Q2 2020 iClick Interactive Asia Group Ltd Earnings Call
[music].
Hello, Ladies and gentlemen, thank you for standing by where I'd like Interactive age Group Limited second quarter 2020 financial results Conference call.
At this time, all participants are in listen only mode.
After managements prepared remarks, there will be a question answer session.
Today's conference call is being recorded.
I will now turn the call over to your host Ms., Lisa the senior manager of Investor Relations. Lisa. Please go ahead.
[noise] Hello, everyone and welcome to <unk> second quarter, <unk> Twentytwenty financial results Conference call. The company's results were issued earlier today and our POS pick on line you can't all be earnings press release and find out for our distribution list by visiting the IR section.
Of our website at <unk> are that I Tyson C. L I see take a car.
10, Tom TJ, Chief Executive Officer, and co founder of I click will begin Nicole and provide a high level, we view of the second quarter results and sheer insights on our execution strategies, followed by our Chief Financial Officer, Terrence Cleat, who will give us more.
Hi life on the financial results and guidance for the rest of 21 since.
Then we were trying to pull back over to TJ for closing remarks, and open the call for two and eight.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks and uncertainties.
The company's results may be materially different from the views expressed today.
Further information regarding these and other risk and uncertainties is included in the company's 20-F as filed with the U.S. Securities and Exchange Commission.
The company does not assume any obligation to update any forward looking statements, except as required under applicable law [noise].
Please also note that I Quakes earnings press release, and this conference call include discussions among others had GAAP financial information as well as unaudited non-GAAP financial measures I.
I clicks press release contains a reconciliation of the on all that non-GAAP measures Sheila most directly comparable on all did that GAAP measures I want to know trying to co over to our Chief Executive Officer and co founder chant Tom TJ. Please go ahead.
Thank you Lisa under welcome to the coal everyone.
Even use the honest doesn't you environment I'm delighted to share with you that isolate reported another record quarter <unk> financial results demonstrating the important role, albeit hall analytic itself is a play you quickly understanding the graphically changing online.
Consumer behavior here in China.
We reported total revenue of 58 million.
The second quarter or you increase of 18% from the second quarter of 29 team. We also happy that we reported record high adjusted EBITDA of 5.2 million increase all.
322% from the second quarter of 29 team all our adjusted net income for the second quarter was 2.5 million versus a loss off their upon 7 million in the second quarter of 28 29 team.
I want to bring to your attention that this is the search to conserve cave quarter, obviously has to reporting positive adjusted net anyhow.
Historical all time high adjusted EBITDA on the adjusted net income we reported here all confirmation that we have reached.
Inflection point on all I, achieving the economies of scale necessary to maintain consistent profitability.
China's economy has started to rebound after a steep drop ins.
First quarter caused by the Korean nonferrous, yes, there are challenges that still lie ahead.
Domestic demand is beginning to drive China's recovery forward, Bob external demand could be at risk given the perino various effect overseas.
So far off our business has proven resilient.
As brands are looking to China more than ever to make up for business lost in other areas of the globe. So deal affected by the.
Pandemic many of our brand customers are season. This as a significant opportunity in the post pandemic world as China's digital Allied position is continuing to drive ins stay at home economy, we along with many of our.
Our branded customers believes the pandemic well change these behaviors permanently and as the information. Our company provides is essential part of planning for these new reality.
With this I would like to share with you update on the progress of two of our most important goals set at the beginning of this year.
Our first the important goal for 2020 is to improve the profitability of our marketing solution business.
As many of you who follow all company no our marketing solutions business is a bread and butter of our success in this area. We see continued healthy on the steady gross as all clients shifter marketing budgets to performance based solutions.
Especially now faced with the uncertain environment broad buys a pandemic since the outbreak has caused such as dramatic change in consumer online buying habits brands, our shift into advertising expense to increase online penetration on the VI in.
Perfect position to monitor on checks the executive evolution.
With this dynamic as a backdrop covered with our diversified portfolio of over 3000 customers we reported revenue of.
53 million from marketing solutions for the second quarter of Twentytwenty, an increase of 14% from 46.6 million for the second quarter of 29 team.
This business continues to scale and contribute to our profitability on the we remain positive about the demand of our performance driven marketing solutions in the second half of the year.
Our second that important goal for 220 as being to continue to develop of our enterprise solutions business. This is on the will remain our key focus for many years to comp we began this business men.
