Q2 2021 iClick Interactive Asia Group Ltd Earnings Call
I Love our review of the second quarter 2021 results and share his thoughts on our execution strategy attack.
She's financial officer turbines team will follow and give us additional insights on the financial results for the second quarter and provide guidance for third quarter.
And full year of 2021. He will then turn the call back over to TJ for closing remarks before the poll is open for two N a.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provision.
<unk>.
The U S Private Securities Litigation Reform Act of 1995.
Forward looking statements involve inherent risks and uncertainties.
As such the company's results may be materially different from the views expressed today.
Or information.
Regarding these and other risks and uncertainties is included in the company's 20-F.
Filed with the U S Securities and Exchange Commission.
The company does not assume any obligation to update any forward looking statement, except as required.
Wired under applicable law.
Please also note that I Quakes earnings press release, and this conference call include discussions of unaudited GAAP financial information as well as.
Non-GAAP financial measures I quick press release can cancer.
A reconciliation of non-GAAP measures to the most directly comparable unaudited GAAP measures I will now turn the call over to our chairman and Chief Executive Officer, and Cofounder Ching Tang TJ. Please go ahead.
Thank you Lisa.
Welcome to the call everyone.
We are excited to share with you yet another quarter of robust growth in both our marketing and enterprise solutions.
The strong financial and operating performance.
In fact, the <unk>.
Second.
Quota so very good performance on numerous metrics, including enterprise solutions revenues.
Gross profit adjust EBITDAR.
Adjusted net income.
Further demonstrating that we have the right data driven solutions for our clients.
And that we are enjoying strong demand from our products and our services.
With our solid execution on a clear strategy to further penetrate the enormous private dominant traffic market, we remain confident in our strong outlook for the future.
Total revenue in the second quarter grew 34% to 78 million.
Looking at our two business segments.
Enterprise solutions achieved record results for the seventh consecutive quarter.
With revenue, reaching searching for mailing 160% year over year.
Our marketing solutions segment also continued to deliver healthy growth as revenue grew 22% year over year to.
64 pumps 6 million.
Where else profit increased by 46% year over year.
Outpacing revenue growth as we further expand sales growth in marketing solutions and drive increased contributions.
From our higher margin enterprise solutions business.
Well, we keep investing activity in enterprise solutions, we have still managed to achieve historical highs in adjusted EBITDA and adjusted net income.
Demonstrating the strong.
Mix of scale, we have achieved marketing solutions.
I believe is a market leader in assisting clients realize digital transformation through embracing offline to online integration opportunities on the private domain traffic.
In China.
Encourage any according to pwc.
Line on offline.
Retail sales in China are estimated to reach two trading on the six trillion respectively.
On a we believe the total eight trillion 10.
Give us a rough estimate of the enormous market potential we are facing.
Okay.
Well all key account clients on the mid tier clientele segments remain distinct they are equally important growth drivers for our enterprise solution sales.
The market we have over.
So you saw it in existing key account clients and marketing solutions for which we expect to see significant cross selling opportunities.
Especially within those industry verticals, where we have gained.
Traction.
Such as cosmetics on the food and the beverage.
As we grow our enterprise solutions business, we will grasp additional opportunities for scalability through replicating our success in these familiar industry verticals.
In.
In the meantime.
We're also further growing our presence in the mid tier market and have received a strong reception from our clients for our high value easy to use source to us on our unique implementation methodology. That's provides hence one team.
<unk> led the implementation delivery on the Guy data integration.
Maintaining our momentum we use key account clients under penetrating rapidly into mid tier clients segments. Both Ari.
Those organically on those through expansion into.
Into new vehicles, we use vouchers remains a top priority for 2021, although we are off to a great start.
I would now like to share with you some clients pay studies for each of the gross Angers feeling enterprise solutions.
Starting with our organic the key account clients.
But by leaf commercial one of China's leading department store brands is a exciting example of how I flex your integrated solutions have broad impressive value to all key account clients.
Our traditional grinch all traditional scripts.
I played helped to integrate 400 under 70 daily offline client stores into a REIT Chuck mini program that functions as a centralized online consumer interface with very smart marketing tools.
Towards for live streaming e-commerce on all of the areas to a truck traffic on this stimulates consumption.
At the same time by at least use of our standard <unk> product.
I S C a F.
