Q3 2020 Bilibili Inc Earnings Call
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Please go ahead.
Thank you operator. Please note the discussion today will contain forward looking statements relating to the company's future performance and are intended to qualify for the safe Harbor from liability as established by the U.S. Private Security Litigation Reform Act such.
Such statements are not guarantees of future performance and are subject to certain risks uncertainties assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion again.
Discussion of the risk factors that could affect their liability business and financial results is included in certain falling of the company with the security and Exchange Commission. The company does not undertake any obligation to update forward looking information, except as required by law during todays call management.
We'll also discuss certain non-GAAP financial measures for comparison purposes, only for a definition of non-GAAP financial measures on a reconciliation of GAAP to non-GAAP financial results. Please see the Twentytwenty third quarter financial results news release issued earlier today.
As a reminder, this conference is being recorded in addition, an investor presentation and a webcast replay of this conference call will be available on the Investor Relations website at <unk> IR day availability dotcom.
Joining us today on the call from deliberately Finnair management art and its to reach and chairman of the board and Chief Executive Officer, Mr. Collyer Lee Vice chairwoman of the board and Chief operating Officer, and Mr., Sam Fan Chief Financial Officer, and I will now turn the call over to Mr. fan who will lead the <unk>.
<unk> remarks on behalf of Mr. channel.
Thank you to do tend to everyone for participating.
Twentytwenty third quarter conference call I'm pleased to deliver to day for opening remarks on behalf of the true.
We feel golden opportunity to expand our reach in todays market to feed this window will step up our posted EBITDA growth with a focus on for the growing our content expanding our brand awareness on the type of channel acquisition debt.
We expect total is good for you on call for peak season.
As a result.
Our user base we call.
The August however.
Exceeded 200 million milestone marching on yield monthly report.
Total revenue for the third quarter were 54% book and good night to sales amending and the deal you will have 42% to for two 3 million both on a year over year basis.
Mobile users also continued to grow at a faster pace.
Mobile and the views were up six to one.
Per cent Yoga class hundred 80 for me in the third quarter.
Our leader with a highly engaged spending and average on 81 million per day on our platform that can really be one off debt decreased video communicated for.
Really true in China.
The call is a growth of our new growth not only reflected on the high inventory levels, but also on the page views on conversions.
And to use were up 89%.
On a year, which were 50 million in the first quarter.
Our premium ratio improved to support for its 7.6% from 6% to 2% during the day since early last year we.
These include the true 20 of our top line expansion and in the first quarter revenue reached another record high of RMB three point.
True clearly upselling to four percentage year over year.
While we grow our top line, we also improved our gross margin growth.
Gross margin was total 3.6% in the third quarter up from 18.9% in two or three losses, and what we are getting even more operating leverage.
What BBB have become a household name among young generations. The on large groups on potential users who are just beginning to them about us.
The JV commodity upsize, our anchor and will begin to cash cost you have a wider net.
Today, we are getting traction weve more diverse democratic the ever before.
Marketing campaign, that's had on newly introduced the slogan BBD order, we do through like has helped us to define and promote our pure commodity audio.
During the third quarter, we launched a series of online and offline campaign to promote our brand proposition to an even broader audience across different demographics.
This strategy is working.
And we are telling these efforts into the fourth quarter.
Our industry partnerships are also stressing ocata offering and growth in.
In August we entered into a five year been this corporation agreement with quench media through our strategic equity investment.
In which we can improve the book hockey rights to caution on existing and upcoming high quality movies and TV drama Theater.
We have also entered into a three year exclusive partnership with Dr., Dan for exclusive My book I think rod of legal matter What's championship.
This has significantly enhanced our provision and brand in the important use for general.
Especially during the EPS 10 this year.
In October we deepened our partnership with volume by signing on strategic agreement with your subsidiary and class.
The green more premium enemy content on mobile games total users.
These expanding alliance not all that you reach out on the operating but also demonstrated that both domestic and international industrial leaders have common recognition for our unique value in China from the tumor market.
While we are working to build on our brand and attract more users increasing demand for high quality video content bodes well for capitalize on the growth prospectus.
China represent the largest on a video publishing the work.
According to the Phoenix reported by the end of first half of 2020 near 819 million users in China consumed on a content video format.
Software not walk in a smarter how will enable more simple content creation and consumption.
Our experience over the past decade has made us a pioneer of visualization movement.
We are committed to capturing the market opportunity by further execution our growth strategy.
Which would be well youre comfortable with from the longer.
With that overview I would now like to provide some more color our content community and commercialization activities I will begin with a review of our content our fuel TV content ecosystem for the cornerstone of our business and the man engines power how growth vehicle for.
For the first quarter, we had approximately 1.7 million content creators of loading 5.6 net of video promote look.
Representing increases of 51% or 79% respectively.
For the year over year.
We continue to cultivate our notion of soil to a low coming creators to grow and force by.
By promoting our genetic assay admitted nudity algorithm, enabling the highest quality of original content to quickly contraction and expand its embedded.
In the first quarter the number of video debt achieved one relative yield increased 73% and the number of content creators with over $10000 growth, 75% growth year over year low.
Meanwhile, we continue to help our content creators on back to monitor our rewards for our cash incentive program and our newly launched advertising platform sparkle.
The March making platform designed to better connect advertisers and can connect greater growth and bring more commercial opportunities for operators, providing a safe and scalable portfolio for native app.
Each of these components help us maintain and grow this important beauty ecosystem.
Our total five verticals in terms on video views in the third quarter were lifestyle Gam entertainment enemy and pack a knowledge. Among these tuck on knowledge will be emerging on one of the positive growing sector low.
Moving on PBB is also true so as mainly growth Mike on track to our power from looking for informative an exit for educational content.
In the past 12 months.
Our nearly 100 million growth across different age groups, what knowledge related videos on baby, making us one of the top lending platforms in China.
While we enhanced our content offering our leading verticals, we are actively expanding our content reach in new categories.
The automotive sales.
Total was one of them into three video views in just general grow roughly 477% year over year disrupt class, our longevity and the staying power with users a day metro.
In this case, our cone JV users have come to a life stage for auto consumption.
This transaction also help us on truck wide demographic and opened a new advertising opportunities across broader industry group.
Turning to our OTV Ali less money hockey content is paying off with our stronghold in just general relative to produced on these elements not only on truck massive new users on also become the most effective driver of premium memberships.
This is especially true for sale for dual tranche enemy capped.
Trapped with book Yellow generating 260 million views you can just for three months since its launch income.
Timber we were excited to welcome pursuing TV drama low for young for interest on integral to our platform, marking the growth TV drama to for and our collaboration with a bunch of media.
Yes, sure whether you need to hit of the release and the trend is number one on PBB most searched for weeks.
This show has generated 410 million video views setyan.
New record in this category.
We are also reaching new highs for documentary anniversary show the common our value for self produced the commodity show for youth shortages should that received outstanding reviews beyond our typical community.
Generating approximately 410 million video views and eight.
8.2 million equally true up this success not only in reach our beauty category, but also attracted and cloud.
Our growing number of new dishes alluded lover looking at documentaries. We believe our recent agreement will be fees due to the strong endorsement our documentary quality and will further enhance our content library.
Also building on the success of losses Darla, we'll be arriving another margin yulia, you've got a value that we expect this year will bring our commodity more assessments and Troy.
Turning to our community, while our user growth continue to drive we set a number of moving costs across our key financial metrics.
In the third quarter, our digital video views reached $1.3 billion up 77% year over year, our user generated a 5.5 billion monthly injections. So what do you charge comments life and baby them on post of 117% year over year.
A number of our official member is also on the rise as it end of third quarter, we have now to fail. The milling operation members will pass our hunger question again.
On the flip up 56% year over year retention levels also remained strong well above 80%.
With a decade of experience under our belt, we believe our commodity remain one of our biggest competitive advantages and most in the evolving online as income industry.
Turning to our commercialization progress.
The growing traffic on our platform for each are being as low as well we go out more premium content and services to meet our users diverse entertainment.
Our debt business revenue for our mobile campaign as well on the 1.3 gearing up for 37% year over year accounting for 40% of our total revenue.
During our massive Gan lower base, we continue to expand our ATM offering in diverse Gerard we maintained the popularity of our exit.
This team titles.
Our new blockbuster dam, Chris has come net income DMG continue to resonate with our fans and attract new leaders at toward another strong Testament that our robust for distribution and operating capabilities in the if you channel.
October we renewed our exclusive as Gio license with any class and the celebrated again for anniversary.
Additionally, we launched a few new titles during the third quarter, which include.
And domestic balance UN dieting and ours up his intention on which have been well received by our users.
As for our GAAP top line, we have 10 titles in diverse geographies that have acquired approvals and are ready to be released in the coming quarter.
Next in queue, if was art online digestion planned.
