Q2 2020 IQIYI Inc Earnings Call

This call at this time, all participants in that listen only mode. After the biggest presentation don't feel question and answer session. So I asked the question. During this session through any to press a one on your telephone.

Yeah, Why said today's conference is being recorded.

Oh, no need to hand, the conference over to your first speaker today Investor Relations director off I T. <unk>. Thank you. Please go ahead.

Thank you operator, Hello, everyone and thank you who joined I see that can call to tend to June do earning conference call. You companies results were released earlier today and the Liberal on companies Investor Relations dropped out as I I, our dog I see dot com on call today arm is that you go Oh.

I Wonder director and the C O Mrs out doing long hours. The Oh, Mr. Salad, we won other chief compliance officer, and Domestos Yum Yum Senior Vice President of our membership business. Mr. Gone will give a brief overview of company's business operations and highlights followed by seldom who will go.

Through the financials and guidance.

After their prepared remarks, shortly and Michelle will join Mr. go and the show them in the two and a session. Before we proceed. Please note that the discussion today will contain forward looking statements made under the safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 90 95.

Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations potential risks and uncertainties include but not limited to dose allies in our public filings with the RBC.

It does not undertake any obligation to update any forward looking statements, except as required under applicable law with that I will now turn call over two weeks ago. Please go ahead.

Hi, everyone appeal for joining us today.

Altogether.

Last question for our long before since our last.

Like many other companies on the industry leading.

Turning a huge renewals.

Sure.

Block treating.

Numbers on the group's tonnage.

Clearly that.

And then Nick most influential sector trials and the other business in the first half of this year.

Thus fibers.

And then you'll start.

Oh, Peter during the first of all of.

That's all home.

Violent.

Hi, Dan ground.

Being control the into two earlier than most other countries people.

Walks and give them in China to study online and preparing for critical in that.

National entries in a major for holiday.

Hi School and the final terms being down.

Oh, which took place into on the line.

I'll start with declines in both People's video video.

Okay.

Yes.

The abandoning also inform all complement ally.

Movies is actually a.

Moving.

Doug as one of our most important content halfway in user acquisition membership attraction.

Deals with us.

No you moving.

Well, we live off.

Online video platform.

Which I have to answer the second the big not once our export movies and there will not.

So pieces of mine shortage and.

Worse.

After tools of sprite already with passion and acquisition.

Unfortunately.

That was cinema in China War permits we opened on July 20, with limitation of circuit has and attendance rich soon.

Considering the average condemn rate of last year was lower than.

We believe that even with diminish.

Our movie.

Well can you normalize that.

We have more will be well elite cinema.

Well.

OLED TV germ October national holiday.

This movie or could it be out on internet.

In two to eight weeks after the offline, we know that might recover well.

How improve our subscriber growth on the second there in legs underneath it.

The standard also delays that youre, absolutely arm of Japanese animation.

Which normally it generates overall that happy in on animation channel.

Good.

As we live in assuming in June.

By mid two line almost the OTA and initiatives have come back on our training members growth and that the attention will benefit from Randy.

As well variety show the predominant some how active the production.

Yes, we about it in really delay.

On the other half of headline near the adjusted according to the postponement of either advertisers the self promotion.

Either.

Advertising as a key driver for R&D show revenue.

The boom yields and.

The latest creation as you and all the delay or initial Instagram do it therefore, it's very positive event.

Edwards type business so.

Well take time off an actual to reflect.

So as far as show that our Marcellus production.

Has also been delays on one through three months in general.

We will permit.

But considering the much longer production cycle for drummer.

Kind of delay well not influence mantra that live in time, we will also take all measures makes them to mitigate the political risk.

Hi, Tony if next year.

Now that goes in the first of this quarter starting with our membership.

As of June Thirtyth of total subscribers, while 104.9 million.

Subscription revenue grew by 19.

Perfect year over year to RMB four.

Because of weaker constant flow of course, if drummers include too.

Together with the above mentioned that Lisa.

Our subscriber number if Chris.

Having said that in this second quarter membership slowdown is temporarily as often scrubber earlier on in from the end of June.

We are also encouraged by all the positive cycle we are.

After.

The adverse effects on content blind.

We'll seeding along with the permit.

Containment.

In China, although it may take some time to fully recover with our content service guys getting back to where we believe this new users are they.

All come back later topline form.

Additionally.

Our user base prove to them blocks the amount of potential for long form video in lower lower tier cities.

Most importantly, well.

Improving our original production.

Our 40 plant in House Studios.

Working on her dance, Prospero gyros, including drummers or officials movie ammunition mall.

Many of the or trend was launched a have shown.

Trim popularity among more exciting titles.

They are in.

Action soon.

Our war.

Despite the debt temporarily.

Well acuity.

Instill confidence that our membership business well show healthy on the.

Sustainable growth over a longer.

In the second quarter up or high quality accounts and continue our slate.

Swagger growth.

Innovative operation monstrous relaunch the leads to filter.

Our new content Library Ultra rich collection of sell at a sole suspense plumbers and so strong appears to users.

This.

User retention and the significant to our platform in terms of.

Two objective personal title.

One of his shows we weren't subscribers acrylics of Alonzo beyond we own and includes the drivers of content with.

Wider grant of titles, such as idle producers Street and MCP arm.

Two.

Were also deploying new movie release in three to 30.

For example, we lump sum more move more well premium video on demand motor fuel more including.

Action adventure lenders Imobile doubled war so.

Action movie.

Now cohort.

Well, maybe we achieved our hope movie.

Hi.

Control.

On the off how winning movie Marianne just start.

Double war.

I've become instantly it on our platform with as a cinemark quality audio visual impairing well online.

Mistreating.

Promising potential Peebles mode.

In the future. We we are really more high quality movie while with more.

Hop drummer such Oh.

Oh, it's paid hole the fabric here either tableau generators.

In demonstrative acts as a key driver for subscriber growth member.

Some content titles is isolated those high quality order to don't like that.

As.

Unlike for one there are still come broken them in and out.

In an outside.

The core constantly in terms of Nielsen subscribers, but flagship and retention.

There is not fold increase in the lifetime value of our library content.

Our premier of milk animals accumulating.

I thought subscriber base of.

Hyperthermia Limbach renewed.

Operator.

In membership service.

Further.

Cater to yield.

At that worse in months.

We are further optimize our membership system.

By lumpy, but I have diamond membership package on made on history with ice damming membership integrates comps in the offerings of our goal membership.

A couple membership litigation our membership we are membership.

Both membership.

Underground access on multiple devices, including.

Mobile devices PC Smart TV.

Our devices.

The advertising business continue to be softer in the second quarter due to the advertisers part is caused a traffic fly after people went back to normalized.

Our initial production delays however, we are being up low to bundle of the image.

So bill and macro economic environment.

The Graham your goals lights, let compared to the first quarter.

The average customer spending also improved.

Sequentially in terms of advertising verticals.

And the beverage batsmen accessory telecom service on the consumer electronics.

Showing on relative that hit recovery.

We are also or new measured pace for for monetization slight and some will help layers from our result blockbuster sold idle producers suite.

Hello.

Commerce, with Sanofi must pay or regency's, attracting Eric on the brand.

Our plants with us.

This kind of ecommerce show further enhance it achieves the IP matter, where our directory trams brand awareness and nothing else commercial.

Well the mine local group so on and ore producers, we have received commercial.

Adam.

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In documents from more than.

15 top brands, including down more multiple spring in just.

The last two months.

Leverage in popularity of our goal team we will continue.

Commercial contribution to drive long term demand.

Yes.

Our advertising business is also in part by terminology in Malaysia, we use right on it to place more property as euro.

Substance for advertising placement and as high as.

Some pay five person according to the third party data.

We also upgraded all we do in format in April.

Insert of apps that lastly matched.

I'm not power plant.

Looking ahead to the second half of the year, we passed the advertising business to remain under pressure maybe label as we are recover.

That might take some time, we are in resuming overall advertise our confidence.

And then become under control and the all comes into production has returned to normal going for war, we will further strengthen our confidence.

In permanent more innovative app format to better meet heads with from the totality challenging macro.

Environment.

A comment.

Moving onto the accountants in the second quarter.

Our premium content, although one attention domestically and abroad Sotheby's drummers a number of hours and not have book gain happily visibility not social media excitement.

In Q2, we advanced though.

From nails.

We lumps of analysis of winter.

The Kornya billable headcount.

Our long romance drama unknown we.

All along when you go for me.

We'll take title, reflecting the situation in the entertainment industry, which will become.

Trading profits on social platform the patented.

We never job for the second the drama.

Arab under meters Altira become overnight.

The fashion after its really.

As you call it answer cancer drugs drama title in the first half.

Have a year with an evening.

With an initial reaching of a nice constant to go back.

From a comp.

Calming sorry of yes, you've had an impact.

18.

Tool for me no not stronger in 29 Q2 highly create a softer immersed in mid to alternative here we have built.

If our diversified or more prolonged answers for the three year, leading the online term or market.