I see I am enabled them to formula.
On the execute inside poor consumer strategies to build a consumer loyalty on the backend.
Our sauce product allowed by lead to digitalize, the sales management and <unk>.
Evaluation inquiries and management efficiencies.
As you can see it was.
Performance.
Finally, our data analytics technology supported by lease target marketing.
This consumer repurchase rates on that provide data domain traffic with actionable analytics and the insights.
I'm smiling consumption on the social behavior data.
Our partnership we used by Lee has demonstrated the wide range of services.
We can provide to maximize all client success across business lines and the ability of our standard product.
Two.
Increased development costs.
It made us the ongoing rollout of authentic products, we have continued to enhance our product metrics to cater to the different needs of our clients.
You May remember, we launched our first cross.
To record a standard product ice Michael just this April.
We are excited to announce that to Korea companies.
Gorilla.
Global fashion home sale market on Poland.
Fastest growing branded phone.
Ross bone car seats on the baby products has implemented ice smart go to quickly and efficiently expanded our China footprint.
These two client client successes.
M a squeeze our screens in understanding the needs of global.
<unk> guidance on our sales teams are in gaining access to consumers through highly effective integrated solutions.
We also know that our partnership with Baldwin is advancing well.
We have completed the integration of our resources.
Brett on the systems and most importantly have engaged with a number of new top tier clients.
Together, we are driving strong value in the marketplace. We used the combination of all fully integrated people into N solutions.
Leverage the strengths in operation.
Sources of substances on bike and the systems.
We isolate networking on the experience in wechat ecosystem on our expertise in sauce product offerings, we look forward to further expanding market share by capitalizing on the.
The creation of our smartphone potential profit.
The only income in China.
We are also very proud to continue to be recognized as the industry leader on that this quarter. We received big data on the intelligence company after a year from the 12th Tiger.
You know Martin agency of the year.
Gold award from marketing magazines agency.
The year of what a 2021.
Asia Best in class digital bucket marketing technology from the Hong Kong Mol at work.
When you Penny Wong among others.
All of those.
Regarding China's evolving stayed home security regulation landscape.
Well computers into many investors favoring the uncertainty it has brought to the Chinese technology market. We expect this to have limited impact.
The rules on our business model and operations.
In this environment.
Peyton the Investor concern. It is important to highlight that online education accounts for a very limited contribution to our overall revenue.
In addition.
We have achieved their wall Street.
Classification for the state of security from the Chinese government.
Please note that level three is the highest ranking for the non banking institutions on this is to highlight our compliance.
We use our state of security regulations.
We will continue to monitor closely.
Adapt to regulation as the change in the future.
Steve in the recent.
Regulatory developments on the macro uncertainties, we note.
They do have some adverse impact on the advertising industry. Although we are no exception.
As a result, we will be more cautious we used the gross after the marketing solutions looking into the second half.
I know, we'll focus our resources on that.
The most profit for clients only for risk management.
While continuing to invest in our enterprise solutions, despite the short term.
Headwinds, we are steadfast in our belief of I think exceptional value proposition.
That's what we bring to brand new clients with our integrated team.
Enterprise on the marketing solutions in the long term.
On a separate note.
You may have seen from our press release.
I have recently been appointed as our new chairman.
After the board of directors, which I won't be seven in addition to my role as CEO.
I assumed the role of chairman of the board of directors to consolidate the management on execution.
Execution of the company's strategy.
Stretch.
Even more comprehensive ways alongside my co founder Sammy.
Who will remain a member of the board of directors with me.
I would like to thank our co founder Sammy paint ball faced enormous contributions as chairman for more.
You can derive a decade.
I look forward to receiving his counsel as a member of our board of directors.
Before I end my opening remarks, I would like to share that the board of directors has approved.
More than two upsides the share purchase program announced on December 10, 2020 by tons.
$10 million from.
15 million to 25 minutes.
This demonstrates our continued confidence in.
Our long term growth prospects.
We firmly believe attached with the dedication of our employees and the support of our shareholders. We expect to capture additional market share in the quarters ahead, both organically on those rules.
In partnerships.
Partnerships as we lead China's ongoing digital transformation.
This concludes my opening remarks, I would now like to turn the call over to our CFO terrorist city to.
To discuss the second quarter financials.
Harris.
