in the near term wheen kind of Michael side and long term potential there on the second question is on input method used your monetization with all the quite a large user basis be growing healthily as well can you share some thoughts into the monetization outlook down the road Ah. Thank you she is.
Uh huh.
It's something that's all that's me.
So he will go to zero coupon bond with a long I'd probably be long I wouldn't call.
Two quick ones just feel Holly this is Jim Collins regimen isn't what we did on todays call I am a little sometimes old Oklahoma Super supplements alcohol again, well windows on the go to so that's all going well because in Jacksonville digital Gladiator <unk> sometime late <unk> early comes into play.
Neither digital I Cook at home will go into human she she's would you go to says you know how does not.
Let's not forget you don't just so [noise].
Open die digital coupon <unk> I can chime in your jobs or the challenge is to meet all just on the younger when someone that's awesome over the years ago. So again, yes.
I think is minimal dish will go over to David just leave here somewhere in children lead yet so that it wasn't so that's also favorably.
Okay.
[noise] in terms I searched mine type thing.
Nation, I think and because of the destruction ought to coping 19, <unk>, apparently a advertisers have scaled back their advertising budget and a it it for now it looks like we have to take more time to negotiate to with advertisers for that and you know framework agreement.
And we spent a advertising spend had the challenge to optimize the willingly yeah if everything.
Oh, well, Oh and the food for personal go Oh search we are actually trying to you know upgrade all its search products and services. The with March you, a nice capabilities and moved beyond information.
Providing information to offering valuable knowledge I know, we all focused on knowledge, Oh, you know generation and knowledge computing onto.
Hey, and took it to bring more valuable added services to our users.
For example, we recently, we launched Oh, our AI nutrition list, Oh, I'm to empowered by our knowledge computing, a natural interruption technology that you surveys is able to provide personalized dollar tree guidance based on users how its condition and disease I assume.
Kind of value added services to users that we can actually you know are rolled out to advertisers full monetization potential.
I don't know <unk>. He just not done from a legal has implemented to liquidity shingle nodule suitable for limited to go through with all the retail either on the Creed herself teaching to do this whole thing sort of social political these gains yet.
Oh, we use more knowledge embedded in our search resolved I, it's actually a lot is actually going to a check to an increasing number of advertisers and also if it is influential enough how we can actually charge users.
Directly Oh small hospital home dozens of just sort of just an uncle <unk> power. So I don't kick off the group of cooking Hobble region.
Hi citizens on some of the ones that someone could handle those [noise].
So you could also dealing with this awesome I want to see if we those homes or did you feel that for me. The most of the little hold together Johnson <unk> Johnson sort of on a woman's legal traceable to put 'em. We couldn't other gives a novel belching once we get said unions it'll be a lot on June.
Ladies and gentlemen, any deal was on Josh.
You know kind of come up and down syndrome, when Jim that's mostly on the one I'll send that to a student so good morning sentences autolatina until the middle to high speed high single digit.
I'm, Oh wait I don't want us hopefully they'll dominion full time to go straight Peel that onion <unk>.
[noise] on turning to the monetization model keyboard I think all on strategy I have always data we are for the girl I'll use the basin next problem or use case into salary monetization progress and a into possibly <unk> Rodolfo implementation sorry.
Oh, we have steadily driving forward, we saw optimize the data capabilities that better support it better support targeting a recommendation on the eight it's expected to maintain static grows a mention I know we are also tapping into the potential of more value added service.
This such as E commerce trucking, guys and emoji surveys to better connect to cost most spending friction.
Oh I'm do we expect a great growth <unk> for mobile keyboard.
I'll now a mobile keyboard contributed to mid to high single digit opt for a total revenues.
And we expect that you could grow to a meaningful level Oh, winning this year.
Okay. Thank you.
Oh.
[noise]. The next question comes from Alex Yao of JP Morgan. Please go ahead.
Oh. Thank you mentioned, what's working across from my first question is about the second quarter Gardens, Oh can you break comes a garden. So four out of how does he reviews and among scrub Youre Huntington Beach Armstrong meal.