29 team and I'm proud of what we have achieved in the past 18 months for the calendar year of 29 team, we generated more than 10 million.
In revenue from a studying.
Standing start for the first half of Twentytwenty revenues had already reached 9.5 million as a reminder.
Gross margin profile for this business is almost three times of our marketing solutions. We're confident that these type of success continues to propel our top line on the bottom line results for the foreseeable future.
The demand the driver here is that large under so 50 pages brands have realized the urgent need to analyze and respond to the swift consumer demand shift to online channels caused by the pandemic.
We now require.
Hollis takes data on the technology strategy that can integrate online and offline data on that include social E commerce to pinpoint where the demand is coming from and how to capitalize Hello Hello.
Tempted flies all age as this is taken place.
Tencent with whom we partner with regularly has continued to make it our efforts in enhancing its we each have meaning programs ecosystem, which will benefit to the we utilized meaning programs as the interface to help brands engage on the indirect we use and the canal.
Tumors.
Over the long term.
We have shown this collaboration enhances.
Customer loyalty and the generates more business opportunities.
Our enterprise solutions have helped our brand clients to achieve three core objectives, managing the customer engagement process targeting on the personalization and the overall management of customer data.
As an example of how well we have done with our integrated enterprise and marketing solutions I want to share a case study of our client charge half food.
For those of you who are not familiar with the company chart is the largest producer of roasted seeds and nuts in China, We launched a major initiative closer in April of 29 team as a result.
Cumulative GMB was more than 64 million RMB for the 12 month period ending in May of 220.
Also the number of mainly program visitors totaled over 12 million for the same period well the number of monthly paying users rose by our average of 30% per month.
I am truly delighted with the results, we achieved with charge off and it's just a one of the many say festival places we have developed with our top tier clients using just our first year up of operation in this area.
Overall I'm extremely confident data, we are moving toward becoming one of the leading enterprise on the marketing cloud platform in China that help brands acquired traffic maintain consumers and optimize customers to lifetime values in.
Addition to the robust organic growth. We are also continually exploring various partnerships initiatives collaborative product offerings on M&A opportunities to enhance our long term gross.
Currently we are looking for targets that will complement our SaaS product offerings, all with the data and technology that can further enhanced every reason to drive the aggressive development of our enterprise and the marketing cloud platform.
As part of our effort to continually improve our proprietary market intelligence platform in July we announced the release of our audience to comply with three key enhancements, including broadened data sources newly developed previous.
On the market and modules and recognized brand audience profile. This play that provides even deeper insights into our brands positioning on the competitive landscape.
We expect these upgrades to help drive.
Future demand for our marketing solutions.
I want to take this opportunity to briefly update everyone on some of the industry Awards and.
Isolates, we recently received this quarter.
Winner of the big data or work in the advertising category and to Singapore business Review top 10 digital marketing solution providers in a pipe 2020 busy I O advisor APAC.
Asia Pacific leader in Smart marketing solutions by media assume group three accolades in the Ace top digital China Twentytwenty Awards competition.
It's always very gratifying to be recognized as the industry leader. These awards complement our fine execution on our tribute to the hard work on the.
As evidence of our entire organization in even in these challenging times. This concludes my opening remarks with that I would now like to 10 the call over to our CFO Terrence lead to discuss the second quarter Twentytwenty financials.
Yes.
Thank you Jay and welcome everyone.
Had we report that our business model continues to be resilience is being impacted by the condemning we continue to experience growth in demand for our marketing and enterprise solutions categories to integrate what TJ is that earlier, our data analytics services pay a critical Roe.
In quickly understanding the rapidly changing on NIE consumer behavior here in China.
Cost of by their pandemic.
In this quarter, we continue to report record financial results, including total revenues adjusted EBITDA and adjusted net income.
Im excited to share a few key highlights from the second quarter of trendy trendy.
Our revenue for the second quarter of trendy trendy grew to 58.1 billion an increase of 18% from 49.3 million for the same period of the power year.
These results actually buildable to the increased contributions from existing marketing solutions and enterprise solutions and were partially offset by 4% decrease in the average exchange rate of renminbi to the US dollar for the second quarter of trendy trendy compared to the same period in.
2019.
The revenues a marketing solutions grew to 53 million for the second quarter of trendy trendy.
An increase of 14% from 46.6 million for the second quarter of 2019, primarily as the result of growing market demand from marketers. The revenue of our whole business has steadily increased over time and have given us the ability to improve our path.