Thank you and TJ Hello, everyone I'm pleased to share with you our strong financial performance in the second quarter of 2021.
Our second quarter financials represent numerous records, including wrap up resolves for enterprise solutions for the seventh consecutive quarter and record gross profit.
The adjusted EBITDA and adjusted net income.
In addition revenue and gross billing.
So his second quarter highs.
Revenue for the second quarter of trending trended one grade 278 million.
A 34% from $58.1 million, but at the same period of.
Per year.
Attributable to the increase in contributions from marketing solutions and enterprise solutions.
Revenue from marketing solutions range to $64.6 million for the second quarter of 2021.
22% from $53 million.
They're part of the second quarter of 'twenty 'twenty.
Primarily as a result of growing market demand fund specific action marketing campaigns.
Revenue from Enterprise solutions was 13.4 million for the second quarter of 2021.
Approximately 160%.
From $5.1 million for the second quarter of 2020, primarily due to the increasing need for online and offline consumer behavior data integration and digital transformation.
Gross profit for the second quarter of 2021 was $24.3 million.
Representing a 5% to 6% increase compared with <unk>.
<unk> 6 million for the second quarter of 2020, mainly due to the continued expansion of the company's marketing solutions and contribution from higher margin enterprise solutions.
Cash and.
Cash equivalent time deposit and restricted cash as of June 32021 was.
100 <unk>.
$3.7 million compared with $94.5 million as of December 31, 2020.
Our balance sheet remains strong.
Long to accommodate both our organic growth and M&A opportunities. We have in case, a $50 million ABS repurchase program through December 31st 2021.
As of June 32021.
The aggregate value of purchase shares was approximately seven.
$4 million.
In addition, our board of directors today authorized the company to upsize the share repurchase program from 15 million to $25 million.
For the rest of my discussion.
We will focus on our long GAAP results.
You can find reconciliations of these.
Non-GAAP results in the past release, we post earlier today.
Which can be assessed at our Investor Relations website.
Adjusted EBITDA for the second quarter of 2021 was $6.1 billion compared with $5.2 million for the second quarter of 2020.
Adjusted net income for the second quarter of 2021 was $2.6 million compared with an adjusted net income of $2.5 million in the second quarter of 2020.
Gross billings in the second quarter were $194.2 million represent representing a 46.
Ascent increase compared with 132.8 million for the second quarter of 2020.
Overall, we are pleased with our financial performance in the second quarter.
For further information please see the detailed recap of other financial metrics in the past release, we issued today.
Plus we have emphasized last quarter 2021 continues to be a year of strategic investment into our enterprise solutions segments.
And a growing range of packaged products.
Including CRM and as Michael.
Which have both been seeing increasing.
Actions for our <unk> guidance.
Our focus remains on growing the contribution from enterprise solutions as we capitalize on the large available market opportunities before us.
Having a vessel we have become more cautious regarding the growth of marketing solutions in the second.
Per year.
We have consistently said to the market, we are focused on ensuring a sustainable and how the growth rate for marketing distributions.
Based on the current environment, we will focus even more on risk management cash flow management and profitability.
We.
Half of that business ongoing solid profitability will continue to help support the robust growth of enterprise users.
We would like to reiterate the strong value propositions that the integrated enterprise marketing offerings can pay assets pools that consumer lifecycle distributions.
Expect that generates value for brands.
We remain confident that our strategy is to capture market share will drive long term value.
Before I end.
Sure.
I would like I would like I would now like to conclude my remarks with our outlook for the first quarter.
<unk> and a full year of 2021.
<unk> looked at our outlook for revenue is based on current market conditions.
And reflects our carbon gauge of the COVID-19 pandemic impacts.
These assumptions are subject to change.
We estimate revenue.
There's some enterprise solutions for the first quarter 2021 to be between $17 million and $20 million.
Revenues from marketing solutions for the first quarter is estimated to be between $65 million and $75 million.
We keep our guidance on.
Revenue 21 that total revenues and enterprise solutions revenues unchanged.
With that I'll now turn the call back over to TJ for closing remarks.
Okay.
Thank you Terence.
Data driven solutions are clear.
Clearly driving scope scalability.
On the sustainable growth.
And the cross selling opportunities, we all see from our existing marketing solution clock.
Through partnership with Boston.
Feeling strong growth opportunities ahead.