So our view so we keep her too I was the final demands from our user analyzing what.

Underlying.

Intention of our top margin over artificial idle producers three turned out to the or another.

Success in across a half of a year.

Domestic.

Internationally.

Asia cost if so.

Unlike until the ARPU.

Life, an amazing cleaner also received positive feedback that you are not hotter.

Our original CD ammunitions aerials Girls club.

Premiered on design, a big team our platform well and our on Nickelodeon Asia handle from the August from this August.

Additionally, there were few Threed original movies are under post the production more movies are under 14 or to start short in leasing this year all of this well was our trends in our constant supply.

As the 106, Shanghai TV to wall.

Makoni more coal mine malia buying lunch.

Or not hybrids upfront or once asked our drummer award and the up assets Grimsley Award is our first the internet's drama Sarah that wins.

Thank you and.

A more oprah uncertainty serve some higher international feel on the TV Fastwo Internet summit with top producer drama scenarios, including the upfront.

In passive tenant Han and waiting for Youre in the future one the annual annual online drama Award well our ocean over our official such a big part and obviously there are well owner annual variety show a more.

Additionally, Arsenal documentary.

Bill a documentary film.

Touch heart.

Bunch on Jan one surpassed a documentary audience walk and the 14, So first international film Festival.

Looking and the second half of 100 hunting.

Our health.

Where are you more heat content.

So.

So profile in quality, including.

The Union.

Some of the Providence, one of the lots of homes area.

Your life.

Hum locked in Shanghai, Dacogen, and who you prevailing.

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Recovery will not go after markets recover that Mr. Elsewhere for innovator model on the essential.

Brett over the next two years, we will gradually launch more of this is think of it if things paper.

In the southwest to cover diversifying the category.

Dr partner as a wholesaler for British off our pipeline consistent of.

Titles, including our summer so shop on the dimension lower as well as more multi received the such as of the capacity to meet our hard work even to ask the drop of try not to an 800. We believe this roles we are bringing our young.

Why brand and the positive and there is pressure there under the on that.

A dynamic in waiting period.

Building up emotional.

Connection with our audit.

Our R&D uncovered divisions are one of our core competence in this partner we launched on technologists apart for the everyone. We do coding formats that available on both PC onto advances.

Both teams and if it's an advantage in transmission higher quality retail concept.

Saving almost 20% bandwidth.

User perspective.

Perspective, it allows the worse literally in dry ultra HD video using less data without losing the holiday.

In pacing.

Other worth it hits our employees.

Has right into the challenge on the demonstrates incredible upgrade to retail commitments to our company our mission.

And that we couldn't be more proud of them.

Well, it's hard to predict precisely when they are.

Well before resuming of all the of Netflix elements.

We have already power.

Our mining in the effect of that our users have demonstrated there are tremendous creation under affinity trial oxygen the accountant under.

Accountant the partners on advertising customers, albeit slow us down from the part.

All of this hub store refined our confidence and.

The combination to further develop our strategy wish for our visit and that the labor.

In summary, so.

Sure no other team and the service.

The substantial collection of IPO asset.

The other branded content from our creative messaging.

Robusto technology platform, we are in March.

The challenge in parallel in our strong position and the continued to drive greater long term value for our shareholders.

With that I'll turn it over to Chicago, and so talk about natural.

Morning.

From an operational highlights despite of love my for environment in China with delivered another quarter of growth with other revenue increase of some year over year on membership business continued to be the MEMP at least driver with revenue up nicely.

Yes, the conduct of 55% of our total revenues our highly business continued to be solved with revenue decline year over year due to the high that budget cuts.

Decline after the pandemic determined under the delay of the system or the shows both our cost of revenue in the operating expenses decreased year over year in our constant caused only up 2% we kept spending strategically our original content to drive U hauls production.

Ability, why making wise and disciplined investment across the board as a result, our operating loss margin narrow to a 17% from 26% ecosystem curated.

Last year, our net loss decreased to RMB 1.4 billion from RMB 2.3 billion units in period last year.

As of June 32000 today, the company had cash cash equivalents restrict cash in the short term investment RMB 9.5 billion for detailed financial radars. Please refer to our press release our war.

Our website.

For the third quarter of year 2000, and they expect the total net revenue to be reaching RMB 9.6 point 5 billion, an RMB 7.4 billion cubic studying a 6% difference for that year over year. This forecast reflects.

With Cardinal preliminary view subject to chart I will now open the floor to coordinate.

Operator please.

Thank you ladies and gentlemen, you may now begin the question answer session. If you wish to ask your question. Please press star one.

And for your name to be announced.

If you wish to answer your question. Please press the pound heskey.

Please ask your question in Chinese and translate the question into English to keep opportunity does please limit to one question each time.

Your first question.

Hi of Wendy Chen from Goldman Sachs. Please ask your question.

Okay, great. Thank you show up so that our answers. Your question is how much energy gasoline for some time, that's the most recently side.

So now just I mentioned that the Jake Laclede and sometimes annually.

Okay. That's.

Thank you want that I said that got just how you continue we'll let you thats actually the peak season that concludes our former technology and I haven't yet, particularly.

We'll go from jobs that you should look like.

Hi, intellectual mature that for example, and let them Oh I find excellent taking my question. So my question is about a subscriber growth outlook, we mentioned that that the steps class momentum has come back since the end of June. So wondering how do we see this is quite good okay. Okay.

After that and also for the second half the year after college intrinsic Sam and that.

Summer peak season started and also how do we see the subscriber level Rachel.

Medium to longer term thanks.

Now lets you at full capacity before you hall normally only our media, whom.

You mentioned Yankee Jiong cohort. He for you here you can start your the harsh against them, but im not going on behind young kids get us again behind young so year to search engine that will ensure we all know intraocular.

Sure enough and would you please turn to general sure.

Yes.

Thank you Andy data Eurocrats adapted a examination that before the end entrusted your colleagues already ended July led to consider in that situation. This summer break is a differential from normal season Saturday.

We then go down to the digs EMEA declined one month and Oh 30, other that since it is shortened.

Shutting the holiday summer break apart.

Hi, Foods, and maybe a junior high school students as well so that we cannot.

Okay can precisely the NAV and the number that we are seeing the very clear channel founder rebounding off our traffic and the subscribers. Thank you.

Thank you. Your next question comes from the line Thomas Chong from Jefferies. Please ask your question.

So I was somehow August one each how larger so our what if he went well do win T art, you actually quite surprising or gotten more money are doing these ratings.

So we saw that drillship woman cant stop on NAND I'll come down a little new tape out doses.

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Before we decide that Oh, well when you got to more concrete either cobalt <unk> Mg.

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Oh doses can you give us a.

Oh, well then I'll, let me tell me they need Tracy woman desktop I mean, they've gotten there.

Friends might you might not taking my questions are my question is about the Apple Pie thing Oh look in the second half given that we're seeing some kind of recovery.

In kill free or how should we think about.

The momentum for pay eight as well that it's M.D. I am I took a part of the question is about our Oh, we deal strategies in the second half how should we expect that would be up that up because that was a marketing and any tape <unk>, that's a bit Chad I would be great. Thank you.

Harsha.

You know not who also can hang on offshore and overcame a bundled attempt usage on top.

So you got to me, Jim with our fleet for our paid more comfortable Hawaiians either Jim.

A major.

Thanks, as long as how about on buy into that I'm sure you actually get you may.

One machine not only just more tools I think I think yeah.

Yes.

Okay sure Ofone.

Thanks.

Last year the JV.

I see if youre not Jim that side and again I'm not what we don't Basher unit and Hi, Sheila for you to issue for the engine, which are on bought cargo in future lets recall a sequel woman by your own JV in jostle plentiful time here.

Sure John D. P. UTI leader juggling on some kind of home yet jump back onto remotely.

I think youre mean cavity more accurate.

Timely completion, former you'll downtime to write GPG, let tammy trigger VLP, so you're not catching up on local soon take what mother nature shortly huge our wish on that.

As to others. That's your question and yes, that's a distinct alamo to all that as a revenue comes from the Brent Heitman. So okay. I ran present, a larger protests pushing off the over at rapidly that we can see that indicate that as a t. a brand advertisers set out to their budget is coming back.

After Iraqi so he is not gradually to be on air and but it will take some time reflect internationally because the data I think that's some of our new variety shows they'll be on average on August and the summer maybe I'll September and possibly peak on October so that's it will take.

Sometime in two reflecting nationals.

The easy to advertisers and.

Hi, There Dot Hill is things isn't a comfortable so much all our advertising revenue even that there are some rebound it will not to.

Like the too much on the financials regarding the sale that we did.

All righty activities on the market it promotions and the technology. That's on building and also after that so we put effort that community communities that top supported them, but are there. There is actually I have seen summer program already that the we'd be sometime in two build it into the large scale.

And I think that's the most of the advertisements in those they could will come after the form of the if it's a tightening ended AD inventory will be.

Not that much so dr., we don't see much opt.

