Q2 2021 JOYY Inc Earnings Call

[music].

Ladies and gentlemen, thank you for standing by and welcome to Joy Inc's second quarter 2021 earnings call.

At this time all participants are in a listen only mode.

After the managements prepared remarks, there will be a question and answer session.

I'd now like to hand, the conference over to your host today change she the company's senior manager of Investor Relations. Please go ahead James.

Thank you operator.

Hello, everyone and welcome to Joy second quarter, 2021 earnings conference call.

Joining us today are Mr. David Li Chairman and CEO of Joy.

MS Ting, Li our COO and Mr. Alex Liu the general manager of Finance.

For today's call management will first provide a review of the quarter and then we will conduct a Q&A session.

The second quarter 2021 financial results and webcast of this comparable are available at IR adopt joy the X gene.

A replay of this call will also be available on our website in a few hours.

Before we continue I refer you to our Safe Harbor statement in our earnings press release, which applies to this call as well as we will make forward looking statements.

Finally, please note that unless otherwise stated all figures mentioned during this conference call.

U S dollar.

I will now turn the call over to our chairman and CEO Mr. David Shutting me. Please go ahead Sir.

Oh Hello, everyone.

Welcome to our second quarter 2021 earnings call, we maintain our growth momentum in the second quarter. Despite the negative impact from local holidays, you know certain regions. During the second quarter of <unk> hundred one we grew our total revenue.

<unk> spy certainly my point further in person year over year to 662 million.

<unk> revenue increased by 38 points of 4% year over year to $598 million.

Notably this quarter on a non-GAAP basis, we almost achieved breakeven at a group level for the first time. After we consolidated the YY live Ais B goes non-GAAP net margin continued to improve to three three.

Presume from one 6% quarter over quarter and is non-GAAP and non profit increased to $19 million.

Before we go into the detail of the development of our product.

We would like to share with you the last lobbyists to progress in the further enhancement of our localize the content offerings.

As discussed on last quarter's call. We view our content ecosystem is one of our strategic course that determine the long term competitiveness of our products during the quarter, we have made great strides.

Expanding our protocols are the content morality.

In lodging, our premium content library based on our thorough insight in to local users content preferences.

We partner with booming entertainment companies.

Local talent agencies.

And abroad in multitude of high quality streamers and content creators in categories, such as gaming <unk> show, where IRET Shoals music lifestyles lie.

Lifestyle and many others.

In the entertainment and the content in the category.

Partnering with local entertainment agencies and celebrities we achieved with the meaningful progress in further expanding our premium content and.

Assembling.

Top local talents in the music and.

Rajiv Shah category.

In the U S <unk> hospitals.

Idaho talent combination you may with.

Our style of jobs, such as Palmer Broxton, Chris.

Chris Turner and the DG will keep attracting over 300000 unit unique visa Europe.

Views in Turkey.

Our platform attracted the king of pop music.

Al Tac and as <unk>, Neil generation finger Ren parity to become staffed streamers on V go live.

In talent my one of our Thai country music streamers Big alive.

<unk> bonus Carl key.

Pop music variety show and DVT, the two grades of fanfare.

To provide a stage of other country music singers to showcase.

Talents people lives immune Legion is launch.

Launched a country music competition, bringing celebrity advisors and professional charges.

In collaboration with <unk>.

Renowned local talent agency.

After tax the wrong in our gaming and streaming channel on Big alive.

Officially launched our own E sports activities Korda Beagle fall in the Middle East region. In 2020, we have organized the word to you offline events, including video creation challengers and content covering multi.

Coal Hill schemes.

In the second quarter, we partnered with a number of gaming companies.

Further enrich the gaming content on our platform too.

Better safety our users.

Active.

So that.

<unk> demands.

In June we reached a strategic collaboration agreements with.

King offer our own Jack warfare.

Mobile strategy strategy multi player role playing game will launch in France, and Germany Syria.

Middle age themed.

Online gaming events.

Jewelry, which virtual charter.

Chest wall.

Relieves the randomly to the audience without the tune into the live streaming China well.

<unk> top gaming live streamers play the games and the interaction with our local fans.

In Indonesia, <unk> become the exclusive partner of the <unk> tournament and the livestream playoff among 137 teams bring.

Immersive <unk> experience to the local audience.

In addition to our continued expansion of content in the categories, we have pursued.

Seem seamless integration of content with the reach and.

Diverse local culture.

As mentioned previously our mission is to cultivate cultivate.

<unk>.

Inclusive and.

Global community, where everyone can be heard and seen.

Diversity.

Diversity.

Sure.

Inclusiveness, some manifest not only in the number of regions in which we operate all the very peak of content categories.

Whereas we all kind of in the categories, we have made available.

But also in the degree at which we have integrated our content with the local culture user behavior and the social elements for.

For example during <unk>.

<unk> <unk> live launch the goods to vehicle fluids to be good.

Campaign in Indonesia, the campaign motivated as a local young to express their creativity by show increase.

Roman dense youll need counter and customers through music all stand up comedy shows thus winning endorsement from Indonesia.

Industry offered tourism and other government agencies.

As content creators served as the foundation of our success in creating and maintain labor.

Vibrant and engaging content and community we have implemented extensive program to identify develop and motivated talented creators in the past quarter. In addition to hostile low coal counter theme the comparative patients.

And the talent challengers to better identify that identify talented content creators like.

<unk> also worked with external partners to help creators improve they are probably exposure expand their social influence and pursue content accretion as a lifelong career.

For example, in the second quarter like hospital, the third season of the light Steidel talent show in Indonesia.

In collaboration with a local entertainment company like key selected five call participants to form a popcorn grew call the gym goers.

Which debuted some.

Some checks and music video.

Our payback on more than 116, Indonesia radio stations.

<unk>.

Little of offers for sure in Congress and commercial.

Advertising.

That was a lie is pilot project to test the drive its ability to identify develop and motivate key multi wage professional content creators.

Going forward likely will launch more support him.

Rams to derived from all user traffic to creators.

Our creators.

Marlin tie their content and thus.

Creating a friendly engaging and dynamic content community.

With the combination of more.

Diverse high quality content from.

The increasing number of talented content creators, we believe that we will be able to build a richer and more lovely content ecosystem and to further expand our platform user base.

Now, let me share with you the quarterly updates of our core products product lines.

For <unk>, despite the negative impact from local holidays in certain regions is overall <unk> grew by 0.3% year over year too.

<unk> nine 5 million well is Amin you outside of India increased by 27, 8% year over year, thanks to its progress in localizing its content ecosystem.

Meanwhile, is playing user increased by 10, 7% year over year contributing to year over year revenue growth of 31, 8%.

Geographically.

<unk> live maintained its well diversified growth developing countries continue to outperform.

And it's a regional revenue growth by.

47, 6% year over year in particular revenues from Europe Rose by 100 and.

Four points to 6% and our revenues from Eastern Pacific Region grew by 52, 5% revenues from Southeast Asia and other emerging.

<unk> grew by 31, 7%.

So the doctor.

<unk> <unk> continued to improve user live streaming experience.

Evidenced by the one 6% sequential increase in Android CRA.

Curation of live streaming sessions this quarter.

By optimizing.

Obviously meeting is content recommendation algorithm.

<unk> improved the average delivery time spin among his new user by four 4% sequentially.

Furthermore.

By introducing more gaming content <unk> improved its overall user engagements during the quarter and.

Per <unk>.

<unk>.

Average.

Time spin in EMEA streaming sessions by.

49% sequentially.

Next about like key has mentioned in last quarter's call because we.

Our Iot proud here is our long term growth.

We have pleased the greater emphasize on the healthy house and sustainable ability of our ecosystem.

Growth model.

Why we have adjusted to the light is marketing strategy and focus our investment on content in the social ecosystem since the first quarter.

As a result of our marketing strategy and adjustment combined with Indian government has been since the third quarter of last year like is.

Contacted by.

30th 38, 6% year over year to <unk>.

<unk> two point to $3 million.

<unk> outside of India inquiries increased.

Modestly by 6.8% year over year.

Despite the temporary user base.

Slack tuition.

<unk> total revenues in the quarter continued to increase by 136 points.

<unk> year over year, mainly driven by <unk>.

In developed countries and the middle East.

Revenue from developed countries increased by 106.3% and the revenues from the Middle East multiple it by four times year over year.

Product wise likely upgrade is.

Subtitle function basis the base.

Based on TTS technology to provide automated subtitle and.

Dumping.

But also updated features which enable the video upload up to three minutes and.

Post the.

Production recording.

Thus, providing more efficiency efficient content production tools too.

Content creators, especially those in the <unk> firm may achieve content category.

Furthermore.

<unk> updated its user traffic location and content distribution.

Mccann is to derive mall.

Traffic to creatures of private domains.

As a result creditors private traffic increased by 25%, suggesting.

The social connection between creatures and their followers.

So a multi wage user.

The praetors to participate in live streaming likely means a multiple opportunities to its fan engagement features and achieved.

Seven seven times increase in the daily number of users drawing fans group.

We intend motivating the praetors to hostile mall streaming sessions.

<unk> social interaction features likely improve the user experience in live streaming sessions and achieved.

22 three.

Percent sequential increase in its <unk>, the duration of streaming sessions as well as <unk>.

39% increase.

<unk> is a streaming time per user in multi user channels.

Lastly about <unk>.

Similarly, due to marketing strategy adjustments and the Indian government spend since the third quarter of last year <unk> fell by.

629% year over year to.

$11.8 million in the second quarter.

Outside of India increased by 25, 5% year over year. However, harmful continued to make magni meaningful progress in its user into activity and product commercialization.

Its revenue grew by.