Tom and branch out into other opportunities.
The revenue from Enterprise solutions was 5.1 million for the second quarter of trendy trendy an increase of 18, 7% from 2.8 million, we reported for the second quarter of 2019.
The robust growth was driven primarily by the increasing an immediate needs for online offline consumers behavior data integration.
I take continues to be will on is assessed as revenue in this area continue to increase.
The gross profit for the second quarter of trendy trendy was 16.6 million, representing a 22% increase compared with 13.6 million <unk> million for the second quarter 2019.
Mainly due to continue expansions of the company's marketing solutions and contribution from higher margin and the price revisions.
As of June Brodie Twentytwenty, the company had cash and cash equivalence 60, posit and restricted cash of 64.2 million compared with 61.1 million as of December 31st 2019.
For the rest of my discussion I will focus on our non-GAAP results you can find reconciliations of these non-GAAP results in the press release, we post earlier today, and which can be assessed at our Investor Relations website.
The adjusted EBITDA for the second quarter of trendy trendy was an income of 5.2 million an increase of 322% year on year.
The results were primarily due to the increase in gross profit.
The adjusted net income for the second quarter of trendy trendy was 2.5 million compared with an adjusted net loss of opened 7 million in the second quarter of Trenton 19.
This is our third consecutive quarter of positive at just let income.
We reported gross billing of hundred 132.8 million for the second quarter of two Twentytwenty, which represented a 6% decrease compared with 140.9 million in the second quarter of 2019.
Please note that the renminbi depreciated against the U.S. dollar by 4% compared with the same period of the power year on a currency neutral basis. The gross billing would have been 140.3 million for the same quarter of trendy trendy relatively unchanged compared with one yet goal.
This stable performance refresh our strategic focus in risk management as netting good quality keyence amid economic uncertainties.
For further information Pcs the de how we cap of other financial matches in the press release, we issued a today.
On January 15, 2020, we allows a share purchase repurchase program in which we may per chase our own ABS with an aggregate value of up to $10 million over a 12 month period ending on December 20, like 20 trendy as.
June 30, 2020, repurchased an aggregate value of approximates need 0.7 million us dollar.
Before I do show our guidance I would like to take this opportunity to elaborate on Iconix current strategic focus from my perspective.
In the first half of trendy trendy, we continue to report record high profitability in grew adjusted EBITDA and adjusted net income.
I attribute this outstanding financial performance to our vendors as well as most conns cost control efforts through better operating efficiencies. After an extensive review of our business. We competed in trend in 19.
Currently we focus on kinds credit quality in an effort to save gap our sales from the lingering global economic uncertainty with these save gas in pace. We feel we are in a solid position to drive profitability keying in on the high margin business, while managing a cash flow.
More efficiently than ever before in our history.
Impasse, earning calls we talk about our increasing economies of scale and how we will eventually hit an inflection point in our marketing solution business achieving profitability. We have rich these levels and looking ahead, we are confident in our ability to maintain healthy and stay.
No growth rate from the marketing solutions area, especially now as we see the continuation of advertising budgets shipping to online and creating an even greater need for performance based solutions as a macro trend in the industry.
Finally, we want to make sure we have enough capital to fund our revenue, yes. So today initiated so today and we recently completed a trended 2 million U.S. dollar piping Paceman. These proceeds will be useful wrecking capital to ensure our continued growth as well as compared to be funding our enterprise.
Visions business, which will be our main focus for many years to come.
Gratified to see the organic growth them and the price revisions increasing as it is already contributing 9% of total revenues in the first half of the year compared with 5% of the same period last year.
Now I would like to conclude my remarks, with our outlook for the balance of trendy trendy. Please note that our outlook for revenue is based on current market conditions and Refracs, our preliminary estimates of Marquette and operating conditions, taking into account the come window drivers condemning.
These are subject to change.
Third quarter trendy trendy.
Revenue is estimated to be between 66 million and 70 minutes.
Revenue from enterprise solution is estimated to be between 7.5 million an iPhone 5 million piece note that this is the first time, we provide a quarterly guidance on revenues from enterprise solutions.
Gross profit is estimated to be between 18 million and 22 million.
For full year trendy trendy revenue is estimated to be between 240 million and 260 million gross profit is estimated to be between 70 million and 75 million.
