Q1 2020 Earnings Call
[music].
Corridor Twentytwenty, adding school.
At this time, because because I don't know, but I mean right.
After the management. So good luck, we will have a question a lot to session.
Please note this event is being recorded.
Like the hitting the <unk> Oh this heel heights today, it's still left he.
General manager of Investor relation of the company.
Go ahead.
Operator.
Welcome.
What's called or tender.
Conference call.
Joining us today.
David shootings, chairman and CEO George.
Reserve ranging and appeal.
[music].
One of these call management will first Hawaiian reveals a colder and then we will come back on say section.
The first quarter 290 financial results what caused this conference call I'll be able I, our thoughts why why don't call.
A replay of this call will also be available on one side you know few hours.
Before we continue I refer you to our Safe Harbor statement No earnings press release, which applies with these calls as we will make forward looking statements.
Finally, please know that unless otherwise stated all Peakers mentioned during this conference call are you there maybe.
I will now turn the call work to our chairman and CEO.
David shootings. Please go ahead Sir.
Oh, Susan I must feel.
But alcohol planes I doubt it like no one gig RDR lenient did you do the type of all the while we so as you well known enjoyed Chinese.
Yeah go away do you go either joggers since you didn't call sees a single each you see unchangeable woman until we also was sold all a chance we'll just how do.
The unless you have turned on that caused you to change and the you. So let's get into all just any Murphy taller suits you Miss a beat on synergy that we will move to pay you lean cheese, when Eugene cool and use it.
Thank you let him.
The one well comes off was quoted 2020 earnings call today.
First of all all of US a joint you hope you and your loved ones stay safe and healthy.
At the Colby 19 academic sweep across the globe.
Experiencing unprecedented disruptions tall, a norm would way of life.
So those who come the pandemic on the front lines, including doctors nurses and volunteers.
Unsung heroes of this extraordinary time, we think highly appeal coverage compassion and dedication.
Oh, well my Okay, and she'll women that tries to do a good either your goal. So do go tumor which had been looking at one of us achieve moved out since one of which I'm not looking good we've assumed that we can get a new machines you know Google cool. That's when you take the woman that goes out too much.
Oh Jeez you she's a lot of challenging the you have how we it's.
Already hardening and easy to warm and those will unfold, maybe sooner rather than just as it you'll get a meal.
I'll, let me be cheesy, yeah, Yeah, sorry told me Little woman, Jonathan when you use of that we'll find out do you guys should just reach all watch it well well actually interested on the Chinchilla song no change.
They are sure well done the Washington banking cool known people go up I found the so those would seem that you all.
You saw that should Oh, neonatology, and usually what was that when they you look we'll hear them Gen <unk>.
I would also like to send all off all employees around the world you have demonstrated remarkable Brazilians and adaptability doing this time of uncertainty and change.
Because of your Hot word in June in January.
We were able to continue delivering strong operating and financial results in the first quarter of 2020, despite the challenging macro environments.
As such during the period, we grew our total revenues by 49.6% year over year to RMB 7.15 billion.
Thus validating our strategy he does P.T. areas.
On the one supercharging all of my she meat and short form video equals engine.
Number two who seem to social nature of I'll pass them through the development of new product features a number sweet fortifying our leadership in the domestic entertainment Vice you mean industry by a content innovation.
So as you know, what's your and they've got nothing comes out woman, Dave you want to tell you if I'm going to go though do you go one is you know didnt.
Columbia, usually dollar diegel beagles on total dollar arguably Audrey look I mean do.
Yes, you do you live either so we model Hersha movies.
The June end up I alluded to result in that.
So on the who else will do is it do you want it.
Zelnickmedia sure woman Ginny, who you go just Yankee intensity in the triangle I got it being shared gagliano changeable exactly sure yeah. She thought she should oh.
Oh sure you don't see you Gotta go away, we like the test.
First of all I would like to share some updates regarding the remarkable progress we have made implementing all globalization strategy.
As many of you have noticed without revenue contribution of over RMB 2.1 billion in the first quarter Eagle is catching up to why light in terms of revenue generation.
Even more striking is that equals revenue is increasing at a rate of 99.3% year over year.
This achievement is a result of our determining pursuit of all globalization strategy, which we set up several years ago.
We capitalized on the global trend of my streaming on short form video and established leadership position in both areas.
Meanwhile, this also assisting even brighter future.
RDR lenient studies that you do you go live with Oh, So you know looks a little <unk> well adopted disclosure that he zone. So you will also be go live. The you know I mean, you called out in general that she so I'd say, it's wrong. He says he not only be something I love I've been decided she does involve.
Why don't you really got loved by vendor should enjoy.
So those will draw do you go lives so the gold Eagle.
Eagle yield on why the Jewish <unk> dollar since you again. She then maybe Tony so not a lot by visual chart is <unk>.
You go live inside of me well, although I don't Paguaga says household TV quota.
Easy will fall out well yahoos yeah.
Following up on Sheila you go lives Sogou, though.
But if we just times just on the edge.
So you need beach unions, when she loved <unk> or somebody else well, you'll take all of <unk>.
Just want to tell me look if you go live of the World War should not change what else you are tail woman and they'll five I would now that said listen we'll do you have some deep so even though we like to doctors, who know can you get.
If you go live of the usually be only is actually you do you go easy to if you go lives that female wall.
Ladies and non-GAAP Shadow, Jim do you do total up I know.
You go lives just slow you don't go to legal does that change old would only yeah and then.
Just one that each uses then you would have to book Hershey I used to equalize is that your equals one goal you just told me all the but you are simply not only that he's.