554, 3% year over year, and non-GAAP operation loss narrowed or further on the.

Sequential basis.

In the second quarter Hog, all launched its version 4.0 product to better satisfy users' needs.

Four.

<unk> spaces.

Social entertainment.

In this version the feature channel enables user to engage with a friend.

Community members and freely communicate with one another in the form for real time text voice video and interactive games.

Users can also publix publish posts in their virtual family, thus fulfilling their real time as well as non real time social disasters.

As a result, the penetration rates of cargos feature to channel increased by.

<unk>, 4% and.

30 day user retention rates increased by five 5% sequentially.

During the quarter huddle launch the heme, partly game a number of popular games.

Each feature multiyear Rosa audio chatting in gaming functions as well as <unk>.

<unk> of user experience in real time interactive games.

As a result, the penetration rate of party game increased by 10, 7% and as the average user time spend increased by 30% sequentially.

To conclude despite the negative impact from local holidays in certain regions, we maintain the growth.

Trajectory of our global business and achieved significant progress in further enriching our local lines the content offerings.

With the enhancements of our products the monetization improvements in our operational leverage and.

Execution of mall prudent marketing.

Strategy, we are in malls.

<unk> reached the breakeven breakeven.

Non-GAAP basis at the group level for the first time after we consolidated the council the safety the YY line.

Despite the recent.

Molly utility in the macro environment.

Increasing uncertainty uncertainty due to COVID-19.

We remain.

Communicated to our long term vision and.

Coverage mission.

We will continue to deploy our resources to areas that can sharpen our competitive edge, including including further optimization of our localize the content in our social ecosystems as well.

Enhancements to our research and development abilities.

So that we can create greater value for our shareholders.

With that I will now turn the call to Alex <unk>.

General manager of finance for a more detailed explanation of our quarterly financial results the results.

Thanks, David.

Hello, everyone.

As Joy <unk> general manager of <unk>.

Talk about the financial results.

First a majority of our revenues.

Places are now denominated in USD.

Starting from January one 2021 we have changed our reporting currency from RMB to U S.

To better illustrate our operational results.

Please note that the financial information on a non-GAAP financial information disclosed in our second quarter earnings press releases is present continue operating basis.

Unless otherwise specifically stated.

Starting from the second quarter authentic compare the company the consolidated we are.

Counts for our investment we are.

We measured investment and apply the equity method of accounting you one quarter in theaters.

To enable us to provide financial disclosures independent of the reporting schedule.

Sure.

Also.

The above alive was substantially completed on February eight 2021 with certain customary measures to be completed in the near future.

The historical financial results above our lives are reflected in the Companys consolidate.

<unk> consolidated financial statements.

Please continue.

Operating accordingly.

Starting from the first quarter authentic pentair.

During the second quarter.

It can provide.

The negative impact from local holidays in certain regions.

Our strong growth moment term and delivered robust financial results.

Our total net revenues for the second quarter increased by 39, 7% year over year to USD $665.7 million from USD $433 five media in the same period of 2020.

Primarily attributable to <unk> continued opinion users growth.

The highest monetization capabilities.

In particular, our live streaming revenues for the second quarter increased by 79, 7% year over year to $629.6 million.

Driven by live streaming revenue growth from vehicle.

Other revenues in the second quarter increased by 43% trajectory circuit to buy media.

Cost of revenues for the second quarter increased by 32, 2% year over year to USD 458 upon stream media.

Revenue sharing fees and content costs increased to USD $289 million in the second quarter from USD 198, 2 million in the same period of 2020.

Which was in line with the increase in live streaming revenue loss.

Bandwidth cost.

We created two adjusted $27.5 million from $32.7 million in the same period of 2020.

Primarily due to the company's improved efficacy.

And the combination of bank based users for <unk> after the India comment but of Chinese apps in late June 2020.

Partially offset by their continued yoga.

User base expenses outside India.

Gross profit increased by 64% year over year to USD 200 straight for media.

Gross margin in the second quarter of 2020 via improved to 37% from 26, 8% in the same period of 2020.

Operating expenses for the second quarter increased to just the 340 million from USD 247, six in the same period of 2020.

Among the operating expenses.

General and.

Dominik Shortcake expenses increased to one <unk> and one <unk> million dollars in the <unk> project.

$51.5 million in the same period of 2020.

Primarily due to impairment loss arising mainly from investments made in prior years.

Our GAAP operating loss for the second quarter was USD <unk> and one <unk>.

From just the $119.9 million in the same period of 2020.

Operating loss margin for the second quarter was narrowed to 15, 3% compared to 25, 3% in the same period of 2020.

Primarily due to the increase of operating income of vehicle.

Our non-GAAP operating loss for the second quarter, which excludes share based compensation expenses.

<unk> <unk> of intangible assets from business acquisitions.

Impairment of goodwill and investments and gain on disposal of subsidiary and bitterness.

Decreased by 8-K Port St <unk> Circle media compared to USD 65.70.

In the same period of 2020.

Non-GAAP operating loss margin for the second quarter was narrowed to 2% from 39% in the prior year period.

GAAP net loss from continuing operations.

Attributable to controlling interest of joy in the second quarter of 2025 was USD $109.3 million compared to adjusted 2008 five media in the same period of 2020.

Mainly due to impairment loss arising mainly from investments made in the prior years.

Net loss margin was 16, 5% in the second quarter of 2020, but.

Compared to 6% in the corresponding period of 2020.

Non-GAAP net loss from continuing operations attributable to controlling interest of Joy was USD <unk> 5 million in the second quarter compared to just 55 million in the same period of 2020.

Non-GAAP net loss margin was significantly narrowed Daryl <unk> profit in the second quarter of 2020 back from 7% in the same period of 2000.10-K.

This means that they have almost achieved breakeven at group level for the first time.

Consolidated YY live.

Notably <unk> head of chip a positive non-GAAP net income for the second quarter of USD $94 million.

Non-GAAP net margin improved to three <unk> percent from negative three 8% in the prior year.

Period.

Diluted net loss per ADR.

In the second quarter of 2020 was USD, one fourth street compared to zero point stream not in the same period of 2020.

Non-GAAP diluted.

Net loss was.

With narrow to USD thereof, quantity or away from USD <unk> 63 in the same period of 2020.

Additionally.

According with our cultivate distinct ply approved August 11, 2020, and on November 16, vigor distributing a dividend of USD <unk> <unk> five.

For the second quarter of 'twenty 'twenty back.

With expected to be paid out September 29, 2025 to shareholders of record at the close of business.

Timber plantation in Gabon.

Also we would like to provide an update to our execution of the share repurchase program announced on May 2020 kind of age the company made.

Purchase up to USD 300 million of its shares to August 20 <unk>.

ASP of Joy suitcase 20 talking about the company had repurchased approximately USD 296 <unk> of its shares.

We will continue to.

To invest in safety.

This development initiative to further expand our global market rates.

Cultivate at Haile and Kid yogurt community and enhance our high quality content offerings.

We will also actively explore other base to maximize shareholder value.

Beginning in the second quarter.

Have anticipated some negative impact there.

Uh-huh license also implement a captive.

The greater lift of pandemic related lockdowns in certain countries.

We expect our net revenues for the third quarter to be between USD, 608 media and adjust the $635 million.

Representing a year over year increase between certain plus 7% to 18, 7%.

Constant currency basis.

Excluding the revenue contribution from <unk> and above alive in the same period of last year.

We currently have limited visibility surrounding the COVID-19 epidemic long term impacts and geopolitical uncertainties our business.

And the markets in which they operate.

Therefore, this forecast OLED reflects our current and preliminary views on the market and operational and business.

These are subject to change.

That concludes our prepared remarks, operator, we would now like to open up the call to questions. Thanks.

Thank you we will now begin the question and answer session.

Wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you need to cancel your request. Please press <unk>.

Go ahead <unk>.

Our first question comes from Thomas Chung at Jefferies. Please go ahead.

So I would say one.

Okay. So what if you in a way.

<unk> just on Brooklyn, you sound a woman to send us all do.

The E <unk>.

<unk> signed binding.

Sure Bill.

Sure <unk>.

But in terms of <unk> changes.

For Baidu.

<unk> been the Tricia <unk>.

His phone.

But you're also saying.

Since many human but taking on my questions.

Two questions. The first one is about the Q3.

The new guidance as well as the <unk>.

Margin outlook in the second half and my second question is about <unk> can management comment about the paying ratio.

There are people who would trend.

Well as the life streaming revenue performance across the different countries. Thank you.

Okay.

Ticketmaster NT.

With IHOP.

<unk> guidance just out Joe Luce, our people more cash moving without constitute each engender appointed answer.

We're seeing some of the Europe.

Felicia.

So who are familiar with <unk>.

Europe will do.

No.

<unk> shutdown Tom.

Cumulative fee income Sunday.

<unk>.

The women also Gucci <unk> can be summed up by Winchester Center.

Despite our joy you might be good life the profit.

<unk>.

Poodle.

Well Im sorry.

<unk> mutual income post.

Covid toward key, but we're going to ship to.

<unk> head count while Eagle.

Eagle eye jumbo charcoal that.

Thank you Alex.

Question.

Regarding Q3 guidance.

<unk> from <unk>.

Second some countries gradually lifting of lockdown.

Therefore, we have.

The negative impact on social.

Social entertainment activities online, which mainly due to timing.

Only entertainment and therefore effect.

Hany.

Okay.

So far we have limited visibility.

Please go ahead.

Good luck.

Therefore, we have to find it.

Can be conservative.

Our nation.

Revenue.

Thank you.

Okay.

June 18, 7%.

Mainly due to short term fluctuation of vehicle lines.