Blended for launch at the beginning of Tavi pretty well.
Looking at our joint operating accounts.
We continue to work with the leading game developer to bring our user premium titles.
Our solid reputation.
Among them or provision capabilities and high guesstimate gambler demographic and may be we believe the total platform for growth in operating partner.
September.
As as men Andrew a partner in China, We began jauntily operating the highly anticipated dilution impact you mentioned the massive success obligation on now operations give another feeder.
On the near term John titles include a plan to get to build on that is how reporter.
Turning to our bad debt it.
Revenue from value increased by 116% year over year, reaching RMB 918, many in the third quarter. Our growth was mainly driven by increased the contribution from premium memberships live broadcasting and other value added services.
Although our brand them continue to spread we're attracting billion partners and low broadcasting hope and adding new enterprise growth content for growing library.
This book is a Prime example, our league of Legends watch on Asia by Bucketing dry has secured important place for BBB in assuming you spoke gerra.
I will showcase our capabilities more east Portholes and lover. According to BBB you multiply book has experience.
For the entire F 10 Championships do them total live broadcasting pay per view relative to the again increased by over 300 per cent compared with nine last year.
Were pleased to see our user growth in wind in the us pay for advanced all exclusive access to our TV content by the end of the first quarter. We had 12.8 million per member of 100 at 10% year over year on.
As we roll out more excitement exciting you know content. We are confident that we can continue converting more paying subscriber.
Finally, our advertising business, despite challenging macroeconomic environment, we delivered another accelerated growth on highly value.
Revenue for on the settlement reached RMB 558 million per hundred 26% year over year.
Our efforts to split our Brendan not all that talk to why the user group, but also in class many new business partners.
On the Tigers across different industry. According to BBB to tap into the converted young demographic of stockpiling verticals in the third quarter was E commerce sales.
And Bruce Willis GAAP.
On the products as an automotive.
In summary, we are on excellent growth trajectory with solid execution of our user growth initiative, we continue to improve our brand equity on the reached new highs across key user matrix the industry trend toward legalization in working strongly on Favre and we provide the most unique commodity experience.
For both content creators and users.
Capitalizing on this momentum we aim to further grow our bread enrich our content offering and unleashed a growth potential of our expanding on our entertainment ecosystem. This concludes Mr trends for Mark I will now provide a brief overview of our financial results for the quarter after on the 20.
Our total net revenue increased by 74% year over year time be 3.2 billing exceeding the high end of our guidance with our non-GAAP EPS accounted for 60% of the revenues. We are pleased with the commercialization progress of our net debt offerings and our ability to convert our on that translates into paying users.
The average number of months like paying reverse inquiry by 89% year over year, reaching 50 million in a for quarter.
Total revenue increased by 63% year over year to RMB 2.5, operating revenue sharing costs a key component of cost of revenues were RMB, one point to getting a 77% increase contemporaries interest on the 19 gross profit increased by 170% year over year from B 762 million.
We are seeing more operating on average from our diversified revenue stream with more revenue contribution from our higher margin business as well as additional income from paying users our costs for the margin continued to improve reaching 23.6% in the first quarter total.
Total operating expenses increased to RMB 1.8 billion up on hedges at 8% from the same period of 2014 telemarketing sales into on the 1.2 billion, representing a 227% increase year over year.
The increase were mainly attributed to the increased channel on the marketing expenses associated with our App as well as well as increased expenses for our mobile games as sales and marketing personnel.
Building on our brand appeal amount for the audio as well for key initiatives intended standard this strategy as our for the has far reaching Mark again that we think will have long term effort.
We plan to continue to build on this momentum to further strengthen and expand our growth with growth cycle.
General expenses were RMB 253 million that led to a 55% increase over year. The increases were primarily due to increased headcount in general and administrative personnel and increased share based compensation expenses.
R&D expenses were on the 401 billing for the less at 52% increase year over year increase were primarily due to increased health on research and development personnel net losses were RMB 1.1 billing for the so called operating 20 compared to RMB 461 in the same period on 19, adjusted net loss, which for the non-GAAP.
For that excludes the share based compensation and amortization expense related to intangible assets our class through previous acquisitions for the RMB 990 million compared to RMB 340, cementing within period alters on our team basic and diluted net loss per share on these 3.08 adjusted weighted diluted net.
Net loss per share what on the 2.76.
As of September 13, 2020, we had cash cash equivalents from deposits as well as short term investment on RMB 14.1 billing on U.S.
Dollar 2.1 billion compared to RMB 8.1 billion as of December 31, 2019 on.
Monetization capabilities continue to improve.
As we leverage our growing traffic base of users across and including for the spectrum of demographics.
We will also continue to roll out more premium content services to convert more paying users.
We believe that over the longer term with monetization efforts hyping user conversion rates and scale will yield an improved bottom line.
With that in mind, we are currently projecting net revenue for the fourth quarter of 2022, big reaching RMB $3.6 billion and RMB 3.7 billing.
Thank you for attention we would like now to open the call for your questions. Operator. Please go ahead.
Thank you Sir ladies.
Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press the pound or hash key.
For the benefit of all participants on today's call. If you wish to ask your questions for management in Chinese we seem to see repeat your question in English.
Your first question on queue comes from the line of Daniel Chen from JP Morgan.
On your piece at your question. Your line is now open.
Hi, This is Alex from JP Morgan.
I have a cross channel regarding the use for of and.
The user profile of the newly added for users.
So you guys have being continuing on delivering very strong user growth in the past for several quarters.
Can you talk about the typical new user profile that you you guys have.
According to recent quarters.
And what exactly is the value that you offered to these guys to drive.
User growth also lastly, what's what's the user growth outlook into the next one to two quarters.
What did you identify HRG that's for sure.
From what should you could you would you that you put on John Bush for eager for each on Genconn.
Its users are for each on challenging that you could share your share.
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Yes, you know you partially true for me on that.
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We do share a woman's MACOM, we like you totally on for this year.
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Hello, Nicole every day to go into a channel Orlando for your quarter apart on countries share the moving gently that the on behalf.
Operating any branches that are easily soil the whole woman the ceiling value on quarters or convenience for the opposite Oreo the whole, mostly on I kind of artist for formalizes homes Yummy on for equity documents no.
Rob Doyle passenger share like retention.
Having businesses.
Due to the wonders for woman homemade are typically utilized to refresh for use on the snowboarder from these countries and income these results on that.
Yes sure.
Sure, let's for certain side, then the profile at the new users actually hasn't changed much compare share historical data on the average age of our users answer and step out 21 years average and the average age for the new Commerce, It's about 20.
For salad.
On very balanced geographic mix, Reg FD out 50 per cent easier coming from and tears city and that low.
No typically we've seen bad.
The users the above parity, it's actually gradually increasing net contribution year over year EPS.
He is realized through began seeing on quarterly dosing for it is estimated to manage with the New York moves into the later on.
For the field for bases on from acquiring there.
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They go from two centers, who do that kind of thing on woman the need for the bigger turned out to be true, though have some class. That's another come under the also on the through Q4 EBITDA neither should view on.
For the summer selling season for this review Google is on the social boxes on carbon reduction just on call.
No.
We've always been on.
Attaching our users.
From our content on the reason why these are comfortable as income and is that they can find what they like on.
Net patent constantly like on demand and for example, animation ddtank in digital content et cetera sales.
Based on the data.
We have been experience on very fast user growth on.
The quality side with our sales maintained a very high quality EPS growth based on the user retention their engagement also the pain conversion rate.
We are quite.
Happy and satisfied with our high quality growth.
You enrollment has really face on CMS on the good news from noticeable when does it go from rotor from is that from growth through two broken However may low three low hot for what they want lender you think were going to die, which is true as your cash flow Brenda.
Our total hydraulically handle dessert sales at two times per leadership from high.
You see growth, becoming here on the without you should do on your only present value the shouldn't have announced value you're free to for either true today that acceleration.
Because we have a very healthy sales that sustaining ecosystem, which is our massive content creator its credit continuously creating high quality content.
We are quite optimistic about the user growth.
And as we look into the future and audio video lighting mission as an in average an average of a trend.
Deliberately as a pioneer and video community industry. We are quite confident we'll continue to deliver on its high quality growth.
On the Chilean is on this role that drove the growth in low woman. The vehicle Nucor comes on in the go to for Aarding already man woman drilling on goes on them value.
Aarding our union on the human number two the other R&D.
To for Donald for Canadian Peak handles this early on in your number the only in one is on the actually will be able to Houston ship channel lunch on on our unique.
Moving on.
Moving on ensuring that we consume realizing on the mobile.
So net last year, we have a set on use their target, which is to reach a 180 million for 2020 and 220 million for Twentytwenty one.
We have already achieved on.
Taking this year is our target and we are also confident to achieve next year next year is our target in advance and we are.
We are likely to set up a refresh our new user target and beginning of next year.