Adjusted EBITDA is estimated to be between 9 million and 12 million looked at this is an upward revision from all pirate guidance of $7 million to $10 million released in the first quarter earnings release.
Our outlook remain cautiously optimistic we're full year guidance remaining unchanged. We have increased our adjusted EBITDA guidance as we continue to see the fast on economies of scale for the marketing solutions business.
Please note that dead remains the possibility of the surgeons in local Copa 19 cases, along with the impact of global economic uncertainty that may influence our financial performances.
Before I turn the call back over to TJ I want to congratulate our end tie company for executing and delivering these operational and financial results. So far this year I truly appreciate the efforts and we're excited to move forward and create more values for our shareholders in the future.
With that I'll now turn the call back over to TJ for closing remarks.
Okay.
Thank you Terence.
Since the beginning of this year the occurring on various pandemic has swept to the world disrupting our daily work on the life routines. The outbreak has driving many commercial on the social activities online and implementing the internet has become a very crucial linked to this.
Since they need and walk.
This all be gain as a necessity for many but now consumers enjoy the convenience and personalization the online buying experience affords.
An online reliance is becoming the new norm.
Many of our savvy brand clients, we use this trend in line with the Chinese idea that every crisis present opportunity.
Given these micro trends, we remain 'cause it positive about the momentum in both our business segments going forward.
While we expect to see continued stable growth in our marketing solutions segment, we are experiencing strong demand for enterprise solutions as brand seek to understand.
And the consumers through our full consumer lifecycle as we provide a comprehensive solution to better understand online offline consumer habits, we believe our enterprise and the marketing cloud platform is proven to fit all these needs in this area and.
We are in a solid position to continue to grow in this environment.
In closing we are confident in our full year guidance as always.
We remain committed to long term value creation for our shareholders on all stakeholders on the protecting the health of our workforce as we see the recovery in China unfold.
This concludes our prepared remarks, thank you for joining us on todays call. We will now open the call two questions. Operator. Please go ahead.
Thank you we will now begin the question answer session.
Fortunately, we've been stars and warm so.
As a reason speakerphone, please pick up your handset before prophylaxis withdraw your question. Please first starting to we do as you limit yourself to one question. If you have additional question jewelry reenter the queue.
Today's first question comes from performance strong with Jefferies. Please go ahead.
Hi, good evening that banks management for taking my questions and congratulations on a solid that's off results.
My question.
About our enterprise solutions business.
Your comment about the lump of customer that we pockets.
The end of this year as well as a customer mix by industries and on August ahead.
Let me also talk about our E U Penn station help our solutions versus our peers as well.
Penetrating to meet the approximate together with WPC model on Pik weight over GMB. Thank you.
Yes.
Thank you Thomas this as parents. So let me first answer the first part about the Keyence lumber is and the pipeline for us and in the first half of the year last year. We you've read you recorded we basically have compete our target to have 50 key accounts. So go.
Going into trendy trending in the first how we did also compete around 50 key accounts. So we see a pretty strong pipeline right now and going into the first quarter. We properly would add another 30 to 40 key accounts. So I think that's right now our you know expectations and I think I would turn.
Two TJ to answer the rest about you know more on the pressures that you have.
Today. This is the operator I believe there may be on mute.
Okay.
Hi, Jaime our.
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Hi, this is TJ surface light.
Our CFO SAP in 28 lighting, we have already actually loyalty 50 key accounts and in the first half hour Twentytwenty credit that clients we have.
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This year in Barclays show off this year on year.
For the second half of this year, we expect that we are going to add another maybe as.
Of Philadelphia, New client afford us fast enterprise solution. This year, we ever to focus on the factors related to consumption.
And industry Inc. sale like Latin America, it cuts map it through and that rate and also FMCG.
Okay.
Well underway through all the SaaS solutions.
Okay.
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We think this market is that we'll see market and we have seeing a lot of different opportunities, especially in terms of the trials of their business models.
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Can you imagine that relationship with big consumers and after Q, improving their nyasi and also accumulating down here with purchase the good.
So all they are included in our services. So we can see that.
The market that we are trying to serve is quite a bit.
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So right now our marketed.
So the market. We are trying to serve is very hills as I status now and allows us a client that we have surfing is the mix here enterprises and also that the large tier enterprises and further steps.
Enterprises that were serving which are the 100 enterprises.
A lot of.
A lot of this big clients are quite fill in the market.
So why now we mainly focused on updating our system and also we are trying to expand the market.