And iPhone.

We'll provide further updates once we have that Tim.

<unk>.

In terms of revenue growth for the whole year.

We expect Eagle Beckman Q&A.

Okay.

Hum.

<unk> shoot that particular chip quality typical life that you hit Delta 10 o'clock.

<unk>.

You also had a two times, so LCD old product with Jaco to Manhattan Institute all.

You may sell ammonia.

Total supply mute, Hitachi, which expand our GAAP total.

Adam <unk> with <unk>.

<unk> placed on cloud that you can play with on time that kind of people out of the park.

EMEA Europe.

After the Santa.

Look <unk> done.

Tokyo icon.

Omer don't have Nancy <unk> with a product without <unk>.

Joe.

And the legal fees.

Women kind of whole product, which totals to some extent.

So we don't have enough potash.

<unk> cute Todd.

<unk> had sushi cutoff.

To the degree you heard Neil.

It also imply the total development woodland.

You've got to hit the <unk>.

Qdoba.

Hey, Jeff.

As for the revenue.

Jim.

The group's revenue growth the second with mainly cannot find with other countries in southeast Asia.

In the East region.

Mainly due to enrollment.

In terms of revenue distribution.

Our revenue as well.

Yes.

Paul Eagle life in the second quarter.

Thank you Rachel.

Together.

Okay.

In terms of future trends in the long run positive about potential.

<unk>.

Including you add.

Well I mean, the east instead.

Considering that.

We can have better paying capability and also.

Capex.

Yes.

Ending our Hawaii operation.

Okay.

And also other developing countries.

Sidney Thank huge user base and also that as we continue to cultivate.

The avs and habits in this region.

Leave that.

Let's transition potential Megan at Delta.

Yeah.

Thank you.

Our next question comes from Alex <unk> at Morgan Stanley. Please go ahead.

Physical anytime inflation with the tier one will be even with T cell <unk>.

Got it go live champion Pedro.

70 <unk>.

<unk> 16 will be called life, Emmanuel you Santiago seed bulk or ludo.

Youll see both I mean, you'll have buildup, which you said would hold up.

The hold.

Hey, Joe.

Sure Dan So Joe.

It'll have champions so it's both.

Both our Mann Goldman Sachs <unk> junkies, so much income.

Just to deal on Thiago <unk> Goldman <unk> Baidu Baidu.

Baidu, the Jacob Javits Center <unk>.

The whole Jacob so Dr Chen to whole okay.

Tiger Sanjay in place that guys see Lucia either meeting.

Net cash.

The woman somewhat Q2, you won't say P. J P J a woman.

Okay.

So that's a good CFO Eugene circa <unk> way.

So can you pool the Waco Ccs.

My first question is related to.

<unk> life, new product content strategies recently, we have noted.

Increasing penetration into game segments and also some casual games like Ludo.

And then also wanted to get an update around e-commerce strategy.

And then my second question is related to the use of cash and the status of the Baidu transaction.

We have almost use up the share buyback.

The program of 300 million do.

Do we have plans to.

Initially a new buyback program and a.

The use of <unk> use of cash or other purposes. If you can share. Thank you very much.

Susan.

It is a little in the U S. Initially.

Several womens fashion.

<unk> proven achieved <unk> now made shoes in Europe.

She is our new homepage instrument that century.

<unk> some geologists of usage can lay the needle any change orders or <unk> will be merchandised.

<unk> mentioned that Nielsen has formed for the local joint venture.

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While monthly tissue gunshot wounds to Jana vivo.

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Just a single Io pin pad.

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<unk> Europe O'neil.

In one channel usages.

<unk> three <unk> <unk> 2 million passionate highly to match the winter season.

In order to the pension longevity changes to be ourselves up.

Governor leeway.

The St Johns in England here with our CEO jurors Ranchero, Oman, Qatar economic RG two one tolerances.

EMEA and Canada critical to it also in a.

China, either tissue tradition merger.

<unk>.

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<unk> lunch engine solar.

So in our development to the.

She's knowledgeable sandino.

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<unk> development.

<unk> Saddam allergic John Hardy Hall will <unk> at 10 <unk>.

The <unk> synergies.

This is David.

In terms of new contents related kims game streaming.

Okay.

While our observation we found that using <unk>.

Especially in Europe.

South America and the engine.

Therefore.

We have gradually introduce more gaming content.

Okay.

As the global mobile game market.

And that all right.

Content offering and socially.

Okay.

It's small lagging naturally.

I believe that gaining content.

Will it be a COVID-19 impact.

Nothing.

And we will continue to partner with leading mobile game company.

Three eight.

And might be content community gaming content.

As for the new game. This is a small attempt.

To encourage.

Okay.

Please connection and interact with other users.

Enabling users to.

To engage in.

Section.

Through the night Dreaming and also casual.

Casual game.

While we have seen positive impact.

On <unk> activity and engagement level from these newly introduced.

And the mobile game.

We might need longer time to draw any conclusion.

The revenue contribution.

Okay.

As for cash usage.

I believe that you could see from our earnings.

That in the second quarter, we have protection.

100, <unk> mainly in Europe.

And we are still executing our quarterly dividend payout.

As for the remaining cash.

<unk>.

The sale of <unk>.

Right.

Substantially completed but still with some customer metrics.

Yes.

Great.

The full completion of the deal.

To determine.

Okay.

<unk> cash.

So that would be a.

To give you a.

Thank you.

Okay.

Our next question comes from Hugh Wynne Zhang of China Renaissance. Please go ahead.

Hey, Gordon talked about how she is theres a lot of Cuba.

Lynch joins Hill can you go towards electric.

Yes.

Thank you Pablo Centennial.

Please go ahead.

So.

Yeah.

Pulpwood to go through it on the total charges.

Oh, yes.

Sure sure.

Great. Thank you so much when they go to a kid.

Why because it's not just the can.

Hey, John.

That's helpful.

Thank you for taking my questions I have two.

The quality of our content ecosystem.

Few times guidance.

Could you share more color on income.

The localized content.

Okay.

I know, what's what the retention hold that.

Differentially.

Yes.

On monetization.

Talk about the progress.

That's to me.

Sure.

But advertisement thank you.

<unk> or the other.

So <unk> <unk> hydropower headphones illogical time P&L also impact.

<unk> Tau.

Sure.

Yeah.

Tricia Women's home EG Booties original question social digital KVM.

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It was for the Caribbean bulk orders from New York portfolio further Shlomo.

Soon with <unk> in New York.

Sure John Chandler to hook up yet so.

Well I don't want Jerome highway peaceful and Toyota Tundra Rioja that those issues teacher referrals.

The session.

The announcement date of Dolby vision <unk> here now on our beaches.

Roger.

<unk> is a very logical.

Susan adventure.

Okay.

Yeah.

Sure.

I can answer the <unk> Congress Shanghai logical fit.

Friedhelm months quarter, Shove <unk>, Chile Division highlights.

Total change agenda in that year.

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To the <unk> to go up.

Tone on tone on IBM.

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For sure.

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Five months ending the June quarter.

Okay.

Sure.

Most orders are the two of them in Illinois channel due to timing of Dropdowns and partial triple orders, Oregon, Russell rule higher each year and you'll hear in the digital give you if all the showroom channel.

<unk> attributable to the Bureau, hiring some new balancer virtual Rodrigo you've only a thorough of our mutual Shaw.

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She rush order through the <unk>.

<unk>.

<unk> revenue share.

<unk>, China International will take home channels as a primary heidrick <unk> <unk> now.

Yes.

Southern Europe.

The search engine.

<unk> got one of <unk>.

<unk> Energia, followed two easier to <unk> answer.

Some of our core doctors are fully engineered.

So it will be more.

Okay.

This is David.

At this stage.

About content.

Currently the motivation and constipation.

Okay.

On the development.

This quarter, we have taken the first step.

Alrighty.

Yes.

Thank you Ray.

And so you can see okay.

Okay.

In the coming second half of the year.

Okay.

Small program Tibet.

Okay, and also bringing more conducive update regarding traffic allocation and provide guidance.

Monetization.

Okay.

The captain.

Uh huh.

And with that we'd be able to enable creators.

Play a greater role.

Okay.

But.

To say is that compared with advertising the oxygenation.

That's not happened overnight.

Thanks.

Offerings and user experience.

Okay.

Thank you.

Adjusting advertising.

That would be flat.

The only change.

Using Julien.

<unk>.

Have a positive impact.

Okay.

Our product.

Regarding guidance.

My transition.

Currently speaking our revenue stream mainly.

Advertising.

Membership subscription.

Today, Thanks, Jamie.

Again its revenue stream.

Thank you.

Wow.

Although growing at 40% year over year.

Cliff Chen.

11% quarter over quarter this quarter.

Jim.

Right.

Thanks, Paul.

We're gradually progressing diversified mine.

And we will launch some new monetization feature in the second half, which we believe.

Beneficiary to the content creators.

It will better connect a fan.

Okay.

A Q&A paying habit.

Therefore HIV.

Of our revenue.

Yes.

Okay.

Our next question comes from Li Zhang at Bank of America. Please go ahead.

Oh, Hi, Doug how hard this is.

We rolled out with that one.

Oh, Hey, why don't you go again.

Wow.

Oh sure.

Glad to be wiped out.

Why do you think about that.

Yeah cause without doing that.

Okay that sounds good.

<unk> telephone line that you've got so I'll go back to Tom. Thank you, Matt you know, we're all kind of come and go that's supposed to go to J Jill.

See that.

Yeah.

Yeah, well, we come up with that.

Joseph Vornado going away now.

Yeah kind of.

You had a competitor.

What do you suppose.

Oh gosh.

