Q3 2020 Lizhi Inc Earnings Call

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In the quarter, we also diversifying our content Tamarac spring more content in line with the hot intense capex navigation array of cranky operational content and promotional activity to generate crashing distinctive contents truck Quaker and enhanced that happens appeal to users.

For example, we announced a live audio shells and producer Paul Cassell collaboration with a number of popular TV series and variety shows such as nothing asset sales and the company one separate bank, we are creating huge spend that.

Thank you Ted each episode will take more than 200000 times on average animation more than 1.3 million times exposure.

We also launched our campaign Hot idle show today, which we like some of the most popular idled to share their stylists and Phillips our competition.

And change rapidly deltak through with it.

Now going to front page content, we imagine a content creators to produce high quality forecast based on defense sales 15 college need to long tail content creators to be more engaged in an active on apple.

And we rewarded the bathtub down with increasing new their capex and higher levels of exposure. Moreover, we launched the pilot pay Lisa subscription program to leverage the gross premium audio content on our platform and further enhance our monetization capabilities.

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In the meantime, we're actively working on expanding our forecast the business and try to sales the leading position our fleet here in the Chinese stock has seen a change in late September we launched Apple 10 were 72.0 integration online offline resources to support contemplated scenarios.

A staff of accretion, including upgrading commercialization services industry.

Industrial aspect alone subjects across town and brand new data analytic capabilities, we enter to attack them more new creative and hold true content offerings in both quality and quantity of more than 50000 podcast host the kids taken in the first 30 days of this program.

Recently, we hosted our first the offline forecaster salon sales team and like a popular content creators in core classes sector to share their creation expenses with Qualcomm.

We plan to host the more back half the salons and related events every month sales that less effective channels of communication and build relationships with existing and future content creators with these initiatives will help us capture way international more talented creator.

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Another area of focus in third quarter involved enhancing user engagement, increasing the vitality of our user community and strengthening the balance between keep paying users in the quarter, we launched a variety of 2000 and content through its users can endorse the performance of their favorite content creators.

And help them grow on the path taking.

This enables creators to have more exposure and opportunities to interact with more users. We've seen that the holes that you lack in from the endorsement campaigns are more active in the content generation and half a battery engagement with audience.

Which further aggravate the virtuous cycle of our Latin vibrant community.

The content also utilized our advanced the AI technology to tap to be any patient to be identified high potential content creators to build the immersive audio expenses in our community and bring users closer together, we've created a SaaS type of macro talk where you.

BG users can post and interact with each other so a variety of social networking functions.

MTO artist apparatus enhance user engagement and community vitality. The monkey total interactions reached a record high of 3.2 billion times in the third quarter.

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Comes in and goes is our focus on roads and so forth can products.

In addition, we've seen across the integration of our past and audio entertainment and users and content creators increasingly active in both segments.

Over 65% of our audio entertainment costs, where conversion from coal cats or content created marking a year on year over year growth of 15%.

We take in the higher participation of content creators across different segments of the path from Moreover, we posted at various content to help cost half of creators can more attention in defense happens for example in August we hosted a major film festival and in light of the content creator.

To produce forecast in a share their stories about films through last training talk show. These kind of events has fluctuated forecasts of creatures, who have never tried to auto in attendance action before joining the life training show and had a truly interactive and immersive audio experience it.

They not only can more fodder for their forecast the through the that some of that happening even become audio entertainment cold and interacting with their followers through Baghdad audio entertainment features.

We believe innovative and interactive features happening that can be strengthened the connection between creative and users and enable pop has created to attract more audiences.

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Your assistance since our founding Santa consequence, or seeing you both tweeting today's linking the timing.

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In addition to men tend the business growth through various strategic initiatives. We are also exploring opportunities that will allow us to diversify our business model.

Leveraging our massive content based and the leading technology capabilities. We are deploying the in car audio market and exploring the site, both markets, which equates to potential by collaborating with new energy vehicle producers. We believe this pen is off to strategic importance for our.

Further development and expansion in the online audio industry, and if youre optimized the advantages and values of our audio content in diverse use narrows, we will ensure that the user experiences which are broader user base and increase our user scale throughout.

Yes of the expenses and incentive yeah.

Your technology and operations, we will cooperate with leading companies in the market advance our new car audio strategies and deliver superior audio experience for our users.

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Yeah, we'll find out soon.

In terms of auto technologies, we are dedicated to advancing the application of acknowledging all capital through big data analytics and machine learning, we continuously inspire and fought tenanted long tail paychecks, all Tampa lending meet newly joined high potential contemplated have.

And a large number of followers and more attention in a short time, we support our poly AI enabled reputation system.

Apple Centerpoint girls, we will further upgrade the data analytic center to help create that understand their Croatia ability and 10 days from different dimensions. In addition, we established an AD supported online audio content management mechanism to identify and until when it occurs.

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This has been true to our content control ability and enhance our operating efficiency. Besides the quality mix movements have come down.

In the future, we will continue to develop cutting edge technologies, such as artificial intelligence to empower the content creators and business development.

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In conclusion, we will continue to making Apis to create value for our unit, maintaining our leading position in chinas online audio industry and capture the tremendous growth opportunities of the online audio market.

Oh gosh, it I doubt, so I mentioned, a moment ago tallies EFO lose some volumes movement just up title the year thing.

Thank you everyone with that I will now turn the call over to our acting CFO Ms. telephone who will discuss our financial results in more detail.

Thank you, Michael and Hello, everyone rapidly.

We are pleased that our second quarter financial results were in line with our expectations.

Endeavor to increase operating leverage so about set of improvements in profitability during the quarter.

In the third quarter, our total net revenues increased by 10% to RMB 361.5 million for the same period. After delighting mainly contributed by the growth in our paint the pace.

Our average number of boxing pay user increased by 17% year over year to 448.3 thousand in the third quarter, driven by our content offering strategy and around our many efforts in driving user interaction and engagement.

Listening, we generate our revenue primarily from our auto entertainment business, which contributed on the 355.8 million to net revenue in the third quarter up 2020, representing a year over year growth of like I said, the increase was mainly due to our increasingly expanding user base and increasing the number of pain.

Users for our interactive audio social entertainment product during the period.

Additionally, Paul Capex advertising and other revenue grew by 61% year over year to RMB 5.7 million in the third quarter up Twentytwenty. The increase was mainly due to an increase in the number of paid users in our core capabilities and advertisers.

Cost of revenue increased by 2% both year over year and quarter over quarter to RMB 270 point lining them.

The year over year increase was mainly due to the increase of salary at a we have a benefit hadn't caught and bandwidth costs, which were generally in line with growth of the company's business as well as the recognition of share based compensation expenses that became effective apply after all at all partially offset by a one percentage.

Chris in the revenue sharing fees because the isn't he profile for content creators we lost in the third quarter of total lighting has been scaled up in February 2020.

The quarter over quarter increase was mainly due to the increase of revenue sharing fees to our content creators, which was in line with growth of your revenues, partially offset by the decrease of share based compensation expenses in that quarter.

Our cost propping, what I'd like to point 6 million in the second quarter, our third quarter up 2020, representing an increase of 21% year over year, an increase of 6% quarter over quarter.

Our non-GAAP gross profit was RMB likely 1.9 million in the third quarter Twentytwenty, representing an increase of 43% year over year, and an increase or up 1% quarter per quarter.

Gross margin increased by 100 basis points from the second quarter up 2020, reaching 25% last quarter.

Our non-GAAP gross margin was 25% in the third quarter up 2020 compared to 26% in the second quarter opportunity operating expenses decreased by 13% year over year, and 10% quarter over quarter to RMB 100.2 million in the circuit opportunity research and development.

Effective a key component of operating expenses was RMB 55.6 million in the third quarter up 2020, representing a year over year increase of 38%. The increase was mainly due to our increase in lumber up research antibody for employees as well as the share based compensation expenses recognized.

After our IPO study.

Selling and marketing expenses were RMB 27.1 million in the third quarter of Twentytwenty decreased by 53% from RMB $58.3 million in the third quarter up to the lighting a decrease was mainly due to reduced expenses related to branding and promotional activities in the third quarter opportunity.

General and eliminate administrative expenses were RMB $70.4 million in the third quarter of 2020 compared to RMB 7.8 million in the third quarter taken lightly.

The increase was mainly due to the increased expenses in salary and welfare benefits professional services and a recognition of share based compensation expenses upon after IPO.

Our operating loss was RMB 9.6 million in the third quarter up 2020, narrow down by 82% year over year, and 62% quarter over quarter non-GAAP operating loss was RMB 2.9 billion in the third quarter up 2020, now down by 94% year over year as 74%.

Quarter over quarter.

Net loss was RMB 7.1 million in the third quarter up 2020, now down by 87% year over year, and 72% quarter over quarter non-GAAP net income was RMB there'll point sixmillion compared to last GAAP net loss of RMB 48.5 million in the third quarter up 20 lighting, Alaska loss of RMB.

8.2 million in the second quarter, our Twentytwenty, respectively.

Basic and diluted net loss per 80, s., but I'd be zero point to one three in the third quarter of 2020 compared to RMB 30, like one two in the third quarter opportunity lighting and I'd be 0.48 in the second quarter up 2020, respectively.