Yes, Yes, you go lives but.
He told you and dealer thanks to all the gene do machine. So you don't either well then they listen hygiene instantly.
We live.
Alive agenda. So that you don't get potash is on bulk pool pay me O'donnell.
Hi, all she.
Geology listeners on lunch and valuable Juniper citadel, well, that's already known either things you've uptime.
Well, Michigan C.G., a whole maybe you could <unk> locally abuse, we look how the woman's yet that don't work. So we will not sure what you would see though just didn't even though we legend, yeah, well monthly Oh sure I showed triple a fool cultural no.
In the first quarter equalize has witnessed impressive growth in both users and revenue.
On the U.S aside equalize <unk> mobile and they use by 37.8% year over year, and 15.9% sequentially to 26.7 million.
<unk> a historical highs.
On the revenue side sense with rapid growth of people who lives revenue.
Equals like human revenue increased by 92.4% year over year to RMB 1.97 billion.
Particular, he's revenue contribution from capital markets, such as North America, Europe, Japan, and South Korea increased to 33.9% during the quarter compared to 23.5% a year ago.
This demonstrates that people like nice you model can be reputation globally.
Meanwhile, as a nice you mean penetration rate is still very low in many of your little pockets. We firmly believe that we have only just scratched the surface about global growth potential.
A couple of user and revenue growth, even when I spoke facility also continues to improve.
The non-GAAP net margin of Eagle life was well over 25% in the first quarter of 2020.
What has contributed to equalize method global expansion isn't as strong localization capabilities that is definitely adapt to local languages cautious and social values.
So far if he has established more than 30 ritual operation centers around the world by working closely with local hosts to cultivate a diverse and engaging content ecosystem.
Going forward, we tend to further expand equalized presses for all four key areas.
North America.
The middle East.
Japan, South Korea, Australia, and you'll see that.
Taking into account of each markets user base and spending power. We think that every one of those markets has the potential of exceeding the revenue skilled condensate generated almost domestic likes you mean business in China.
This laid a solid foundation of the rapid growth and overseas like GE revenues in the coming years.
I actually was just hone slow you only old GB. It all works. It works older. They go check me, but how did you pay locums, how low you got Philadelphia.
Usually do you go live with or your type.
Then just as that.
I can call you look when they though.
Well most of those heavily juicer, yeah Coppola couldn't go.
Well I think that's on shipping goods, you know who the sometimes look I believe.
Oh Gee I Love you go live with the so it's all just look from Jim.
Moving to a meal I legible, if it didn't really use on the trend means your book.
And you go well me a 10 day you go live well. This was also during childhood yet Tivo, though if you go live with US. So the all time highs decent lessons <unk> 12, I understand you go live with it so they'll know you'll just a woman hungrily BARDA.
To go evil things I'm going to listen to you or maybe that's a little girl lets you follow your pool.
Well you want to book, how often does agenda, so Gulf little.
It's a particularly notable wins or was it up you go lives, which you know if possible.
So I'm always <unk> woman Gilat tissue teaching Puyol July Hello, Buyside evil on there.
Steve will you off you had kind of cool exhibited because it's all the time.
Beyond its robust revenue growth potential overseas consuming also embraces more social features for example on as was 13% of People's lives do you use post go live streaming sessions every day in the first quarter a far higher percentage then it's come to pass in China. It is also higher.
Then a voluntary optimal ratio of many cellphone platforms in China.
Such high level off user engagement validate the pre but it prevents applies to me as a form of entertainment and social decision around the world.
Kids willing to use has urged intact, we continue to be fine various social features equalize <unk>.
For example, I started feature called bar made it easier for uses to share content to be go lives and thus quickly invigorated the social interactions he use it and users and pitching host and friends.
Resolved over 50% of Eagle life users assess the bar featured in the first quarter.
As we further optimize equalize content sharing features going forward, we should be able to extend its use a community and in Kansas user engagement continuously.
Oh, you from young woman, she she's trying to who you like either this progress.
A few hedge I'm sure you'll see there could be agenda, let me go back since you tease huh.
Already Armenia studied people like he the you don't want so I mean, you Dod Darla, even sign you meal.
Only be they've gone up and then just evaluation schedule.
You can go up I mean, this just look at you.
But achievable phone for like he though which is quite a change or would you want me a job pilots that baby me odle Cuddyer bundled product.
Well John says on the you know what you.
You'll you saw the US is on what was that yeah, you look Salveen Guinea dog and go you see things just so you still you know why don't sushi revealed that she's all like either being generally that kind of cheap.
Beyond assuming we also made solid progress you know shelf on video platform like heat, we should see other component of all a few girls engine.
The first quarter of Twentytwenty like he's total mobile and they use increased by 121.9% year over year and 14.1% sequentially to 131.6 million also a historical high.
Notably, we also accelerated nike's use acquisition from developed markets, including North America, Europe and Japan.
Because the average use of spending on let Andy Heyman in those developed markets is greater than in emerging markets like keeps expanding footprint in developed markets is paving a clear path towards enhancing monetization going forward.
But she still likely the youre, Hunan smell myeloma highly unlikely side, let's look let you either us or something like ebay you don't either made here then she mean shield equal to similar though generally has a last year. She is unlikely the team how are you going to be fully either.
Sure they each in dollars or the trends will giacobbe likely to a woman, it's all going well done guys, who though would be although goodies, so although you'll recall.
Oh that fumed I got you see lids hone seen the Savannah, Georgia, Bruno well know the Yahoo. Google is that good each again puts you show. The you look lets say, though when you.