I forgot what you tell them, what we're doing right now.

Is it all I think that'd be helpful halfway through that door and that can go Europe.

Yes, Oh, you said, yeah, you Aman that's out there marketing for me, it's much more likely.

Oh, what do you think you got it thank you.

Mad men for taking my question two questions here first.

Can you give us more color on the regulatory elements are in deep rents over the market and any consider like data the content. So that <unk> that can delay it want to follow up on the South America team, Jeff and I think the last quarter I think we have a good cash position and monetization Whitney good Oh well.

Oh actually no I think that you still want to know your thoughts.

Do you have any considering that now you're there right now.

Oh computation king Thank you.

Tiger Fluidized egos.

<unk> four <unk> are alive with the firewall months Europe.

Sales in Europe.

<unk>.

Chunghwa wound channel to our sugar Johan Johan.

Yes on the first one there.

<unk>.

<unk> auto Shanghai Guangdong.

Shang.

<unk>.

<unk> will remember in soda achieved orders with <unk> on the <unk>.

Daiichi those offerings have not our junk dealer.

I don't know what you don't know right.

So the <unk> merger the <unk> some of our finishing tongue villages of <unk> <unk>.

The change income we are doing for chunghwa hurdles are generally eligible.

I want to go with the initiation of a new dealer channel for the year.

Well you know I don't know John that is a good idea and Vodafone.

This is David.

Regarding your first question about regulation and uptick in CLO.

Okay.

Yes.

Yes.

Can be completed.

The majority of our business.

PMT begin.

But we do have R&D team in China.

Yeah.

As for our global overseas market.

2020, as we penetrate into multiple markets.

You bet Eastern Pacific region, East and other emerging countries or revenue is actually well.

And region.

The risk of any single region has been greatly reduced.

And we would love to emphasize is that since the incorporation of Joy, we has been strictly complying with local policy ethanol.

Which company in which countries we operate.

We will continue to execute on our global tenants.

It's geopolitical risk to any particular region.

Further diversifying our revenue.

Okay.

But even even the other two the likelihood the telephone solid I think the tone on the LNG, while Joe. This is John the general floor, <unk> <unk>, our chief laundry <unk> home a dishwasher.

What you told US is a strong lean more on I'll say, we want our IV and <unk>.

Stronger susana use of even to the achievers geology nausea usual.

Youll controllers, and a new one Congo to yoga and Vodafone Artois to Chicago.

The ocean of Angola, with John Shone lumber to the U.

<unk> or without <unk>.

Telephone the ecology, <unk> genomics center cumulatively.

One related to a warm lead us.

<unk> revenue.

English referral.

G&A, so that's actually a ineligible and here she will hold post outages.

Digital Grimoire, Cynosure guidance Hall, where Ronaldo needle.

So we'll move to the Dodge launches around KUSA in Omaha.

As a woman and those are the two large introduce autonomous zynga.

Yeah Nathan.

Obama single quickly <unk> millions on the Eva grew more so none of that down the Eagle <unk> and China, <unk> E Mail and business email, that's a lumpy on a given our revenue and Luciano.

China ease as well.

So in the.

<unk> list is that John <unk> is up <unk> 10.

Tim boxes, a year with George Holm, <unk> Honda solution and neither U a E.

And that's actually <unk> <unk> on that.

Was asking a woman diagnosis on annual Europe, which archer.

We're mostly done.

Congress agenda to go we do shop psychological Netherland.

While consumption to grow.

This entity will finally income towards the <unk>.

<unk>.

Yeah.

Okay.

Regarding your second question, we understand that previously.

And the Internet.

The usual logic.

Expansion.

Thanks.

That might change.

Effectively.

Hey, Brad.

The sizable unionpay standpoint.

And you can actually leverage on the inbound.

Okay.

This gain.

Okay.

Ken.

Okay.

Okay.

Hi.

And then.

H.

These appointments.

19.

Thank you.

That is the kind of logic.

But we don't see that.

Yeah.

The deal.

Joy.

What we can see that.

My competitor right now is actually investing in dollar amount we.

And what we can employ.

From what we know is that.

One of our key competitors.

And.

<unk>.

Billion, even tens of millions of U S dollar.

The acquisition.

And that's.

Consensus is.

In that.

Couple hundred million U S dollar.

Abelian U S dollar into Europe.

Acquisition, it will not actually make.

Okay.

So I think that <unk>.

To be more practical and take a relatively wide.

We are buying.

The health.

And sustainability of the product therefore be more.

Able to obtain establish position on the longer term.

<unk> you.

Opportunity to change.

<unk> competitive advantage.

Thank you.

Turning to olefins.

Very helpful. Thank you.

Does it.

Our next question comes from Tien <unk> T.

Eight capital. Please go ahead.

Yeah, I'll then quickly.

Sure.

Sure.

Yes, Sir.

Okay.

Well thank you.

Thank you.

Uh huh.

Yeah.

Yeah.

Yeah.

No.

Uh huh.

Is that fair.

Matt This is Jeff Leiden.

Okay.

<unk>.

Sure.

Keith.

Yeah.

If anybody is actually.

<unk> has been doing.

Next to me for a long time.

Okay.

What's the difference between the mezzanine.

China and overseas.

That number wasn't a bit Q.

<unk> been doing overseas.

Oh Wow.

Thank you Mr. Mark <unk> interim.

In terms of our gross margin.

Net margin going forward. Thank you.

Although a smaller target.

The year on year.

After an <unk> <unk> to the <unk> to the <unk> Javier Javier.

<unk> sugars and border.

Because of what are the cause of it.

<unk> you got to you even though.

Tom <unk>, who forgot.

<unk> does that change your sciences, though quite honestly or local demos Sheila.

Totally or down in the meantime, Briggs and you don't even need a five year filmed without looking at Ohio.

To go down through the year.

So Sheila Dang dealers at the meantime, virtually water.

Two the sequel data you put whole new angle, which is the patrol national Linc.

Sean in soil for coach.

So those larger boiler.

As usual some users verticals further towards it was <unk> 90 <unk>.

<unk> sorry.

One of them one you made through outages around good two to three launches are sort of Google and Facebook.

We have also announced virtual other yield so I'm going to let John answer whether you're willing to go.

Ego gondola igo remains is that earlier, so Josh and Leon Hodges.

Greenwood hotels.

Sure.

Hello.

You should.

EBITDA was deemed essential workers who are not.

Okay.

<unk> literally choose during Q1 equity guidance shock.

<unk> Iot to the day rates retirement, Butsu Sundar, she's joining young so I'm glad you said it will.

Total patient.

Patient volumes soliloquy, most but doesn't gather system.

So on a sequential basis, which is not something that.

<unk> embodies centers are going to exit the market.

You could see yourself.

Timna stamina, and Knowhow renovating Shelly Hirsch Yoplait sushi domain for the T cell sampling dollars Yoshi to coordinate all the time to talk with the <unk> provision for those winter playbook to show that we do.

Tony is on a kind of a big go down to <unk>.

Turning to kind of our Eagle downs to ship.

No.

Some cheaper total icon of our collective life <unk> two parts.

She's the chief transformation through persistent foolish.

Let them keep that.

Jump to agenda to GAAP.

Yes.

Regarding.

Operating live streaming.

Hi.

Okay.

Other areas in the world.

On Iraq.

Quite significant differences.

First of all operating in global markets.

Many different region. So many different culture, you're actually operating a multi language multicultural.

In China.

One of the single market, So thats why.

We have operating capabilities and team.

The <unk> region and our local team.

It's based on.

Very thorough.

Attending local culture.

While regulation and the maintenance.

Development of local content and content creators also maintained by the localized.

<unk>.

And secondly, I believe that there is another difference in terms of user acquisition channels.

And in China actually every day.

User acquisition channel all of these companies that can really change themselves. So that one is actually very difficult to obtain additional.

To continue.

As for the overseas market the mean.

Sure.

That plan at Google and Facebook and the data itself.

Actually heavily rely on like Jamie.

Public pool of user traffic it's available.

The story of user traffic.

It's also.

Banking.

Global like Jamie.

Regarding margin trend.

Not to say that.

We've seen improvement on net margin non-GAAP guidance and second quarter.

Mainly due to three factors.

Yes.

<unk> revenue expansion with Diavik.

Nation progress of multiple product line.

And the second.

Right.

Lower bandwidth cost and payment channel costs.

As mentioned the decrease in Nike's advertising income.

So for the second half of this year, we believe that we will continue to improve operating efficiency and then although gaming has been.

Entergy into legal guidance between up with the.

Content cost margin to be increased significantly and will likely remain relatively stable.

Sure.

And then for marketing activities as more marketing activities will roll out in the second half of the year sales and marketing expense will be higher but sales and marketing expense margin will likely to be slightly lower than the first half so income.

We believe that the segment will enter into a new U S up 15.

And from the full year perspective, we believe that vehicle segment will achieve a positive.

Net margin portfolio.

And from a long term perspective, considering that the Standalone operating profit Opdivo life remain about 20% and other products are gradually moving towards breakeven and we believe that the overall profit margin will be gradual.

Thank you.

And then just left off.

Alright.

We look forward to speaking with everyone next quarter.

Thank you management. This does conclude today's conference call. Thank you all for joining you may now disconnect.

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[music].

Ladies and gentlemen, thank you for attending by and welcome to Joy Inc's second quarter 2021 earnings call.

At this time all participants are in a listen only mode.

After the managements prepared.

Remarks, there will be a question and answer session.

I'd now like to hand, the conference over to your host today James Chi The company Senior manager of Investor Relations. Please go ahead James.

Thank you operator.

Hello, everyone welcome to join our second quarter 2021 earnings Conference call.