How about share result.
Your next question comes from the line of he ran Chong from Citi. He ran please ask your question. Your line is now open.
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Gentlemen, there since had too soon he made on saw your system sales without for cool arch for no acquisition candidates in the data book the day completed shortly shop.
Instruments for sequential net trade book just from a concern for you know for 2016, a debt bump every biosecurity sales outcomes for kind of talked about dose expansion and then always true now for most of my comments on current share tuners illustrative with well on them by your quote on because.
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No. Once this percentage other silicones management for taking my questions. So have a true question historically content on it.
At this time.
So.
Historically did have a day focus on total mass win per country on a capacity, which on a serious from a movie.
On increased net with say some premium content coming out for example, with our GAAP for years, we're on.
Sure and also run for young from US. So that's also a tournament for this pause contents just share your thoughts on opinion on should be on a non linear on on what flow to upgrade it went our ecosystem on that.
Okay.
For the spread take a step back on a state abroad and on share push for video is a 100% from two to see where today only deal. The majority the PVD attorney from license content. So how do you see from.
On the deal on if.
We'll expand our user base to a much bigger payable income from India, what ratio two things for what the Btwenty PUGC on or Judy and on what hit on implication for content. Thank you.
Day, so what other when he's already shown how should share on habitrol settings as organic Simpson on should these on the personal digitally magic ball for appeal, we view on the healthy to dollar that began we also the value the only reasons for that.
And just watching I shall be it totaled a net users and he can share. The shipping go that these that seasonally the bank. It's always an easy addresses at the time that was on the child and they got to ensure the shifting Oh, that's either so you will know which issues and you don't for the show Chile, Colombia ships generally not only on the old you only have access.
Total.
Before we get into the strategy of our TV business I want to rate and for site video assets. They released Corpus, which includes PGD OTV and live broadcasting and the Rand upgrade that we've been focusing on this year is proposing all innovative.
Like which actually increase short form video long form video metaphor.
And well continue to cultivate and moving sport content offering for video services based on users' needs and we'll also continue to invest in.
Archie content.
So there's no really total interest yeah. I also think there shouldn't be appealed the decision on how to do on I saw it our total shown how users on on the whole thing Todd Jones on T. shirts issues on Gen counsel, yet on how the total now so total shipping out on down or not how you should be done for OTI me that he got on total.
You got those shifts true horseshoe augmenting the book about would you be the Shanghai confuse either Sean had interactions with the battle.
I'd also like you and for site Act ARPU, Chile content creator ecosystem remains the core of our business and from the engagement level and our active content creators content submission on this key data continue to show that we have on there.
Our very strong position.
Position in PG ecosystem, and the P.T.V. component will be clearly believe unique advantage in running our own TV business and for our future.
As we look into future for there to integrate our OTV content ecosystem with RP TV content.
No GLG realized for the hardware rely or how should we focus on that just hoping way Cushing now from a high level. They have so much on debt is our duty acquired the IP by yourself wish on high. This I have the outlook I want to see losses about our ability to 14 share Georgia is contingent on the tied up I guess it all shows up on.
Our real quick ones on the ROI guns on go from say that's on Hawk for.
For that.
On T.V. strategy.
Moving forward, we'll continue to focus on self per year self publishing and work will be on poor weather driven IP driven and will also serve our content ecosystem. We hope that the recovery produced will be a label for high quality content and addressing.
From time, we'll be focusing on improving our ROI and start paying conversion.
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For sure you can try to Tantalize for design wins for our young for the answer is Oh margin dilution from held up on made its looking for yes, 100 absent lay social on appeal in high on taking downtime you actually about issues fundings on cash on its own congrats for talking should that build on that so the true control.
EBITDA, how should a year total on taking on how he had a whole agents or so for your angle what goes on up what you show just how to on any key the well we havent seen views are well suited for himself youre going to watch how should you know for production Sheila Your channel.
So they really started to get into the south production for self produced Chinese enemy back in 2017, and 2018, we started getting to that documentary sell for an action and 2019 into Mirage variety shows on production and for it this year.
We are making few accounts into the real real person TV and movies for the Internet for the Internet users and we have already from warmed up very integrated methodology to how to get into certain verticals as for now they really.
He has already become the go to platform for animation and documentary and user already have the perception that evidently has the best in this category and for this year our attempt in that TV movie and variety shows for example from for young and BRAF for you.
As generate at a very good feedback from them on our users and received very high ratings across all platforms and this is business has been Uh huh.
Sure Mark for our attempt in a time into new new content categories for those content on the revenue from the premium membership Asheville assets revenue from sponsorship and advertising and actually on the right.
And it has already exceeded our expectation we are quite confident to continue to try out more new content offerings in those categories.
So for those on a downside to dollar GTT JV chunky on adoption, although I like on to establish OTV babies on taxes should acquire on telephone calls our losses. However, if you give me on this on how to find book I consulted yes on keep on July sort of off for you and I won't go away. So.
Oh, you need a million homes on going on so he will just end up at least for the fall short single assets, Yes, I have to do the same thing, though tissue its own that's all for U.S. issue that Jones, our chances that you ship on CBU Orlando play on those shows on the way I for one dollar content about Boshell total Jones on.
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Thank god for someone to come down on the high sales are for you and other than the on say doses on true say the transit has about share buyback so no.
No that was also is on the one the industry order book dollar generals on physicists spouses zones on that that session to make up for what are some of the layer on those for all of our core will be total will change on the turned our guys on sito play ball shop share value Johnson on them.
So on the value for GB for diligently I believe that there are several factors from one at a price premium memberships advertising revenue new user attraction and Ah that add on value for our P value TV ecosystem as well as IP.
January generation.
And the short term, we think we have already format virtuous cycle, where as a premium membership revenue and AD revenue has pretty much covered our old GB content cost and our first three quarters. This year operating cash flow for that.
The first three quarters for this year as positive and asked for our membership we have achieving our have achieved outstanding results.
Yes end of third quarter, we have 12.
12.8 million paying paying member premium membership, which grew 110% year over year and the quality of those member are also high on about 80% of them have signed at the end you membership on automatic renewal on membership.
As for the sponsorship and advertising revenue associated with our GP business true, 230% year over year all the hot.
All of our key project has become a very valuable advertising outlet stores for our advertisers. So in summary, we believe the OTV has very important strategic role in our business.
On the whole shown high jobs relies on local artist OTV the yields for the New York play well for Jones on larger which is a high show Yoshi Dominion South, Florida, So I'd be they'll show. He turns all these actions on that on hockey I go talk Yeah, Hello, I was on high speed all the phone cash on interruption on corn crop not quite down one day launching the star Wars why.
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She has reduced yields on your on them.
Sure on the.
Okay.
Oh Gee these high quality content actually started very very well for our user growth and for example, the cap reported that Chinese enemy and run for the on of this on the latest high quality on TV content has been attracted a lot of news.
User coming onto diligently and once they joined the literally the majority of them say on billability to consume more PGT content and actually that the new users that were attracted by those have to be their retention and quite debt.
Oh, Yeah that you saw on tie those are the cash is usually short housing for that challenge for us. It's only for the paint Lady hunch offshore schedule shorthand for the pant leg tissue you allow you to on the talking that's just hold on to ensure that the adult day, the India only true they want all the whole JV. The Jones on how we see what other people do you need a Shanghai.
He will be a formal are from a nail on late either both on total Assange, Yes, we'll do our total you did I apologize because you saw on flashing therapy that I don't on the units on labor job not homes on whether the thoughts on the fees on the thoughts on the IP ride on what she shifts IPO, Josh a place for Yankee and child on me.
Some of these assets heating anda on cautiously flow range, how high she's had assumption, yes, although income by threshold on gotcha. So shall we achieve all those other two ships just on Monday, you are sometimes Josh is a true the T cell.
As for the variety shows from for years has been quite successful for attempt for deliberately despite.
Second for variety shows or specifically rap related variety show has been has been around the industry and there's few precedents for we are still to make can you break through in this verticals and ARPU TV content ecosystem continue to rain force.
The the fact and influence at this you show a bottom for the derivative content per produced.
By our content creator the over on video views related to that your relative content has reached Oh on year 300 million, which also help us to further expand into the music category by attracting a lot of music lovers, a musician to joint family and.
Offset for I guess for at this show, we also generated quite decent our sponsorship revenue in appetite advertising revenue and because we have integrated product chain ongoing daily we continue to extend the IP value by launching.
New music label waste and launching a series of offline concerts related to the show. So on the rebuild we were able to further extend and enhance the value of the IP.
Oh for my husband on you're seeing things on the old you need the Ikea attaches shop precise on coffee that much on how to keep pace on GAAP for for Yoshi on blocks you Shantanu since I am told on Celtic unfold. How are you channel dish order on TV documentaries on will be the Shanghai that you gave us a hold true it up off yeah, Orlando guys on the appeal TV.