Yes, absolutely well maybe at the end bouncing, yes. It would you put into media outlets that who do you think autoliv ducs again seeing sounds good either down to some of what percent of course. It Giovanni Yes, you then change either phone usage at all so I'm not so you don't really.
Anyway, you like he thought she loves me email Jinsong, where you'll once you get them yet see the size yen Ching companies you well many yelchin down do you still kosher time, you got like either so since I got one of them don't tomo, Don Civgin chunk, we'll try and told you saw the she's Oklahoma Eagle has that changed yet as to how the ball.
Total likely the leader ongoing part of what Daniel who can you.
In addition to rapid expansion in developed markets like he is also forging ahead and boosting its social features and social influence in developing countries, such as Russia and Indonesia.
After we launch a series of new innovative video recording Peaches seems to pass won't.
He served as a much needed channel four socialization and the Prime Social Entertainment since you said those against Gordon and isolation during the global endemic.
Yeah. That's also leveraged its market leadership to establish new partnerships with local media outlets populace celebrities charge organizations and government associations in.
In Russia. For example, we joined forces with the Federal Agency will use affairs and popular celebrities to encourage uses to show to share self made me news about that life on the current time, so as to incentivize young generation to take more precautionary measures.
He Indonesia for example, we launched the lighthouse clinic initiative to provide users, which we all night health consultations.
As part of this initiative.
Chris and nurses invited to join Nike's online challenges and create videos to teach viewers. The most effective hand washing methods and how to best protect themselves against infections.
Which is global reach and local resources like he is making meaningful contribution to helping developing countries handle on expected situations in a fun and informative manner.
There are two though what we have things on why you halko year with a team that easily how goes I assure you saw your hobbies on ROI, we thought so chango, you'll you'll you'll downtime woman's or you can do it so don't social instead. So if you I mean, you also launching in Q4, so she the.
I'm kinda somebody lot socialism genius and Q1, the essentially that Juan.
I will just be times will you know where the tons she's entre yeah. She's thinking I found the so it's also if you want to kind of use Jensen machine Shire Hall. So it wasn't hot Congeni, whom you don't they don't share. Good I mentioned in Chicago, just little full who will do a generally don't Soma well so don't watch on its Moshe well done she's only.
I don't think we'll do well in saying since you've obviously the pound button. The way you want to remain on sometime ago.
Ownership Pago general sort of often thought so the also muscle that she's only owned a lot of show.
She did launch into a channel while changing a whole bunch you Cook.
The yields a nail notebooks, yes.
She is we'll probably do party, who know so to answer your question yeah.
Tonkin, who don't so that's something you mentioned.
Once again, so my I would only be it I know about little Srinagar.
Well, we assumed on shelf in their own who the yen summit.
So he assumed you don't you would that how goes up so it does sound. So shows yeah, you'll see the it looks you do a legal well does that you made on Sunday lunch <unk> since you don't.
He still appears high then you can check.
I don't even they going Josh how well you did see me the suits you find out.
<unk> sole source it almost canola pago the diligence you don't yes, you know what was your comments you don't.
Yes, yes, yes, Jim most you might you don't museum.
Urge here, what's your RG cool hobbled <unk> uses that are totally she's Uh huh.
Now, let's turn to handle during the first quota, we assess operations and make the decision to take the long term view.
Franchising those use acquisition Apis that would deliver a high quality ally.
As such Toggles Emmy use decreased to 31 million in the period from 33 million in the previous quarter.
Notably by reducing our marketing initiative and the investment in India, we were able to generate more effective user traffic and refined the quality of hognose user base.
And with all the vision to maximize uses lifetime value. We continues its digital social features on handle to better connect uses stimulate social interactions and cultivate a vibrant engaging community was one tigers content and high quality content creators.
During the first quarter for example, we began utilizing content based on uses lie.
These and personality types.
Resonate with the younger generation.
Meanwhile, we refined the platforms recommendation algorithms and social media channels to augment its content distribution deficiency.
We also upgraded Hogwarts user group functions, which were formed around shed interest and thus have proven to be exceptionally fertile grounds, we're targeting our content distribution and intense seem to social connection between users.
In addition, we launched the potty chatroom, along with complementary money position features.
Uses were highly appreciated of this upgrade at it provided them with a carefree digital environment through which they could communicate and socialize.
Following these upgrades more than 60% of those users have engaged in chatroom interactions on the platform.
While the willingness to pay for social features has also accelerated in parent.
As the effectiveness of value propositions continue to expand that was quota of this user retention rates stickiness and every time spent all grew on a year over year basis.
Moving into the second quarter.
Let's use extension to date has exceeded our previous expectation.
Without increasing complete monetization system in place. It's a couple of has entered into a new phase of wells and the stage is being set for the platform to become extremely active highly connected online community.
Oh, Hi Tech, let me give them in a woman's usually go who I lied side as well you looks it will either be lucky that when she will be lets you have all them and then later on the oil <unk> well known cheese, you finally usage. It wasn't it looks as though you will notice I guess I'm pleased to lie those old Yeah makes all juggling shield.
Selling and sometimes you thought it looked to use and the sounds here. We don't yet how are you from you know who don't know Geo clubs are you going on time fill up that shouldn't be well movie like <unk>.
Globally. So that's the words anymore.
Well, let's really would put on Julia will you use holds yoko the changing have I'll hop needle.
Well I was up and you go to mutual to sit down yet people don't.
Do you have looks it was in the Blue sounds hobby and we'll know her Tanya. She has all five introduces stands out you impair the cheaper.
You'll could you talk was Genie would sure those on clothing that yes. They do you wouldn't put on she was a genius gosh, we don't.