Joining us today to David <unk>, Chairman and CEO of Joy.

Ms Ting Li COO.

And Mr. Alex Liu and general manager of Finance.

For today's call management will first provide a review of the quarter and then we will conduct a Q&A session.

The second quarter 2021 financial results and webcast of this conference call are available at IR deck joined the X gene.

A replay of this call will also be available on our website in a few Alice.

Before we continue I refer you to our Safe Harbor statement in our earnings press release, which apply to this call as well as we will make forward looking statements. Finally, please note that unless otherwise stated all figures mentioned during this conference call.

Alan.

I will now turn the call over to our chairman and CEO Mr. David <unk>. Please go ahead Sir.

Hello, everyone.

Welcome to our second quarter 2021 earnings call.

We maintain our growth momentum in the second quarter, despite the negative impact from local holidays in certain regions. During the second quarter of 2021, we grew our total revenues by 39.7% year over a year or two.

662 million, while <unk> revenue increased by 38, 4% year over year to $598 million.

Notably this quarter.

Non-GAAP basis, we almost achieved breakeven at a group level for the first time. After we de consolidated YY live is beagles non-GAAP net margin continued to improve to three 3% from one 6% quarter oil.

Water and its non-GAAP net profit increased to $19 million.

Before we go into the detail of the development of our products.

We would like to share with you the loss largely as the progress in the further enhancement of our localize the content offerings.

As discussed on last quarter's call. We view our content ecosystem is one of our strategic course that determine the long term competitiveness of our products during the quarter, we have made great strides.

Expanding our product or the content morality and enlarging our premium content library.

First on our thorough insight in to local users content preferences.

We partner with gaming entertainment companies and <unk>.

Local talent agencies.

Agencies and abroad in multitude of high quality streamers and content creators in categories, such as gaming <unk>. So Laura.

Shoals music lifestyles lifestyle.

Lifestyle and many others.

In the entertainment and the content in the category.

Partnering with local entertainment agencies and celebrities we achieved with the meaningful progress in further expanding our premium content and.

Assembling.

Top local talents in the music and <unk> show category.

In the U S <unk> hospitals.

Idaho talent combination in May with.

Our star lineup of just such as Palmer Broxton, Chris.

Chris Turner and the DG will keep attracting over 300000 unit unique visa Europe.

Views in Turkey.

Our platform attracted the king of pop music.

All of that and as I.

<unk> new generation finger ran parity to become stacked streamers on big old line in.

<unk> Mike.

One of our Thai country music streamers on Big alive.

If they pay data in bonus Carl key.

Pop music variety show and DVT, the two grades of fanfare.

To provide a stage of other country music singers to showcase their talent physical lines immune Legion is launched.

Launched a country music competition, bringing celebrity otherwise <unk>.

In professional charges.

In collaboration with <unk>.

Renowned local talent agency.

After tax the wrong in our gaming and streaming channel on Big alive.

<unk> officially launched our own E sports activities corner.

It will fall in the Middle East region. In 2020, we have organized a variety of events, including video creation challengers and content covering multiple his schemes.

In the second quarter, we partnered with a number of gaming companies.

Further enrich the gaming content on our platform too.

Better safety our users enthusiastic.

The answer that <unk> demand.

In June we reached a strategic Corporation agreement with.

King offer our own Jaguar warfare.

Mobile strategy strategy multi player role playing game will launch in France, and Germany Syria.

Middle age themed <unk>.

Online gaming events.

Jewelry, which virtual charter.

First of all.

Relieves the randomly to the audience without a tune into the live streaming in China as well.

<unk> top gaming live streamers play the games and interact with their local fans.

In Indonesia, <unk> become the exclusive partner of the <unk> tournament and the livestream playoff among 137 teams bring.

Immersive <unk> experience to the local audience.

In addition to our continued expansion of content in the categories, we have pursued.

The <unk> seamless integration of content with the reach and.

Diverse local culture.

As mentioned previously our mission is to cultivate cultivate.

Inclusive.

Global community, where everyone can be heard on the scene.

Diversity.

Diversity.

Inclusive needs some manifest not only in the number of regions in which we operate all the very key off content categories.

Priority all kind of in the categories, we have made available.

But also in the degree as which we have integrated our content with the local culture user behavior and the social elements.

For example, during Ramadan <unk> launched.

Good vehicle fluid to be good.

Campaign in Indonesia, the campaign motivated as a local young to express their creativity by show increase.

Roman dense youll need counter and customers through music all stand up comedy shows.

US winning endorsement from Indonesia Ministry of tourism and other government agencies.

As a content creators served as the foundation of our success in creating and maintain <unk>.

<unk> and engaging content and community we have implemented extensive program to identify develop and motivated talented creators in the <unk>.

Half the quarter in addition to hostile local counter themed compared to patients.

And the talent challengers to better identify the identified talented content creators.

<unk> also worked with external partners to help creators improve they are probably exposure expand their social influence and pursue content accretion as a lifelong career.

For example, in the second quarter like hospital, the third season of the like ESI the talent show in Indonesia.

In collaboration with a local entertainment company.

<unk> selected a five call participants to form a popcorn grew call the gym goers.

Which debuted.

<unk> check and a music video.

Our payback on more than 116, Indonesia radio stations attracting.

Slew of offers for sure in Congress and commercial.

Advertising.

That was a lie Qs pilot project to test the drive its ability to identify develop and motivate key motivate professional content creators.

Going forward likely will launch small supporting programs to derived from all user traffic to creators.

Creatures.

Marlin tie their content and is thus.

Creating a friendly engaging and dynamic content community.

With the combination of more.

Diverse high quality content from.

The increasing number of talented content creators, we believe that we will be able to build a richer and more lovely content ecosystem and to further expand our platform user base.

Now, let me share with you the partially our base of our core products product lines.

For <unk>, despite the negative impacts of from local holidays in certain regions is overall <unk> grew by 0.3% year over year too.

<unk> nine 5 million well is Amin you outside of India increased by 27.8% year over year.

<unk> is a progress in localizing content ecosystem.

Meanwhile, is playing user increased by <unk>, 7% year over year contributing to year over year revenue growth of 31, 8%.

Geographically.

<unk> live maintained its well diversified growth developing countries continue to outperform.

Regional revenue growth by.

47, 6% year over year in particular revenues from Europe Rose by 100 and.

4.26% and our revenue is from his term Pacific region grew by 52, 5% revenues from Southeast Asia and other emerging countries grew by 31, 7%.

<unk>.

Upgrades <unk> line continue to improve user live streaming experience.

Evidenced by the one 6% sequential increase in <unk>.

Duration of live streaming sessions this quarter by.

By optimizing.

Obviously meeting is content recommendation algorithm.

We go lives improve the Android delivered time spin.

<unk> is a new user by four 4% sequentially.

Furthermore, by introducing more gaming content <unk> improved its overall user engagements during the quarter and.

<unk> per.

<unk>.

Average time.

Time spin in gaming and streaming sessions by.

49% sequentially.

Next about like key as mentioned in last quarter's call because away.

Morality proud here is our long term growth.

We have pleased the greater emphasize on the healthy house and sustainable ability of our ecosystem.

Growth model.

Why we have to adjust to the light is marketing strategy and focus our investments on content.

Social ecosystem since the first quarter.

As a result of our marketing strategy and adjustment combined with Indian government spend since the third quarter of last year like is.

Contacted by.

30th 38, 6% year over year to <unk>.

<unk> two point to $3 million.

Outside of India inquiries.

<unk>.

Modestly by 6.8% year over year.

Despite the temporary user base.

Slack tuition lines.

<unk> total revenues in the quarter continued to increase by 136 points.

<unk> year over year, mainly driven by <unk>.

In developed countries and the middle East.

Revenue from developed countries increased by 100, and a 6.3% and the revenues from the Middle East multiple order by four times year over year.

Product wise likely upgrade is.

Pedro function basis based.

Based on TTS technology to provide automated subtitle and.

Dumping.

But also updated features which enable the video upload up to three minutes.

Post the.

Production recording.

Thus, providing more efficiency efficient content production tools too.

Content creator, especially those in the <unk> firm may achieve content category.

Furthermore.

<unk> updated it.

Its user traffic location and content distribution.

Mccann is to derive mall.

Traffic to creatures of private domains.

As a result creditors private traffic increased by 25%, suggesting.

The social connection between creatures and their followers.

So a multi wage user.

The creators to participate in live streaming likely means a multiple opportunities to his fan engagement features and achieved.

Seven seven times increase in the daily number of users join <unk> group.

We've seen Tim motivating the Praetors to Hosta mall streaming sessions.

<unk> social interaction features likely improve the user experience in live streaming sessions and achieved.

22 three.

Percent sequential increase in its <unk>, the duration of streaming sessions as well as <unk>.

<unk>, 9% increase.

<unk> is a streaming time per user in multi user channels.

Lastly about <unk>.

Similarly, due to marketing strategy adjustments and the Indian government spend since the third quarter of last year <unk> fell by.

629% year over year to.

$11.8 million in the second quarter.

Outside of India increased by 25, 5% year over year. However, Huntsville continues to make magni meaningful progress in his user interactivity and products to commercialization.

Its revenue grew by.

554, 3% year over year, and non-GAAP operation loss narrowed the further on the.

Sequential basis.

In the second quarter Hangzhou launched its version 4.0 product to better satisfy users' needs.

Four.

<unk> spaces.

Social entertainment.

In this version the feature channel enables user to engage with a friend.

Community members and freely communicate with one another in the form for real time tax voice video and interactive games.

Users can also publix publish posts in their virtual family, thus fulfilling their real time as well as non real time social disasters.