Shanghai the old traditional high heels on where that Apple season for.
To summarize we believe the value of the IP can be further enlarged on dividends ecosystem, which includes game and M&A TV movies merchandise and multiple offline events and at going forward. We are looking to further into.
Great, our PGP and RGB content ecosystem.
Your next question on queue comes from the line of Binnie Wong from HSBC.
<unk>. Please ask your question your line is now open.
[noise] a range on change on Julia does on her first of all congrats on the amazing set of results and also strong on loan. It was I think the points ahead by 12% I.
I Wonder if you can comment a bit on the competitive landscape.
Impressive to see on a monetization right advertising live streaming or continue at a triple digit growth and if you look at engagement here it seems to be true to fit right. If you look at the time spent I think Q is a slight decline for feature initially is the strongest in the past years and D. U N. The you raise show also.
On to come down to 27% so anything that we should be aware of structurally and how do you see the competitive landscape among the different entertainment tough on evolved and especially as we see some of your short video and live streaming players are also very aggressive in growing debt advertising business in for.
So how do you see that you all understand that we have a very strong ecosystem here.
Just want to hear a bit more into how you see.
For years, it all getting more aggressive on more capital and how we see it. Thank you so much work and that's why it's allergy on.
Just on watch on pushing pushing or share.
Onto a feature on chunky Oh, all is a page on channel now wish on Johnny's not just for shock turning the page on the could you comment it turned out as you're on my fellow joke oncologists, Yeah lets you negotiate terms on the house I.
Just on we should at Delta essentially.
Sure on what kind of what you're going on for the need for sure on engagement you should take us on solid waste.
He was on T. doing on each and Fortunately on handle should take all that gets you to know what's on should I start your shoes, just on me, especially with your they'll find Inc.
So youre right now.
You said April he has a shorter she goes on to.
But you do acknowledge them for you.
On which is we'll type margin not just a single growth you should just show for my time Bob.
On the P. tie into your income.
Total teaching no growth digital advertising book oncology for here with US you'll have not changed your thoughts on just on on August one which is for you at all on the Alogent. So teacher went away.
Just a bit on socially accounts you could be holder pocketing. The algorithm that continues the improvement not get was strong for the piece on margin not well just on one each home Cook, Oklahoma French companies on on anything.
Hi, Tim.
Mm.
For Macy's on the than men do there.
Moving on the.
Okay, Dan on the new shortly for the Union Reserve true. This is not good zone.
But what it is you have a time spent so we want to see channel.
Shoot Hamamatsu normally that's up to the woman the value those or possibly even going on a whole whats it on the DRG buscher children zone the whole.
Local washer.
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Yeah I think this is true.
Yes.
Day.
This is a yes, if they do have [laughter] true.
Total solution for realize how would you don't depending on who the two young ku from today that didn't come to hide from the harder too onerous or if you hold on for brokers.
Overall on the table in both on the on this woman generally are you looking harder.
But you can see moving real growth you like on a meager with.
For the Roshe can do the however, it seems on each though how true since it is a true rural growth you can answer maybe seeking zone send us on that would be everything's on these on the calculations for yellow ABCD average Sidoti on will need on Brito her meager what you're looking for a hassle arcade not walking away Negro realizing there.
Shifting partially growth from go how here that you don't leave the hope would really be Jamie you guys. As you go from Liza fleet actual results from.
So as for the user engagement on matrix, we actually I'm seeing are quite positive.
On may check from the time spent which is 81 minutes.
In Q3 compared to 79 minutes in Q2, this year and over on a community engagement in Q2 5.4 billion times versus 2.2 billion in Q2 and also the matrix from.
Video views per user per daily is also improving.
In general we are we are still carrying out this high quality per user growth momentum in the third quarter as for the competitive landscape in the video business.
Competitive landscape has always been for years, whether as a competition between a b C or the assets.
They did they rebuild.
We have witnessed many players come and go and most.
Most importantly, we believe the trend of utilization.
The present, a huge market opportunity for the entire Internet services in the industry and as a pioneer in this space. So it really is well positioned to capture.
On market opportunity.
To me when that they are the Negro when he investment volume and the need for portfolio manager.
Dessert or what.
Really you looking hydrochloric on on lead times acquisition without relievers, yet to bulk for women.
Yeah on the machine losses home for it.
Inquiries on the true they'll slow her meager two true when you look but he's on from brilliant would shutdown brokenhearted shutdown from DAVA inquiries for some of whom the recovery the cash for the percentage of that runs on the other day.
Got on to hold on some growth for both on the that Brenda she's on the book from problems as shown on the whole focus on resource for the on the south on the on his own.
His or her sales or fees on them infusion hit him and they use on related I'm hopeful.
Overall, the two deals already on the so for example on will reveal will you go you got from higher Kobe. So in order for these on the candidates you pronounce from work.
Well there you go to price on people Rebooking. However, we're still on a phone call. We like the growth from the US you should I just low one.
As for the advertising business, we believe the App advertising.
Advertising value for our server platform actually is a reflection of the users value.
On visibility we have to capture we have captured that.
Just a set of users in terms of time spent in terms of user engagement as well as the user cohort. So thats not been backing up our advertising revenue growth at the same time, we continue.
True improve our advertising efficiencies launching innovative product.
That's also helping our debt to Reaccelerate, our AD revenue and as our brand perception and brand power continue to increase there really has now became a must in that platform across many average.
Hi users.
I'll pick on that yet.
If you don't change where the ship is original essential it's on.
Your next question comes from the line of Alex <unk> from Morgan Stanley.
Next please ask your question your line is now open.
That's true.
Oh right on Kelly, Sam Juliet goofing on how to get to.
Moving on when you jump on EWP on God's again.
I'll make a few thoughts on the human data can be summed on they've got josue, particularly from Chinese happy holidays. It should only.
On a home on there and be somewhat.
My stance on lung should be doing for on the argument on the you got uses for cash.
I translate my question.
So my question is regarding advertising business.
We have seen year over year acceleration for couple of quarters already can you share with us the drivers behind the strong growth and what's the outlook for Q4 and 2021. Thank you very much.
Gold is on TV established on Cibolo on call pay hold on to the total only revenue both sounds it sounds like she she's Jones outlet that's not only on you know the on he answered if he doesn't which on the alcohol three bids on for years. Our total if he bought any chance you can buy sell the Alco kitco on all other than true.
Well for me Dunking high density the jobs and finally on the Porcella, Yeah, Hi choices on golf competition on the team Hi, bulk on go higher EBITDA the business I'll leave that he's shown on John's knowledge on the shown here the only on from high that's yes. They show your Chinese you can tie that she's hoping for the future.
Not only the pouch on she just Saudi all yellow book also Jones on for the you go from drawing out the digital by holding for your annual GAAP, Chile that drag on that.
Well go here on your not so much on the yields on the at low the channel called Josh. So generally I feel like people would like also don't on Pony jumped on up I believe I also low.
As based on mentioned earlier on there there are lot of fundamental changes behind our advertising revenue revenue. So first of all Gary Lewis user continue to do for a high quality growth on diligently there about half of the young generation in China.
I've been active on the village, which is the Golden cohort for brand advertisers and also the the brand advertiser are able to build their brand perception and influence user buying decision on deliberately and we have more and more high quality content on.
Moving to reach from mass market audiences, which allows visibility becomes a modest impact on the go to platform for AD.
Advertisers and we continue to improve our advertising efficiencies as we continue to enhance our data center platform to better support our commercialization efforts and we will continue to roll out more innovative ad formats and ad hoc.
So despite the challenging macro environment has more people think it's Alex it's getting more and more tougher enough advertisements business. They really are able to deliver on accelerated advertisement revenue for five consecutive quarters.
Although the on Dalia no hard tissue. It on your solid yet truly channel sort of society on how should they be done why would a dealership delta while go way more profitable for you. So normally you guys are true don't already know Yahya interest. She won't go Jones on for how they didn't shame on us.
On our dealer washes hall, which on tones out he showed kind of a cool the Sally quake on one food. He shows over here. The Sally question on guidance you trace really do it.
Yes, you should share your father, Tom moving on which as you can see her well for shipping saucedo challenging high on just shift Australia. Both on average housing bubble for people that housing, although thinking would heartaches for.
Are you already on me I'm going to go down true cheaper dollars just from the Cook on Oh, Yeah. What we're told they have seen king's speech for ship on Chicago Philadelphia.
As we look into Twentytwenty, one I will continue to improve our overall integrated marketing capability to on standardized and scalable integrated marketing solutions and our continued to improve for acquisitions on single users and focusing on.
Improving the efficiency for our vertical players continue to improve our services service quality for different advertisement verticals and we're also continuing to launch a innovated scenario based commercialization net Mastercard, which is.
Who monetize scenario multi screen on.