<unk> tissue job she used to using their own sounds Yoko again, China, who don't chunk time, you, though they don't hunkering cleans will Uh huh.
On the domestic problems, we continue to fortify our leadership in China and attainment lies in the industry.
To ensure that diversity and high quality of our content library, we doubled down our commitment to producing premium live streaming content into first quarter.
He much for example, we launched idle Friday.
Weekly celebrity lives Truman show featuring celebrity local groups, who interact with their friends doing lashing sessions.
The combination of music talent and celebrity Ackman has proven to be appealing to our audience and we expect to develop similar broadcast going forward.
We also focus on expanding on that I see me offerings through the integration of virtual events to heighten user engagement.
The first quarter, we launched a series of events referred to as open at 10 o'clock.
By incorporating all platforms in higher collection of puppet machine tools.
These virtual events create an engaging and authentic music party atmosphere fall users.
Users not participating in these events as they are able to interact with each other on the virtual pencil and exchange virtual gifts.
In the future, we will continue to leverage our state of art technical capability to both Hisun, a newer about content and tiny a new innovative methods of stimulating user interactions and they use engagement.
[noise] or the right you used to go but I'm not here or was that you change again Jeeves you, Josh Wolfson Eagle Ford said easy to why why the oil cooler maybe through the up I've not read and she dollars that's held I used to.
So here seems our leading with all your equals survey of I live with a huge seal.
So that when the you know juggle corridor that you've seen fanconi stood out on put on Yahoo, teaching grandkids and work on she's heart.
Regarding the epidemics impact overnight also benefited from the ripple effects of stay at home and social distancing practices with its active user base growing by 21.7% year over year to 45.1 million in the period.
A portion of these newly added users leverage the perform for remote collaboration attractive by its ease of use highlights you mean quality and suite of interactive features.
In addition, modernize also develop especially assuming program focused on come combating the krona virus and supporting the city of Mohan during the epidemic.
This program, our especially media teams produced and distributed an average of seven to 12 hours of targeted live streaming content of day chewing over 150 lives you mean channels in total for our users.
We also launched 72 last June sessions in partnership with meet local institutions to provides users with virus prevention education and psychological consultations.
Assuming our social remains open Jiegu since you joined robot and also the strong volume single Natalia Sarah seamlessly generation January's interchangeable validate our doors sources Honda leveraging the Latino which it easy.
This is on the uses idea you eliminate all saw charging so dominate the on road shows as Youve onshore Olympian, we sold our core products remains on.
So our media Yahoo third season got easier women's hydrogen sulfide suitable for.
The new high yield so, let's see any unusual the single tivo till mineral warm another time seasonally the terminology turn chasing.
Well just linear sure towards your versus onto knowledge, which will listen in on this actually realize senior judges revolver to actually in clean high bundled change where youre working harder to engage liveperson here or not we'll turn that you got surety tenure Omega antargaz sooner uhhuh healing taleo, which answer the other into.
Quite low so feel solid assumed here.
In summary, we maintain our laser sharp focus on cultivating our do growth engines in the quarter.
While the global outbreak of the Koby 19 novel Corona virus has caused a significant amount of macroeconomic uncertainties in most markets will remain relatively insulated from this method impact as the demand for premium online entertainment content and authentic social engagement continues to grow.
Moreover, our continuous business closed further showcases the volatility of our long term strategy as well at the depth of our product Echo system localized operations and cutting edge technology.
While the past decade was characterized by the gross and will transition of the domestic lighting market. We believe that the coming decade would be known as a decade in which licensing and show from video platforms helped to better connect users around the world.
We will be at the forefront of this trend.
We will build the products enable the users and lead the charge two brief enjoyable and useful experiences to people around the world.
That concludes David prepared remarks, now the Joy CFO.
We talk about the financial results.
We maintain our strong momentum and develop deliver robust financial and operating metrics during the first quarter of 2020.
Our total net revenue for the first quarter increased by 49.6% year over year to RMB 7.15 billion exceeding both the high end of our previous guidance range and street consensus.
In particular, our IC revenues for the first quarter increased by 50.6% year over year to be 6.76 billion.
Given by licensing revenues growth from those who are segments and people segment.
Revenue in the first quarter increased by 33% to RMB 293.2 million, mainly driven by higher advertising revenues from Beagle.
Cost of revenues for the first quarter increased by 56.5% year over year to RMB $4.95 billion.
Revenue sharing fees and content costs increased RMB 3.55 billion in the first quarter from RMB 2.52 billion in the same period of 2019, which was in line with the increasing assuming revenues.
Bandwidth cost increase to RMB 528.1 million from RMB 20, 97.4 million in the same period of 29 team, mainly reflecting the continued expansion of our overseas user base and time spent forming the Beagle acquisition.
Gross profit for the first quarter increased by 36% year over year to RMB 2.2 billion.
Gross margin in the first quarter of 2020 decreased to 30.8% from 33.9% in the same period of 2019.
The decrease in gross margin was primarily for caused by the fact that cooler and veeco segments had lower gross margins for contributed significantly growth greater cautions of net revenues in the first quarter of 2020.
Compared to the corresponding period of 2019.
Operating expenses for the first quarter increase to RMB two point.
5 billion from RMB 1.2 billion in a same period of 2019.
Primarily due to the increase in sales and marketing expenses, which reached RMB 1.4 billion in the period from RMB 134.2 million in the same period of 2019.
The increase in sales and marketing expenses was mainly attributable to our increased efforts in sales marketing activities in overseas markets as well as the impact of depreciation and amortization related to the consolidation of Beagle.