Non-GAAP basic and diluted net income per Ariad will be 0.01, compared to non-GAAP basis that doesn't see OLED loss I'd add of RMB 3.73, I can be 0.18 in the third quarter up to delighting, our second quarter up 2030, respectively.

Difference between GAAP and non-GAAP EPS is mainly due to adjustments to a quick update for share reduction values and share based compensation.

As of September Thirtyth traditionally, we had cash cash equivalents restricted cash as well as short term investments of RMB 350.6 million.

Overall, we achieved meaningful progress in the third quarter opportunity, but continue to be optimistic about the future of on the auto industry in China and across the drop in the near future. We will continue to carry out our user growth strategy and remain dedicated to enhancing our counter ecosystem certainly be.

Oh, well is expanding technology capabilities and advance our strategic initiatives to build out our platform for sustainable growth.

With that he meant for the fourth quarter of two entity. We currently expect total net revenues to be in a range of RMB 370 million to RMB 400 million.

This forecast reflects our current market condition, including those related to the combined likely pandemic and reflect the company's preliminary estimates of market and operating conditions and customer demand, which are all subject to changes.

Now this concludes our prepared remarks today and where we'll now open the call to questions. Operator. Please go ahead.

Thank you we will.

I'll now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your needs to be and now.

If you wish to cancel your request you may press, the pound or hash ski.

For the benefit of all participants on todays call. If you wish to ask your questions to management in China. Please immediately repeat your question in English for the sake of clarity and orders. Please ask one question at a time management will respond and then feel free to follow up with your next question.

Our next I mean, our first question comes from the line of Vincent Yu of Needham and company. Please ask your question.

Sure. Thanks management for taking my question.

Actually I have a few questions Mike.

My first question is can you guys comment on the total time spent by users on the platform at this time.

The break were Shorthanded.

During the.

Sure sure.

And just like you can keep the works, which you understood I actually want to shout women, who had either.

Most of them, but you know.

Okay. The second question is can you comment on the behaviors.

Highest pay user cohorts have you seen a significant rebound Dr cope with Nike.

Hi, Good decision goes can you judge that psychology goes.

The digital publishing lease settlement Ichi General who will lead the general huge kinda wish him.

So the question is do we have any updates regarding their considerable ritchie like streaming initiative and the pipeline industry.

Industry do you see it on the huge dollars yidian essentially just to use when you're just like you did in Q4, you could go to come in really good stuff. So my first question is about the data regarding around podcast in live streaming you also should programs our usual children we should.

In the UK, which is what you will do well you know his trigger.

Somewhere between two pieces you see shifts thanks.

Competition, what I heard.

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Okay, Marco will take the first the three questions and I will translate for him and.

For the first question is about the time bound by users on the pack on so it's a shorter summer break with the momentum and the average data usage time of 52 minutes, which is after all efforts on meeting diversified demand from users. So in this quarter, we launched with a serious of sending them and.

Furthering reached and the highlights in our premium content, the massive high quality content pool and diversified interactive kick features for the improved our tap on its appeal to you that you should the usage time and he has said the vitality of our community.

They are going to reduce a judge how the share count what are your quotation.

It's a whole new mill since it was shown that wouldn't be.

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Hi, Shannon.

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To support who know your pool changing the fully single woman to sales how much you do see also to some to the season, we'll see you go for the table youre pushing so touched on them.

Okay for the second question is about the highest paying user cohort.

And actually rebound after the Cobi nitrogen subsided. So first of all the audio lactamase quite different from the video live streaming. So all my audio it's much more mass market. The concentration of paying user is relatively lower with limited revenue concentration among the top user.

So overall, we saw you that have better balance the online and offline Consumptions wild assumption of work in school.

And the alliance with some change recovering we saw rebounding average ordinary users founding compared to to lots of water, which is not due to the higher the paying user cohort.

Thank you do you see signs are higher sales are highly good for you and your board of when people can go into just want to say I am Zibel feminine woman variance you. When are you going to go so could the merchandise.

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Due to the year than a year, but I'm, losing you say sense on when can you know the are you willing to take a union euro the functional.

Good for those who don't Jonas.

Mm Hmm.

So in terms of celebrity like streaming we provide a pack on but deliberative change rapidly Stan and the channel for them to meet and interact with deliberate is more closely many popular celebrities I'm willing to interact and communicate with them through our own my audio entertainment features.

Oh, well once we also the song who want or.

And Bob and I must tell you who are you going to Jennifer Beugelmans future.

Hi, just a duopoly.

Towards your life with regard to put a new.

Yeah, Julie that there was a woman.

I don't you know you got to go to the office.

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Undertaking so that women can I didn't mean to double conferences.

Confers the teacher will do.

They would have bought them getting number one.

I don't know what my only ever is there room and the Tony do you want to handle 20 the modem.

Because it's again many of those are the continued one that's an interesting Bob who undergo a new to the.

So he leaves the years on TV.

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Crotona you go you can see mid single function.

Yes, as I offenses, although.

Although you know core fund a bunch of that I don't remember.

Chairman, but will need to go buy one.

So I'm not been handling supervisors, however, you should one.

But in the meantime, we attributed to meeting user needs of interaction with celebrities through different programs and again, reaching the live streaming content, so whereas sales tomorrow.

The Mako take an example, we made to the chance of being a former member of Rocky Girls power, one, which you might have heard about a highly popular goes to chart a path for audio like Finland and activity interact with her fan base.

Exposure, what accounted for more than 2 million times.

In addition, we also collaborated with a number of popular TV shows to host a creative event. The other laterals, we cooperated with Athlon age 48, a popular local schools and young grew on a pro forma EBITDA show of the upcoming one super back with the lots of attention and discussion amongst them.

With more than 1 million times exposure across the Internet and 600000 times cumulative pay.

Scenario.

Thank God.

Formed out of amenable manager the equalize the sales other CIM Lena well Madison Dearborn, So how's the.

So do you like he'll talk on how to co founder Bonnie Hyun.

Well unless you want I realize there could be an animal family senior sales.

In terms of the advertising, we believe the advertising for audio and actually quite high potential. So we consciously many focus on optimizing the advertising management Papuan at the current stage, which is the exact expected to happen more positive impact in the future.

Right.

Super Thank you.

Thank you.

Okay.

Okay.

Can I can ask one more question.

Yeah, sorry, Michael can I ask just one more question. So like you mentioned is that we are developing that so on the audio.

So I'm wondering are we going to walk through the auto manufacturers or software.

C platforms, which are export on these other manufacturers and also feels like here for this audio which will be used on cars.

Driving.

Well heavily relies on like a recommendation and also our voice control I believe.

Returning to more out to self develop and divestment or are we going to work with them as.

Edwards them or provide.

Provider or like a will there be an impact on R&D, but we're just was everything that you said no lets you know years ago now to get to that emptiness. Originally so we are just ordinary stood at each of the comes out should be okay.

And don't hold on no trigger.

So that you can a lot. They just some directional color if need be just picking up the Yankees with you that we cannot.

Yes, no. It's a good deal because of the whole meal and stuff and just I guess, what's your thought on the hydro.

No I do understand that your whole chunks that are in need of wholesale sales me summer.

Okay. Thank you.

On Monday fit alcohol sales ideally suited to this exciting and the minimum rental.

It's actually going to hope.

Oh.

Well my answer to you Bob.

A third argument a general answer you Union Blender.

Sure so the holiday.

But on Wednesday, She all day time period, some sun Pops up so those how soon cool pool.

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Timing T M.

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You mean, two sources say, Tom Toomey Aldo.

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Turning on to attend a see through Virginia.

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Okay, I will translate for Michael So we think the in car audio market the high potential market, especially for the new energy vehicle Pirquitas.

And for that you saw audio application, it's more about the focus we will concentrate on especially in the product side and also the Ugly then we are going to be improved both top dog products also the offerings and combined with our AI technology Ah first theme.

We went through the <unk>.

User experiences for the in car audio.

Pro dots.

And.

You are right that are there products might not be as applicable in the two used in the in car audio system a another site in Florida, AI representations and reputation is very important for the in car audio market and we do have years of.

Expenses in the technology and also we have leading technology capabilities.

Which we can use to deploy into the in car audio market.

As for now our focus is more on the AD technology and also the improvement of the user experiences. Thank you Susan Thank you.

Hi, Thank you tomorrow she thank you.

Have a question from the T.V. of Citi. Please ask your question.

Plenty, sometimes somehow goes are you going to do due to the early on with that Michelle Wendy. He goes look I insisted on <unk>.

No I cannot should be to the gmtone keyboards, I'll dive constitutional not tend to go to shouldn't should be one shot since you're doing those sales.

Oh, the whole what should have been.

Until usually each alma well that they are the ones you shouldn't look when you take an agenda isn't it seems like you're calling showing up in terms of wage.

Hi, Tony.

Shannon to teach him one tiny towns so to say unfortunately, each amount for the show to say you won't go down so you saw wage and whatnot.

Well there is a total boss on Coolsmooth quite yet, but then he tells me she said, let's say things.

Good morning management, Thanks for taking my questions and congratulations for the profitability for this quarter.

I have two questions. The first one is about the fourth quarter initiatives. So we sort of guidance on a quarterly basis may I ask is there any major marketing event activity during the quarter and if so would that be an implication for the expense line.

And my second question is about the implication on that mission like relation that limitation on the use of tipping, including large donor and mine I don't know what that implies for the leaching paying users. Thank you.