Solutions.
So as for the Twentytwenty, we believe our advertising value has been widely recognized by our EPS by our advertisers as we looking for Twentytwenty. One we're quite confident to continue to carry out this positive growth momentum.
[noise] like.
Your next question comes from the line of wage on from Banc of America Securities made at least go ahead and ask your question.
Oh, hi bodies into account how awful she touched on that yet on what the only on once you go into for this out when salomon's on essential that sales from the marketing there just what trends are you where are you sure.
Sounds on Matthew sometimes die on me.
I don't see that works on cake woman shots on how to hold up going on that you saw sales on me on that.
For two ships now how does that once you for financings on that's helpful lap these assets.
To show on that you all may ultimately value to drive superior being tied to a you see on couldn't Oh, Oh, Oh shipping day go now on lesson pilots on dive on that she GAAP on merger two from me on your mail, Yeah, all kind of orders for critical mistakes on that and I just don't see things that I think Matt mentioned dr. from graduates from.
On results two questions first on the South American he can you give us from a breakdown on for sales and marketing to sway end up whatever channel next one for two quarters and secondly, I want to follow up on the competitive landscape do you observed on the shelf read your platform actually on.
Okay, so relative to build a higher percentage on.
No Oh me review Parchin I need updates you can share with us on here.
Okay. Let me take your first question you know for fall, we have you know for 14 billion.
On the cash reserve.
So and then we all thought she's alive positive operating cash flow in the first nine months of 20 countries on we have various everything on the calculus of LSW.
Our support our you asked on either on though for area.
We measure to for a replay.
Total attention for the ROI on your last mindset on marketing in terms on the snow for example, the cost product activation and debt conversion on their attention.
Our weighted Henry will drive well you know we are working we and the rest are those in Q3.
You know everyone on doesn't succeed on track for users. So we have anything backing you'd acquisition true in channels.
Moving to asked all the feedback channel and multi channel.
We often lasting ground advertisement to promote our new logo BBD ought to be utilized.
And we also attend and organized on no offline PCG related events in different cities.
On this summer as a result, you are you on.
For the harder on maybe we'll grow on like planting for milling quarter over quarter and also some of your surpassed 20 minutes.
As mentioned by Tony we see both the time on the membership conversion and advertising lenders to know you.
Well I'll use for steel.
Before.
General Scott Peterson for for the EMEA.
Our vision, but.
Well one last month on month, so in terms of the total.
The muscular appended to our total revenue well be.
Lower then coupled with two for this year.
Well relative books on the user retention and the paying user conversion into book.
[noise] Oh, no liquid on bringing in either.
Just to start shipping doses from processing through interest.
They were either.
For leases for me, but with mobile social thing for the coupon and those would be shipping companies how should the government.
This is an acre.
On.
True everywhere, if we could have been shipping for us how strategic sales were not hard to see growth how should working for you. If you go to you it by shipping product for us new doors on total heard on either pressure not versus Oneq receivable nigger, whatever you want to but just on a short for self is or not.
On the city true.
Our cities are being able to flow leader for orders from what are somewhat anyway.
From the matures on but actually the heart team for through you don't do that for billing.
So as for your second question on I Wonder if the concept of net for video because we don't believe.
User choose.
To consume video content based on EBIT and video, but rather from pool that is on it.
It's very easy to change the low end of the video, but it's really difficult to create eight the on the high quality content that easier slight so whether its long form on or someone.
Probably a scenario.
But it it.
It shouldn't be a format for.
Ah product concept.
Moving to that these are not only on the whole slipping to on the true she's email the whole Tom the University turned out to the sales.
From a good good day, so don't put on Tuesday, Poughkeepsie listeners on Utopia deals on a per unit for the switching topics on publishers and on that for you. So for this with your balance sheet to go to undergo couldn't on.
You should know that had been doing book, Some New York City to city.
Well sure from zone. So you are harder for us well moving parts and happy with resource for good Chicago Garnier, Let me go from now that you're shipping the needle from it does.
For the crushing perks users either with possibly on inquiry book you look on.
As for military we offered me too.
Mens range from a dozen second a true.
Two few hours and each type of video has different ah different audiences and for different content categories. The land also there is for example, the music category on a majority of the value is less than 10 10 minutes and for us on.
Games and lot lifestyle, it could opt to ours. So we don't think it's on the concept of the.
Lance.
Actually the concept of the content and I believe really we are a more comprehensive general content platform.
For women, who are kind of on sort of interest for it.
Your your time here, how should just pick on peers, you know you've been shooting range Rover zone.
That's on though quite a person a true we're talking to who will share the no Sonia 20 on it should be true from doesn't try those nothing here for you just do a simple here, though neither touched on Investor day, the two for sleep and legal sponsored producing quite with on she's on to not answer too.
Two class or whatever so it will force your book producer Pneumococcal disease for them with you on that need on the team for doing that goes on the class.
So in the past couple of for years.
Moving products that focusing on providing maturity short form videos.
And our they've experienced quite a decent growth rates.
The same time did it really is also continued to do for high quality fast growth. So we believe any.
Any product that provides the acquired from that fits users need that haters Caesars interest and preferences can win over their price.
We reported a see a lot of other Peter we do see growth to true.
You know, sometimes you don't book the whole non-GAAP total month low Suzhou that somebody goes for thinking on the whole artist to see it from these two countries on washes out these on growth.
Sure its income.
In the past 11 years, probably on a daily has always been focused on the content ecosystem driven business model and to satisfy users'.
Interest and need for high quality content and this model is proven successful for us.
Our total with utilities on truly you go from conceivably growth should thinking huh, that's user growth that though we like shipping delays from the future you hear what really well on the book.
Good to see all the shipping or something I think Richard for.
Okay and on the book the whole forgot overview.
So as our comprehensive on the deal community believed really actually we believe represents the future of video product, which we believe will be on many scenario and monetize for me.
[noise] [noise] Anda.
That concludes the question and answer session I would like to turn the conference back over to management for any additional for closing comments.
Thank you once again for joining us today, if you have any further questions. Please contact myself to a young reducing your IR director, our TPG Investor Relations, our contact information for IR in both China and the U.S. can be found on today's press release have a great day.
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Good day and welcome to the deal we'd be these hotels going on the 23rd quarter Earnings Conference call. Today's conference is being recorded.
Finally, I would like to turn the conference over to <unk> Senior director of Investor Relations. Please go ahead.
Thank you operator.
Please note the discussion today will contain forward looking statements relating to the company for future performance and are intended to qualify for the safe Harbor from liability as established by the U.S. Private Securities Litigation Reform Act on that.
They are not guarantees of future performance and are subject to certain risks uncertainties assumptions and other factors.
This growth are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release on this discussion again on discussion of the risk factors that could affect their living on the net financial results is included in sort of quality of the company with the securities.
On an exchange Commission the company does not undertake any obligation to update forward looking information, except as required by law. During todays call management will also discuss certain non-GAAP financial measures for comparison purposes only for.
A definition of non-GAAP financial metrics on that.
Reconciliation of GAAP to non-GAAP financial results.
We see that Twentytwenty third quarter financial results news release issued earlier today.
As a reminder, this conference is being recorded in other share an investor presentation and a webcast replay of this conference call will be available on <unk> Investor Relations website at <unk> availability Dot com.
Joining us today on the call from every day at least in our management Aardonyx <unk> Chairman of the Board and Chief Executive Officer, net Collie, Vice chairwoman of the board and Chief operating Officer, and that's true Sam parent Chief Financial Officer, and I will now turn the call over to Mr., Ben who will lead the price.
Your remarks on behalf of Mr. channel.
Okay. Good thank you everyone for participating.
Well you can do so called to cope with school on.
Please get delivered to day for opening remarks on the hop off the true.
We see a golden opportunity to extend our reach into the market.
Defeat this window GAAP, all posted EBITDA growth would that book up on for the quality our content expanding our brand awareness for the partner channel acquisition.
Definitely that's really good for you on political for peak season and.
Net result.
I will do that based on the call.
The Olga however, you exceed that 200 million milestone Lucky I knew luckily be cool.
Although revenue for the third quarter were up 54% book.
Good night instead of building on the did you will have 42% to two three moving both on a year over year basis.
What about you don't total continued to grow at a faster pace.
Mobile revenues was 61.
Okay Yoga Yeah go ahead, good 80 for midway through the third quarter.
On the leader with a highly engaged debt.
Average on 81 million per day, our platform. They can really be one off that's because it will come in the future.
Immediately and try though.
The credit as it grows I'll do that not only reflecting the higher engagement levels, but also on the pay per view that come with it.
Thanks to you well operating like Doug I'm, the only on which your 50 million tons of coal.
Our operating ratio improved to six point.
Fourth pillar plus 6% for all six two.
Two quick and then go from till last year maybe.
Maybe quickly crave all on all the top line expansion and years ahead.