R&D expenses for the first quarter increase to RMB 722.2 million from RMB 404.7 million in the same period of 29 teeth, mostly due to the increase in salaries caused primarily by the consolidation of Eagle.
Our GAAP operating income for the first quarter was RMB 186.4 million.
Compared to RMB 473.6 million in the same period of 2018.
Operating margin for the first quarter decreased to 2.6% from 9.9% in the prior year period as a result of a lower gross margin the impact of depreciation and amortization related to Eagles consolidation and other overseas expansion initiatives.
Our non-GAAP operating income for the first quarter, which excludes share based compensation expenses amortization of intangible assets from business acquisitions, as well as impairment of goodwill and investment and gain on disposal of subsidiaries and business was RMB $613.2 million.
Compared to RMB $717.3 million in the same period up 29 team.
Our non-GAAP operating margin for the first quarter was 8.6% compared to 15% in the same period of 2019.
GAAP net income attributable to controlling interest of Joy Inc. for the first quarter of 2020 was RMB 286.7 million compared to RMB 3.12 billion in the same period up 29 team.
The high GAAP net income.
In the first quarter of 2019 was mainly due to the re measurement gain of the company's previously held interests in Beagle amounted to RMB 2.67 billion.
Net margin was 5.4% in the first quarter of 20000 compared to 65.3% in the corresponding period of 2019.
Non-GAAP net income attributable to attributable to controlling interest of joint income was RMB $428.9 million compared to RMB 653.5 million in the same period of 2019.
Non-GAAP net margin in the first quarter of 2020 was 6% compared to 13.7% in the same period of 29 team.
Diluted net income per Mds in the first quarter of 2020 was on the 4.49 compared to RMB 44.5 in the same period of 2019.
Non-GAAP diluted net income per Mds was RMB 4.8, compared to RMB 9.32 in the same period of 2019.
Looking forward to the second quarter of 2020 were faced with the continuous challenge of the Colby 19 epidemic.
At the current stage, we expect our net revenues in the second quarter of 2020 TV between RMB 5 billion in RMB 5.15 billion.
Excluding the revenue contribution completion in the same period of last year.
Representing a year over year increase between 16.7% to 20.2% on a pro forma basis.
We currently have limited visibility surrounding to running to epidemics long term impacts on our business and the market in which we operate.
Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.
That concludes our prepared remarks, operator, we will now I'd like to open up the call two questions.
Ladies and gentlemen, we will now become the question then our profession.
Good luck to ask a question.
Please press star one on your telephone and.
The amount.
So the convenience of everyone on the call. Please ask one question at a time.
If he was up 12 question. Please rejoin the queue.
Offer when asking your question. Please state your question in timing.
I will immediately were put your question. Please thanks.
Our first question comes from Thomas Cho from Jefferies.
So I hope.
So somehow say today today's order to you it goes it legal Jim how the yet.
When do you throughout while repeatable.
Selling and five.
Second our Q1 woman. So you can vision that future Golub BDC Hello.
So let me sigal should diabetes Eagle.
Got it kind of early early.
So we will gun Bottomline limited one that publicly but the way as almost in that you could update to that then like a flag ICANN biological uploaded to the apartment Ddos usage.
Developed market by.
Exactly yes.
So he is on kind is our doses.
Yes.
Oney attribute value goes all the time fee that we also.
Ben Locke offense management for taking my question.
Congratulations on the strong set of Columbus Applebee goal given the strong Q1 in both topline and bottom line, how should we think about the full year.
I will be equal in revenue.
As well as the bottom line.
20 trendy.
And on get ahead, we have seen the geographical revenue contribution from developed market is also gaining traction.
Ask about what we should expect.
By the end of this year in terms of our political revenue mix. Thank you.
Thank you Thomas let me address those questions. So first question is regarding the year, the revenue and profitability for Beagle.
As you can see in the first quarter, we did achieve.
Very good growth in terms of user and revenue as well properly for people. So we expect that trend to continue so.
In total I think the revenue forecast for Beagle will be higher than previous forecasted. So I think we're looking somewhere around 65% year on year gross for Beagle in total for the revenue gross.
In terms of the possibility as you can see beagle puppet.
Is well about 25%, adding in the next few quarters, we expect.
The day to continued or to even to further optimize and then on the lucky side as we grow the user base of like he will also enhance the monetization of Nike through the licensing as well as the advertising. So we expect the total vehicle us profitability will also be better than we previously.
The market. So I think that's very encouraging for the next few quarters.
In terms of the composition of the different markets as you can see in the first quarter developed markets contribution will be goals revenue is well over 33%. We expect that trend to continue. So if you look at end of this year. We think the revenue from those type of market will be even higher it will be higher on a quarter by quarter basis, So that we will be higher than the.
The current rate.
And then we will also continue to expand in other markets, including the global and emerging markets as well.
Thanks.
Yes.
Thank you.
Our next question.
From Labor day of Bank of America.
Please go ahead.
Hi.
Our consumer loan hunting, the us highlighting across our really aren't going to cloud oceangoing why the efficient tightened down south Central Atlanta, Montana.
Hi, likely power and actually the key to know where they could choosing where you feel the ARPU actually eco highly likely that youre quarter. So to the high share my intent on something that based on past that I notice any team condensate increases should actually dental news on Italian showed us and no corresponding a quick question. Yes, you are the castle terms our house answered out that you know.
Okay. CLARCOR you took share buyback look I hope I can look what's acquisition coming on existing achieving a park financings will then kind of these are quiet.