Okay. So the Vicki news when would be the high will you sort of went teaching hospital capex. So thank you for being here for the first question our CFO Eric.

Finally, we will answer.

Thank you for your question and let me share some information about our major events in the second half of this year.

Actually as Michael mentioned, Bob the linked quarter were more focused on platform development and improving operating efficiency and in the fourth quarter with a host a record operating events and by the end of this year what plants. Your Hoda and your voice there are many ads, which I believe was the minutes revenue as well and.

Do show no way I can we're reaching new audio podcast AD product and we plan to fully enter into the in car audio market, enabling more users to listen to high quality product and we believe this way up content creators can more attention and expanding user base as well. Meanwhile, we will or worse or just.

Promotion and he said he policy is based on the actual situation and we expect our revenue assurance policy remained stable Gen already in the fourth quarter sales.

Thank you and I would tell my goal for the second question.

Vicki I wouldn't get it we're not even going to no consignment between should are you go.

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No. The reason I don't have a woman you to though.

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Internationally are you willing to keep our consular she's selling into motion.

Tony hunting the Goonan men chip on the top.

With many of the trade.

Not a done deal or with whom in Toledo function.

Well many easy.

So why movement towards the leader well know on kind of blue fun.

Devons home inside edge of your friends and family to Tony took him a yugo velocity on the your central say he's looking at some assumption.

She do they choose genzyme this year with some insight on summer onto one exists.

So the crowd and some of the revelations is more about the like failing tap arms and they use their behaviors on the lapsing how long it actually takes a long time for those regulatory Palmer proves that the regulation.

Many like all come into different back in the market, which I believe is a reasonable for the industry at college here, we actually have been committed to implementing the regulatory policy and upside and a strict control on the user behavior I think.

Expectation functions on the papon at for the under Eighteen's as nature has developed and launched a under age most elastic December to protect their wife and interest from the perspective of product function, which has reduced the risk brought by the under age we're talking.

King behavior.

We have also been actively cooperating with relevant departments to me the network Security standards. For example in September we launched at the audio book networks and literacy for teenagers, so all powerful and activities throughout the knowledge of network security.

So that I saw audiences are fully aware that system to some to it I guess Oh theater.

I you you can put them into the using your follow up on cargo door to them searching condolences.

You may sales comps to to advancing the woman.

Moment, you know some true to your who fear that we all get used to your school and then Tom closer together.

Just on the middle in zero once you that and did so you know so many nice truescience well known to us on the 10 cents would be also.

Diverse source or someone that didn't want the woman you will find them properly.

Meal touched them. They go from bother you so.

Well me those two shoes each of the last local.

I'm going to say go to someone that Jim on the outlook.

Well me today to the horizontal.

You are going to go on when you can see when they need it is today the timing to home yet.

Someone as she goes it seems on it or when will you be in a book would be similar to the situation that we too.

Well, Matt as you know, we don't lose volume in some years ago, we filed for two reasons.

Truthful go to Jim one woman the outreach to the civil Mrs continues to boom.

Okay. So in general the concentration of paid users on the chair, it's relatively low so I'll go into some of the sector, which is based on why its interaction focus is more on the emotional connection between user and the host at why it is more about the companionship demand driver for.

I cant give capex is a strong bonds between the user and content created as well as the relationship. So instead, we're focusing behaviors are very rare all telephone in general we don't think the regulation will have much impact on our current business development. We they will continue to actively looking man.

Relevant regulatory requirements and cancers that after nine audio granted took off and we keep learning and rather than agencies in the online audio sales to promote a sanitation up the industry and sales reputation of the industry players and to meet the requirements.

Of audit related to common thinking well say, we can thank you.

That's it thank you.

Hearing next question is from really young Oh, Hi, sung please ask your question.

And yeah. According to Howe said it just show what that she went way ill, let go 20 or even when he spoke on you woman treating them well.

Hi, So a peak when he think he a bunch I think a whole choices that detail what is the two women. So but this is like a profile you'll notice in making shall I say this with Eagle when do you know what the other one you should see a woman me and oney or anything on that.

Okay.

Got anything Okay franchise LT I mean, he meant a young male issue so who wants to stay you see a yahoo.

That then pay for inside China, and I would say that I find myself. Thank you management for taking my question I have two questions. The first question is can management share color or some details of our latest cooperation with the Colombian government any implications on revenue or investments going forward.

And my second question is on 2021 outlook.

Can management share any expectations or guidance in terms of maybe revenues or uses thank you just yet.

[laughter].

Hi, Thank you.

The sensibility.

But I wouldn't be so sick when you own them Nacala condos himself with.

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Well to the usage and the see CMBS complements the FBI Hall at the eyes of hybrid and I thought Oh come on you are going through my mind to private usage.

Disillusioned this S sedans you go.

The one I thought she is actually got them to know the city to.

So this is jim or someone Puma the woman the source anyone know sitting here two years ago, who would be way to continue.

To that they need to do that so much of an article in the times we continue.

Well I'd say take with GE, the loosen Trinity Vue Woman's day name again, so I could ask you to her home in a physician.

She said, though to goma until we all need to.

So unit volume.

Simply CBU tons home and how do you tell me young Womans I realize you so far that we're talking to them in a quicker Dol condolences.

Ah ticket sales pick up on the table.

So the question. The first question is about the Pirates My audio me Joe programs. Each year has being enacted into so we think meet your was selected as one of the peloton My audio mutual companies, even in Guangdong Province is actually.

Equator recognition from the regulator in authority over the Companys top positions in the industry and also a demonstration impact of Lejus practices. So this will actually pay a guiding low for us and for our future development of content categorization.

And to add technology developments and also the big data analytics. It will also increase our industry impact and enable us to receive more support in the technology development and innovation.

Ah So soon woman centric.

So I started school my COO and John.

Josh I'm from hydrogen so.

10, she took a UGC is again due to the side, though tissue fruits and they don't it's comfortable to go and I know, it's useful to treat them to go to come to the father.

Keep his hands or thought on how to say emotion.

Trend it should put on you can you may see some that hungry.

Ah publishes I would use a them Oh, there you go Mano punching summit, where young Ku satellite.

Given how the quote on the.

Looking your lunch.

Okay. So in general our next that will more focused on the enhancement of our tap on the construction and focus on the Unik UGC feature and support our content creators try for long term growth through AD technology and explore the diversified business model.

Including committing ourselves to expanding the audio applications to narrow and also bring users they really interactive audio entertainment expenses.

Our plan is to.

Meaning that the good.

I'm on a holloman show could go to see genlyte towards its a bit uncertain when.

Okay. So for next year's forecast the weird thing its still too early to say anything about that so we need more time to file future development. So Carlos we will not discuss the detailed the forecasts are for next year. Thank you said it'd be thank you.

Thank you Chad.

Your next question is from I believe of credit Suisse. Please ask your question.

Oh, well anytime soon so you sound like you know what they are.

No I'm good job pulling them kinda when she joshing I wanted to mention that the intangibles you how either chunky seem to go do you need to look Sandler O' Neill me too.

Hi, quote on the Jihad, though I will translate myself.

What's management's even encourage oh do you feel like streaming audio entertainment competition landscape.

Oh, the audio luxury sector and God you guys. If you got your that you plan on overseas expansion. Thank you.

How are you.

Susan seems undergo let him make a figure that out both in financing.

Oh, well my son's handhelds or somebody in Chicago or sometime diseases drugs will you take a union disciple.

Yeah, So don't really own can either <unk> or just you know just using a sizable should.

Poor going and then leave a de man woman, Julie Hi on the nuance it Jim.

Jim goal or an on who the sit through the survey.

Real quick do you want to either completed HM who them so true yeah.

Good morning, Jim that you soon on the Lincoln the TONBELLER Kubota Kinda Mark.

Say selling your home in Romania, most was without the they don't want those are that you'll show the <unk>.

About the eastern Seaboard Judaism, there Tom to conservatism just it needed to know.

Well me John she should only on Tom tool so truthfully.

Talking to you in one.

Did it don't do true mine, Julian who the union committed to get to know how to Sheila.

Bunker Hill with who are seem to be all that's it for this amazing simply been traditional woman uses cities I tour.

So what is it the same way.

Domestic no one is home to the cochlear whether in home.

Clearly, Tom, though so do to assist them to know a woman something diluting the.

The muni masculine needs this.

Due to the sales and you should.

So compared with other platforms in terms of the competition IGI has always been targeting the audio market with a strong focus on diversifying the content and committed to developing they deliver the basic business model with years of development and Afrezza we've.

Give out the massive content cool and feel to have strong community atmosphere and being committed to providing a highly engaged in age interactive community, while creating more possibilities for audio to our leading technologies. So in terms of consolidation we've actually.

Establish then you factor in rewards mechanism, while content creators and further enhance the content creation and improved our content quality. We will continue to meet users that rectified demand for audio and help them Express themselves and then received a companionship with we had a weighted.

Through a variety of focus areas like content creation communication and the audio interaction features we.

We are also dedicated to help content creators present themselves get recognition and achieve considerable income through with it. We believe the audio you those fees actually actually a blue ocean market and we believe he or she has differentiated and competitive advantages in the market.

No I would agree I know they are using their finance I got noncash Lumpiness Johns Hopkins, if his home town Hall.

So there's a few million and she's really.