Called for Robert.
Robert will read on Mega recall high RBC reported.
Two pending upcycle to focus on deal the year.
While we grow on top line.
Cool all gross margin growth.
Gross margin was total 3.6% into for the quarter up from 18.9% in two or three losses.
And what we are getting even more people love it.
What we didn't really have become a hold net among ultimately shows the on.
Large groups all potentially you guys, what you're beginning to blah blah blah.
The JV community Upcycle encode and would begin to talk to you about white on that.
Today, we have Gary will talk show Weve more times book Democratic than ever before.
Marketable capital that's had on moving introduced the slogan BBD, Although we do see a lot of help us with the fight and promote our appeal to mop on.
During the third quarter, we launched I feel that all like an awful lot campaign to promote I'll run proposition, even broader audience across different demographics.
[noise] debt Digi and walking.
No we are telling the upward into the fourth quarter.
Oh industry partnerships also scoping all called the offering on growth.
In August we entered into a five year been accomplished young women, we quench from media you have got to get the equity investment.
Yeah, we can't it's good for copper rights to caution existing and upcoming high quality movies and TV drama Theater.
We have also entered into a three year exclusive partnership with right. Dan will go to my book on Ross on resolve that debt what channel show.
This has significantly has helped position on brands in the important use book General.
Especially in the EPS 10 this year.
Yes October we deepened our partnership with volume lots value strategic agreement with a subsidiary I mean.
Yes.
Good clean more premium and they called him more about volume.
I will do that.
We expect a lot from not only do reach out on the operating well.
For the also demonstrate that both domestic and international you got to lead us how coming up a nation all for our unique value in trying to fill the theme on market.
While we are working to build on brand and I talk more user.
Credit demand for high quality video content, well off well for capitalize on the growth prospectus.
Moving now represent the largest all had video population from the work.
According to the data reported by the end of football for Tommy Plenti near 819 lending you that in China Caulfield All I can tell you we'll give you a format.
Boston net well enough model, how did will enable more simple capital equation and called assumption.
Oh, it's good for over the past decade had made up of highly all video ligasure moving but we.
We are committed to capitalize on gift lots of opportunity for the execution of our growth strategy.
Which would be well your cost deposits on the level debt.
With that overview I would now like to provide some more color on our content community how much on average activity I will begin with a review of our culture, our people to be called ecosystem for the costs go up on their list and the men entering that powerful growth vehicle for us.
For the quarter, we had approximately 1.7 net income and quite tough on bloating 5.6 net of video promote local.
Does that include gets on 51% of 79% respectively.
Both year over year.
We continue to cultivate on Marshall soil to a low carbon equates to growth going forward.
By promoting on genetic assay, a neutral nudity I'll walk with enabled higher credit drop already on the content to quickly get traction on the expended on base.
In the first quarter. The number off did you have got that she's the 1 billion video views increased 73.
3% and the longer all come from equated with all that said the target pulled on growth 75% growth year over year.
Meanwhile, we continue to to help I'll come back later on back on Monday total to walk through our cash incentive program and our newly low advertising platform sparkle.
The March making tough on that does not get better connect or the book.
Hi, guys income Colloquy total a green light commercial opportunity for calculator, providing a safe and the scalable portfolio for native App.
Each of the component help off net 10 and relative importance for your TV ecosystem.
I'll talk like verticals in total so I'll give you a view in the for quarter, one lifestyle GAAP Entertainment and let me pick on knowledge on multi that's on knowledge in the margin had one off deposits growing sector.
Lenny on BBB is also trending so as many growth might hold.
True to our power from looking for from May to an equity educational content.
In the past 12 months, though.
No one really on how you're feeling group for a call gets on a go what knowledge relative to the big for the Bumblebee, making us one of the top level platform in China.
While we have total called the operating our leading verticals we are actively expanding our content reach you pedigree.
The automotive.
Correct on what's one of them in Q3, we do view, India general growth roughly at 177% year over year. This reflects our longevity and that's been color with you that at their material [noise].
Interest paid our coal JV users have come to a life stage for an auto cost function.
This transaction also help us I trust wide demographic and opened a new advertising opportunities across for the industry group.
Total total OTV Ali's last Monday hockey content is paying off with our school holding give general BDP to put deals Chinese element not only for truck not day, when we do that but also become the most effective driver on premium membership.
Just for the especially true on they'll produce tons annually.
On the book Yellow generating 216 million views you can draw on the three low since its launch.
September we were excited to welcome the fuel TV drama real for young.
So on the on single well cap on marketing approach for TV drama for on our collaboration with question media.
Yes, sure well that meet the needs of the relief and the trend is number one on BBB low such that for you.
This show has generated 410 million video views on that.
You will recall in this category.
We are also reaching new high quality commensurately on Novartis share Department.
Our value cross sell put you on the collective show Rockpile you short houses for that received the outstanding reveal beyond our typical commodity.
Generating approximately 410 million video views and eight.
On to let equally true up.
It's not all that we told you the critically but also attracted about.
Operating number off from the addition of a new that Libre looking at supplementary we believe our recent agreement with BBC do due diligence on Gulf from an hour documentary quality well.
Well for the enhanced our calls on LIBOR.
Also go to on the success of Lafayette, Darla, we'll be arriving another margin you'll yet you've got your debt, we expect the upgrading our commodity last seven months into it.
Turning to our community, while a user growth coupled with like we've got a number on costs across our key commodity matrix.
In the third quarter, our deliberative yields which will flow through building up 37% year over year, our Youtube generates a 5.5 billion low labor reductions. So good each on color like a baby the momentum posts on.
Hi, good at 17% year over year.
The number off all official number is also on the rise.
End of the quarter, we have now to sell them really or fish from members will pass our hunger question exactly.
For the fifth up 56% you all value potential level also the men's drop well above 80%.
With our decades of experience under our belt, we believe our comment is on that while all of our biggest competitive advantage for us as most in the involving a lot and it's an industry.
Turning to our commercialization program.
The growth topic on our platform, you'll just how good net law as well we go out more credit costs and so the debt to meet our use of diverse.
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Our GAAP revenue for our mobile campaign as well on the one cause for bidding up 37% year over year, a couple of all for the purpose of our total revenue.
Building on our backup Dan Love our base, we talk a little to extend our debt offering in diverse debt rather we men 10, the public utility operating colleagues deep did feel entitled.
Our new blockbuster Gab growth has come that total debt you continue to resonate with our sales and I tell you that it's what another strong commitment Dod outlook for distribution and operating capabilities in the if the job growth.
October we renewed our exclusive of Geo license with any plot and the celebrated again for anniversary.
Additionally, we launched a few new titles during the third quarter, which include.
And the Mystic balance you on LTE and also up we've got him on which have been well received by our users.
[noise] and follow GAAP losses, we have 10 titles in by book geographies that have acquired a pool, both and they're ready to be released in the coming quarter net.
Lastly, true, yes, Walt on a lot of that.
Cash and.
Glenn get for launch at the beginning of told you touch on what.
Looking at our joint on the operating to GAAP.
What we've been moving them several product our yield accretable title.
On a solid reputation.
Long debt operations have the capabilities and high guesstimate gamma demographic on May.
BBB the total platform for growth in operating partner.
September.
Our debt men, Andrew a partner in China would began jauntily operating the highly anticipated given the favorable impact from the lack of success on the action I know operation yet another feeder.
On the near term to on titles include a plan to get to doing that for you how the quarter.
Turning to our bad debt it Rob.
Robert will follow that increased by 16% year over year, reaching RMB like standard 18, moving in the third quarter. Our growth was mainly driven by increased the contribution from pillar membership live broadcasting and other value added services.
Although our credit AMCOL interest right. We're on track to compare your partner a lot book on the hope and adding new and the pie growth content for going library.
This book is a Prime example, our legal from that you'll watch on the share buyback cutting right has occurred in quarter paid for BBB, assuming spot job growth.
I think to showcase our capabilities multi sport coat as a lover. According to BBB the multilateral coffee experience.
For the entire 10, TMHF see them total lybrook coffee will pay per view relative to the again increased by over 300 per cent compared with nine last year.
Were pleased to see our user growth when on the us pay for the value all exclusive access to our TV content by the end of the third quarter, we had 12.8 million equivalent number up on.
Great at 10% year over year on.
As we roll out more excitement excited on you know content, we are talking of debt and we can continue to call looking more paying subscriber.
Finally, our title business, despite a challenging macroeconomic environment, we delivered another accelerated growth tied together.
Revenue for on the settlement reach on the 558 merely a hands on 26% year over year.
Our tough for us to plug our bread then not all that truck the why they do that group, but also in class lending within the partner.
On the tiger across different industry operating to BBB to tap into the call voted young demographic.
For our leading what the coating the fourth quarter or E commerce.
Book value GAAP.
On the product at the automotive.