With Jago MC HYSYS locks and has 19 you guys are going to internalize the doses to allow an unwelcome tick tock. So if you annualize this year, so things and show that concludes our legal mail kind Alistair.
Things are easier player Colonia away, if I can sell quite go tissue, though you actually coordinate our ALCANZA trial had I'd say no kind alcohol dying to help with that so there's no within down lets you should not quite as based our team that Glenn its hunt that things don't if I may or may be facing updates.
Let's see signs that.
Congrats on a strong quarter, especially Overstaying my two questions, mainly about overstate first say too.
About the user is having a flowing quad her ended April or panic and also could you give us.
And then Tyler.
At the that on a gross.
Chanda in different the commentary in terms of either on the second delay it's getting about computation is that the competition with the take Tomcat do you see any new player out some potential player from the Chinese.
How many thats going over say may have.
Hi, Joe impact Oliver shall treatment in alerts are thank you.
Thank you Larry let me address the question. So first one is about the user growth trend in overseas and the impact from the common 19, I think in General code 90 is positive for our global business because we see many countries there have been implementing restrict our indoor policy on in.
Solution policies. So as a result people tend to have longer time watching on entertainment content, including like assuming and shop on video as a result, we do see good a user traffic our use of time span as well as the user retention rate across our live streaming and should come video platform. We're also seeing increasing percentage of the iPhone penetration.
Because as I said, our key strategy for both people Ivan likely focus on the new user goes for from developed market. So I think given the continues to be 19 situation. We will continue to benefit from on batch plant so as well as I sat in general our user growth profile from developed markets will continue to be.
Higher than the rest parts of the world.
That's the first question.
The second question.
Our adjusted and see whether they be has anything to add in some of the competition I think apart from tick tock.
We don't see any other major kind of competitor on the second video side. There is some regional player.
That is coming from China, but in terms of the use of scale in terms of ABS absolute revenue scale. It is too much smaller than beagle.
And then apart from Chuck on video also for live streaming Pico type has achieved tremendous growth over 90% year on year grows we don't see any other competitors that is coming along even to.
The similar growth profile as a as people like so we're not afraid of the.
In addition at all.
Changing honey Nielsen wheels on electrical and one question.
Doug zones.
Eagle usual seasonal momentum is like he is the highway that suit to go to answer the individual quarter Greenwood, She's really interested on bother you agreement Hello.
So you know what you're the warmer quicker into Newsource entire you. Obviously know when you look at one children in or Michael J., each order sure to grow year with our Jenkins.
Sure well no no. So that it was you know crisa Honolulu sure, but the Geo you look generally those who know those.
Thats it.
We generally to the juggle juggle this model Cook to go to hospital General liquids. Although you. If you will see Loma Linda you Couldnt harmless again, a jewel goods homogeneity or boosted that on Jimmy Choo Salt agree more this year.
Hi, This is Barry let me.
Based on the brings comment.
So firstly in terms of the overseas shortfall, we do competition.
I would like to say after two years ample I agree likely is overall user scale has been grow very very very big.
Actually there.
Well I mean, you have been girl work.
Yes.
Our users so in the future. We intend is we'll have more RBC ratio approach in terms of the competition, we will make a warehouse balance between our.
Looking back then.
For the shortfall, we do business as well as a growth speak.
So in order for me.
Healthy model to a to support more longer higher how sustainable over the competition.
I'm going to turn to go to reporting you know what you're the remainder change also come with other summer judicial urgent and then look at Churchill jelly sense, though the office longer maybe you could be should also you're going up and you look also commented on crime intermediate Romeo cannot lingo so the judicial.
In terms of that last streaming business, we actually didn't see any of the you know that.
Okay competitor outside of China, and after four years of asphalt.
Already is that more than 30, RPC outside of China and in terms of those kind of scale of the business as wise. The operational expertise. We don't think either you know the local based peers can compete with us.
No that should be in Permian, What's your book.
So he is just so you got some goulds. So the tools looking only the teacher tune yen five though you know what she doesn't change how would you let's see Eva.
Moving on could be at all the you just like our internal you mentioned that you answered yet yeah Jos.
Well, no particular talking down Jonathan and goes to the types of any mutual are eager to double digits.
So you know we're going away he bandages or goes through a crowd you those shall we more the total number do you.
In terms of the shelf or will you, Iran. We truly believe it really depends on accompanies comprehensive.
Capabilities outcome competitive capabilities.
Including a technical capability or operational capabilities, the user acquisition capability as well as other brand promotion elevated.
So if you will have a global helpful. We do business market I'll try not only our Nike and shortfall.
And to come up two of the major established how comps so going forward, we don't think or in terms. So the short haul reader based phase we will see.
Very established competitor came out in the short half year right.
Thank you.
Hi, Thank you.
Our next question comes from Napoli one.
Okay.
Please go ahead.
Hey, guys tend to show 20, now where the Lumpiness, yes, if I piccola taken away shot that opinion and trying to show that Michelle began to show that also yards I highlighted our legal Atlanta, I cant that they're already and I always have anyone can enjoy that all too.
Well I can do you can tell you the unified Shantallow, you'll need it sounds like Google, Okay, Hi, Bill Wilson to like a life will likely that they seemed high yield push celestial Atalay Omega Orlando San Diego.
Not to the 250 to one key.
Yeah. Good if I, just don't know Taesa, where either sometime tonight usual.
Nothing in there I like you wait calculation, yeah, not bills or something you can talk last you are likely to Dan Quayle, either neon agency to target.
Anyway.
Well go to lay a gun to tick tock singularly, she cafe and Uh huh.
Well just laid myself.
Two questions.
Regarding eagle.