As a result the.

Penetration rates of the cargos feature to channel increased by.

Some points, 4% and.

30 day user retention rates increased by five 5% sequentially.

During the quarter Huddle launched the AME hockey game, a number of popular games.

Each feature multi user all deals happening.

Premium functions as well as <unk>.

Inquiries of user experience in real time into act two games.

As a result, the penetration rate.

Party game increased by 10, 7% and as the average user time spend increased by 30% sequentially.

To conclude despite the negative impact from local holidays in certain regions, we maintain the growth.

Trajectory of our global business and achieved significant progress in further enriching our local lines the content offerings.

With the enhancements of our products the monetization improvements in our operational leverage and.

Execution of mall.

<unk> marketing strategy.

Strategy, we almost reached the breakeven breakeven.

On a non-GAAP basis at the group level for the first time after we consolidated the council.

<unk> YY line.

Despite the recent.

Molly agility in the macro environment.

The increasing uncertainty uncertainty due to COVID-19.

We remain.

[noise] communicated to our long term vision and.

Coverage mission.

We will continue to deploy our resources to areas that can sharpen our competitive edge, including including further obviously amortization of our localize the content on our social ecosystems as well.

As enhancements, our research and development abilities.

So that we can create greater value for our shareholders.

With that I will now turn the call to Alex <unk> General manager of finance for a more detailed explanation of our quarterly financial results the results.

Thanks, David.

Hello, everyone.

Joy <unk> general manager of <unk>.

About the financial results.

First a majority of our revenues.

Prices are now denominated in USD.

From January one 2021.

We have changed our reporting currency from RMB to U S dollar to better illustrate our operational results.

Please note that the financial information on a non-GAAP financial information disclosed in our second quarter earnings press release is present paid our continue operating basis.

Unless otherwise specifically stated.

Starting from the second quarter authentic compare the company the consolidated we are.

Counts for our investment in <unk>.

We measured investment and apply the equity method of accounting one quarter.

<unk>.

To enable us to provide financial disclosures indicate of the reporting schedule.

Sure.

Also.

The show above alive was substantially completed in February 2021.

With certain customary measures to be completed in the near future.

The historical financial results above our lives are reflected in the companies.

Consolidated financial statements.

Discontinued.

Appreciate it accordingly.

Starting from the first quarter of 2000.10-K.

During the second quarter.

It can take back despite the negative impact from local holidays in certain regions.

We maintained our strong growth momentum.

Labor our robust financial results.

Our total net revenues for the second quarter increased by 39, 7% year over year to USD $661.7 million from USD $473 five media in the same period of 2020.

Primarily attributable to <unk> continued <unk> growth.

Monetization capabilities.

In particular, our live streaming revenues for the second quarter increased by 79, 7% year over year to $629.6 million.

Driven by last premium revenue growth from vehicle.

Other revenues in the second quarter increased by 43% trajectory, so take $2.5 million.

Cost of revenues for the second quarter increased by 32, 2% year over year to USD 458 upon stream media.

Revenue sharing fees and content costs increased to USD $289 million is a second quarter from USD 198 pointed to meeting in the same period of 2020.

Which was in line with the increase in live streaming revenue loss.

Bandwidth costs.

To address the $27.5 million from $32.7 million in the same period of 2020.

Primarily due to the company's improved emphasis there on that.

The combination of bandwidth usage for <unk> after the India comment but of Chinese apps in late June 2020, plus.

Partially offset by their continued yoga.

Europe is expensive outside of India.

Gross profit increased by 64% year over year to USD 200 straight for media.

Gross margin in the second quarter of 2020 via improved to 37% from 26, 8% in the same period of 2020.

Operating expenses for the second quarter increase that trajectory 340 million from USD 247, six in the same period of 2020.

Among the operating expenses.

General and.

The amendment Shortcake expenses increased to just the one <unk> and one <unk> million in the periodic project.

$51.5 million in the same period of 2020.

Primarily due to occur impairment loss of revenue mainly from investment made in the prior years.

Our GAAP operating loss for the second quarter was USD 101.

From just the $119.9 million in the same period of 2020.

Operating loss margin for the second quarter was narrowed to 15, 3% compared to 25, 3% in the same period of 2020.

Primarily due to the increase of operating income a beagle.

Our non-GAAP operating loss for the second quarter, which excludes share based compensation expenses.

Amortization of intangible assets from business acquisitions as they are.

Impairment of goodwill and investments and gain on disposal of subsidiary and weakness.

Decreased by <unk> 8-K Port St <unk> Circle media compared to USD 65.70.

In the same period of 2020.

Non-GAAP operating loss margin for the second quarter was narrowed to 2% from certain 9% in the prior year period.

GAAP net loss from continuing operations.

Attributable to controlling interest of joy in the second quarter of 2020 was USD $109.3 million compared to just 28 five media in the same period of 2020.

Mainly due to the impairment loss arising mainly from investments made in the prior years.

Net loss margin was 16, 5% means the second quarter of 2020, but <unk>.

<unk> two 6% in the corresponding period of 2020.

Non-GAAP net loss from continuing operations attributable to controlling interest of Joy was USD <unk> 5 million in the second quarter compared to just 55 million in the same period of 2020.

Non-GAAP net loss margin was significantly narrowed.

Zero to 1% in the second quarter of 2020 from 10, 7% in the same.

Period of 2020.

This means that we have almost achieved breakeven at group level for the first time.

Consolidated YY live.

Notably <unk> has a chip a positive non-GAAP net income for the second quarter of USD $94 million.

Non-GAAP net margin improved to three 3% from negative three 8% in the prior year.

Period.

Diluted net loss per ads.

In the second quarter of 2020 was USD 1.4th Street compared to 0.39 in the same period of 2020.

Non-GAAP diluted net loss per ads was.

With narrow to USD, Daryl pointed Vera Wang from USD <unk> 63 in the same period of 2020.

The addition.

Accordingly, with our quarterly dividend ply approved August 11, 2020, and on November 16 vigor.

Bigger will be distributing a dividend of USD <unk> 5 billion.

For the second quarter of 'twenty 'twenty back.

This is expected to be paid out September 2019, 2021 to shareholders of record as of the close of business of.

Timber plantation in Gabon.

Also we would like to provide an update to our execution of the share repurchase program announced on May 2020, kind of which the company may repurchase up to USD 300 million of its shares to August 20 <unk>.

ASP of Joy suitcase 'twenty, you're talking about the company had repurchased approximately USD 296 <unk> of its shares.

We will continue.

To invest in business.

This development initiative to further expand our global market rates.

Cultivate a pilot and get yogurt communicate and enhance our high quality content offerings.

We will also actively explore other ways to maximize shareholder value.

Beginning in the second quarter.

We anticipated some negative impact on users.

License also implement activities.

The greater lift of pandemic related lockdowns in certain countries.

We expect our net revenues for the quarter to be between USD 608 million and USD $635 million.

Representing a year over year increase between certain parts of 11% to 18, 7%.

Constant currency basis.

Excluding the revenue contribution from <unk> and above alive in the same period of last year.

We currently have limited visibility surrounding the COVID-19 epidemic long term impacts and geopolitical uncertainties our business.

And the markets in which we operate.

Therefore, this forecast OLED reflects our current and the preliminary views on the market and operational and business.

Fifth subject to change.

That concludes our prepared remarks, operator, we would now like to open up the call to questions. Thanks.

Okay.

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 and wait for your name to be announced if you need to cancel your request. Please press <unk>.

Go ahead <unk>.

Our first question comes from Thomas Chung at Jefferies. Please go ahead.

Jonathan Chang.

Okay, sorry about that.

<unk> just can you sound a woman to send us all doing.

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Got it okay, so nisan that changes.

For Baidu, RP pool, and he'd been the Tricia <unk>.

His phone.

But you're also seeing.

Thanks.

Human but taking on my questions.

Two questions. The first one is about the Q3.

The new guidance as well as the.

Margin outlook in the second half and my second question is about <unk> can management comment about the paying ratio.

<unk> trend.

As well as the life streaming revenue performance across the different countries. Thank you.

Okay.

Ticketmaster empty.

Hemp with IHOP.

<unk> guidance.

Lucia or excuse me more cash moving without constitute each engender 40 Tulsa.

We're seeing some of the <unk>.

Felicia to.

So familiar.

Sure.

It also limit yourself.

Appropriate lithium shutdown Tom.

290 in some way.

Each of women also Gucci <unk> can be summed up by Winchester Center.

Despite our joy <unk> life.

Absolutely.

Well Im sorry, it <unk> mutual.

Covid to achieve between ship.

<unk>.

Eagle bulk charcoal.

This is Alex I will answer your question.

Regarding Q3 guidance.

<unk> from the end of the.

Second quarter, some countries gradually lifting of lockdown during the pandemic standpoint, we have anticipated.

And some negative impact on user social entertainment activities online, which mainly due to timing.

The entertainment and therefore affect some users pain.

Okay.

So far we have limited visibility and clarity.

Impact of the Lockdown.

Therefore, we have provided.

Relatively conservative estimation for Q3 revenue, which implies a year over year growth.

13, 7% to $18 seven.

At some level.

Mainly due to short term fluctuation of vehicle lines.

So an iPhone.

We'll provide further updates once we have better visibility.

In terms of revenue growth for the whole year.

We expect Eagle Beckman Q&A a decent growth.

Tom.

<unk> got.

Tim quality typical life that you hit Delta can clock.

Sure.

Archie to the young sort of to Tom's Chelsea Europe, Paddock wood Jaco to nijhoff, Instituto <unk> known as <unk> hundred 12.

Supply mute, Hitachi, which expand our GAAP total two nine atom <unk> silicone here, though Peter.