We have achieved.
Strong performance through the first part of 2020, one and I believe we have established the core fundamentals for driving further growth.
More committed that well.
We are more committed than ever to growing our higher market enterprise solutions segment.
Yeah.
Along with our marketing solutions segment to improve the overall profitability of the company.
The market opportunity from private some income it is massive with applications in virtually every segment of the consumer and the beetle.
To be market. We also recognize that a few subs model in China is not ideal.
Therefore for the key account clients, we expect to benefit from the collaboration we sponsor to provide operational services and outstanding.
With warehousing and logistics systems.
Meanwhile, we also see huge market potential.
Mid tier clients. That's what we are not all these services with our soft choice, but also provide them with valuable industry methodology.
See this dynamic as driving stronger scalability that will yield.
In enterprise solutions.
I wish to thank all peace stack holders partner clients and shareholders, who see what we see in high quick studies.
The promise for a very bright future the promise of deliberate to innovation against the backdrop of the digital transformation overtaken China.
To all our devoted I clean cars, who helped us to deliver excellence every.
Every day I see thank you to all of you for cities with you that our success chewy risks.
Two how shareholders.
Note that while we are experiencing the impact of shifting regulatory sentiment due to our geography.
We will not be swayed by injury and shifts in sentiment that do not impact all fundamentals.
Instead, we remain keenly focused on the long term drivers that have led us here without.
The history of our successes.
And the prospects of our ongoing success, which we believe operate well.
While.
We feel parents valuations do not represent the fair value of the future of <unk>.
We'll remain focused on creating loss.
King.
Shareholder value.
Our management team is dedicated as always to driving gross profit.
Excellent.
Thank you for your continued support.
This concludes our prepared remarks.
Thank you for joining us on today's call.
We'll now open the call.
Two questions.
Operator, Please go ahead.
Yes. Thank you at this time, we will begin the question and answer session.
Your question. Please press Star then one on your Touchtone phone.
If you are using a speakerphone please pick up your handset before pressing the keys.
Your question please.
Press Star then two.
For the benefit of all participants on today's call. If you are Mandarin speaker. Please raise your question in Mandarin and then immediately repeat your question in English and please limit your question to only one eight each time at this time, where possible and apparently doing something with the roster.
And the first question comes from.
Nelson Cheung with Citi.
Hum.
Oh here, we go into with you, but when do you think when you put it.
Marketing solution.
When it comes out I think he said.
I'm sorry.
Yeah.
Oh yeah.
You can see that go along.
Uh huh.
In fact, the U S.
Oh yeah.
Hi, Stefan.
Into that that was it.
Oh, no longer winter on U S enterprise solution.
What kind of money Center Munoz head Count 62, Oh cool.
Okay cool.
Thank god, because without that I'm bullish on the whole you anyway, because it sounds like you're going to Uh huh.
Because I didn't hear it turns out to the cohort kind of.
Oh.
Have you been taught out dosing cohorts.
Uh huh.
Let me translate.
The question is do you think Mr.
Thanks management for taking my question and congratulations on that.
Our culture and TJ.
Our new room and I have two questions. My first question is on the marketing machine.
Just wanted to check if management.
I'll take the advertising outlook.
So they can half this year.
Next year, despite the impact of the education overhang.
But the soft consumer sentiment as well as the resurgence of Covid cases, and my second question is related to the enterprise solution.
Just wanted to check if the French market share our the number of new K H.
At each quarter.
The BTG.
This quarter and do you see.
Yeah.
Or what are you planning will be disrupted given the soft consumer sentiment, which mainly to our software business gross profit.
Mid tier clients right now thank you.
Okay.
Uh huh.
Our children need him when he was sure TJ.
She didn't need to be able to I mean, the one shot you forgot a woman the Duke my opinion solution you forgot a woman the G or enterprise solution. So you know what Oh, she don't read I've shown you that evil and teachers who claims.
Marketing solution.
We have solutions for me in the women's and you sound good or somebody I want to know Oh, he or she says a thought of how clean are.
So when you buy the nursery you've shown that you can go to Tony Lindahl.
Toward Bush's company, what kind of attrition.
Yeah sure. So again, there should all be go younger Jim a vocal P. Charlotte tells you thought where you shouldn't you wish you all you did.