The reflection.

The revenue.

From the secret.

Thank you Andy.

Thank you.

And now we have Alicia Yap from Citigroup. Please ask your question.

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Gentlemen here.

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Tom or the he we all show to you we enjoy suite, obviously conjunctions with your true for them to cheat quarter sure I called it achieved disappear.

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Sure.

For me, Jim you, Josh somebody shop, Yeah.

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Good morning, 12, I'm not sure you buy it completely quarter sure woman since you bought foolish for how comfortable you can quit.

Yes.

I know you might use our wire Kimball international yes that may alter and you have much monjack or stricture socgen.

Yes, I'll answer that supposed to crash and until later Shalgam to answer the second one and we have a different just gathering a tragedy regarding debt difranza confidence category.

I will start with no drama for example, the drama there to do or our steel influential factor certainly hardiness gasoline. There. This is the first did you almost important wanted and including the the production cycle our license cycle. The second one answer right regulations cycle and Oh, So does it.

There may have some input from the other one heizer, but not much well the variety showed that the thing that most of the is the revenue comes from other multiservice. So it will be determined mostly by Heizer watch it ended their promotion activities gadgets.

So most often.

Variety shows that needs to be air order productive or Gadlin based on the contract agreement with the major advertisers or is that the appropriate to our assessment. So data only only a very feel on the Rockies show static we decided to schedule.

Anyway, it's the Casa de Hospira has some big more amending our sample or aren't that we expected that to do that and you will gradually increase the operator as long as it is a broadcasting so down meaning indicator, we made schedule and Eric that even without bring.

Hi, there now so I don't.

No.

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Sometimes yet.

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We are very unfair achieved a premier each arm yesterday.

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Terms I think the geopolitical tensions on year HIF. Please.

You mentioned Trulia GBM.

Got it okay.

Do you want that they buy.

Oh, no 20 people can get a company.

You confidentially.

Sure.

Also the other scheduled a other two accountants category animation and its radical movies that things down to the Japanese emulation generally how our trafficking I'll animation, China, So just to break.

The part of the Japanese animation, new episodes, releasing somehow influenced our any mention of traffic as well and Ah, but a in the future how well that is kind of where possible we.

We will invest more on the domestic animation production for the threat movies that we can't.

Everybody can see that's about a half the year to their knowledge about the movies released offline offline that we got off to also because of their though we ranked number one the movie traffic compared to other platforms to that this cadence I started on the continent why does it somehow influenced us more often regard.

Directly it's good news is after the Cinny Murray already we opened just from July since you first if we if that's the demo and you know babies will be released offline and possibly opted to to eight weeks, yes, it will be a and on the internet as well and possibly doesn't national Huh.

All of these will be the pick time affords us ratliff lead us to released Oh, so data to further that local obviously with the cadence as possible but.

We will evolve to more our engineers movies and the quality will this into the same assets radical movies, and we will pop that we will do more to come to a cooperative with that kind of risk and that builds on our all in Scotland is the movie confidence and independent.

Thank you.

Ammonia is although no.

A couple of weeks after the show seller ought we received inquiry from both not that in the FCC.

Inquiry on a consolidated its however, with your voluntary to disclose this inquiry. This time, because we want to be transparent to all investors that's basically logical Hans thank you.

Thank you.

Okay.

Your next question comes from the light and achieve from China.

Please ask your question.

Oh, yeah, great Oh, what do I see a California here [laughter] negotiating with me and I can show Ti Dom Oh, Yeah, you guys Oh, yeah. So nothing that I. Thank you know what you do.

Pick up so I can comment one guy because I think I think this isn't likely Oh boy exactly yeah I guess.

No I think to play out like that it can blame it is only going yeah I can be anywhere. They can go up so we know quite that just because we found that continues.

Oh, I sound definitely thats exactly.

Why do you can get into or how to operate in California, where of course pick up.

Yes.

Hi, good morning, good on time shipping what exactly what's in that way and then make our organic a pickup when will fade.

Thanks [laughter].

So two questions relating to their membership revenue or why is that due to the delayed a young child.

He dropped my short answer I can show, Jeff Hi in their life later half of some of Rick I Wonder if there's seasonality.

For the for the rest of the year, Oh, we going to be a more balanced.

Membership growth between Ctrip, Ken or Q this year versus prior years.

Second Bernake I think nine if it was amazing appeal.

Chris to increase the ARPU also remember I said, just wonder what's the organic growth.

Gross.

Well number thank you.

Was the young on power for DRAM and see if we're going to you.

Phenomena.

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Much impact currency.

The reason.

Yes.

As Oh, I see a SVP.

Okay members of the business Mr. Yahoo, just answered a question that's yes youre right.

Through the Q3 normally the peak season for our traffic and the same as our subscriber additions, but at the anomaly that is also highly depending on our content supply as well some of the summer to with the really heat broadcasters will it have them as higher topic and subscriber addition.

Sometimes not but to for this year adaptive with a England's after pandemic and also relative a smarter summer break it out to we cannot predict all anticipate precisely about to them.

Number of did not and other subscribers and by two we it's very clear that we are already seeing some rebound from the Q2 and and we hope that said the chance, we'll continue on to increase but to it again it may sound that.

Hi, I'm a uncertainty on that thank you.

Thank you.

And now we have been email from Hydro International Please ask your question.

Hey, plenty to actually fits into what that he went what people, which is when you get someone you will maintain when the.

A woman dive regalia terrific S members. It S class so what happened.

Well the quantity NK cells has had a swing synthetic fiber and it will show me, okay. So to the papers and Russia.

Hi, this is actually as that.

That said Supersite.

Within one or the expectation is what is.

The woman's expectation.

Well typically with nickel went the other one disappointed because.

Because it could tell us how what Josh what kinda woman side.

Hi, good hopefully they will take the internal investigation.

What's unless they're dating back I spoke again, how America April specific.

Can you quantify what specifically visitations then the I'll talk about what's on the et cetera.

Sure well has nothing to do that with away and fulfillment we are somehow.

At this level on the trends in the.

Hi, Susan for yes.

The answer is more seriously shoot them seems and Tom.

Which I like how do you mean.

Some slowdown.

And I sit on something on the on nuclear and since I want to you.

Shoot on for young people that have deals under this agenda. So nothing on something tend to be some good of.

For the so these are hypertension, too and somewhat due to a hands on a comp was abandoned that can be found in the sort of football Mitch.

Hi, Thank you bye.

Thank you for Kraton regarding the odds diamonds that membership and at a yes or that the from the main.

May 23rd we launched our new membership package or how do I someone membership to cater data on our system diversified and membership compensation.

It has the that's the thing that's it's only launched of automotive in one month dances until that Q2, and we didn't see it accounts for too much on the Oliver relative apparently massive user basis, so down but it is it didn't meet our interpretations and though we have to the stakes.

Patients out into to further improve our.

Subscriber monetization. Thank you. So I don't know followed with an actor Crescent.

Turning the internal review on the as easy as Chris I think you're right, it's a being almost like for more than four month Pos.

But you have to understand its internal independent intend to reveal so we recently you could that lead to resolve instead as Roy not what I can tell you is.

The voluntary scotto of this investigation is set up a trade show the confidence of the management on the Doug results of this internal review.

We do believe due to the solid the discipline internal control process under a corporate governance, we're building the past 10 years.

Together with a cooperate card or weve promoting the company.

We do believe and the result.

All due to the to the.

For the company, let our belief.

And also.

Here because lot people a similar clutching so I just want everybody, including those not big non Chinese.

That's right.

Hi, I think you have to understand unlike those short seller.

All the politicians.

We are.

Well some.

We are people go crazy not disjoint, where someone who pursue tree not interest so I do believe.

Okay, though of the lead off to Dr. Lynn.

We will be up again, we wish you all investors accorded here and of the company under and the potential of the management. Thank you.

Thank you.

Thank you Joe next question comes from the <unk> of 10 hope from Th capital. Please ask your question.

Oh, we certainly got plenty sometime.

Oh, well you cool.

Killing innocent claim woman.

Absolutely outstanding pool.

Because the ships come to you on that need to break it doesn't pay kind of recently talking which I can't give you a quick repeated begin receiving some nothing like it did you see on one step which in British against each other.

[laughter] phone.

Now ill, let you know when they need.

Did you guys are.

Could you mentioned that we can you get hot.

No no, Michigan wasn't associate the food Gigabits in Oh, I guess why one that you just that comes should then domain that additional hiring you see.

In the coming up.

She is.

He was 87, yeah, because in Q2 should oh, well that companies will take two or so yeah yeah.

Yeah.

Take a ship, Michigan, so could you teach cool so I keep coming back.

[laughter] Guy take more claims she got.

Yeah, that's been canceled box that she'd habit is James bond, but no doubt that didn't know Jan Kees <unk> Chica Ah Onez Bush southeast.

If it hadn't been she's just yet I know things happen. So the first question into this I want Sheila if the company can give some color.

Keep on equation.

Diamond members and yeah.