At the same time, we are trying different business models, and we just try to satisfy different needs of different customers.
Some of our triathlete the data analysis. So we would try to set ourselves in terms of there and other clients my needed therapies.
Any program management and.
Also at a science line me a five in terms of the operation.
So we tried to quantify a different surfaces to different clients, but overall or are we seeing the data is still being quite aware and fill in the markets and that is the area. We are trying to interest.
The slow movement users.
Regionally.
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So what we're trying to deal right now is that were trying to keep a five different business models to deepen client and after we get enough later.
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This modest work and we're trying to expand of Visys models to the market.
Okay, great. Thank you. Our next question today comes from phones young with benchmark. Please go ahead.
Okay. Thanks for taking my question Peggy headwinds.
What do you follow up on your enterprise solution partners or any of teaching mentioned in his adjustable part the market is seems to be substantial.
Just wonder.
We what's the potential Smith baked into the customer number customers youre seeing.
And the lining markets are we looking for more additional to customers or more ARPU growth going forward and all the trying to get even more than you have to economic particularly for the customers you in the could last year are we seeing a healthy levels, the new loans and potential expansion yes.
On this year and lastly on depend on any of the margin profiles for them I solution right now with the gross margin level RBC.
Hello this.
This is pattern. So let me first just some of the numbers and then TJ can also add on some of the you know comments.
As you mentioned I think right now we are still focusing on growing the pie and numbers more than the ARPU at this moment and renewal percentage because is adjusted for US year have the video right now is.
Pretty high more than 90% past all kinds deal.
And with Us and.
Going into the second half as I said.
In the first half we basically compete the 50 a key accounts already so we're looking forward for another 50 actually in the third quarter. So thats why we also raise our guidance a bit and that's the current situation margin Pogo, while it's still stood at PV high around you know 60% with this.
Particular, seven basically as we mentioned in our we Mark It was like a few times almost three times higher than our marketing solutions gross profit margin. So I would stop here and as CEO TJ has anything to add on.
Our current wore me all tied all of which will watch on juices, contending with you or longer achieving the digit Russian shorter region table.
Thanks for your questions I don't have any further opinions on that question I think I have.
Offer a lot of details about in terms of assets now.
Thank you. Our next question today comes from there probably with Roth capital. Please go ahead.
Yes, thanks for taking my questions and nice quarter could you talk about in filling up in the last question the revenue base for your enterprise solutions.
What is the growth in existing customers.
Versus growth from new customers and then second question maybe for Terence So.
Guided you on your EBITDA is now.
Nine to 12 million for the year, you've already done seven and a half.
So this sort of implies.
Wanted to have to Florida has in the back half of the year I'm, just curious if theres any incremental investments.
Your operating cost came down year over year, maybe those anomalistic because of cobot, but I'm just kind of curious if there's any large investments in the second half a year that maybe we're not speaking about thank you.
Thank you Darrin, let me answer the second Pantheris and as you aware actually ways to guidance of the adjusted EBITDA number and we already comparison point 5 million. So he actually in high that go into the second half for us. So we're pretty confident in our bottom nice second is.
We still continuing where well I will you know operating expenses. The first is that as you mentioned, we actually big a little bit prudence in terms of the expensing because of the new business that we are developing on the enterprise sites. So we properly was sitting in for the you know.
Expenses to grow this business that moved further that may actually.
You grow some of the you know bottom nice numbers, but we are still be the confidence because of marketing solution will be able to support that growth and with some self generated cash to help us to view this business further.
And that's on your second part on the first part I think we basically mentioned some of the growth as of the lumber us and right now the growth is mainly coming from new clients and new lumber kinds, adding to our pipe rather than some existing science of course, they are we doing the numbers, but that contribution relative.
He is do like 10, 15% only and we bought a whole you know pipe coming from new accounts, mostly when we add on new clients and we basically you have more you know a revenue coming from the enterprise solutions.
And our next question today comes from Rome, Kingstone with Allianz Global Burgers. Please go ahead.
Hi, guys, great to see the strengthening profitability.
First what percentage of your enterprise revenue comes from U.S. brand new companies into President Trump's Executive Board will remain in place regarding Ted Ted do you see this impacting demand appear enterprise solutions in any way.
Hi, Brian This is Terence I do think that that would have less impact on our enterprise solutions because right now enterprise solution is still.
Pretty much you know only working.