Tenants out or is it sort of it if we see such a unique pieces I have young bother sometimes inclusion.

To help you know type and the tool money away because the trend in food drug so that you can sit huh.

Well, that's something you can tune done of course, I quit senior boots, you some woman the.

In the news.

But in addition, I personally think the audio market shocks and begin to get that up and the application narrows, the ortho and diverse we they increasingly popularity of intelligent vehicles and like smartphone devices the growth potential for that when our industry.

As sizable as mentioned earlier, we are exploring that new car audio market and we believe that the last month of audio device. It can actually further enhance our competitive advantages.

Hi, My couldn't come in Oh, we're really I want to sit on your soon to become hot dog.

How do you put the looting real functionality issue.

Oh, hi, one of them and use it to say somebody who comes to us.

You can do the juicy the sales his own way can that's okamoto sensor.

So in terms of the overseas expansion, we think the overseas market is actually huge and users have a strong demand for audio products, we are preparing and developing some of the pulled out no overstating fashion and when we have more.

Apparatus, and where we have more without we will get close to the to the market. Thank you.

<unk>. Thank you.

As there are no further questions now I'd like to turn the call back over to the company for the closing remarks.

Thank you once again for joining us today I think if you have further patches. It feel free to contact me just investor relation through their contact information provided on our website at IR Darlene should die at them all the TPG Investor relations. Thank you.

Thank you Sam.

Thank you ladies and gentlemen. This concludes the conference call you May now disconnect your line.

Thank you.

[music].

[music].

[music].

[music].

Hello, Ladies and gentlemen, thank you for standing by for Leisure incorporated third quarter 2020 earnings Conference call. At this time all participants are in a listen only mode. After management's remarks, there will be a question and answer session. Today's conference call is.

Being recorded.

I'll now turn the call over to your host Effie <unk>.

I've got but the markets for the company. Please go ahead.

Thank you very much Hello, everyone and welcome to need to Inc. third quarter, Turkey, Turkey on this conference call, we reduced all financial and operating results. We are newswire services earlier today and they are available online, but he's supposed thought today's call will include all the founder and CEO at least the Mako.

And now after the CFO me, it's true Oh, Massimo will begin with prepared remarks, and the call will conclude with a <unk> session. As a reminder, this congress is being recorded in addition, well highlights.

Highlights presentation and the webcast a replay of this conference call will be available in the <unk> that show off our website at IHOP dog eat dog at them.

Before we continue please note that today's discussion will contain forward looking statements made on the D. Safe Harbor coal, we so called the U.S. Private Securities Litigation Reform Act of nights when I keep buying these.

These statements type CODI contain words, such as late we'll expect target asking that you have the potential to continue or other similar expressions forward.

Well were looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a novel business risks and uncertainties that could cause actual results to differ materially from those projected in Oh I can't take it.

Many of which factors are beyond our control.

The company, it's a big advisor Representatives and other Reits. It does not undertake any obligation to update these forward looking information, except as required to I love the applicable law.

Please note that the interest on its press release and this conference call Utopia, Gosh, Oh, I'll became GAAP financial matters as well as all the kids non-GAAP financial measures needs its properties comparatively cooks the mediation on all the kids non-GAAP measures to unaudited GAAP massive I mean.

Now I'll turn the call over to our founder and CEO Mr. Mako like please go ahead.

[noise] no.

Got to go it comes out you did oh, yes through the awkward.

Hello, everyone. Thank you for joining us today.

[noise] that'd be a bunch of people using our father Yucca funding.

Well mine, but generally softened to 10, a month I would say San Lucas.

In January one.

Well one side is also showed susi shallow <unk> part D plans Osama bin Doug do you do you see.

So you think you would come up and up.

Valuable services getting call.

Coaches true Oh.

Oh, how these so called the resolve of met coal we might see normalization kinda, we adapted our leading national politicians not ideal sector for the first time in school going public we achieved a non-GAAP quantity pocket, which is also a testament to the scalability and the robots than you all called fit this model.

Well, mostly football Copel will yield Parliament on me on.

Oh can get used to that and you'll just see that meal with US you can go to Yahoo. You sounded like what does how do you do.

You want and you see the the talks you want them senior piece I'm going to quickly yet.

So, but you know one came out a few June you don't go I'm almost all can be summed up I was actually.

Hello, which I knew about it for a while.

Thank you for your will show it won't be summed up balance sheet.

Smart woman real go with a beautiful thing hopefully some.

Ah so you're seeing a move towards how will that go to the neo some kinda Josh.

But you go do a walk the do it with a new phone call goes I'm sure that all new bond issue.

Oh sure Youre months issues, we don't really talk towards a poor using your local no.

You will see.

If you do you can you talk about why they don't go so what I'm trying to agree with you that Bob and Shire them, but those are all positives and some do.

Oh, it's education to kick language and optimizing outcomes now offering as well as leveraging high quality user generated content continues to drive user traction engagement. We also introduced a more innovative features to for the year. So you they expected.

No. So quater all maki ever can give them a bold bites into one for a day year over year, we couldn't 56.2 million and our Maki average paid user base increased by 17% year on year. Additionally, we saw we bought when the average new the family.

Finding increasing value to our policies seem to content ecosystem. The nagaworld average monthly active content creators, we should at 6.15 million during the quarter.

Thanks to our efforts to all driving erection and engagement between content creators and to use the jewel audio and sound must be true the quality audio and sound like user penetration rate increase that to a certain point viper down from 12.8% a year ago.

Meanwhile, one commander tell time young Womans Union, either timed auction coal suddenly love Chicago years, Susie movie ever go out you can see we're going to show you and say Gee she's done.

<unk>.

So it sounds like you can use all the three show you where you want what do you want to go to Doug So Luc yet who don't seem to be able to talk to.

Yes, I don't know whether times due to the use of on page and looking says hamzah well since your vehicle sales.

That goes away Lindsay.

Somehow we don't see assault on your door Muslim didn't put up the two dogs.

Despite I'm cracked the backend to try to address the macro environment. These here outgrowth momentum reaffirms our ability to capture rising demand for high quality teachers go audio expenses and audio interaction lead. She is at the forefront of the rapidly developing audio entertainment market.

Pro whitening users. We've kept you waiting listening expenses driving quick shop premium content and expanding user engagement opportunities. We are committed to unlocking the great potential of the online audio market to achieve our well defined vision for the future I will now discuss the P.L.

So focus during the quarter.

So Dan.

Woman, just you called that column, our young boy on PAMA, you'll do you see the Neal.

Yes, this guidance, how cheap Curtis with telecom, though you woman they need on top of that sort of soon.

Well, let's call it a.

So that issue so.

Sometimes we'll be looking at BORCO slowdown.

Tissue at both ends up so.

Lets people woman penalizing them up.

Your chance to buy once you the you can see.

This is all I mean and show you the Sasol.

Let's see book or that you're most without.

Well I guess I'd say you'd she can be summed up on this is a deal.

Firstly, we continuously expanding and optimizing Ali passive and that work user generated content portfolio to be a wealth of patients for sustainable growth.

And we have a strong emphasis on content creation and continue to execute to initiate keeps off all content strategy. The novel well have to upload your tall Apple continues to grow rapidly in the third quarter with liking me then you call cost the uploaded tall tap on all cumulative number of Qualcomm.

The 254 million as of September Thirtyth is Turkey, Turkey represents one of the pieces and what do you think that that.

Actually increase over the previous year.

[noise], sorry, but see the woman who are you seeing it I talked into tool sales.

What would you need to talk to your comment on the peak late.

Well my guidance in include product.

20 years limb that's hard to say.

Hello to you said you know you get used to the European sales.

Finally Hawk women's Y O Y type you know something's got to handle.

Going to school.

Cool, meaning do you know, who you and talking to you.

No guidance on the great ERP either through yet.

It seems like that's one element that bill Belichick like.

We will continue to see that female millennials dot com.

You're not going to go to some of your cool Boston Soaking heart lung Neil.

Yep.

Well, we haven't gotten kinda no.

He's asking the real quickly.

Are you doing.

Thank you well go what's your name in a quarter.

Well done up on kind of want to do you think then I'll be presenting them seems right you can do a lot more.

Quarter with more than half the concentration and optimize the constant dollar through a number of initiatives. We for the improved audio creation tools to support content creation. In addition to ongoing fact, then good your p. occasion function based on our audio sensor technology not only provide more audio.

Contact tempted Apple, including audio recordings of the liberties and our original user generated materials.

We will pass all huge HBP home page and the for the organized and launch the representative John.

Weve redesigned interface and navigation boxes.

Cleaner and wanting to buy feature we neutral using exploration and the listing expenses a lot wider powerful offering.

We are pleased to note that a few of the new content Iraq, such as entertainment instead, Liberty and makes a premium we proved that the exclusive collection so high quality Paul.

Afghan is back pretty strong traction with existing and talking.

To your door months, usually occurred on me Okay Boy.

Good in Q2.

Im a little hard to you will conclude let me close with all goes on we will tell you that no we don't.

So as you may know Tom towards the top door to door person Aneel, you don't tell moment in time.

Absolutely.

You will.

Well, then cotulla being the most you'll.

He said.

The answer to your Auto Museum Mogadore.

Tom Sawyer looking Neil.

No Theres no news in coal by the debt that you essentially.