Touching imports see if there's a complex.

So that's one and number two is that.

I have to doubts and demands or.

Revenue from member if that can actually since then they didn't they said it supports it.

Thank you that's kind of that market cap.

If they are some other ways.

Lastly ship much bigger monetization in addition to the membership fee. So what's the thoughts on that from a management. That's two questions. Thank you.

Oh, well see on them I wouldn't read on the balance.

Our shoes on margins you important this woman she.

You will see from within the Shamsul, She's a boon savi to see you. So most of the coal mine woman towards engine, both which is a tough you would want to come see woman.

Do you put on somebody to the sequel to sort of Unemotional would you listed on the and then how things will happen some people's homes with home.

Sofitel itself to hospitals that are the woman Shimon Villa Highway patrol good them down going in this channel so channel more sure.

With the young.

With easier is yet to whether you see a minimal.

And then he is young woman Cond Nast fix the GP, assuming gentris and San Marino shelf really is.

I see that once you that didn't chanana should anything that really moves within your own pool.

When you say degrees here, which is both in the 2000 silicon, but depends on who you ablation transition.

Fine treats where you're going to north entries on us in them licensees.

I was hoping that we are concentrating them figured wendy's, we'll do it and then like depend on shelf, we though we are industry totally.

So, let's see right she hakuna Hamir Jim.

I'm here with the fasten your feet on the choose who are looking good.

As you within them, because Obama and prevent loopholes with assignment.

[music].

It does sound Holly answer the first a question after that you can see that we'd love to there's often a subscriber fees and other monetization mathur due mostly to cater to different choices options are costume assessing the data we have a massive user base.

He sees it seems a controversial back to its fundamentally it's not because they had to each other at all and as I said, Oh, so that will further exploring possible magnetation matters it to cater to the Albert user demand and the without any other birds are failing to some other users.

As we can see that's a smart into that.

Oh, just subscribers, Okay, Oh user data monthly the early thoughts it gives a mandate with borrowings in the history and a until now that's a week to me the car into you there tend and they use are willing to paying out of content is all other entertainment form to determine if you clearly to that.

Going up and so we can see not to just a long form video or the music listeners well people to paying willing is increasing data. We are surgeon data paying it just feels a clear channel and document will fall within that Oh.

Got you play a more should not be Valencia.

Sure Hi, surgeons, yeah, there's a whole Sean thanks for your sure I'll give it so yes unfair hi survey by the younger.

So I'm not sure sure, but you know.

Mm Hmm long haul there's much at home phone number for guidance.

For the gross oil.

Future away, what shoes, joining actually on the industrial components, you mentioned dunga inaugural.

Japan Archie either.

Exactly.

Hello.

Yes, Thanks competitor here picture for dual BOP Trojan NGL okay.

Each year showing them for the region.

I'm sure you.

Who I may all food quick follow yet.

Trigger might enable merging a single floor.

Hey, our goal top activity.

Pharma Marshall you got your poor can you give you a cost we're going to.

No one technology, a bunch markets may all yeah sure not Darling ingredients for benchmark. Please show.

Dumps wrote off individual projects involve players larger harsher.

How much cash.

Something job would you want.

That's the you mentioned only a year you drew mailbox John.

Baillargeon, yet to go take or Youre, just youre very popular, particularly Q4, you take actuarial topline yup.

Gotcha Okay.

Okay.

So you Tom.

You'll drill enable passionate injection sure that idea.

We also see all who your door on Florida Thunder, so so how much or whatnot.

Yeah, Matt.

Simply that Youre Contributable GAAP.

So anyway last real quick.

Okay, and our international versus your phone call order take on managing GAAP Hum Doescher nationally robot.

I'm sure you don't see.

What is your month warm.

Yeah, Shaun she'd actual traditional daughters controversial.

The horticulture commercial John to young please turn to answer to you can clearly be.

Regarding our business model data as we firmly believe that our major south our revenue if students subscriber revenue that to the subscriber revenues deal cannot cover all the Costa is because the pasta my 10 year intense computation currently that our monthly fee is the arm.

Maybe a 19.8 if it is good calculated amazed by the end or the discussion between me and it sounds like a few years ago, we didn't have as much of the benchmark. So regarding the indicate that momentum that's it that way, we consider things DOCSIS three rating that they had no you.

There's in China, and you obviously in China that normally we'll we'll watch for movies to per month, and then there are licensed a D. The selling price also five RMB one did so the combined together. It is of 20 RMB pull a month, that's why we made our price for the month.

Let's see out to the a 19.8 RMB. So it doesn't feel isn't a relative no regarding <unk> because of the computation is cannot cover all the content cost. It right now there's still with other revenue so together with the other Titan rapidly so because we have different formats.

Hi, there are the retirement that's on the subscriber wheel.

Hi, there.

And also now subscriber titles as well with the other Adam.

Added value.

Matt monetization masseurs, including animation literature, and just so that we believe the combined Oh Dear to revenues together, let's deal with it we can achieve the probability of the Orocobre accountant athletic.

Thank you.

Yes. Thank you.

Thank you go last question's comes from the allow for pay from Oppenheimer. Please ask your question.

Our anyhow aligning Saddam Hello, guys. It see what do you see the hotel when itself are eager to see a woman something you need to towards its own Delta. One does she starts you got to sort out there I'm just sort of been shop, well jobs homes about coal you touch would be I saw oh.

Your mind quoted on how much you you're most of what she'd be Oh wait lights actually Ami and Oh wait Jarchow, what are the warranty and I would translate for myself.

I want to know more about the 12 at the so drama series light up back kids or whether it be back into queue, and then I want to know in terms of our eyes or is there any differences between the shot Oh drama series and the long one we used to produce more and then.

In the future is a.

A key area for us to in West. Thank you very much.

[noise] I'll also for the nail on the way on Quicklogic obviously.

Hopefully to show what I can put all time high interest meals you know the point you.

So we have now.

Relied upon along with that sure will you be challenging year Chinese you Jim.

Oh sure Veeco brilliantly beyond short lived it gets you have on yet I can blend you. The combo can you know we cannot route.

Oh partner to sure.

Tons and tons you do you see mines food and keep as usual legal she told tied to the legal or illegal leasing learning.

Sure.

What does it have you had pointed you on Broadway.

John you will terminate.

Oh, she comes itself is or south I just to answer. This question that after the same stuff. So we are still very appreciated that and the very happy to received very positive feedback regard and that's where our line on the from the Lisa Theater as I think.

We launch into and especially that the titles he mentioned the basket and the we definitely that a wheel in NAFTA War on this time off the hot intensive suspense drama and the other thing citrus as well, but we will not at all cost that we will not be latham last on the long or long.

Longer apples, though John Thomas as well, because they have different to expressions and the different ways to attract our users.

No matter the long outlets the longer episodes or to start to afterwards, we definitely will continue to improve our capabilities to provide more high quality content. It's all a user.

Mr. William will also at some point on this topic I start you look like Q. Thank you Tom you talked to you fully Cosby our pressure obviously.

Last year, so all of that number each month, Josh Yup I Hope you may you it's useful.

Do you felt more fleet apart from that should be though we are why Youre Telecom Hall.

Just kind of a child as though to a shot to John Multitest adapt it to the accountants cost per episode is a little bit higher than the longer episodes of drama, but it is a bill its ability to attract the subscriber is.

As a stone as the other form of the Jamaat Heighted. So that we can't see a little bit better ROI for this kind of a child Abbott though to drama.

Sure. Thank you.

Okay.

Thank you no Oh, no Oh now I had a conference back to Diminishment present does this continue.

Thank you have all joining us today. Thank you I might have a good day.

Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating as you may all disconnect.

[music].

[music].

[music].

Ladies and gentlemen, thank you for standing by and they'll come to the ITC second quarter.

Hi, Scott at this time, all participants in that listen only mode.

The biggest presentation don't feel question and answer session.

The question during this session, we need to press a one.

Please be advised that today's conference is being recorded.

I would not I tend to conference.

Speaking today.

All right.

Thank you. Please go ahead.

[music]. Thank you operator, Hello, everyone and thank you John <unk> second quarter tend to jump <unk> earnings conference call. The company's resolved the leads to other today and that level of the company's investor relations stopped outside <unk> IR Dot dot com I'll call today, obviously Eagle Oliver.

Folder director and the CEO Mr. seldom along I wouldn't see Oh.

Just so we want all the chief content officer and to me So shall I am senior Vice President of our membership isn't it.

Mystical will give a brief automobile company business operations and highlight.

All of the by seldom who will go through the financials and guidance after their prepared remarks sharply and Michelle <unk>, who will join Mr. go and the shutdown in the <unk> session. Before we proceed <unk> no doubt the discussion today will contain forward looking statements made as are the safe Harbor provision.

The U.S. hobbies Securities Litigation Reform Act of Nike Nike plot.

<unk> looking statements are subject to risks and uncertainties that may cause actual results could differ materially from our college exploitations potential and as such as his include but not limited to don't I like our public filings with RBC.