Within China or in the Chinese transitory, so I think the precedent tromso or the.
Some clarification.
In in this one or two days and maybe it may not extend to debt extreme and it may be you know stopping some of the.
Business in which at and T. talk which are basically to oversee ratios of racing and though inc. and we don't have much business actually on the overseas Russians only 1% to 2% of our business are on that we chat and two topped our phone so no matter marketing or enterprise solutions basically the impact would be minimal but.
To be honest I think we're not in the best position right now to comment on Q. We have further cover occasions of what that executive order will be men.
For for the business for Chinese company or for multinational corporations, So I guess that impact with the minimal at this moment as we basically based on the information available.
Thank you. Our next question today comes from Poland, Lu with China Renaissance. Please go ahead.
Hi, TJ Terrence thanks for taking their question I think thats why as many regard your enterprise solution.
Since the start of the global pandemic would be.
Hearing global SaaS companies talking about structure changes of their clients. You know customers are enterprises are accelerating to migrate to cloud based services I just want to us to if you have seen any such trends you know and is sort of structure changes of your customer behavior.
Among your enterprise install base.
If there are any services our product that used to be undervalued by your customers are now being highly appreciated.
You just sharing some examples and colors on this that will be very helpful.
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Okay.
So as thanks for your question, let me just answer your question real quick so before to condemn it we have already seen our huge combined.
From our clients in terms of the data analysis and also how to use the offline later to serve the anite activities. So after depend on that we have still just in mind is getting larger and four for our clients actually Mark science.
Yes, the needs to switch there I'll fight on surface offline activities to online atrophy.
At the same time can no longer weight, the our flight data are.
They want to use more I'll fly the data that they have accumulated in the past to serve their ani activities and.
Because a lot of our brands needs to have a lot of a flight data before.
So so for our enterprise solutions a client we can just held them to better meet the combination of the Ani theater and and the offline later.
Especially you switch the apply their Q2 serves the online surfaces and for some of our client there is especially interested in their surfaces provide a meaningful brown stores and also other many program surfaces. That's also something we can help them.
So we have held our clients create a better purchasing environment for their consumers and.
So this is one thing and another thing we.
We have also held them.
We have also provide better backstage surfaces to down to.
To satisfy their needs.
So not only degree Thats why Danny interest of the leader, we're also very mature in.
Operating in this area so.
Yes, so we can help them.
Brent their market and better deploying their proposals and plans okay.
Thank you are next question today comes from Nelson Chung with Citi.
No.
Hi management. Thank you for taking my question and congratulations.
Yes, so it stops.
A question on your margin.
Can management explain more.
The drivers behind Youre saving in the operating expenses.
What is your from bye.
Operating efficiencies of the company or is it driven by the synergies between the two.
Yes.
For the enterprise solutions, what would be the biggest cost component of that business and what would be the trend going forward into the second half of that year. Thank you.
Hi, Nelson this as Terence Thank you for your questions.
In terms of the margin profile I think on our marketing solutions margin profile is always at around 20% to 24% as we already present to the markets and for the enterprise SaaS solution is a relatively high margin business, but is not yet with the stabilizing.
At the around you know the 60% on margin profile is pretty much attainable right now and you you asked about operating expenses our base of the operating expenses, even look at our you know recent quarters.
Going back to 2019, we are sitting a relatively stable operating expenses per quarter aligned properly you know 50 million 16 million cannabis numbers and that's like our base case, right now and to grow purposes first as I think that would be quiet stable numbers.
In terms of this size.
Part of or the enterprise solution popped a major cost element is still basically is.
Human resources, basically the headcounts and the overheads and now we don't need to pay the media expenses as I'd like to media or the marketing solutions and I think.
Thats the biggest cost component of the enterprise solutions and I Hope this answer your questions.
Your next question today comes from both.
With Oppenheimer. Please go ahead.
Hi, TJ tens Lisa Thanks for taking my question congrats on the salary shows.
So my first question is about marketing solutions I notice, even though our gross viewing but back to John RMB basis, but our revenue actually our increased creek here. So I think there was due to our increased take rate that area. So I would like to know where it is trend going forward.
I notice we mentioned, we focus focus on the high quality cost numbers. When this thing we can.
Stock growing the gross peering and then my second question is about enterprise solutions I I I think I heard we are trying tree was more into this business and bad maybe do some virgin acquisitions in this area. So just wondering what kind of investments or the equity.