<unk> placed on quad <unk> on top of that kind of equalize the EMEA profit.

After the Thunder Shitala argued to unsold.

Tokyo icon.

Omer don't have neon tissue right with a product without COVID-19 homebuilder.

How the fulfillment vehicle, what women carhartt product without total Swiss on attendee.

Moving to Nanya patent on quarter Youll acute Todd.

Let me just add since each other to the degree you.

<unk> she is a woman.

<unk>.

You got to hit each of the physician at Qdoba.

Hey, Jeff.

As for their revenue.

In fact in region.

Eclipse revenue growth the second with mainly cannot find in other countries in southeast Asia and.

The East region.

Mainly due to the Ramadan season.

In terms of revenue distributions.

Our revenue is well diversified.

Okay.

<unk>.

For <unk> in the second quarter.

Growth staying rational in our fleet expansion together right.

In terms of future trends in the long run positive about potential developed country include.

Including you add.

As well as the middle East.

Considering that indeed, we can have better paying capability and also at Europe.

Payment habits.

Ultimately ending our alkali operation and content assets and stuff.

In Asia and also other developing countries.

Considering the huge user base and also that as we continue to cultivate.

Avs and habit in this region.

I'll leave that.

<unk> potential.

It does.

Yeah.

Thank you.

Our next question comes from Alex <unk> at Morgan Stanley. Please go ahead.

Hello, physical NFL inflation with a tier one or <unk>.

Go lives champion Cathedral.

So if all man.

So <unk> will be called life, Emmanuel you said casually Balcor ludo.

A woman Youll see both I mean, you don't have brought up which is that with all the features.

<unk>.

Yes.

Sure Jake Diehard, Dan So Joe.

It's a needle that's happening so what is your largest both on man woman that she that define our Kochi junkie. So C&I so much income.

Just to be on Thiago <unk> Goldman <unk> Baidu Sanjay.

For Baidu to.

<unk>.

The whole Jacob so Dr Chen to whole okay.

Tiger Sanjay in place that guys see Lucia either maintain.

Net cash.

We will then youll somewhat.

So you won't see big <unk> woman.

Quaker oats.

So that's a good shape on Eugene Sangre <unk> way.

So can you bridge the Waco Ccs.

My first question is related to <unk>.

<unk> life, new product content strategies recently, we have noted.

Increasing penetration into game segments and also some casual games like Ludo.

And then also wanted to get an update around e-commerce strategy.

And then my second question is related to the use of cash.

The status of the Baidu transaction.

We have almost to use up the share buyback.

The program of 300 billion do.

Do we have plans to have.

Initially a new buyback program and a.

The use of.

Use of cash or other purposes. If you can share. Thank you very much.

Susan.

Is it going to usually Julien.

Women's jeans on fashion.

<unk> achieved <unk> now made shoes in Europe.

Do you see the new homepage instrument that synergy.

<unk> geologists are you shipping.

Any change orders or <unk> or <unk> for the local don't answer.

First of all yes.

<unk>.

Sometimes they only minerva.

Toyota will mostly tissue gunshot wounds to Jana vivo gene.

<unk> <unk> solution and restructuring.

It sounds as a low dose <unk> Giovanni.

Just to <unk> NAND.

Nate will.

Eventually and Doyle our foot on the Eagle Tonsure Roundtable.

While demand for <unk>.

<unk> discipline in Europe.

The one challenge usage it will move.

C C Viva La Jolla, do even assuming a 2 million tonne national highly the Max issue the one comp.

In order to the <unk>.

Yamana go anyway.

The St Johns in England here with our CEO, George Ranchero, Oman, Qatar economic RG, two one tolerances.

EMEA and Canada for Eagle rock on our Montana, either tissue tradition merger.

<unk> reaffirmed once Johan.

Yes.

A woman.

Two the <unk> Tianjin solar.

So in our development to the <unk>.

Synology Sandino.

Sure.

Europe, which had engine.

On the <unk> development.

The Shenandoah <unk>, Saddam allergic townhall, he hauck <unk> <unk>.

The <unk> synergies.

This is David.

In terms of the new contents related to game live streaming and video games.

Throughout our observation was found that using such a meeting.

Especially in Europe.

In South America, and they are interested.

Therefore in the past.

We have gradually introduced more gaming content.

Okay.

As the global mobile game market.

Debate and that Eli.

Its content offering and social interactivity.

It's small lagging naturally in the long run.

Gaming content.

Be a important impact.

First content offering.

And we will continue to partner with leading mobile game company <unk>.

Three eight.

It might be.

Community gaming content community.

For the new game. This is a small attempt by us to encourage Q&A to establish connection and interact with other users.

Enabling users to.

To engage in social interaction.

During the night Dreaming and also by plane casual game.

You'll file we have seen positive impact.

<unk> user activity and engagement level from the newly introduced.

And then looking at me.

We might need longer time to draw any conclusions.

The revenue contribution.

Gaming and video game.

Paul.

As for cash usage.

I believe that you could see from our earnings.

That in the second quarter, we have repurchased around one.

100, <unk> mainly in Europe.

And we are still executing our quarterly dividend payout.

As for the remaining cash.

Yes.

Sure.

Sale of our life.

Substantially completed but still with some customer metrics going forward.

Matt.

Hum.

Phil.

Full completion of the deal.

We remain.

Amy cash G&A.

To give you a timeline.

Thank you.

Okay.

Our next question comes from Hugh Wynne Zhang of China Renaissance.

Please go ahead.

Hey, good morning, gentlemen.

Cuba.

I'll, let Chuck and Kelly Scott can you go to electric.

Good nickel, yes cultural.

Hopefully youre talking towards the Dupont of Nielsen tenants, yes.

Sure.

Okay.

Yeah.

Sure.

Pulpwood to go through it on the call today.

How do you plan to tender.

Oh telematics frequently.

Okay. Thank you Scott.

Why now.

Thank you John.

Cool.

Thank you for taking my question I haven't gotten.

Got it on content ecosystem.

A few times during the prepared remarks can you.

Shlomo cut on income.

Localized content.

Okay.

And what about the retention in the hall.

Differentially.

Yes.

On monetization.

Talk about the progress on that.

Monetization with us.

Advertisement thank you.

Our assertion during Q1.

The <unk> hydropower has shrunk relative to timing on the Ocean <unk>.

The leaders of Tau.

So chooses to pay on Groupon.

Attributable loans home easily residual cash flow source for the diesel KVM.

Oh, no mometasone nasal hydrocarbon.

<unk> was for the Caribbean bulk solution portfolio quarter Shlomo.

As soon as <unk> and <unk> to ensure that they look IPO.

Well I don't want Jerome highway peaceful and Toyota Tundra drill 500 physician teacher peripheral judges alternative to other <unk>.

Jonathan data <unk> TV <unk> here now on our beaches.

Turning to join us.

Very logical to Susan <unk> with Columbia.

I can answer the <unk> Congress Shanghai logical fit.

Friedhelm month quarter, Shove <unk> division highlights <unk>.

<unk> total.

Total change agenda in the tier three.

Woman.

To consolidate and achieving our highest desire to go turn on drawn our whole now IBM.

<unk>.

Parents for sure.

Sure.

Yeah.

And in this quarter.

Okay.

Sure.

I'm not sure those are the two of them.

We don't generally due to timing of Dropdowns in virtually all triple orders, Oregon, Russell rule higher each year.

<unk> <unk> attributable to the below <unk>.

<unk> is only one part of our marriage or through Chicago.

<unk>.

Should our shoulder to the <unk> solutions at all of our <unk> system.

<unk> revenue share.

<unk>, China International will take home channel.

100, <unk> Shadow momentary revenue model <unk>.

Yes.

Southern Europe.

With us on changes substantially.

So I Wanna, Josh as it is.

<unk> Energia, followed to Egfr <unk> answer.

Colorado is a fully engineered Roger so we win more.

Okay.

This is David.

To your question at this stage.

City of Nike, it's about content.

Especially the motivation and constipation.

And the development of income.

This quarter, we have taken the first step we have already.

Positive impact.

Right.

And frequency.

Alright.

In the coming second half of the year.

Youre welcome.

One small program to better.

Okay, and also bringing more conducive update regarding traffic allocation and provide diversify.

Monetization.

Especially captain.

<unk> has outperformed.

That will be able to enable creators.

Play acquainted involved.

Or is that flat.

But would love to say is that compared with advertising the oxygenation.

That's not happened overnight.

Our content offerings and user experience.

Okay.

With you in the cloud.

Adjusting advertising.

That would be.

Gradually change.

Yes.

Julien I believe that you will have a positive impact.

Health and sustainability of our products.

Okay.

Regarding diversified monetization.

Currently speaking revenue stream mainly income.

<unk> advertising and membership subscription as.

As of today live streaming.

<unk> revenue stream.

But should maintain at around 95% of our revenue.

While other revenue, although growing at 40% year over year.

Cliff Chen.

11% quarter over quarter to this quarter.

The site is still relatively small.

Gradually progressing diversified monetization plan and will launch.

<unk> monetization feature in the second half, which we believe.

Beneficiary to the content creators.

It will better connect our fans.

And Kartik Bay, Q&A paying habit and therefore driving.

Of our revenue.

Thank you.

Okay.

Our next question comes from <unk> Li Zhang at Bank of America. Please go ahead.

Oh, Hi, Doug how hard this is.

We all out without one P. D C. GAAP, Oh, Hey, why don't you go ahead I'm glad you went about working with Europe.

You mentioned that you'll see.

Doug.

Okay.

Yeah cause without doing that.

Okay. That's a good.