He does not undertake any obligation to update any forward looking statements, except as required under applicable law with that I would now I'll turn the call I'll, let you mystical. Please go ahead.

Hi, I wonder why some people walk going up today.

Okay well.

Matt Gems, our long before it's all a lots that are all likeminded public company industry.

Turning a usual yours.

Uh huh.

Oh block treating.

Number let's try to.

So I read that.

I mean, if some of that you bought back.

Back to our trials and the other people live in the first half of.

All subscriber.

On the you'll start time.

During the first <unk> half or home.

Compartment.

With a dynamic Brenda.

Being controlled into two earlier than most or all the countries people with war and the good thing you try not to study online on the prepared for critical you've done that.

National untrue.

They show for Holly.

Hi, Scott I'm up I know.

Oh reach nice tool.

Hi.

I'm sorry, we saw declines in both people to be more video.

You can see.

The abandoning old school all companies a lot.

Maybe you fracture.

Well movie.

So a lot of almost see often becomes an upgrade you'll start I could be show a membership Patricia.

With that shutdown all cinema no you maybe.

Well, we live off.

On diabetes.

I wish I guess effect will be gone well, so our goal movies and there as well.

Oh piece in supply shortage.

At worse.

Back to truth, right or action and occurred Lisa.

Unfortunately.

We don't see them off entirely war permit its tool we opened on July 20.

With that misuse of circuit percentile attended rich so.

A copy of or the average.

Red Oak last year was lower than 30%.

With that even if you said, while our movie industry.

Well kind of normal life style by style.

Hi.

At Mont Belvieu well yeah.

In about a month well.

John October National holiday.

This movie what would be out on that.

Hey, it's the opposite offline.

Like the car.

Okay.

How improve all subscriber growth.

In their lives.

Uh huh.

Also in May, but youre, absolutely our Japanese animation.

Which normally generates overall that happy doing all animation channel.

What does.

That's related to.

The only since June.

By mix lie, although the OTA animation.

You bet on all three members grows on the French.

Right right.

As well variety show up.

Some hall effect as the production under that resulted in.

Good day.

Other have all pipeline mute the adjusted hobbies group all of our the other what prices the self promotion has either right on the other Oh.

Yes.

For example for RFP showed revenue.

I remember that the yields and.

You bet situation, if you and Oh.

Well I pay so we are.

Thank you.

Therefore, it's got a positive factors.

Hi, good.

Well take time off an actual to reflect.

So as far as show that's our Marcellus production.

Has also been delayed 123 months in general.

Well a dominant.

A buck from Stephens, a much longer production cycle for drama.

I don't feel that well involved in.

Much of that live in time.

Well it will take home bancshares, making tool.

The goal on John I told you.

Yes.

Now, let's go through the first week of this call her starting with our membership.

As of June Thirtyth, Ultrabook subscribers, while 104.9 million.

Subscription revenue grew by 19.

Project year over year to RMB four.

Because of weaker comes in light of cool summer include.

Gather.

The above mentioned that Lisa.

Also however, a number correct.

Having said that.

Second quarter membership low down.

I'm currently.

Subscriber.

From the end of two.

Well, so encouraged by all the positive side.

The.

After that.

The effects on comps in the supply.

With seeding along with the Dominic.

Payment.

In time, though although it may take some time to fully recover with outcomes and service got guys in the background. If you believe you use or are they.

All come back later car tall platform.

Additional.

You'll certainly.

Most of them blocks the market potential for long wont be deals in lower load here if you.

Most importantly, well that delay.

Well we.

Section.

Oh, what the plot in house.

What you heard that approach.

Gyros, including drama or officials, albeit amnesia mall.

Many of the or travel.

Launched a hub show.

Trim popularity manufacturing titles.

Yes.

Succession soon.

You know war.

These five at that time program.

Well it could they are still confidence that all membership.

Our show healthy.

That's pending about growth or look at loan growth.

English second quarter of all high quality content continue our.

Subscriber growth.

You know into operation more stress.

Launch the.

Okay.

A new content Barbara.

This collection of sell at a slow.

And so strong appears to user.

Yes.

Yields or intention.

12 platform.

Okay.

Two jumped up versus a title.

One of his shows.

It's fibrous privilege of lumped overview.

We always.

The drivers of homes and with.

Why third bench of type.

Such as idle producers.

They are.

Two.

Right, Okay volume you movie release.

Okay.

Yeah.

We lump sum mobile mortgages, well premium we do on the bump.

Well.

Including.

At the mantra under a movie doubled war.

Action movie.

Now clubs.

Well, yes.

Hello movie.

Hi.

Control.

I'm of the off how meaningful.

Marianne just started.

Okay.

I've become.

That's helpful.

With that Cinemark quality audio before you are now lives.

15, promising potential people mode.

In the field trial, we are really more high quality movie wild.

Public drummer such.

Oh, it's critical that fabric Keith you that's helpful generators.

Yeah, Matt topic, I have a key driver for subscriber growth.

Well.

Some content hydro.

Both high quality orders at all.

And I'll be available online for what you are still come broken them.

On the outs.

Okay.

Constantly.

Oh Nielsen subscriber metrics.

We pension.

Yes.

Okay, So you click and collect.

Our library content.

Our premium of adult animals.

18.

I thought from fiber.

Well what parts of the mailing Bob when you look to innovative.

Membership.

On a per that.

It hurt you.

That's not work.

We have further optimize all numbers.

Some.

By lumps use up at that.

Membership package on based on history.

I mean.

Membership integrates comes into offering all go membership.

Total membership litigation our membership we are membership.

Well membership.

On the web access on multiple devices, including mobile devices PC Smart TV.

Right.

The advertising business continues to be softer in the second called due to the other what types of projects.

A traffic clot after people impact would normalize.

Our initial production delays.

We are seeing lower coupon.

In.

Bill It Mark.

On the mix environment.

But revenue.

Largely coming out with our first quarter.

I would it help to Mark's banking also improved.

Sequential but in terms of what typing verticals.

On the factors that's been accepted telecom service, if not consumer electronics.

So you refer to that hit recovery.

Well so while.

Sure.

Well the monetization.

Right.

Hello players from or result blockbuster.

Producers suite.

Hello.

Commerce with soft remarks table Josh.

Correct.

Brad.

Well I work class we saw.

This kind of E commerce, so well there in.

She is IP rabbit, well Directorate clams, Brian.

Well.

So to answer then well the.

The goal so at first we have received commercial.

Everyone.

In documents from more than.

15 top brands, including.

Multiple spring in jobs.

The locked up.

Leverage.

Okay go team, we about continued yours.

Commercial contribution will drive long term convinced that it.

Thanks.

Oh.

It's also the power supply and the knowledge in Malaysia yields right.

Let me.

More property at Euro.

For iron ore pricing placements.

Hi.

Some pay five prison. According to the third party data. We also upgraded all we do in average format in April.

Elsewhere.

Act.

Let's say matched.

[music].

Flat.

Looking ahead to two affecting the hub of the year, we passed the other work mm.

Men under pressure.

As we are recover but might take some time.

In sum, assuming overall at what price our confidence.

That makes it become under control on the all comes into production has returned to normal going for war, we will further strengthen our confidence.

In permanent more you always have format so back to their heads from Tyler challenging my call.

Environment.

A covenant.

Moving onto the accountants second quarter of premium content alter what drives the attention domestic on the abrupt.

Talk a bit stronger us a number of or not.

Okay properly.

With that.

Bush our media excitement.

In Cotwo, we launched though.

From a sales.

We lumps of note offerings are.

We gone you be level.

Our.

Romance drama on though we are all along when you go to maybe.

We'll take title, reflecting the situation.

And our team and industry, which will become.

Trending topics on social platform the patency.

We knew that youre affecting the drama.

Under.

Altira become overnight.

Question after its really.

Thank you called it out so thats Oprah drama title in the first half.

Oh per year.

You need.

With initial reaching all night to go bar.

From a correct.

Call me, sorry of yes, you've had it in postpaid 18.

A tool for me, though not stronger in something like Q2 was highly create a self driving cars.

Let me see alternative.

The old.

We have all diversify or multiple sponsors for the three year, leading the unless our market.

Well. Thank you. So we could hurt too I was the fiber demand from I'll use our black analyzing what.

Right.

Our intention of out of Argentina over our initial idle producers three turns out to be another.

In the first half of the Euro.

Domestic and international there.

Asia course, if so.

Like.

ARPU.

And I made between our overall.

Positive feedback youre not partner.

Ill open MOCVD ammunition aerials.

Well.

Our premier.

I think Tim.

Well, our on Nickelodeon Asia handle from the Auger, probably if August.

Additionally, there were three older low movie.

Post of production more movies are under accounting or to start shop leasing this year.

Okay, well for the expensing all content plot.

That's the 106.

Hi, TV effects to wall.

More Colombia more call Mike Mauler Leo.

Lunch.

Or not I suppose upfront or what.

Our award and APAC Subsequently award.