In summary, we are all excellent growth trajectory.
Solid execution of our user growth initiative, we are continuing to improve our growth equity on the reached new highs across key user matrix The Inc.
Thats true trend toward with utilization looking strongly on labor on the we provide the most unique commodity experience for both content creators and the user.
[noise] capitalize on this momentum we aim to further grow our brand reach our total offering and dish liquid potential I'll expand the online for payment ecosystem.
This concludes with a true Dimmock I will now provide a brief overview of our financial results for the quarter I'll turn it on tape.
Our total net revenue increased by 74% year over year, RMB 3.2 billing exceeding the high end of al Qaeda with our accounts.
Accounting for 30% off the revenue we are pleased with the commercialization progress of our non-GAAP operating and our ability to call, but ill on that topic into paying user.
The average number on most of that taking either include by 89% year over year, which were 50 million per quarter costs.
Total revenue increased by 63% year over year to RMB 2.5, getting done they're selling caught a key component of cost of revenue were RMB 1.2 billing there will be similar percentage increase cost incurred in 2019 gross profit increased by 170% year on year from before 162 million.
Yes, the marketing on average for how that was a follow on on the screen with more revenue contribution of our higher margin business as well as additional in calc on paying due to our gross profit margin continued to improve reaching the talk is 3.6% in the fourth quarter.
Total operating expenses.
On the 1.8 billion up on hedges for the 8% from within period of 2000 lighting value marketing sales as well on the 1.2 billion, representing a 227% increase year over year.
The increase from badly.
Attribute to the include the channel and the margin benefits associated with our App as well as well as increased expenses for our mobile games as sales and marketing personnel.
Building on our brand appeal amount for both the audio and we're all for key initiatives intended standard this strategy as opposed to have far reaching market again that we've seen how low can elaborate.
We plan to continue to build on this momentum to further strengthen.
And our growth with growth cycle.
Gen expensive on the 253 million the net of 55% increase over year. The increases were primarily due to increased headcount general and administrative personnel and includes a share based compensation expenses on do you expect it to on before has a wonderful but for that 52% increase.
Year over year, the increases were primarily due to increased health on the research and development personnel net losses were on the 1.1 billion for the so called October 20, copper sales on the 406 daily with Imperial took on margin adjusted net loss, which for the non-GAAP measure that excludes the share based compensation and amortization expense related to intangible assets.
I'll close with acquisitions, what on the knot has a 90 million compared with RMB three hedge book, what is still living within pillar losses on that team basic and diluted net loss per share was obviously 0.0 debt.
Adjusted basic and diluted net loss per share was 2.76.
As of September 30th relative we had cash cash equivalents public deposits as well as short term investments off on the 14.1 billion.
Dollar to quite wondering compared to on a plane, while getting as of December 31, click on lighting.
Monetization capabilities continue to improve revenue.
Average our growth in traffic based on your growth across and including for the spectrum of demographics.
We will also continue to go out from a pill and content services to call growth more paying users.
We believe that over the longer term it monetization have growth hyping do the conversion rates and scale will yield and improve the bottom line.
With that in mind, we are currently projecting net revenue for the fourth quarter of credit attentive to recruiting on baby food quality, it really and RMB 3.7 billing.
Thank you for that as we were like now to open the call to your questions. Operator. Please go ahead.
Thank you Sir ladies.
Ladies and gentlemen, we will now begin the question and answer session. If you wish for asked a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request for you.
Press, the pound or cash.
For the benefit of all participants on today's call. If you wish to ask your questions from managements in Chinese leasing would you. Please repeat your question in English.
Your first question on queue comes from the line of Daniel Chen from JP Morgan.
Daniel Please ask your question. Your line is now open.
Hi, This is on Alex from JP Morgan.
I have a cross channel regarding the.
Use or above and Oh, the user profile often newly added for users.
So you guys have being continuing on delivering very strong user growth in the past for several quarters can.
Can you talk about the typical new user profile that you you guys have.
According to recent quarters and.
Exactly the value.
With that you offer to these guys to drive.
You sort of growth also lastly, what's what's the user growth outlook into the next day, one to two quarters, which identify HRG that's for sure.
From what should you could you would you then within John Bush for you a feature on Genconn. Its users are for touch on that you could share your sure.
Then the eminently always show on machine.
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Sure.
Sure. So for me on that you could share young for that.
Hold on peak pretty common share gains from you on the job share like true.
On the issues will feature a junior debt.
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On wheels, you totally on for cheap.
John This is true shoot.
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A lot going on they go up without.
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Yeah, I mean, there are answers that are easily on the whole on the yields on the on the quarter ended up coming in is our hundred loyal the whole look on that kind of hard to for formalizes homes on me on 400 without unions on the whole top Doyle passenger sure like for you Sanjay.
Got it.
Your true the $1 per woman Omega tickets utilized to refresh for use on this new quarter for sure countries manage on these real from Doug.
So, let's turn let's for search trends that had been the profile as the means users actually hasn't changed much compare.
Our historical data on the average age of argue for years and step out 21 years accounts and the average age for the new Commerce, It's about 20 or so we see very balanced geographic mix Reg FD out 50 per cent that be either coming from their tier.
City that low and notably Weve seen bad.
The u. easier to above 30, it's actually gradually increasing net contribution.
Contribution year over year.
Realized therapies are seeing on quarter day dosing with visa, maybe low man to the New York will seem to the later on.
For the field for basically.
For the John from.
Yes, you will see through margin you look for comes.
And on the whole on.
Total.
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For the hammer selling is a harder for Butte, Google is downbeat bowsher boxes on the garbage without surgical.
So on it.
We've always been.
Our topic our users.
From our content on the reason why is your Comfortability early as they can and is that they can find what they like on that.
What type of content they like on dividend on for example animation Ddtank.
Digital content et cetera, so based on the day that we have experienced a very fast user growth on the quality side with austerity maintained a very high quality of growth based on the user should retention bear engagement also the per.
Net income version right.
We are quite.
Happy and satisfied with our high quality growth.
You had a woman actually on frequency on comedy from now.
Those who will undergo total on each is that on growth.
On book on however, net.
Sorry, low hot for for let's say Orlando like.
Like what goes on with future for high for gas for low level.
Archaeological on kind of low dessert sales that total growth leadership five you can see growth becoming guarantee that obviously for what really is on track for the shipping for the Nataliya quit for for either true that usually on the way.
Good day.
Because we have a very healthy self sustaining ecosystem, which is our massive content creator its credit continuously creating high quality content.
We are quite optimistic about the user growth on.
And as we're looking for the future and Aasco video light station as done in Alberta and average.
Okay.
Really really as a pioneer and video community industry weigh on.
We are quite confident and we'll continue to deliver on high quality growth.
That's true and gains on the whole that goes on low woman does look with.
For those operating will be our two for Aarding aarding, yet on let's really them go total again value.
Aarding, our email on that really on go to argue.
To her Donald for Canadian pay condolences on the Aarding along with the only two months on low actually for me. It would seem to future lies on our NIM will be up on me.
Moving on ensuring that we are going we like to yet on the go.
So net last year, we have on.
Sat on their target, which is to reach a 180 million for Twentytwenty 220 million for Twentytwenty one.
We have already achieved on this.
Taking this year sees your targets and we are also confident to achieve next year next year is our target in at that and we.
We are.
We are likely to set up a refresh our new used or target and beginning of next year.
How about share result.
Your next question comes from the line of UN Chong from Citi.
Ren Please ask your question. Your line is now open.
Hey, Social Hall share class just on a pure auto them on their own made or some kind of ship on sorry.
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At this time.
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Historically did a day focus on total mass win per country on a class controller periods from a low mix.
Total christened at waste day.
Some Indian content coming out for example, we're talking about when you were.
On this show and also reported yet to tell us your EPS.
So tournament for sports content can you just share your thoughts on opinion on should be under no.
There on what relative website at one day I wanted to force that's come on that.
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Great take a step back fit abroad and on share push for video is 100 kind of compute usage.
Tom you deal for what's your relative.
Maybe I'll come from license content, So hot when you say.
On the deal for you expand our user base to a much bigger payable income from India at what range for two things for what the betray for you appear to be an old Judy and on what hit on indication for content. Thank you.
That does for the other one you all jvs on high Chit chat on Habitrol sales as Odessa should these on the question you did nothing has you balk walk to review on the topic you, though that these on we'll also the volume the only reason for advantage on Kim I shall be it pull for that May also.
Can you guys seem to the shipping go that these at this every day they get both within media. This is on the total that will go on for child and he got to ensure the shipping but would that be that so you will not which is you guys Yehuda should show she's going to ship generally do not value on the ogone on which issued a total therapy.
Before we getting here on the strategy of our Ogilvy business.
One tier rate and for site value as the visibility for corporate.