Is the weeks news out opposing revenue goals roots are more reflective it's off a trial six weeks news.
Then we can use oh, if it's the issue is more on the be minutes or can you help us understand where do you see the weeks you said demand at the moment is there more from the multinational companies a waterfall nonperformance a brand ads budget.
Any color would be helpful. Thank you.
[noise], Okay I'll take the first question so.
Okay. Okay. This yeah, R&D, Tim I walk I don't see indicates a EUR, 8% year over year decline Amit point.
So the decline was mainly due to the negative impact of the pandemic, how such related revenues.
I'll focus my hardware it well continue to have a strong year over year gross mainly driven by almost every quarter.
So for the.
So that's related revenue.
[noise], but oh, yeah decline, it's many due to the a weak demand.
So you'll know that the pandemic huh it oh the sectors so basically for.
Those are right resi affect us doing the Q1.
So is start to normalize in Q2 as people are you in prison leawood turning to work.
So those advertisers such has all on Famy encoding live streaming and all education they scale back their ads projects from the Q1 level.
So in Q2 of those sectors well report.
Got you slow girls in Q2, all not yeah, Oh, yeah basis.
Well the sectors that was U.S. they impacted by the pandemic can kill well say those are offline service sectors, such as a house cat merchant services and a localized services.
Helping recovering.
But in a relatively slow pace and the steel spent much lies on the yeah away yet basis so far.
So for E commerce.
It's up when delay recovering, but not fully back to their normal levels on the yeah.
Oh, Yeah. This is a is especially for those online travel agencies.
They include that into the E commerce, so for OTI, each well take more time for their advertising comes back to normal level.
So with that fall for Q2.
A waste of pressure on the revenue side, but tech well trending down say a sequentially into the.
Hey, Chris up more than 10% between 10% to 20%.
So oh.
Well no doubt our loss from tools for 20 Mealy RMB in Q1, two basically.
Around the 50, and then on be loss in Q2.
[noise] [noise] almost a so the second question is a follow on the.
Acquisition cost of sites.
Is the topic acquisition yelled at me tell them largely praised the number also subsequent regenerated Oh, we gained the third party browsers amini.
The more traffic CRO read the more you need to pretty them, regardless old school.
Monetization novel.
Or if I I will I worked for generalized a trend that you see the more reflected a ball school classic.
So clearly girls.
With regard to the third party browser operators muscle function.
Ization of war other other elements.
On a Sunday.
Yeah. So.
The traffic increased or roughly Uh huh.
20%.
Due to the pandemic say people's staying at home and the they have more time to go a lot such for those information.
So well pay to Uh huh, so manufacturer us fit for the default so changing all not bipartite basis. So we'll pay them based on a number of college mounting oclock by the 60, you any price. So Oh, you know weight due to the.
And dynamic or at what has oh scale to their bodies. So Meanwhile, the price I'll.
Try that but ishares fixed so the economics on the cloud traffic on a per unit basis, you Chris stay in Q1. So that's why what what made the EUR 220 million I'm the loss in Q1.
So oh, so far west.
Up and that make up that much better.
Traffic has been trending down so basically oh by the end of Q tool it well basically back to one level.
So due to the trending down Oh average I mean for Q2 on average about traffic Oh, well, if you say oh.
10% to 20% lower than Q1, so accordingly, the tuck well be tend to 20% lower than Q1.
Understood. Thank you Joe.
[noise] question today comes from matter, we really see I see see.
[music].
Hi, Good evening. Thanks for taking my question I'm like let's say small regarding the topic was fishing concepts wall.
So Joe you mentioned that I'd tell me the sand gross it's coming round traffic goes in the first well enough. So that if that means that the odd though like.
5% to 7% is coming through on that on price hike. So just wondering how we have seen must be met a price hike girls.
Coming into the second hop off it yes.
For other sectors, so basically all the factors away see traffic.
Gross.
Oh, sorry, we see so yeah. So it was it a traffic out.
Inquisitive for all the channels, our organic and Tencent and also a acquired traffic.
So for the I pad try that.