First the internet's drama Sarah that Weve.

Thank you and job.

Oprah Twentys serve.

Nope feel on the TV affects low income that summit with adults are built from us area, including the upfront I.

Detective tenants and we can put your fuel truck, one and you and your online drama Award well all Osha goals, our official such big pop.

They are well nerves that annual of artificial award addition that way or no documentary.

Phil Dr.

Ill.

Touch product so a bunch on yen.

The up after document.

Okay and walk as the 14, so first of National Film Festival.

Looking at friction out of 100 hunting as there are healthier.

We are more heat content.

So.

So profile in color, including.

The yield yet.

Some of the Providence, one of the last October.

Hey, your lives.

Ping Pong locked in Shanghai the loan.

Well you.

Moving on.

No go after markets recover that meet elsewhere.

In Norway to model on the essential category over the next two years, we will gradually monks more of this think of it if things.

In the South Carolina tool cover diversify the category.

Dr partner wholesale footwear official all pipeline, hence it off.

Titles, including somewhere so.

The measure lower asset multi multi if the though.

Half of the two meets our health work the to ask the drop off trend up 2800.

Leaves the trials, we are bringing up yes.

Why brands on the positively.

Pressure there under the on that.

But that existing portfolio.

Building up the emotional.

Connection we have our audit.

Paul R&D.

Our business one of our call Comparatives in this call Center, we launched our technology. It's a positive for the 80 watt lead dual coding format.

Available on both PC on July devices.

Both seems that if it's an advantage.

Okay, maintaining higher quality redo a concept with saving almost 20%.

From user perspective.

Perspective.

Allows us to drive ultra HD video.

We profit loosing the holiday.

In the thing.

The terrorists are in volume.

Right into that haven't demonstrates incredible upgrade to retail.

12, accompanied our mission.

And that we couldn't be more proud of them.

Well, it's hard to predict precisely.

They are.

Well before resuming of all the of there for the segments.

We have already cover.

Robert Lightning in the effect of that our users.

But there are tremendous appreciation on the affinity trial ultra dollar content.

Accountant the partners on the advertising customers, albeit still out there from helped.

All of this solid lines, all confidence and the.

Determination to further develop our strategy, we should fall, albeit there on that the labor.

So.

Yeah.

Sure well under tremendous earlier.

Substantial collection of assets.

The other branded content from our creative energy.

Robots that technology platform, we are in what from this happens in parallel in our strong position on the continue to drama where its long term flaw of shareholders.

With that I'll turn it over which I'll go until talk about from natural.

Morning.

Our financial highlights despite of love my for environment in spite of with delivered another quarter of grows with other revenue increase of some year over year on membership business continued to be the MEMP at least driver with revenue up nicely. The February year accounted for 55% of our total revenues our highly business continue to be a soft.

Revenue decline year over year due to the ties a bunch of costs.

The decline after the pandemic dependent under the illegal to set number the shows both our cost of revenue operating expenses decreased year over year, an hour and caused only up 2%. We kept spending strategically award in the content to drive you pause production.

Why Mickey wise displays.

Vessel across the board other results, our operating loss margin narrow to a 17% from plus 6% either security.

Last year, our net loss decreased to RMB 1.4 billion from RMB 2.3 billion units in period last year.

Joel surveyed towards on Monday, the company had a cash.

Restricted cash.

That's helpful RMB My point.

For a detailed financial radars, please refer to our press release of our war.

Upside for the third quarter of here some.

Expenses total net revenue to be between R&D.

6.5 billion, an RMB 7.4 billion study a six to subject for its took that year over year. This forecast reflects.

With Cardinal are living there be subject to chart I will now open the floor to coordinate.

Operator please.

Thank you.

Ladies and gentlemen, you may now begin a question.

Session. If you wish to ask your question. Please press star one.

And.

Yes.

If you wish to answer your question. Please press the pound.

Please ask your question in Chinese and translate the question.

Keith opportunity.

Please.

One question.

Your first question.

Hi of Wendy Chen from Goldman Sachs. Please ask your question.

Thank you can include digital Oh.

Oh, the wouldn't you should ladies and gentlemen metric obsolete.

Most recently welcomed 2000 shipments from the Jacob.

John.

Okay that Keith.

Until intact.

Got you actually cumulative attached to that you got peak season next quarter.

Yes.

Thank you.

We'll go from John Thats, you should look like.

Come to actual mature that will be important lessons.

Oh.

Thanks, Nick Thanks, taking my question. So my question is about the subscriber growth outlook, we mentioned that the subscriber momentum has come back.

The end of June so wondering how do we see the subscriber.

Okay.

For that and also for the second half.

The college intrinsic Sam and debt.

Peak season started and also how do we see the subscriber level Rachel.

Okay. Thanks.

Our next year at full capacity before you Hall Nodule Asia.

Are you asking Yankee Jiong hookup loyalty for you.

Can you talk to your current trajectory button and let you pump yup calculus again.

So what are you sure.

Some dollar will ensure the all got hydrochloric.

Pressure to now.

Sure.

Yes.

Thank you Wendy data Eurocrats adapted examination that unfolded entrusted your colleagues already ended July led to consider in that situation. This summer break is a differential from normal season stats.

For example, the down today.

The decline one month and so the other that sensitive shortened.

During the holiday summer break it followed.

Hi foods and that May be a junior high school students as well so that we cannot predict precisely the net adds a number it's about two will be updating the very clear Chen founder rebounding off our traffic and the subscribers. Thank you.

Thank you go next question comes from the line of Thomas Chong from Jefferies. Please ask your question.

So I was somehow they said why do you talked a lot you saw what if he went well there wouldn't be are you actually quite surprising gotten more money.

The when you strip that so when you saw that Joe sure woman Consob I'm, Dan I'll come down.

Hi, Joe should probably.

Bad.

Yes.

Wasteful Oh, sorry.

Yes.

Well when you got to more concrete either cobalt <unk> Mg.

The momentum.

Joe Joe Sure why do you guys I'll say.

Oh, well, but I'll, let me call rebuild the news rates it wasn't that swap I mean, they've gotten there.

And your monopoly taking my questions on my question is about the piping outlook in the second half.

And that we are seeing some kind of.

Separately in guilt free how should we think about.

The momentum Bakay eight as well as MD and my second part talk the question is about our Btwob deals strategies in the second hop out should we expect that would be up that up in sales and marketing at any time that can be Chad will be great. Thank you.

Hi chip.

Well not ruled we also can have on offshore Africa eight fumbled on.

On top.

So you got to be GM with our fleet.

Hey, what comfortable Hawaiians Jim laws.

I mean, yes, Bob Thanks, as long as have I'll jump back into that come a high she all you've actually again you may.

And as soon as long as you have more tools I think bias.

Yep.

Yes.

Okay sure open.

Thanks.

Yes, yes, the JV.

So you quote woman bye.

Jamie you also plentiful time.

Core GMB.

You will see the May also have on yet some of that ultimately.

Got you won't have a few more texture.

Okay, well, you'll downtime to GCG, let Tom Jacob VLP, so you'd have to actually up on local soon.

Nick shortly huge our operational.

As the other subject question.

Yes.

I think the Alamo to all that added revenue comes from.

Brent Heitman to sell K. I reference into larger protest portion on our AD revenue that we can see that okay.

Hey brand advertisers that to their budget is coming back after Iraqi so he is not gradually to be Eric.

It will take some time reflect NFC nationally because to that I think does some of our new variety shows.

Aired on August and it sounds like maybe I'll September and possibly peak on October So thats eight will take some time to reflect nationally.

On the Tigers ends up on the the Multiservice that too thanks.

Comfortable so much off.

Has the rapidly.

When that.

So some rebounds age will not to.

Like the too much on the financials regarding the.

Yes, we did.

Right.

Pivoting on the marketing promotion and technology platform building and also on to that so we put effort that community.

That's how it's important that but there is in summer program already that we need some timing to build it into the large scale and think that the most of the highs meant.

Welcome.

Form of the is it a tightening ended the AD inventory will.

Not that much so that we don't see much of.

The reflection.

The revenue.

From the could perspective, thank you Andy.

Thank you.

And now we have Alicia Yap from Citigroup. Please ask your question.

Hey, Josh on how goal so I don't see additional what a T. One what are the ones.

Chain Glennie trends at Goldman Sachs. Please ask your shrew foremost soil.

Sure Hi, Steve Joe Shore, Saudi Wilmington.

I'm going to our shop, the Milgard swap here now call now got so we get more future shore. The whole just all why not secretion. Some kinda Glenn just will highlight site.

Hi, Don the garden from Goldman Sachs saturation, shortening why not just.

Well why you think sure rating.

Sure released a lot woman she should it go quite quickly Schwartz.

Sure.

Hi, Keith I don't want you get what that drew sure John Abbott Tycho, What's your ship to ship from tie you down woman does not go up.

Russia Menthol, what's next year now go up.

No go.

No go not all you said sponsorship momentum quite cheap Patricia.