You should target that we are considering can you give more color around that thank you.
Hi, bulky this is Terence I address and top line and then I will let TJ to adjust your part two and first of all our gross billing is still growing if you look at our first quarter total lumber is still only 20% pass.
On your growth for the first half so the gross billing is due growing but on the second quarter and we focus more on the crowded and right now we do have the scale for us to have the capability to basically screen food the best quality Keyence particular under this uncertainty and volume and I think Thats PD.
We are important for the company to ensure the margin profile and some high quality clients. So that's why I would take way is higher because that we pick the best you know kinds and that with high margin and also because they are more people wearing the performance driven solutions right now on the call.
But and during all these so called specific actions more those or the SCPA or CPC more those basically we will be able to recognize more in terms of the revenue on a gross basis and Thats why you see a slight increase in the take rate property around 5% to 10% increase comparing to.
The same us first half of last year. So that's like.
The current situation and going into second half, we believe when the market is more normalizing and that some of the branding customer also coming back we probably will see the gross billing and other grow Shang coming back again, and particular with our strong and strength on in terms of their performance solutions.
So I think.
I would now has to TJ to answer your questions on some of the M&A initiated.
On our strategic acquirers.
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Hi, This is Peter Thanks for your question, so as I mentioned earlier, our focus off surfing the enterprise.
The enterprises, our client of enterprise solutions right now is to help them mallards bathroom, Alistair full cycle management of the of their consumers.
So to held down by acquire to consumers and also confer though and also lead them to guide them supporters and improve their loyalty and also.
The tandem and also increased their purchasing right.
So based on that.
For our strategy of M&A, we maintain a we mainly focused on August four areas. The first.
We'll focus on the eyes for consumer analysis, which centered around there which centers around the consumers will put a lot of focus on this.
And also for the secondary or is the creator and kalo pratfall end to end solution.
Because as we all know the killer whale or life screaming has been getting more and more popularity globally and we all now a nice status is there an acute space. This opportunity ahead. So we believe that being a credit with this technology to empowered to creators and kill out well how.
Brain more traffic.
More efficiently and Kwame market this opportunities for our.
Customer and if they're airware, if the customer experience now attrition, which is also core CRM.
So in China, our customers and kinds actually have higher demands and requirements to stay so not only did see our Alan it's very important M. A C out. It's also in a very important that's why we've tried to focus on this.
Our Q and the last area is a customer, especially.
The last area, it's the mob cat products and services based on Leach.
All right so.
So our vital questions very comes from carbon work with Bank of America Merrill Lynch. Please go ahead.
Thank you very much management for the presentation, it's extremely clear and also I also congratulations on the fantastic results.
I was wondering how first was very good to know that Thats. Your broken out the SaaS revenue guidance for third quarter or seven and a half Tonight I have million for third quarter is very strong on a quarter on quarter basis is up 50% to 90% quarter on quarter and you also turns I. Thank you mentioned earlier that you're looking for strategic.
Your growth opportunities.
Wondering just mathematically or those opportunities already included in that guidance.
And.
Second of all in conjunction with that.
I clicks trading on a multitenant very cheap multiple still on 20 times 20 to 22.8 times EBITDA revenue.
So in looking for these opportunities how valid conscious argue.
That's the first part the second part is.
With the share repurchase program last year your purchase for $4.4 million US dollars stock. This year you purchased a I think point 7 million or is that can be more second half heavy this year. Thank you very much in congratulations again.
Thank you Catherine and first of all in your first question is to be honest, we haven't yet, but Jake some of the merger and acquisitions potential and mostly right now the guidance is based on how you know organic or some small investments and in terms of the business.
And your second question is about you know our repurchase program and in the first how we'd be is opened 7 million U.S. dollar share prices. So we have more bullish going into the second half if we still believe that that we have under value and.
We probably would trigger but you would lead to Bob to you know discussed Fred but right now I thing to be honest I think.
We do seeing our you know.
Operations, I'll add pause or being recognized some more by the market and hopefully going into the second half of the year. These at both will be recognized further by the market.
Yes.
Thank you ladies and gentlemen, this concludes our question answer session.
Permit conference back over to loosely for any closing remarks.
Thank you once again for joining us today, if you have any further questions. Please feel free to contact I quakes investors Relations department due to contact information provided on our website. Thank you.
Thank you Ma'am. This concludes todays conference call you may now disconnect your lines have a wonderful there.