Oh I'm sorry.

Can you give me your quality.

Inching up as a whole you would Uh huh.

The only other point.

Ladies opinion Bono total Asha wants it.

Centene Highpower will know that all.

Yeah, that's the ones that you saw.

Well my I pod to law are those changes even year, though although.

Okay. So so far you know some funds I'm going to pass Idaho.

I heard the CZ hook on site.

As you can with some meaningful positions in core.

I thought I was also it was only when a woman do you ultimately console at the GP would come to you talk also down that you can now go to its own Conway the NIM, although that can that's on T.D. fossum being.

In wave two job the Needham Tom So that people can call, let me wrap up our call.

So I will not high 20, Tula, So union <unk> both on things.

Sounds good.

Oh backward looking high highly on yields as you can see on the job.

Senior Board sometime a woman does get separately.

In the quarter, we also diversifies our content on rock to bring in more content, along with the Hawk and timely topic, when an avalanche layoff, Greg keep operational capacity and the promotional activities to generate crashing distinctive contact from equator and team have to tap also appeal to users.

For example, we launched the life audio shows and produce a possible collaboration with a number of popular TV series and a variety shows such as nothing by 30 and the company while Superman, we've created huge banbury and using it to each episode would pay more than.

200000 times on average and reached more than 1.3 million times the exposure.

Also allows they'll pan pen caught idle show today, which would mean like in some of the most popular idled to share their thoughts and finance all competition.

And to rapidly their fab so what.

No going to front page can Pat me much of the content creators to produce high quality coal cost based on different things.

In college mid to long tail content creators to be more engaged in an active on the capital.

And we wanted the backstop down with increasing user traffic and higher levels of exposure. Moreover, we launched the pilot pay leaves us subscription program to leverage the growing premium audio compounds, all capital and further enhance our monetization capabilities.

Most of the woman you did see the so called on poker you being choose your thoughts off mute is that some of the local communities and view it.

Joe Here. This afternoon well then please follow please announce your father identity.

He says okay. That's the idea.

Thanks, Toni T. some the Samsung do that because you have would you see.

Here the book Asylum kneel down that would do to your while you do trenching, that's what you're going to be launching.

Don't really do a treadmill, what's in there I'm Tom Paulson.

She's okay, I'm going to tell me the NIM towards a tone that down most who don't know comment you saw neutral.

He was also down SASSA can they do you know why go the Neo Tom's auto I'm Dilo, just sort of auto sales.

In Q4 my type it into balance shows on Sensata will could follow.

Got you know booming units in the book Tom.

Hi funds out toward opinion.

Oh, Oh sure my it Department.

So would you mind to Tata book Asylum did you couldn't pull the bulk of that someone look for them. So.

Saudi solidly on consoles and cooking has annual sales of good on true though.

Well my something.

Since you talk to you all been seeing popery I'm going to go to other Liam talk to us.

Well my opinion will fall on the NIM going.

In the meantime, we're actively working on expanding our forecast the business and tried to build the leading to additional feature in the tiny spoke oximetry.

September we launched the Apple 10 worsened 2.0 integrated online offline resources to support contemplated seen their back office operations, including upgrading commercialization settlement system industry.

Industrial assets alone traffic support and brand new data analytic capabilities, we added to attack the more new creators and true content offerings in both quality and quantity of more than 50000 half the whole keep taking the first 30 days of this program.

Recently, we hosted our first the offline will cost us along the sales team and like a popular content creators in core classes sector to share their Croatia expenses with Qualcomm.

With that she will host the more focused us along and relate to events every month to establish effective channels of communication and build relationships with existing and future content created we believe it initiatives will help cost kept awake and there are some more talented creator.

Reach all content offering.

Well one but.

The living the autologous Samsung quotes.

So its first of all you.

Homes, which Ohio with your guidance it.

So I decided to do well not as hot you love.

Don't call it presents a war.

Vince will do the dose uncle I don't know cool down C. wonder on targets are presented.

Bundles in your question that comes up.

Just to that other than them go quarter can do that by wall.

We tell you can go to your existing with them.

Well my Kindle, Tony just to put that organism schantz, one either two awards I mean, although bombing.

That's easy.

Hello, Cantaloupe with only the Google.

Sitting able to do no harm so just some kind of balancing this year.

But some model you'll now own opinion that you saw yourself into golf Silva Lassila can go if whats your view that Neil towards them.

Well go how the new it's also true and this is a new thing yes.

Wrapping up with you on that Judy Walmart, which will add three or so that one of them.

Hi, the Guantanamo segment.

Okay, you're talking it into your guidance is cyclical.

So youre limited Hugo so to avoid neutral Toyota.

Similarly segment that you do get into the quarter. So a couple of times on top.

Tom Tom Carla Lisa single.

Another area of focus so quarter in both the enhancing user engagement, increasing the vitality of our user community and strengthening the balance between keep paying users.

Watcher with lots of the rights offering partner can pack Jewish users paint off the performance of their favorite content creators and help them grow on the powerful this enables creators to have more exposure and opportunities to interact with more users. We've seen that the holes that you lack in from that.

Last month comparisons are more active in the content generation and half a battery engagement Ms audience.

Which further added base the virtuous cycle of our watt vibrant community.

The company has also utilized our vast the AI technology tools that can be any patient to the identified that high potential content creators to feel the immersive audio experiences in our community and bring you. The closer together, we've created a SaaS type of macro block where you.

Need to use the Campos and interact with each other so we're writing off social networking function sales.

Thanks to all these efforts have to you know engagement and community vitality. The monkey totally interactions reached a record high of 3.2 billion times in the third quarter.

So I said, but lets you don't come about Workover limping along with them.

So let me go about acquiring whether going with me.

Gold only on top of that.

Well, it's also important to them about quite a bit.

She is on top of and then also with the booking you lowered the two war.

Sales will continue to come to us.

So what I like.

It can be summed up on the shoes.

So usually the.

Me on console sales can kind of looking back part, though can go all the time.

So while my eyes to run that goes on we'll go.

Thank you we'll go talk about this at Brooklyn, but quiet quarter converted one too.

Let's say positive on the news the things you Samir woman Yeltsin Nums home towards.

Getting way too if you could talk about what could be more features more cocoa chose the border fossett sometime and then getting someone to cool.

So they all don't Miss It does no that's when my mail to Tom Civil War will do and then we'll go talk to them.

Two young someone who dosing the incoming another one.

But you may see that book.

So for a couple of differences.

The order book was how those Oh, that's on Willa when can you tell about why the counselor to war.

Sure. This is we will go to Lincoln you look one of them called common Offences Union Accordingly.

Well that sounds good.

Susan Boyle talking that Wasnt going on your shoulder Dotcom Tomatoes.

Again that in theory.

Sure and then goes to the Dol rule Costanzo so for consoles.

In addition, with sales coating integration of our past and auto entertainment have user content creators increasingly active in both segments.

Over 65% of our auto Entertainment calls, we're converting from coal cost of content creators, marking a year on year over year growth of 15%.

Indicating the high acuity patients content creators across different segments of the powerful. Moreover, we posted it levered compared to help I'll pass the creative game on passion in Defense Atlanta. For example, you all did we hosted a need to film festival and in light of the country.

Creators to produce forecast in a share their stories about films through a lack of training talk show. These kind of events have modulated walcott the creatures who have never tried the auto analysts action before joining the live streaming show and had a truly interactive and immersive audio experiences.

They not only getting more fodder for their passes through the event somewhat down have events become audio entertainment cold and interacting with their followers through various audio entertainment features.

We've been innovating in interactive features happening that can be strengthened the connection between creative and he uses and enable pop has created to attract more audiences.

Htwo.

Good on the tenant you tool parts without another year with its own top one I'd say what are you comfortable assuming you cooking oil quantifying it on more ships.

Can you do a pound of anyone who has any that you sold them.

Woman sounds like GE ports Skoda using Saddam.

We have over 2 million Chico Thompson will go to Google I apologize that you will come back to me the system.

Almost sounding tigger, you hotter woman say.

Then moving on your senior before that you're done with it.

Beach, and then go Parkway aluminium say oil boycott process yields on each other Yoshida will.

Women jumped moon core diluting just following on the Gordon.

Yeah, well you also like you some liquidity yes.

Today, you can find the no question you called out on the Yahoo will move well me down.

You such as ours since our founding semiconductor consorting, you both tweeting towards moving that standard.

Beginning with our lives so either you may begin.

In addition to men tend the business grows to various strategic initiatives. We are also exploring opportunities that will allow us to diversify our business model leveraging our massive content based and the leading technology capabilities. We are deploying the NIM in car audio market and explore.

During the five gold market with a great potential by collaborating with new energy vehicle producers. We believe this pen is off strategic importance for our for further development and expansion in the online audio industry and we will optimize the advantages and that is.

Of our audio content in diverse views narrows, we are making sure they knew they expenses, which a broader user base and increase our user scale throughout year selling expenses and expenses will audio technology and operations, we will cooperate with leading companies in the market.

Advance our in car audio strategies and deliver superior audio experience for our users.

So looking just will fall man woman. So do you tweet only the most of them to use was element and that's on the New York.

Cool all sorts of offensive teachers.

It's one that I want to have some parts of the ordinary other immune towards.

So on Incenting that involves an unpretentious on that this is happening.