Well quite you Wouldnt see actual sure woman thought I sure. So much a whole should not I will call FCC that you guys. Thank you.

Hi, just yet.

And gentlemen, yes.

Ladies and unable to achieve.

Yup, what's your actual two drama.

Tom or the Payce, we all showed meaningful use so we thought it useful in conjunction with your true.

Quarter sure I called it will achieve disappear.

Yes sure focused on.

Sure.

Sure. Let you don't you all the can mechanisms you all can bullish yes.

You fully internationally.

I'll be quick shot out each quarter.

Yeah, I was wondering shop in shop in shop in shop. So we are sure.

You want to home.

Not yet.

Jim lecture from.

To me is yet to be offshore.

Sure.

So we want out.

Oh, yes.

Our portfolio again, EG number will work.

Our fleet Hombach boxes.

Sure.

Our strong.

Yes, you got ROI.

PMO Drew hall, Heikkinen trading portfolio Abunga, yes, what's your thought Sochi push up closer towards your.

Excellent. Thank you Josh somebody Sean yes.

Thats your Yeosock governor.

Well, Matt driven by you all.

Good morning.

You might you completely quarter sure woman, Jim Sheehan portfolio should the whole cultural who you quit.

To Gen Yup, Bob I'll give you the ROI. The Q2 Arsenal, yes that may or can you at that you Monjack port Stricture Socgen.

As I'll answer the postal crash and until late this out into after the second one and we have a different just gathering Saturdays to regarding debt Difranza conference category.

Dr with drama.

Then the drama there to do your all feel influential factors certainly ordering of gasoline.

The first into our most important.

Including the production cycle, our license fight the second one answer right regulation cycle and also dash eight.

May have some influence from high theres not much but the variety show that to think that most of the is the revenue comes from other multiservice. So it will be determining mostly by the hybrid watches and the theater promotion activities gadgets. So most of the variety shows.

Needs to be Eric or the productive or get really based on the contract agreement with the major hi, there or is that a property to our.

So data only only a very steel off the Rockies shows data, we decided to schedule.

Anyway, it's the Casa de Hospira Hessam me more amending our platform or data, we expected that to their revenue will gradually increase the operator as long as it is a broadcasting so meaning indicator we may schedule.

And our debt to even without agreement with high there now Sheldon.

Oh, sorry that the mid July wants to add some points on this question Lisa later.

No in March.

The yards you aren't younger Monday.

Okay.

We.

Good for you made each year, but might engine true Commission culture, if you aren't you Michelle.

Guidance yet.

So what are you able sodium please take a total comparable well caught up and bought.

So you gain.

Chung from year to yet again.

Sure you mentioned Jane the shareholder VR.

You may see Jimmy Johnson.

Yes.

Do you hold that binding.

Who may or some share so we capture on that.

Got you okay.

We achieved by it appears you Jacobson make sure dropping off heights.

We.

We are you John Yes, really Bob.

Yes, yes, sure our home extra do you want your container you shop to inherent.

How would you don't Gms for you.

Okay, not can you talk a whole body to halt to are you.

So I'm not sure and shop. So you guys continue we got all we again, but often.

Yes.

Terms I think the geopolitical issues when yet HIF. Please.

Pension Trulia GBS.

Okay got trunking.

She wants equity by.

Hold on 20 people can get accordingly.

Thank you caught your intermodal.

Sure.

Also the.

The other two accountants category animation and its radical movies that thinks that the Japanese animation generates hop all our trafficking and emission China. So just break up the Pos opt to Japanese animation, new episodes, releasing somehow influenced dollar and you mentioned.

As well and but in the future to how well that is kind of what possible.

We will invest more on the domestic animation production for the theoretical movies that we can't.

Everybody can see that's supposed to have the year to date no sabbatical movies released the op lump offline, yes, we got off to also because we ranked number one.

Compared to other platforms to does this kind of the soft is on the content why that somehow influenced more regarding the theoretical movie. It's good news is that the Cinny Murray already we opened just from July to into first it.

In fact, the demo and you know babies will be released offline and possibly opted to to eight weeks yet it will be.

Into that well probably doesn't national holiday will be the pick titanfall just back to lead us to release, Oh, Sudan to burden at that.

Hi, Doug possible, but.

We will evolve more orange movies, and the quality will this to the same assets radical movies, and we will pop.

Due more to come to.

Operator, with that kind of risk and that builds on our all in Scotland.

The confidence and independents as well thank you.

The monitors although.

A couple of weeks after the short seller, we received inquiry from both not that.

You see the inquiry on local conductor, it's however, with.

Following Korea took its close this inquiry this time, because we want to be transparent or the investors that's basically logical Carlos thank you.

Thank you.

Okay.

Your next question comes from the line.

From China.

Your question.

Okay great.

Yes, yes.

Yes, I know share anyway Ian.

Sure.

Yes, Okay, Oh, yeah. So now I think I. Thank you know what you do.

Okay got it actually I think the seasonality.

Yes, we will evaluate them.

Thank you so yeah got it can delay is that it was done they really yes.

Got it.

Yeah, that's just because we found the continued.

Well I sounded to me Thats exactly.

Why do you consider or has the right exactly yeah, well, yes of course pick up.

Okay.

Hi, good morning, good on how should they what exactly what can we played that make up okay.

Well thanks good.

Thank you guys have the ships.

So two questions relating to their membership services revenue.

Why is that due to the.

The late.

Well.

He dropped much Olson with our IP show, Jeff Hi.

Later half of that some of Rick.

The one that seasonality.

For the for the rest of the year.

We're going to a more balanced.

Membership growth.

Between Threeq and Fourq you this year versus prior years and the second to Renee I think language was amazing nephew areas to increase our pool of your member.

So just wonder what's the organic growth.

Well.

Well I remembered thank you.

What was the young of our for that and see if we're going to you.

400.

Sure.

Settlement.

The only on the Chinese government Cc Fest, which she does that hopefully syndrome.

Yes, it's too early to includes the called Darren.

Yes, we sold our made on the news to Union CPG biggest would support a Jim we opened Donna clients use those Lucille employee was like a fifth.

Jim was assortments and onto a quite.

The whole you this which you can until may know part numbers and that probably point media that.

Lectures and this would season since obviously trying yen sundeep duck on that you could you do.

See Jimmy and this European Party Amos would see this worldwide G.

Sure look to these units are huge.

Tom would you own condo. These you have deals off we will be joining us of Omega.

Good morning, fruitful tend to relax Russo with the she was I'm just kind of advances made it easier.

Only she wants them on sort of unknown.

Which impacted coincidentally GDC.

Susan.

As to our asset SVP.

Members of the business Mr. Yasser pockets answered a question that yes, you're right.

Q3 normally the peak season for our traffic and the same as Albert subscriber additions that normally that is also highly depending on our content supply well some of the summer the with a really he brought foster tool and have them higher topic.

Subscriber additions, sometimes not but to for this year adaptive with England. After pandemic and also relative of Salter summer break it out to we cannot onto for diesel anticipate precisely about to them.

Number opt in that and other subscribers and by two we it's very clear we are already seeing some rebounded from the Q2.

And we hope data Chandler will continue to increase but.

Again, it may sound that.

Hello uncertainty on that thank you.

Thank you.

And now we have.

Hi.

Please ask your question.

Hi, My name is hot I should it says what that she went what people with discipline you just on your momentarily and the young woman entire we a terrific S meant that the equity and so what happened.

One of the quantitative research has had a swing synthetic fiber and there will surely amerisafe so to pay attention.

I hope is actually as Dick.

That was had services.

Within one or the expectations what is.

The woman's expectation.

Well typically what they're going the other one discipline you pick up.

Good how is how what he does show what kind of elements.

They could hopefully there will be able to like the internal investigation.

What's the listeners I think I simply good I know you got a table specific.

Can you quantify what specifically visitations NPL total backup.

Yes.

Yes.

Sure.

Well has not been would do that without going Ukraine and fulfillment.

Hello.

Hello wellness and.

She was on for yes.

John Mattio switch to Jim soups and Tom.

Our economy.

Some slowdown.

Fees on shelf youre on the on nuclear utility.

She was on plan to for that had the on Sunday, we had its the Gensix Assembly. This would have been on something TNB.

Good.

For the so these are high patient so thats, what the due to.

Plans on accomplish dependent I can think apart and so the football Mitch.

Thank you.

Thank you for the question regarding the odd diamonds and membership and.

Yes, so that.

From Maine.

May 23rd we launched our new membership package oncology I someone membership to cater that.

Our diversified the membership compensation.

It has the does.

That is only launched so for more than one month down to until that Q2, and we didn't see it accounts for too much on the Oliver relative apparently massive user basis, so down but it is it didn't meet our interpretations and though we have to in the state expectations, although to further improve.

Well address subscriber monetization. Thank you. So I don't know followed with an actor question.

Regarding the even the review on the easiest car is I think you're right, it's being almost like for more than four month Pos.