Oh yeah.
[noise], yeah, so that although traffic the increase apart from the increased traffic William Yeah also a save 5% to 10% a press hike.
Yes, so for the second half all these you should we have seen must be met a lot pay self deal I know the young girls up that price hike.
Yes, yes.
Hi, a fix that at the beginning of this year, so each well be the same price going through the yeah.
Got it Oh, so I cannot give an update all that oh, youre trying to pick up distribution between organic and odd that cloud topic and Oh, so how much I get contribution style. We check channels are currently did you see any improvement after that well Matt upgrade earlier this year.
Thank you.
Yeah, Okay. So a.
So let's be Starway style last quarter. So in Q4 90.
Traffic contribution.
70% from organic and Oh, sorry, 5%, Tencent and another 75% or from I'll kind of traffic so in Q1.
Good with Oh pandemic, so what we see though a.
Substantially in crazy in traffic, especially for those traffic from.
Oh Wow traffic channel. So there's quota organic you know all the.
For all the channel you look at the absolute well ill.
The traffic Oh, you increased the comparing to last quarter.
By the way is Uh huh.
More traffic increased Oh acquired traffic channels, so that the contribution changed to a 25% organic.
So the 6% from tens and a 39% from a acquired channel.
So after the pandemic or the.
Trying of acquisition well go down so if we look at the.
The end of this yeah, so basically it well back to normal say so they percent authentic so they 5% sometimes on the say 5% from I'll.
Jeff acquisition, so I'll always say away or try to.
Travel up how organic traffic and a unlock the value of such traffic away mean, a traffic more than such traffic said.
So for all came aboard a one way.
A lot it's malleable all about KRW eight one scenario to monetize not necessarily such war news feed so for those kind of traffic we cannot translate it into the such wallet.
So when I say by the end the composition.
Well be Saudi person from organic.
I.
Don't include a such a traffic other such.
And as such I mentioned, a well try to touchy owes us for those well.
Oh, well at his services so for that kind of revenue.
Huh.
Traffic, what can now translate that into Oh organic traffic.
Got it so we think that 35% traffic on the ground Tencent channel.
Is that typically experience brown, we chat steel minimal.
Yes, Dan minimum.
What's the majority of the traffic is coming from could feel mobile browser.
Got it thank you Jill.
Okay.
Again, if you have a question. Please press Star then one the next question today comes from Alicia Yap Citigroup. Please go ahead.
Hi, I'm good evening management, Thanks for taking my questions a wonderful to see match bank I shared with US you know what's your view on how the Chinese users searching I'm you know we've studied information discovery behavior will change over time, so bill so.
<unk> true browse Oh environments steel imports I can give me a and how is the sad itself socal meaningful.
Program and any traction staff and then just kind of follow up on the T.H.C. pop so the pricing increases associated in the beginning of the year right. So we said pandemic if there any channel that we can't quite remarkable shape the pricing I took all over our forecast.
Hi, Thank you.
[noise] I don't what does it will also sort of unusual.
The use of homes sold on a yes, if I can tell people do let's see what a social app with onto a single question to jump the meal changes on the while I'm a on she's sort of hardly she is yet to do some high so cogen, a guy school, social beautiful Jones, who go away from us and by the whole bullish on schedule.
Hotels, and Oh, gosh, probably say digital cooking either John She is she she will do you go shopping yeah. What is your view, though too because this is what else.
[noise] affirmed the Sir you user behavior for search I think for generous Serge I, it's always a browser all app concentrated.
Rovs on that we are basically the same thing and a four vertical so some of the versus what actually happens winning the vertical ecoson systems.
But some large pass on the steel such as we chat I won't tell a total now.
Oh, no toll claim to go like what around the juggle called me Oh, there's always going to.
Foley.
She told the town.
Yes, and it looks like this in this year's huh.
So regarding your second question on traffic acquisition costs I think it's already a.
Hi until within the industry I know, we are making proactive on negotiations the when is the OEM manufacturers.
To see if there is some opt into you know too.
To move the price.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to Jeff do you John for any closing remarks.
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