Hum door seem value that you extended the neo towards Oh, you said your name So 400 consumer one too.

Being today and Thats our classrooms.

So it wasn't too hard than any man woman, yet John Jr. Booties on.

Sunseed should you fancy Lonesome right.

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Finally going out is to you that autonomy and most incidents use so.

Right well.

I will now turn to any one of those I assume you can make on wanting to use it. So you put most of the neodymium should go towards.

Syed Kigali on Saddam Muslims.

Yeah Senior board here, so looking at the New York the equivalent of vehicle Youve shown.

Well I won't learn you don't issue.

Cause on and went to them.

And if you see we move onto them.

Yeah, we'll follow up for them.

In terms of auto technology, we have fabricated to advancing the application of our technology all capital to big data analytics and machine learning, we continuously buyer in the squad talented long tail creators all tap on lending meet newly joined the high potential contemplated.

Have gained a large number of color and more attention in a short time, we support our poly AI enabled representation system in the Aframax and 2.0, we will further upgrade the data analytic center to help created understand their Croatia ability and a 10 basis from different dimensions.

In addition, we establish the AD supported online audio content management mechanism to identify and until when appropriate contacts.

It hadn't shopped, our content control ability and enhance our operating efficiency. Besides the quality improvements have come down.

In the future, we will continue to develop cutting edge technologies, such as artificial intelligence to power the content creators and business development.

Sounds good well run down to ship, we shouldnt really see this.

Lastly on protons are Johnson.

So on Wednesday, So we will tighten you can sit on that engine and feeling good.

Bob will touch anything says on the Jihad.

[music].

In conclusion, we will continue to making efforts to create value for our users maintained our leading position in chinas online audio industry and capture the tremendous growth opportunities off the land audio market.

Oh gosh it either so I mentioned, a moment ago tagging CFO loads on the bonus millman GSR tie rule the user.

Thank you everyone with that I will now turn the call over to our acting CFO Ms., Chen who will discuss our financial results in more detail.

Thank you, Michael and Hello, everyone.

I'm pleased that our third quarter financial results were in line with our expectations.

Endeavor to increase operating leverage well above that of improvement in profitability during the quarter in the third quarter. Our total net revenues increased by 10% to RMB 361.5 million from the same period offset delighting, mainly contributed by the growth pace of the base.

Our average lumber of boxing pay user increased by 17% year over year to 448 was restarted in the third quarter driven by our content offering strategy and around our media efforts in driving user interaction and engagement.

Currently we generate our revenue primarily from auto entertainment business, which contributed on the 355.8 million to net revenue in the third quarter up 2020, representing a year over year growth of 9%. The increase was mainly due to our explicitly expand into the base and increasing the number of.

Paid users for our interactive audio social entertainment Kodak during the period. Additionally, Paul Casa advertising and other revenue grew by 61% year over year to RMB 5.7 million in the third quarter up 20%. The increase was mainly due to our increase in the lumber or paid users.

Our core capabilities and advertisers.

Cost of revenue increased by 2% both year over year at quarter over quarter to RMB 270 point Lybia them.

But year over year increase was mainly due to the increase of January at a we have a benefit had a call at bandwidth costs, which were generally in line with growth of the companys business as well as the recognition of share based compensation expenses that became effective apply after all at all partially offset by a 1% decline.

In the revenue sharing fees because the LNG programmable content creators we lost in the third quarter uptick in lighting has been scaled up in February 2020.

The quarter over quarter increase was mainly due to the increase of revenue sharing fees to our cotton creators, which was in line with growth of your revenues, partially offset by the decrease of share based compensation expenses in that quarter.

Our gross profit will be like 2.6 million in the second quarter, our third quarter up 2020, referrals any increase or 41% year over year, an increase of 6% quarter over quarter.

Our last GAAP gross profit was RMB likely 1.9 million in the third quarter of Twentytwenty, representing an increase of 43% year over year and increased or up 1% quarter over quarter.

Gross margin increased by 100 basis points from the second quarter opportunity 20, reaching 25% this quarter.

Our non-GAAP gross margin was 25% in the third quarter up 2020 compared to 26% in the second quarter opportunity operating expenses decreased by 13% year over year, and 10% quarter over quarter to RMB 100.2 million in the third quarter opportunity research, adding bachman.

Effective a key component of operating expenses was RMB 55.6 million in the third quarter up 2020, representing a year over year increase of 38%. The increase was mainly due to our increase in lumber up research activities for employees as well as the share based compensation expenses recognized.

After our IPO sorry.

Selling and marketing expenses were 27.1 million in the third quarter Twentytwenty decreased by 53% on BPP $8.3 million in the third quarter up to delighting. A decrease was mainly due to a reduced expenses related to branding and promotional activities in the third quarter opportunity.

General and eliminate administrative expenses were RMB 70.4 million in the third quarter of 2020 compared to RMB 7.8 million in the third quarter taken lightly.

The increase was mainly due to the increasing expenses salary unaware of the benefits professional services and a recognition of share based compensation expenses upon after IPO.

Our operating loss was in line for 6 million in the third quarter, Tony Dungy narrowed down by 82% year over year at 62% quarter over quarter non-GAAP operating loss was RMB 2.9 billion in the third quarter up 2020, now it's down by 94% year over year at 74%.

Quarter over quarter.

Net loss was 37.1 million in the third quarter up 2020, now that by 87% year over year at 72% quarter over quarter non-GAAP net income was RMB there'll point sixmillion compared to last GAAP net loss of RMB 48.5 million in the third quarter after the lighting Alaska loss of RMB.

One to 2 million in the second quarter, our Twentytwenty respectively.

Basic and diluted loss per ads will be 0.13 in the third quarter up 2020, compared to RMB 30, like one or two in the third quarter up 20 lighting and I'd be 0.4 in the second quarter up 2020, respectively.

Non-GAAP basic and diluted net income per ariad will be there, but they are one compared to last GAAP basis as he lost the idea of RMB 3.73, I'd be zero point to light.

Quarter after delighting second quarter up 2030, respectively. These.

The difference between GAAP and non-GAAP EPS is mainly due to adjustments to accretion of pay per share reduction values and share based compensation.

As of September Thirtyth traditionally had cash cash equivalents restricted cash as well as short term investments of RMB 350.6 million.

Overall, we achieved meaningful progress in the third quarter opportunities will continue to be optimistic about the future auto industry in China and across the Gulf in the near future. We will continue to carry out our user growth strategy and remain dedicated to you have they are causing cofetel certainly.

Brad awareness, expanding technology capabilities and further back our strategic initiatives to build out a platform for sustainable growth.

With that Im Matt for the fourth quarter opportunity. We currently expect total net revenues to be in a range of RMB 370 million to RMB 400 million. This.

This forecast reflects our current market conditions, including those related to recover by the license or damage and reflect the company's preliminary estimates of market and operating conditions and customer demand, which are all subject to changes.

This concludes our prepared remarks today and we'll now open the call to questions. Operator. Please go ahead.

Thank you.

We will now begin the question and answer session. If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced.

If you wish to cancel your request you may press to pound or hash key.

For the benefit of all participants on today's call. If you wish to ask your questions to management in China. Please immediately repeat your question in English for the sake of clarity and orders. Please ask one question at a time management will respond and then feel free to follow up with your next question.

Our next I mean, our first question comes from the line of Vincent Yu of Needham and company. Please ask your question.

Sure. Thanks management for taking my question I actually have a few questions.

First question is can you guys comment on the total time spent by users on the platform.

As the summer break was shortened the beauty in doing.

During the.

Sure sure.

And just like you saw in Q2, which you will Miss soda Ash wash out once you have.

Carlos.

No the.

The second question is can you comment on the booking behaviors.

Yes, the user cohorts have you see a significant rebound after code with Nike.

I did.

She goes pediatric altogether.

We should wait several each in general so.

Yes, Joe a huge good color.

So question is that we have any updates our goals either setoguchi like streaming initiative and commitments initiative.

On the huge sales yet.

So should you use I wonder if you could eat into.

Dziedzic culture, Burmese Ruby good yourself.

My first question is about the data regarding.

Around podcast and the live streaming jewels should programs, our Georgia Goldman.

We have four cohorts before too long.

She is very good.

Someone from GPC Asia Sujit. Thanks.

Toxicity and what I heard.

So I'm going to get off.

Okay zero introduces a decent people with absolute dollar to the switch you sort of its launch up some peanuts will get into the second half.

The switch USIS saw Darla.

I will match, the ball to though or sharpens on that in June.

Launches.

A woman really to the U. woman she's bottom to sound too much all else equal thinking that the long haul as future.

I'm sorry for the June a woman she said about your kind of element to you before we go to two alone they used to the new.

Come see us on center, you see that it's only two quarters.

To their full for the new to the name or dollar our father pulled on a wildfire, where those junior booty summer peak.

So you would have seen lead valdano youre with US you should talk.

You bought some sort of where you are too.

Okay, Marco will take the first the three questions and that'll translate bookings for the first question is about the time bound by users on the panel. So we had a shorter summer break with the momentum and the average data usage time of 52 minutes, which is sad to our efforts only.

Adversely by demand from users. So in this quarter, we landed a serious of sending them and for being reached and highlighted our premium content.

The massive high quality content pool and diversified interactive features for the improved our cap on its appeal to you that you should the usage time any half that the vitality of our community.