Which includes Ptv Ogilvy in live broadcasting and the Rand upgrade that we have been focusing on this year is proposing all of the various you like rich.
Actually include short form video long form video mid farm income and will continue to cultivate and range for content operating video services based on users' needs and we'll also continue to invest in on.
Our RGB content.
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Total interest here I will take us into the fuel division on how to do on short Ti dollar total shown for our users on on the what's going on.
For the total job usage issues on cargo yet on how the total know shots on goal shaking out on top.
That's how you should be done for OTV, though you got on but were told you go you also true Holzshu all the things we bought would you need a Shanghai compute dealer channel typing for single the Battle for Ed also like your end per site.
RP UGC content creator eclipses churn remains the core of our business and from the engagement level and our active content creators content submission. All this new data continue to show that we have a very very.
Very strong position.
Position in that PDG, the ecosystem and the piece for GB component will be built we believe unique advantage in running our OTV business and for our future.
As we look into the future for there to integrate our OTV content ecosystem with our future content Inc.
Now, let's see on TV and I showed on clubs I rely on high should we focus on such as it's hoping way Cushing now on the high school. They held on what's on the on body is out looking quite good the IP, while yourself when you Shanghai. This I have the outlook I want to see wanted your thoughts on baby talking share.
Your true again thinking credit that are usually posted up on me. It was one of those on the ROI on Gulf for say that's true.
For the Oh JV strategy.
Looking forward, we will continue to focus on self produced self publishing and what will be pong quality Pitman IP, driven and will also serve our content ecosystem. We hope that the recovery produced will be a label for high quality content.
And at the same time, we'll be focusing on improving our ROI and pay income version.
Oh, yes, Genio on book Automatons, RTL volume price is what we will be eligible for altschul for much houses on joint venture on.
Yes, Hi, just houses all while working on tie that true, though yes, hi, Doug just digital media on Paul why there's on top toy agent channel to follow on.
Sure, Yes, I had a chunky lies for all these on most all along we're going to use our overall growth we don't yet from the outlook for me to putting fall, yes, one times on that what they sold on the team Hi, I'll, taking downtime on the actually about issues why you book Shaw on Hong Kong for talking on should that Donald on the debt.
True guns Tony.
Cash it yet cholla, taking on Hollywood occult wages on does for you on goes on those follow up what we showed you just hope for many cheese up will be on your team who will go on hold to the talking so you'll get a little ups, how should flow thats for sure that your channel.
So it really started to get into the south production from self produced Chinese enemy back in 2017, and 2018, we started getting to that documentary cell production and 2019 into low route variety shows on production and for it this year.
We are making few attempts into deep rooted for real person TV and movies for the Internet for the Internet users and we.
We have already from warmed up very integrated methodology to how to get into certain verticals.
As for now there really has already become the go to platform for innovation and documentary and user already have the perception that visibility has about index.
In those categories.
And as for this year, our attempt and that TV movie and variety shows for example from for young and BRAF for years has generated a very good feedback from on our users and received very high ratings across all platforms and this is.
This has been a show.
Show Mark for our attempt in a tap into new new content categories for both content.
Revenue from the premium membership Asheville assets.
Revenue from sponsorship and advertising and actually.
The revenue has already exceeded our expectation we are quite confident to continue to try out more new content offerings in those categories.
So for that kind of downside to the LGBT for each onto on adaption, although I do want to establish Ultragaz EBITDA DOCSIS Oh, yes, doubtful on calls lacing Hi weather appears easy on this all tied up on book I consulted yes on good Black Sea lice roll up awfully on Southwell.
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Yes, well, there's no doubt that that Oh gosh for like the coldest on will then maybe on hotel up on local will be weighted.
Total shall be turned out was that on sito quite ball shop Sheesh satellite Joshua.
So.
Value for on GB for deliberately I believe that there are several factors from one.
Pre premium memberships advertising revenue new user on traction and add.
Add on value for RP, you GB ecosystem as well as IP January generation and the short term. We think we have already format for truck cycle, where as a premium membership revenue and AD revenue has pretty much covered our old GB.
Content costs and our first three quarters. This year operating cash flow for that for a few quarters for this year as positive and asked for our membership we have on achieving our have achieved outstanding results.
End of third quarter, we have 12.
12.8 million paying paying member premium membership, which grew 110% year over year and the quality of those member are also high about 80 per center that have signed and add new membership on automatic renewal membership.
As for the sponsorship and advertising revenue associated with our GPU business grew 230% year over year August Hot.
All of our key project has become a very valuable advertising outlet stores for our advertisers. So in summary, we believe the OTV has a very important strategic growth in our business.
Total hotel shopper adoption relies on local artists OTV, though you know through the mail way, which on not locked into his or her show T. W. W. W. Ell shows the accounts all these on hoping that on hockey on Paul Yes, Hello, Hi accounts it out on cash on on a telco growth was partially on one day locking yourself on why.
Oh sure your comments on these on the Kingsway should which is you should kind of how much cash seen should appeal to either late on choice deal for no total total net your lodging fees on the show all time high ROI Appeals easier trades in the market share should follow on fuel that follow that these until it's all types of teammates for the last thing on those flow based on kind of GAAP.
Hi, Cctlds ROI on them.
So on the debt.
RGB high quality clients can actually start very very well for our user growth and for example cap reported that Chinese enemy and brought on Friday on of this on the latest.
Weighted high quality on TV content has been attracted a lot of new user coming onto deliberately and once they join diligently day.
A majority of them hey on their ability to consume more PGT content.
And actually that the new users that were attracted by the GB their retention is quite good.
Oh, yeah that you've shown tie the GAAP transition short housing for that share on just it's only for the pain Lady on hunch offshore if you adjust for times are looking like TJ you want to talk on that just hold on to ensure that doesn't go away the India only true love Guacolda RGB Jones on how we achieve what how the appeal TV to Shanghai.
If you follow the cell phone calls on from a nail on late either bolt on holiday. So yes, we'll talk on volume did I apologize could you saw flash for gene therapy that balance on the you mentioned labor job.
Oh, it's on the thoughts on the fees on the thoughts on the IP right up on dishes I gotcha quite true.
Yes, I'm talking about me on its own gotcha heating anda on cautiously flow rate channel Hi, just retired assumption, yes for don't come back threshold on gotcha. So shall we achieve all those other two share just on Monday, we are.
So price actions.
A key channel.
As for the variety share scrap for you has been on quite successful for attempt for deliberately despite music for variety show or specifically rap related variety show half and half.
I've been around the industry and there's few precedents, but we're still to make a new breakthrough in this vertical and ARPU TV content ecosystem continue to range for it.
The fact and influence that you show a lot of for the derivative content per day used.
By our content creator the overall video views related to that your relative content has reached a low.
On year 300 million, which also help us to further expand into the music category by attracting a lot of music lover on mutation to joint Philly and.
Adjusted for it does for US this share we also generated quite decent sponsorship revenue and appetite advertising revenue.
And because we have integrated product chain ongoing daily we continue to extend the IP value by launching new music label ways and launching a series of offline concerts related to the show.
On Billability were able to further extend and enhance the value of the IP.
Joe for all my husband on your thinking you guys on the RGB. The ITC action shop feedback on go feed on its own had to keep pace on GAAP all for Yoshi fault block to shocking value and hold on Celtic on full time.
Charles dish or day OTV documentaries on that these are shown on tidal easier on a hold true, though while yeah Orlando judge on the appeal TV Chicago traditional high it will go for that Apple is it.
So to summarize we believe the value of the IP can be further enlarged on dividends ecosystem, which includes game and M&A TV movies merchandise.
Multiple offline events and at going forward, we are looking to further integrate our PGP and ogilvy content ecosystem.
Your next question on queue comes from the line of Binnie Wong from HSBC.
BD. Please ask your question your line is now open.
Hey range on San Jos Giulia does on her first of all congrats on the amazing set of results and also strong on low it was I think of the points ahead by 12% what.
Well, you can comment a bit on the competitive landscape.
Impressive to see on monetization right advertising livestream, all continue at a triple digit growth and we feel good engagement here essentially treat a bit right. If you look at the time spent I think Q is a slight decline for feature initially is the strongest in the past years and D. you end the year ratio also.
On to come down to 27% so anything that we should be aware off structurally and how do you see the competitive landscape among the different entertainment tough on evolved and.
Especially as we see some of your short video and live streaming players also very aggressive in growing debt advertising business in particular, so how do you see that you walk I understand that we have a very strong ecosystem here up I just want to see a bit more into how you eat it.
Yes ill getting more aggressive on more capital and how we see it. Thank you so much work and that's why you saw.
Just on watch on associate pushy or share by trying to update you on chunky.
Oh, all his update on channel now what shall change on these larger Schawk total accounts I Wonder could you from many times I'll just true tallow joke on call out the share lets you negotiate those on the head I.
Just on we should have done without taking on chunky.