So as we acquired Beagle earlier last year. The aim was to create another why why in global markets not Adam target has almost achieved as Jim said optical revenue Kid surpassed that of why why later this year at current run rate to just curious if there is.
So longer term target that management cashier with thoughts regarding overseas endeavor see I used to rapidly hi, et cetera in two years, both in terms of Eagle and I'd be go live and likely respectively and second one is a regarding like he just curious how to use different.
Shade likely versus other short form video social platforms.
Overseas market I like tick Tock, let's say.
In Q2 to say, yes in terms of regions position gives a target et cetera. Thank you.
Thank you and Ali let me address the first question and dependent Jeff the second one.
In terms of the overseas so essentially we see enormous potential out there as I said in the script that ER.
We look at Eagle life first of all people like penetration into different market is going very well and we think each of those big four to both market area, including North America, Europe, Middle East and Japan Korea.
We think there's opportunity to create another similar scale of while I live in each of those four areas in the next couple of years. So that we put those together that means there will be.
These four times of the current wireline revenue scale in overseas markets.
Equal.
So thats a very exciting.
Our market potential for.
For like heat, we think like is user will continue to grow and as I said, we will convert those user to lies unique.
And also going forward, we also implemented a advertising dollars. So we think given the market use of potential and the spending power.
Those market Nike can generate another similar skill of our Eagle life.
Right. So short answer to you that we think theres a multiple.
Times opportunity overseas and actually we had a 20 point that you can see acceleration of equalize revenue.
Frustrated that Amazon, we can capture that enormous market opportunities.
Okay, well lets you Sue popular if you go live with a degree of within the logical to go without you know where many of them in the eagle without she's or do the remodel just on both of those shouldn't Guy Latigo owns our to go those either trugreen more so on Monday, we liabilities.
Highlights as will the solidity law.
To go kind of us sufficient little Glenn.
[noise] anyway, you go do ritual.
Well you like he's actually central would you look like keen on future interim unlike hugely thoughts aren't as we go can you talk on the almost sounds Segal said he can't do you mind you almost have major highlighting how are you on the biggest actually engines you going do you see the woman's I'm going to juggle Ewen will sound try not to go back then but you should read all the told I'm not sure.
So you know well gentlewoman logical like either your core the Tsujino Oh sure freight hunk, although Sean do you need share a single charging knowledge on how much harder to share may to June. So you know what melquiades homes in the New York under the supervision that Korea will not to the cheers won't give me a mile quality.
Did you guys are starting with integration junior notes or like either to go. So they will essentially knowledge in union be jewelry, and then look I know you go fleet. How hard you should look Nemo will you just got me and the momentum goes to the like either through the year. We'll just wait I know you compete on Gen console knocks the John.
Well you looked at all and let you know with diesel digital Queen locally adopt so you know the role of Missy you go number two you to Georgia enhance went on a year with a lot more recently, so we like the selling energy no mail and hopefully it shows you learnt how are you going on you'll be looking on diesel.
Yeah.
This is this a David let me add on that so firstly in terms of Eagle life as I said in my prepared remarks, so going forward will continue focus our fall actually area to continue to increase last streaming Rami I know you choke the of the market, we will conduct and we can be without dropping ties Richard.
These days in the seamless I saw our China Australian business. So are you generally speaking in terms of the over this last streaming business, we're quite optimistic on that and in terms of the shortfall, we do business like coaching slightly starting from.
That's helpful Reader I'd from true X. I know you also continue being one of the bat in terms of.
That's helpful. We do editing capabilities and that is why if you look at the like he's a daily usage offload rate.
How far we do actually has been continuously exceed or exceed 10%.
Which is much higher the other Tim it appears in the market. So like you had very obviously community pinehurst contracts over the short haul reader powerful in the market and we and we told you can do you.
In the future will continue to focus on longer term.
Thank you Bob Kaminski features for life.
As we improve that USIS, good news as well to user interaction and after the Chinese new year for this year, we started doing under nike's monetization retrieve continue approach into the I know this year happening like you can.
A sizable revenues for this year next year or continue grow house today.
Obviously.
Everybody knows you know we have a very strong come hasn't seen these iran. Right, but seems like you will continue folks so building more healthy business model and this year. So we're confident we can continue being very established competitor in the next three years for the short haul reader competition. Thank you.
Got it that's very encouraging thanks, shedding managing down for the color.
Thanks.
Our next question comes from Ti on.
He hates capital. Please go ahead.
Yeah, So I see any.
No and Matthew good morning, or whatever you should see on them can I say hi, this package.
Hi, I'm, sorry, if I can show the marketing say youre still on the T. ended Cheney and Oh P. margin appealed to me well how do you.
Yes.
Thanks to report is Oh, Hi, this is your host.
Hi, good momentum had some chung Sutton Gordon downturns.
So let's see from each other so actually extend our overseas practices.
No I rapidly so the marketing dollar will also a matching up so oh I wanted to get some clarification on the full year operating margin trends.
Second line, it's sad, specifically as we got into but keeping the platform and the whole overseas. It's at a similar to what to lead you to China. Thank you.
Thanks, Tim Let me address those two questions first one regarding user acquisition.
In general the overseas user acquisition cost in many markets are lower than in China.
The first point secondly, given the Corona virus situation some of those countries the acquisition costs actually even lower.
So which is good for us.
But.
Looking to second quarter third quarter, EBITDA <unk> contract covering minus 19, Susan getting better than they used acquisition costs might increase a little bit but still in general is much go into in China.
So it looks at the operating margin profile for Beagle.
Equal is hugely profitable as a says well over 25% and the in the in the future I think that margin 10 trend up as well.