Doug wouldn't reduce or.

You guys had this year golf video recording.

It seems the whole milk central were shown that wouldn't be.

[music].

So again, you can see more consistent newborn canon you'll end up with on this are you comfortable can come to other thoughts on file.

Uh huh.

So you don't do it sounds great I associate Belvita.

Woman can harder shallow hydrology is on sales with a cool.

Oh cement sales.

Hi, Michelle.

So the topic, a footnote who should continue at home card.

Look we're gonna Holler piano usage says our sales had a cellphone.

Said another healthy.

Krwfour each anatomical.

Youre hopeful for the R&D to determine whether or not.

To support although youre changing the switching or will Miss the sales on that you do see also to some to the diesel pusher you go further debone operation so touched on them.

Okay for the second question is about the highest paying user offer.

Adding rebound after the Cobi 19 subsided. So first off the audio lactamase quite different from the video like streaming. So all my audio is much more mass market. The concentration of paying user is relatively lower with the limited revenue concentration among the top user.

So overall, we saw user have better balance the online and offline assumptions, while the resumption of working school.

And all lines with some change recovery, we saw rebounding average ordinary users battling compared to lots of water, which is not due to adopt hyatt the paying user cohort.

Thank you just to find a solution.

Yes, she bought it wouldn't be a little Cork, Ireland as well, so say an zibel phenomenon our memories on the year Q1 are you going to go subsequent living bar.

Consequently, Offences Jenny Apker can cost you want to you then nothing today that should all.

And door.

Due to the the amount, yes, Saddam losing your sales trends on London, you lower the woman's ago looking you know the functional.

Good for suitable donor Joan.

So in terms of celebrity like streaming we provide a pack on but deliberative to interact with fans and the channel for them to meet and interact with deliberate is more closely many popular celebrities are willing to interact and communicate with them through our own my audio and.

And Tim and future.

Once we also the Shawn Qu on door.

Bob Landmark will you.

The general who don't lose future.

Hi, another sort of oil Holly.

Towards your life was a good quarter Neil.

Do you believe that there was a woman.

Okay and are you going to go to the ore zone.

Sure Nick.

Therefore, genitalia, yada yada, you and something kind.

So I will mention I think in the trouble.

For us its digital will do.

Jim would have bono dizzying number one.

Hi on a woman level is there room and so when you run a $1.20 the autumn.

Because you have to go and many of those are the continued one Esa niches that Bob.

No.

He uses it.

Certainly yes.

Donald issuance on a younger woman years.

Gross order you got increasing their dual function.

Yes, as I referenced.

Although you Sheila often want to hurt I don't remember.

Tim on bubble around your sort of go buy one.

So I will not consolidate supervisors, however, they will show up.

But in the meantime, we are dedicated to meeting users' needs of interaction with celebrities through different programs and again, reaching the live streaming content through various things so.

The Mako take an example, we might get a chance to win a former member of Rocky growth power, one, which you might have heard about highly popular goes to our path for audio last streaming and activity interact with her fan base.

Exposure accounted for more than 2 million times.

In addition, we also collaborated with a number of popular TV shows to halt the creativity that the other laterals, we cooperated with Athlon age 48, a popular goldcorp and young who are performing the show up there coming one super bad with the laptop attention and discussion the Montana.

With more than 1 million times exposure across the Internet and 600000 times cumulative pay.

Sure sure Okay.

Thank God.

Formed out of how many will then share the using their core class a sales reduction Lena well Madison Dearborn somewhere else.

So did I hear you talk on autopilot running hard.

Well, that's your thoughts I realize significant and low operating theater sales.

In terms of the advertising, we believe the advertising for audio and actually quite high potential. So we currently many focus on optimizing the advertising management capital and a current stage, which is expect expected to have more positive impact in the future.

Yeah.

Thank you.

Thank you.

Yes.

Okay.

Can I ask one more quick question.

Yeah, sorry, maybe I can ask just one more question. So like you mentioned is that we are developing that so on the audio.

So I'm wondering are we going to walk through the.

Our two manufacturers or the software.

Platforms, which are export is all the manufacturers and also feels like Q4 deep audio which will be used cars.

While driving.

Yes.

Well heavily relies on like a recommendation and also our voice control.

I mean.

Returning to more sales to that and divestment or are we going to work with them.

Verizon or <unk>.

Provider or like a little bit.

The impact on R&D, but we're just we're such a good thing about you know lets you know it's a goal now to get to the engine that situation, where this all mini skoda into Joe the conjunction European.

John Hogan no Jake.

So that you can what they just some directional color if need be just speaking of the Yankees with you that we cannot yet to go still because of the Almirall myself and John What's your thoughts on the hydro.

Not too dissimilar to whole chunks that are in need of wholesale where you're from each other.

Okay.

Okay. Thank you.

Amanpour noncore, so driving sales archivists is 18 and seasonal rental.

It's actually going to hope.

Well my answer to you Bob.

Totally minute trends.

And so you Union Glenda.

Sales and so the cohort EBITDA.

But on Wednesday, she'll take time team soccer.

Sandbox up so those how soon.

Hello.

So again, well moqueta guidance in Cotai demand.

Tom can t. yen.

You mean on door Sunday the her side.

Linking whether it's you've got to you on that yet.

Hi.

So you can take a look toward that as accounting entries.

No I mean sort of doing the same so that remains a good hunting the men.

Please bear tweets in the.

Your energy sources say, Tom Toomey Aldo.

Does it fall man woman you'd see it started to bear.

A woman servicing woman, thanks, Kurt I think men clear how's your elements they tend to be that is it.

And on to attend the seasonal Virginia.

This is a man woman doses.

Those are you too hot.

Pushy are wider true true tend to it so that should hold true synergies.

Okay, I will translate for Michael So we think the in car audio market the high potential market, especially for the new energy vehicle producers and for that you saw for audio application is more about the focus we will concentrate on.

Especially in the product side and also the always on we are going to improve both our dog product also the operating income combined with our AI technology.

Firstly, we will improve the the user experiences for the in car audio.

Product.

And.

You are right that are there.

Products might not be applicable in two.

We used in the in car audio is done.

Another site in Florida, AI reputation and recognition is very important for the in car audio market and we do have years of expenses in the technology and also we have leading technology capabilities, which we can use to deploy into the in car audio market.

Yes.

As for now our focus is more on the AD technology and also the improvement of the user experiences. Thank you Susan Thank you.

Okay, Michael Thank you.

Yes.

I have a question from Viki way of Citi. Please ask your question.

Plenty turns on how close.

Well, she's going to they're going to do to that line.

Michel when do you think it goes to the client.

Okay ill suited to lean on keyboards, all bunch of diesel sales.

Thank you we'll go to shouldn't should be on Shaw should be doing.

Yes.

The home.

So until you actually each alma well they are the ones you shouldn't look when you take an agenda there isn't a single common showing options.

Wage.

Sean to teach you want to buy new Tom So to say unfortunately.

So to say you won't go down so you saw wage.

Well Josh.

With that he said total boss I'm going to quit jobs that they need sales means I'm not sure.

Let's see if I use.

Good morning management, Thanks for taking my questions and congratulations for the profitability for this quarter.

I have two questions. The first one is about the fourth quarter initiatives. So we saw the guidance was up on a quarterly basis.

Is there any major marketing events all activity during the quarter and if so that and the implications for the expense line and.

And my second question is about the implication on the mission regulation that limitation on the use of tipping, including large donor and mine I don't know what that implies for the leaching paying users. Thank you.

Okay.

[noise] Weekly news one would be the high will you sort of went is so popular capex. So thanks for being here for the first question our CFO Eric.

Our real asset sales.

Thank you for your question and let me share some information about our major events in the second half of this year.

Actually as Michael mentioned, Bob the linked quarter or more focused on platform development and improving operating efficiency and in the fourth quarter with a host of regular operating you bet and by the end of this year, we plan to hold the annual voice ceremony, and which we believe was the minutes revenue as well and.

Sure No way I think we are reaching new audio Procop AD product and planned to fully enter into the in car audio market, enabling more users to listen to high quality product and we believe this wake up content creators in more attention and expanding user base that will be while we were awed or solid GAAP our press.

Moshe any certainty policies with the actual situation and we expect our revenue assurance policy remains stable churn already in our fourth quarter.

Thank you and I would tell you Michael for the second question.

I'm speaking to the I wouldn't be so we're not seeing one too.

Okay, and I'm, sorry, the NPL, which would as you go.

Good she lives the sales.

Hi, Tim Tim what fuel costs.

Well I quit buying centers.

To implement a tenbfive one due to the border I found the Jonathan purchases.

So the dealer.

Yes, Tom This is Jim English living certainly through the summer as you go quite as aggressive.

So then what are they sort of way with his colleagues.

Colorado, but how many usurious necip cushion on Sunday I may come though.

No.

It's the latter half woman you to though.

Two years ago last years ago Pinquater soon.

The team has on your quote our financing Lina on seizing younger comes with a severe.

So gentle with NIM.

Didn't itself Trina.

Internationally, our you know kind of our consular insight into motion.

Tony hunting, the Grunenthal men Shish kebab top.

With many of the tree.

Not a done deal at least Hillman palette of function.

Well make it easy.

So why movement towards the leader, while on kind of Blue fun.