<unk> telephone line, you've got total back Tom Jake.

We all kind of going through that supposed to go to jail.

Keith.

Yeah.

Now I'll push that Joseph Vornado getting overheated holds enough you.

Do you feel like you're.

Kind of what it will.

Had a competitor that had.

Why do you suppose.

Oh gosh.

Without what you tell them, what we're doing right now you.

Is it something that would be helpful.

Yes.

You said that you will make that's out there marketing for me. It's also likely to call John What do you think you got it.

Mcminn for taking my question two questions here first.

Can you give back MAU color on a regulatory element in deep Reds oversea market and any concern.

Probably the content so that <unk> that can delay want to follow up on the sales and marketing, Jeff and I think the last quarter I think we have a good cash position and monetization.

Oh, well our competitor accident you're right.

So once you know yourselves.

Do you have any considering that now you're there Rob.

Pin pad competition Cheng thank you.

Our tiger with ICR.

Sure.

<unk> are alive with a firewall <unk>.

So if there is any of that Europe and Asia.

Hi, Ross.

Strong global channel to our sugar Johan <unk> hundred three.

Yeah, Matt on the platform.

<unk> said, the hydrogen of Immunomedics ecological channel islands, although longtime he Antoni zone.

<unk> <unk> from.

<unk>.

<unk> kind of a warm winter in soda achieved neutrophil <unk>.

Daiichi those offerings and other junk dealer.

I Wanna.

So the <unk> some of our finishing tongue theological Valerie Valerie now I will not go through the change income we are doing for genital.

As a general household.

Commissioning of a new vertical autoimmune for the Haynesville you know I don't know John good.

<unk> hundred 40 <unk> Jonathan.

Donald.

<unk>.

This is David.

And your first question about regulation and after the sale of YY life captives.

Yes.

Yes.

You may metrics can be completed.

Majority of our business is located in non D&C regions.

But we do have R&D team located in China as CRM upsetting.

Yes.

And as for our global overseas market.

2020, as we penetrate into multiple markets.

Eastern Pacific region.

In other emerging countries.

Our revenue is actually well.

In region South.

The risk of any single region has been greatly reduced.

Well good luck to emphasize is that since the incorporation of joy, we have been strictly complying with local policy in MAU, no matter, which company and in which countries we operate our business.

We will continue to execute on our global agenda, Keith geopolitical risk to any particular region to further diversify our revenue across multiple regions.

But even even the other two the likelihood.

Consolidated has a ton of LNG <unk> jewelry for sure Cornell and <unk> <unk>.

<unk>, our chief Saundra Reichart Hoffart Homer.

What you told us a certain way more nominal.

Tara and good morning.

Stronger Susana use of the retina to the achievers Shahada general nausea Peugeot.

Youll controller to the mainland Congo to IR, Youll controllable Artois Dahaneh to Chicago.

The ocean of Angola, with John Chow.

<unk> or <unk>.

Telephone the ecology, <unk> genomics and Atlassian cumulatively.

Too early to a warm lead us.

<unk> revenue.

Sure.

None of the genome vessel types of interdigital and here she will hold post outages.

<unk> more so than your guidance Hall will Ronaldo needle.

Usual warmer to the Dodge launches around closer to zero. Among those are the two large introduce autonomous zynga.

<unk> <unk> two the Covanta <unk> millions on the Eva grew more than almost done the Eagle <unk> and China <unk> E Mail.

Business EMEA alone Fiona given our Peruvian and Luciano.

China either soil.

So in the.

<unk> list is that John <unk> is up <unk>.

Tim buses either year, George Hu <unk> Honda solution.

The yield the eval.

And that's actually <unk> <unk> on that.

He was asking a woman diagnosis on annual Europe, which archer.

Now, we'll move with them.

Congress agenda to go we do shop regarding their Netherlands.

Consumption to grow Swedish entity highway funding are going towards.

<unk>.

Yeah.

Okay.

Regarding your second question, we understand that previously.

For any internet saw that the usual logic.

Expansion.

Thanks for that.

It might change.

Effectively invest in advertising to grant a relatively sizable user base.

Hey.

And you can actually leverage on the advantage in terms of the user base to gain.

Okay.

Advantages.

Ken.

Attractive.

At this time.

Daniel.

And H.

All of these appointments.

<unk>.

I think.

That is the kind of logic.

But we don't see that.

Applicable.

Plan B deal.

Joy, because what we can see is that.

Our main competitor right now is actually investing in dollar amount.

<unk>.

And what we can employ.

What we know is that.

One of our key competitors have been expense.

And investing.

Or even tens of millions of U S dollar.

Our user acquisition.

And such.

Circumstances, if we in that.

A couple hundred million U S dollar or abelian U S dollar into your the acquisition it will actually make any difference.

So I think that <unk> like to be more practical and take a relatively.

The.

Strategy whereby.

The health and.

The sustainability of the product therefore be more stable.

To obtain a stablish condition.

Longer term.

I believe you'll have opportunity to change.

Obtain competitive advantage and a longer term. Thank you.

Turning to olefins.

Very helpful. Thank you.

Does it.

Our next question comes from Tien <unk> T. H capital. Please go ahead.

Hi, David.

I'll then quickly.

Sure.

People are looking for.

Thank you.

Yeah.

Well thank you.

Thank you.

Yes.

I think Keith.

Yeah.

Yes.

Thank you.

Yeah.

Uh huh.

Uh huh.

Is that fair.

Matt This is Jeff later this year.

Lindsay.

Sure.

Thank you Cynthia.

If anybody you can see.

<unk> has been doing.

Next to me for a long time.

Hi.

What's the difference between the in that scene in China.

China and overseas.

That number wasn't a bit Q.

We have been doing.

The overseas that Jamie.

Oh, well and with the management.

In terms of both gross margin and net margin going forward. Thank you.

Although a smaller target.

<unk>.

No.

The year on Europe.

After an <unk> airlines to the lien quarter.

What do you mean, the <unk> Javier Javier.

Javier sugars in order here.

Because of <unk>.

He is a common one is linked to the unit <unk> you got to you, even though top Virginia tempo for GAAP.

<unk> does that change your science vocal cord, absolutely or local demos Sheila.

Totally or down in the meantime, Briggs and you don't you don't need a five year term without forward looking model.

To go down with a year on year from Sheila Dang dealers as the meantime, virtually holdup.

<unk> is a valuable tool.

<unk>.

Sean in soil for coach.

<unk>.

As usual John users royalty goes further in towards it was <unk> 92, <unk> thousand of them Guaino you made through outages around good two to three launches are sort of Google or Facebook when most of our novel instant messages.

So I'm going to let Jon Werther year within Europe.

So.

We won that earlier so in our Johnson, Dr. Hodges to Greenwood hotel versus.

So those are the neutral non producing over.

You should either be done with dealer Suzhou Hawker who not.

<unk> Leerink Schuster in Q1 equity values.

<unk> raised retirement Booth, you Sundar zoning young so I'm glad you said it will take a.

Total patient.

Patient volumes liquid most because together.

System.

So on a sequential basis, which is not something thats on track on that.

<unk> got to hoping that you could see yourself.

No problem regimen, shortly how stupid sushi domain for the T cell or San Fran della Joshi to coordinate all the time to talk with the <unk> book.

And for those with job playbook to someday too.

So on this on that kind of a big go down to <unk>.

Changing kind of our Eagle downs to ship.

Two housekeeping sell through like kind of our colleague optical life, some kitchen panda windows of opportunity.

Got it.

She's the chief transformation.

Through persistent Felicia.

Keith.

The agenda and GAAP.

Hey, Jeff.

Regarding.

Operating live streaming.

And PR.

Other areas of the world.

There are significant differences.

First of all.

Operating in global markets.

The different region, so many different culture.

Operating multi language multi cultural.

Market.

<unk> in China.

One of the single market, So thats why.

Legal lifetime, we have operating capability and team and office.

The <unk> region and our local team.

After rates based on very thorough understanding of local culture.

While regulation and the maintenance.

Development of local content and content creators also maintained by these local kind of regional team.

And secondly, I believe that there is another difference in terms of user acquisition channels.

In China actually every year.

The acquisition channel all of these companies that can be changed himself. So all night streaming platform is actually very difficult to obtain additional.

To continue.

As Corey.

Overseas market. The main user acquisition channel, an advertising platform at Google and Facebook and state itself do not actually heavily rely on like Jeanine.

The public pool of user traffic, it's available and the story of user traffic channel. It's also.

On banking.

Global like Jamie.

Regarding margin trend.

We would love to say is that we've seen improvement on net margin non-GAAP line in second quarter.

Mainly due to three factors.

<unk> continue revenue expansion with epic.

Progress of multiple product line.

In the second.

Right.

Lower bandwidth cost and payment channel costs.

And third.

The decrease in Nike's advertising income.

So for the second half of this year, we believe that we will continue to improve operating efficiency and then although gaming portion has been.

Introduce into legal guidance between up with the SEC.

Content cost margin to be increased significantly and will likely remain relatively stable.

Sure.

And then for marketing activities as more marketing activities will roll out in the second half of the year sales and marketing expense will be higher but sales and marketing expense margin will likely to be slightly lower than the first half.

Income, we believe that segment will enter into a new U S up 15.

And from the full year perspective, we believe that vehicle segment will achieve a positive non-GAAP net margin portfolio.

And from a longer perspective, considering that the standalone operating profit of Eagle life remain about 20% and other products are gradually moving towards breakeven. We believe that the overall profit margin will be gradual.

Thank you.

And then I guess.

Glen.

We look forward to speaking with everyone next quarter.

Thank you management. This does conclude today's conference call. Thank you all for joining you may now disconnect.