Given economy of scale and the end and then the enhancement of the payment terminals et cetera.
For Nike is still burning money, but as David training mentioned that we focus on our lives we focus on self sustaining growth. So we are expecting the breakeven for the total Pico segment will come sooner.
And we previous guide, so which means the operating margin them net margin profile for the total beagle will be better than expected before.
That's the first question second one for the.
For the revenue sharing percentage for the host.
In general overseas, it's lower present in the in China, Our China, typically we're sharing 45% revenue with the host and the deals you overseas because equalized has no competitor as we said so it's negotiation power is much stronger as a platform compared with individual host and then the deals is too.
Early stage in overseas markets as a result, the host rely more on the platform rather than the other way round, that's why we share less revenue with the host.
Yes.
Thank you.
Our final question will come from Daniel Chan from JP Morgan.
Go ahead.
Uh-huh transaction it just want to one team works out ways out just to the highway shouting towards each year.
When John Leguizamo disease, Portware holiday ongoing Omega shifted she neutralizing shop with them before they actually saw woman. She is a challenge endorsement of the outstanding for not necessarily want they clearly in Saudi Arabia shell I wish I think myself. So my question is related to top spend their behavior in overseas markets. So.
Well I know the Kobe still very two ongoing so just wondering are used a tough spend or in our top revenue contribution.
Areas like Middle East you as you are always going to be impacted or if our revenue in the overseas markets more diversified so more long tail payors. So we'll be less impacted Q2 that endemic thank you.
Oh, well, let me just one question.
Anything out there.
Well I am.
Well, Joe do Oh email woman launch here about well Mcaninch on English will do observable woman's our highlights you border digital cable you sure. There's just not really is a woman's actions up you might come back into says on the nurses, we blow passengers, who the buyer cheeseburger answer to the wonderful server. So you know trigger PV is.
Sure. So you don't read on Gallagher, who are getting legal don't comment you look what makes you English it can be now what you're doing that.
True cultural Johnny survey, the albeit our survey the due to two less would.
I'm, a sick or new wash you're going to go.
If you look at the sometime each arm b, well messenger be big Atlantic City Inking, either some Sally alcohol. So yes, I agree it towards your goal so doing a little easier each on usual.
Hi, Rice's water, sometimes we'll do what you would assume that you're thinking because I'm not sure youre kind of closure nobody template wasting looking huh. So you know.
Well remember to go to work to sit on power supply. That's your current gallons utilization urgent now.
Well see geological work through it so.
So you know strategy on the you got some have on each out which is a woman stages.
Oh, well do a million shot we feel confident on the D.
So a woman the yearly ahead, we'll soon coopersurgical Oh, two though to the each new engine.
Yeah. This is Barry. Thank you for a question I may drive that so I measure acreage during my prepared remarks, which is oh.
Every second a 13% or people after you actually wholesale asked for an infectious everything into first quarter. So deep level actually it's much higher than the you know to percentage then it's counterpart in China and or even comparably. The shortfall. We do a powerful can generally speaking you're going to push off what we do have.
Paul.
It has a much lower ratio.
Apparently.
In terms of you know the.
Hello, tofu over the last streaming sessions so.
So I could demonstrate the overhead flat streaming equal to or actually up different comparably the China last streaming ecosystem.
Hello.
I'm all that work to park.
Yeah actually cover them become part of July last like high lack topics and also the ecosystem is very different so based on that you know we ask you will come with it you know we will have very limited impact from Doug.
There you environmental impacts that trust's second.
Okay, I was hoping that.
Thank you.
Thank you.
Okay, I will now prospects and management for closing comments.
Yes. Thank you operator, thank you for joining our call again, we wish everyone space. Even so we look forward. So speaking with everyone next quarter. Thank you.
Thank you.
Thank you Semex she's here.
Ladies and gentlemen that does conclude the call today. Thank you so much theater attendance.
I now disconnect.
[music].
[music].
[music].
[music].
Ladies and gentlemen, thank you good standing by and welcome to join the.
That's caught up 2020, adding school.
At this time okay.
I don't know bus and I mean right.
With the management the pack a lot we will have a question a lot to session.
Please note this event is being recorded.
I'd now like to him the called for Oh, the T., Ohio today, they left to.
And a lot it's out of investor relation of the company.
Go ahead.
Thank you operator.
Welcome to enjoy what's called her tender.
Conference call.
Joining us today are Mr. David.
Chairman and CEO George.
Well, we serve Braintree and appeal.
Well that it's cool management will first Hawaiian reveals quicker and then we will come back on trade Sasha.
The fourth quarter attendees hockey financial results kind of what caused this conference call all vehicle.
Why why not.
A replay of todays call will also be available a onetime few hours.
Before we continue I refer you to I would say copper statement no earnings press release.
Applied for these call, that's where we will make forward looking statements.
Finally, please note that unless otherwise stated all Peter as mentioned during this conference call on either maybe.
I will now turn the call or to our chairman and CEO BJ Babysitting. Please go ahead Sir.
Oh says I must feel.
But alcohol planes I don't like no woman, Google already hard in yen EG do though have all get locally so as you well known enjoyed Chinese we're going to go away do you go either joggers and again call. So you're seeing why you chose GE unchangeable well. My answer was also was sold all a chance what that's doing.
So you're not shifted on that caused you to change on the you. So well. So lets you had to all just any murphy tallest since you Miss a beat our sense either will mean.
Well merging pay any legal and she is only gene crossed one can use it.
Thank you Matthew Hello, everyone. Welcome to off was quoted 2020 earnings call today.