Console inside edge of your content the Genconn in Twoq and you got a lot of those who don't know your central say he's looking at some assumption.

Jeez you that you should try this year with an inside sales from the Ontario on exists.

So I had a crowded some of the revelations.

It's more about like streaming tap off and the user behaviors on the lapsing tap on X.

It actually takes a long time for those regulatory ER, the Palmer proves that the regulation.

Many like all come into different back in the market, which I believe is a real.

Reasonable for the industry at college here, we actually have been committed to implementing the regulatory policies and a pilot.

Controlling the user behavior identification function or the Papuan at for the Android users meet your has developed and launched in the under age more elastic December to protect their wife and interest from the perspective of Procop function, which has reduced the.

Brought by the under age we're talking behavior.

We have also been actively cooperating with relevant departments to meet the network security standards. For example in September we launched at the Auto book networks and literacy for teenagers go offline and activities to add the knowledge of network security.

So that is already fully or would it just wont to some to write ups or downs theater.

Are you, including waves without incurring you look upon cargo door to doing search and condolences.

Leasing cost you to advancing the woman.

Moment, you know some through the local food, it's reality and use the Yahoo named tortoise agenda.

So you don't see millions the hook once you that and did so.

So you know several months you know some truescience among our top 10 cents would be all shopper.

The worst was.

I want to just wonder woman you will follow up with.

Meal toxin nigger film bother you so well.

For me, though to shoot Gee the lowest local.

To take the someone that Jim one yard.

Well me say to the whole though.

Im going to go on when you could conceivably it is today that I'm going to go home yet.

Someone a few goes it seems on as well.

While increasing the throughput to the situation is that.

Well my zero click on in volume year on year that figure we firepower to do.

Truthfully.

Tim what comedy also took us a woman she continues to boom.

Okay. So in general the.

Concentration of paid users only chair is relatively low so audio entertainment sector, which is based on wireless interaction focuses more on the emotional connection between user and the whole at why it is more about a companionship demand driver for painting activities is a strong bonds between the user.

Content creators as well as the relationship so that local gifting behaviors are very rare all top line in general we don't think the regulation will have much impact on our current business development. We will continue to actively into remains relevant regulatory requirements and cash.

To step up the only audio branches to cooperate with key unit and the ratable agencies in the online auto sales to promote the standardization of the industry and sales regulation of the industry Payors and to meet the requirements of audit related departments. Thank.

Yes.

Ricky Thank you.

That's it thank you.

Hearing next question is from Billy Elliot Hi, Tom. Please ask your question really.

And yeah. According to how should it just so was that she wasn't will go into the eagle when he's the one you will then treating skin bulletins, there's a whole thought okay.

Okay. When he took a bunch I think the whole, Georgia that detail what is the tailwinds. So but this is like a profile.

Sales to making sure I think as to what the Eagle Once you know what the other one you should see our minivan oney, Indiana that cause a quantitative Cape franchise LTV.

He nant Yomiuri ship, so, let's just say you see a yahoo.

That pay a bunch I don't know that I find myself. Thank you management for taking my question I have two questions.

First question is can management share color or some details of our latest cooperation with the Colombian government any implications on revenue or investments going forward.

And my second question is on 2021 outlook.

Can management share any expectations or guidance in terms of maybe revenues or uses thank you just yet.

Yes.

Thank you.

The sensibility.

But wouldn't you do see value on them or not all of those kinds of with.

Well to the usage and the.

See CMBS complements a b. I call the arc of hybrid knock off Oh come on you are going through my mind too hard to use it.

These lucia this as soon as you go.

The one I thought she says is actually going to come to another city. So this is Jim one somehow.

Someone puma the woman the extraordinary well know sitting here two years ago, what would the way to continue.

Up to that the leases on West went back on the terms we continue.

Yeah, I'd say Tim.

Gee, the Lucent, Kennedy, who woman's day Anyones guess.

Switching to comment further.

She said she goes on.

Until now this year.

The unit volume.

Simply senior Bhutto's home and the hiring some lead young Womans I realize this will follow taunting phenomena quicker Dol can go there exists.

Ticket sales pick up on it.

So the last the first the question is about.

The pilot line audio video program each year has being enacted into so we think meet your was selected as one of the peloton I audio which accompanies him in Guangdong Province is actually a equator recognition from the regulatory authorities over that.

Companies competition in the industry and also demonstration impact of leaches practices.

So this will actually pay a guiding low for us and for our future development of content categorization and AD technology development and also the big data analytics. It will also increase our industry impact and enable us to receive more support in the technology.

Divestment and innovation.

So its a woman centric.

Okay, sorry boom I see a broad.

Jon Thompson had a gen. So long.

Since you took the UGC is again due to the title.

Sure what's in the on the Twond quarter, two more just sort of true threed on cigarettes onto the father.

Finfet handful of bolt on product sales motion.

Shannon should pause on you can you may see some that handy.

Publishes I would use a number how do you go about opening summit, where young Ku satellite.

Given how the who was on the.

Not yet.

Okay. So in general our next step will more focused on the enhancement of our tap on the construction and focus on the Unik UGC feature and support our content creators try for long term growth through AD technology and explore the diversified business model.

Including committing ourselves to expanding the audio applications to narrow and also bring users than real interactive audio entertainment expenses.

Our finances.

Meaning that the girl.

So I want to Holloman show Godesses genlyte sources of business.

Uh huh.

Hello.

Okay. So for next year forecast that we think is still too early to say anything about that so we need more time to file future development. So concept, we will not discuss the detailed forecast for next year. Thank you specifically thank you.

Thank you chip.

Your next question is from ideally of credit Suisse. Please ask your question.

Oh plenty sensor fusion and that you know what that she less well known potential coalinga title injunction.

As mentioned that they can change the board how either junkie seem to encourage you to look handle the whole meal too.

Hi, John that you find though I will translate myself.

What's management's view on current audio live streaming audio entertainment or competition.

Competition landscape.

The election sector and do you guys. If you got you then you plan on overseas expansion. Thank you.

Hello.

Susan.

Let me make a few to that wholesale financing.

Our massive downtown Dallas looser.

Somebody in Chicago, the Shanghai diseases ones will you take a using the cycle.

Yes, it was only on Canadian oil Harper judges, you'll just using a soluble should.

Poor bone and then we have a t. again woman Julie.

Down the road.

Jim Golar and don't hold the sell through the survey.

Real quick do you want to use a golf with.

For them so true.

Good morning, Jim that you soon on the Lincoln the handler can do to kind of.

So Sameer Mohammad.

Oh Man woman most what's what are the new condos or that you will show that we are about to be.

Steve would you need from the Taco conservatism tissue new units and now well me John to sit on New York, Tom tools. So truthfully.

Talking to you can ramp up or does.

You don't do true mondrian could be linking the hottest mutual love.

Possibly on what was going to be out I think for those images you pay back to the shore manages to that order.

So what is it the same way.

Downtick neonodes hundreds of cochlear, where they're going home.

Clearly, Tom, though so do to assist them to know a woman something diluting the.

The newly masculine news this.

She'll due to the season you should.

So compared with other platforms in terms of the competition has always been targeting the audio market with a strong focus on diversifying the content and committed to developing the unique innovative business model with years of development and efforts we've given.

The massive CONTEMPO and sales the us strong community atmosphere and being committed to providing a highly engaged in age interactive community, while creating more possibilities for audio through our leading technologies. So in terms of consolidation we've actually.

Establish then secondly, what mechanism while content creators and further enhance the content creation and improved our content quality. We will continue to mean users diversified demand for audio and help them Express themselves and then received a companionship with we had a weighted.

Through a variety of focus areas like content creation community and the audio interaction features.

We are also dedicated to health content creators present themselves get recognition and achieve considerable income through with it. We believe the audio you that feeds actions actually are blue Ocean market and we believe she has differentiated and competitive advantages in the market.

No I would agree I know they are using their phone cycle noncash income this Johns Hopkins if his home town Hall.

So it does take a single unit she's really are.

Tenants out you are just so with.

Slide 10, you can see some higher young bother sometimes occlusion.

So have you know type and the tool and it really has a trend then put you to the increases huh.

Almost something you can tune during the quarter with senior Buddhism Portland.

The notion.

In addition, I.

Personally I think the audio market shocks that beginning to develop and the applications scenarios of audio our diverse with the increasingly popularity of intelligent vehicles and like smartphone devices the growth potential for the on our industry is sizable as mentioned earlier.

We are exploring that new car audio market and we believe the divestment of other devices can actually further enhanced our competitive advantages.

Hi, I couldn't comment.

What really I want to sit on your side.

Hi, Bob.

How are they don't go thinking is real functionality issue.

Hi, one moment into both sides of it will come soon.

You can do the due to the sales is all acquired kinda talk about offense.

So in terms of the overseas expansion within the overseas market actually huge and users have a strong demand for audio products, we are preparing and developing some of the product in the overseas expansion and when we have more.

Efforts and where we have more without we will get close to the to the market in Q citizen.

Thank you.

As there are no further questions now I'd like to turn the call back over to the company for the closing remarks.

Thank you once again for joining US today, if you have further questions. It feel free to contact me just investor relations through their contact information provided on our website at IR Darling should die at that are that TPG investor relations. Thank.

Thank you.

Okay.

Thank you ladies and gentlemen. This concludes the conference call you May now disconnect your line.

Thank you.