But you have to understand its internal independent intend to review so we didn't where you could that lead. The result is instead as Roy not what I can tell you is.

Voluntary disclosure of this.

Gary as you.

Trade show the confidence of the management on the Duggar results of these internal review.

We do believe due to the solid okay internal control process under the corporate governance, we're building.

Yes.

Together with a cooperative card overly promoting the company.

We do busy.

The result.

Hi positive between the two of the.

The company, let our belief and also.

Here because lot people.

Similar question I, just want everybody, including those not big non Chinese big events.

I think you have to understand unlike those short seller.

All of the politicians.

We are.

Well some room.

We are people, great not disjoint, where someone who pursue degree not interest.

So I do believe.

Okay, though I'll lead off to Dr. owned.

So we will be up again, we wish you all investors recorded year.

Of the company under.

The potential the management. Thank you.

Thank you.

Thank you Joe next question comes from the line of 10 homes from Th capital. Please ask your question.

Okay.

Good certainly got plenty sometime.

Well you could.

Q3 women Dennis.

Colin Mccallum Shenzhen pool.

Big ships.

You got let me just really tied to some degree kind of recently.

He is a quick we pay TV Gilly CDN Sam.

Nothing Light addition, she's on one step which in English as Jim each of the commission.

18 phone shop now what.

Yes. So for me quickly did you guys are.

Could you imagine that we can you get caught.

Now let me shift then what my associate.

Yes, hi, you'll find one that you just that's how you should understand that additional hiring.

In the could now.

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Well that companies will take two or so yes, they should.

Take a shipper shipping so could you too.

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Sure Southeast themselves did it have been consists yet.

Thanks.

First question is.

One Sheila if the company can give some color.

Since then we.

Diamond members and yeah.

Touching again or if there's a concept.

So thats, one and number two is that.

I have no Tim.

Sure.

Revenue from member if that can actually.

Then they delayed supports it.

Thank you that's kind of the market cap, but.

If they are some other ways.

They ship much bigger monetization in addition to the membership fee. So what's the thoughts on that from a management. That's two questions. Thank you.

What's the younger when we bought the guidance.

She was on margins and border transforms the CRL Gary you she goes with the strength.

She's a bonus obviously, it's a more slick Omar.

So I didn't improve which is a tough you would want to comp three women.

Do you put on somebody to this usual to sort of Baltimore sure would you listed on the horizon.

Some people Twinkle toes.

So those itself to move the dial do we'll Miss you on Villa Highway pencil goods on ground going in this channel so channel more sure.

The young.

With these here this year.

For the sheer minerals.

And then it.

Well Im Couldnt masterpiece, the shoe consumer interest does that mean on shelf later.

We ended 2000.

I see that what you are getting Chanana should Jimmy Dean.

Most of the annual pool.

Let me say degrees here, which is looking to 2000 silicon, but at times when we do you ablation transitioned.

Fine treats where youre going to north entries on buttoned down five inches.

Somewhere south of grain fundraising secret Wendy's, we'll do it and then thank depend on shelf in the industry probably be.

Most of the right after the Hong you mentioned earlier on yield of five feet on this useful.

Well this unit within them, Google Bamian prevent Lou world with their clients.

It does sound.

The first a question after that you can see that we'd love to therein to often subscriber fees and other monetization mathur due mostly to cater to different choices options are custom assessing the data we have a massive user base.

He sees it seems a controversial back to fundamentally is now transics said to each other at all and Joe's assets also that will further exploring possible magnetation mass alerted to cater to the Albert user demand and the without any other birds are failing to our users that weekend.

Thats right.

I'll call. It just subscribers, okay, Oh user data monthly to yearly starts it gives a many borrowings in the history and a until now so we can meet the car into you there tend to end the user willing to paying audio content is all other entertainment form to the trend is clearly.

To that going up and we can see not to just to have long form video. So for the music listeners will people paying welding is increasing that we are surgeon data paying is this deal with a clear channel and Dr. will follow the next question.

Well, you're showing a more sure of legal and year to.

Sure hydrogen issue so youre.

Yes, sure all together to form and yes, offset partially by the younger.

So.

Sure sure, but overall.

Sure Thats, one partly as much as controller.

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Sure, Okay, what's shoes joining Ashley.

Come daughter unit, you don't Dr. CHEMOSAT Archie either.

On June.

Hello.

Yes, Thanks competitor you epic sure sure I bought sure Jeanette.

Each year shotguns, whether they just.

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Well I may all for quick follow yet.

Trigger nagel not trigger single floor.

Hey, our goal top activity one Sonic one Sean you got your core can you give your costs that were going on now what technology, a bunch market may all yes, sure not problem videos flow benchmark. Please show.

Domestic opportunities.

So larger harsher.

Thank you very much actually go about something job would you.

It's actually you mentioned is only a year your mailbox job.

Hello Junior Tigger Jake.

And just yet youre very popular, particularly Q4, you take actuarial topline yup Dara.

Gotcha Hydratight dealer joint.

So you Tom funds you altered enable thanks for the production should that tied to Europe Fisher, we also.

See offshore what you're doing a one quarter builder, so regardless or whatnot.

Okay.

So.

Okay got it.

So anyway last real quick.

Okay got you have national versus your core what Richard on Pam energy costs.

Doescher National robot.

Oh sure.

Youre sheet.

I think what issue at month.

Yes, Sean geospatial traditional daughters controversial.

The horticulture Thunder, so just to clear to answer to you Didnt.

Regarding our business model data.

We firmly believe that our major stockpile our revenue is due the subscriber revenue that to the subscriber revenue still cannot cover all the cost to it because the pasta my 10 year to intense computation currently our monthly fee is RMB.

19.8, if it is good calculated made by the end or the discussion between me and the sounds like a few years ago, we didnt have as much of the benchmark regarding the indicate that momentum.

Thats way, we consider things that.

Rating that they had no more users in China. The audit the in China normally we'll we'll watch walk movies to per month and.

Licensed a D. The selling price all five RMB one did so combined together it lists of 20 RMB pull a month, that's why we made our price for the monthly fee to the 19.8 RMB, though is steel is relatively low regardless because.

Of the computation cannot cover all the accounting cost it right now still with other avenues that together with other monetizing rather than simply because we have different formats.

Hi, there, although it has meant that some of subscriber wheels.

Hi, there would otherwise have meant and also now subscriber titles as well with other added that added value.

Matt monetization mass, including animation literature, and just so that we believe the combined all of the revenues together that's still we if we can achieve profitability to orocobre our content.

Yes.

Thank you.

Yes. Thank you.

Thank you. Your last question comes from the allow for pay from Oppenheimer. Please ask your question.

Our anyhow.

Any kinda Hello, guys. It's the one key the whole whats out when so.

You gave us a woman something you need to towards its on the Gulf block. The strategic thoughts you did talk to us so that if they don't just wanted a bunch of well jobs homes have a poll you will touch will be I saw Oh, well mind quoted on how much you you'll know so much.

So I'll weigh lights actually falling in the little quick way.

China, what's it was a warranty and I would translate for myself.

I want to know more about the 12 episodes.

So I'm a serious life back case, how well it good feedback into Q and that I want to know in terms of our eyes.

Any difference between the shot.

Drama series and the long one we used to produce more and then in the field trips.

Key area for us to in West. Thank you very much.

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Okay.

For the made on the way we're quite logical.

For both will show what I can put all time, Jason we will look like you.

So we have now.

The relied upon.

Sure, yes, challenging IDH mutation.

Thank you all yet.

Litigation Amir I can do the combo can deal with debacle route.

Sure.

Tons and tons, you look like GE simonton food on the T. as usual with local she Joe tied to the legal Leo leasing learning.

Sure.

That would put you on book way.

John you ultra and they can.

As the.

Compliance officers outside just the answer this question that.

Thanks, Doug So we have very appreciated that the very happy to received very positive feedback regard and better ROI on the from the Lisa Theater.

I think we launch engine and essentially that the titles dimension to the basket and we definitely did a wheel in massive more on this type of hot intensive suspense drama and the other thing citrus as well, but we will not to cost that we will not be latham left on the long.

Long longer apples, though just drama as well because they have different to expression and the different ways to attract our users that no matter along the longer episodes or start to episodes. We definitely will continue to improve our capabilities to provide more high quality comes into two Ali.

Users.

Mr will then we'll open the at some point on this topic.

You look like Q. Thank you.

Tom to you probably Cosby our pressure please.

So all of that number which much auction young but our hope you. It you its usual.

Our fleet Hubspot lecture fees up fully ROI.

Paul.

So this kind of a trough, though to us shot.

John much high to that.

The content cost per episode is a little bit higher than the longer episode drama, but it is adult ability to attract to subscribers is.

As a strong as the other form of the somewhat high to so that we can't see a little bit better ROI for this kind of a child Abbott drama.

Thank you.

Okay.

Thank you now Oh now I would now like to handle conference back to Diminishment present does this continue.

Thank you joining us today. Thank you I might have a good day.

Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating as you may all disconnect.