John Hughes eating that either UGG, the wood treating G suite, Tricia, hopefully three or well what are your thoughts when you see any unusual.
Oh, Oh, Oh, geez, what elements you should've, Colorado.
She should do them in a year, where the income pushing towards your thoughts.
I understand you're doing your whole call I won't Cui.
I don't think it changed at all so each any matrices Tonight you shipped between Asian.
Oh, that's another so you saw a woman the well what do you want to you know if we go to Hong you should be able to trim in the auto related to shipping Jim on the whole year.
But what Ohio, Aegean shiny hedging for Europe.
You'll find someone to Shelby polledo quite shoulder surgery, a T shirt, you should those should be at income central Hudson It would be helpful.
Digital woman, Oklahoma Yamana decision once you annualize what you thought all of you call you didn't know Jimmy Kimmel.
Your body. So you just have the thing that you should just handle one Linda potteiger that'd be dahal that'd be a good telephone holder you hear EBIDTA Felicia told them hold as he can meet its usually you do that with under the T shirt.
Dark shelving and things you like on the woman Ah why do you think you should don't feed on 112 O T shirts.
So you said you shipped between Asian, you should call them to our usual so eat all women's alcohol you wish all of you you know Cui a pinata Jeep 13 shouldn't couldn't John They go and put them in front of me I know crunching Usher in Uruguay.
She won't that you've got.
Local thought all your broken Yahoo. There you go when they leave the company.
And that's a.
Especially as you said you were down like Nissan women.
Sample terrorists.
Oh, it's a trend yet.
Some of it particularly unusual that's even ship again.
We don't even be relevant.
Thank you your final question.
TJ on your questions covered two parks and marketing solutions and enterprise solutions and I will take the first question about market.
Overall speaking in the first half hour advertising business delivered a good performance with revenue growing by 20%.
You can look at the Chinese market. Indeed, there were some industry.
And the team, that's where it's actually markedly teams such as the K talk online education and he gave me and the pandemic has brought more uncertainty to the economic outlook and therefore, the advertising business was affected and in the second quarter, you would see that the impact was limited in the third quarter the impact is.
Pleased to grow bigger so they are indeed, uncertainties in the market, but you know our advertising business cover a lot of the industry and in addition to those tactfully regulated once we also have traditional industries, such as consumables FMC G household chemicals, luxuries, which enjoy healthy growth.
So and in addition, our advertising business such achieved economies of scale and with the steady growth in its revenues, we've seen adjusted EBIDTA and adjusted net income increasing sadly therefore for the second half hour management will focus more on the potential implications of the.
Uncertainty in the market and we will be more cautious in developing our advertising business and with more focus on risk management cash flow management, so as to ensure a steady profitability and in spite of all the negative.
Impact as our CFO returns have mentioned we maintained.
<unk> our guidance on operating revenue. Thank you.
Oh the whole tissue.
One is as you go enterprise solution the jogger Vinci.
LOL trailing in the Ukraine.
Good for me.
Okay Darko.
Sure Glenn.
Sure.
Albert.
No.
Could you talk about what are your formula on them, which as you said as you know we show them in a mutually agreed does he go guidance of Covid.
Junior anchors, you talk about where crinone Cleveland gallium by a dog somebody who makes it.
What is your opinion or do you go opportunities that should shortly one particular sweeping.
So he was on the day that you do in the travel to Daniela So should go with Alco portfolio by Oh geographies on a tissue women huge hospitals in yellow.
So you won't see any measurable I.
Should you go on track with that contract.
Oh boy agree to go to pay you talked about won't even just yet.
Eugene a shame.
Turning to India women traveler, Eugenia illogical Yum by good Toyota tundra.
Just to show you, where the yield that you get cohort, when Virginia, Mexico, which issues I don't see Europe.
What do you want me to go recurrent John that you ship a field.
Three to four.
Which element G C Chicago, who the Hanmi and Oh <expletive> E G.
A drunk all of whom are cheap.
Firearms are shipping now telling these yeah Shelby you.
Certainly oh, how do we see the neutral hung at a issue of Copel <unk>.
A couple of weeks.
Tiago for me and just show them and nurture threw me off with a couple. So you saw the departure of a woman can.
I mean, you almost doubled your July should be a trend. If you want me to I know you Shonda Hasher y'all come quite she teaches all geographies, where there's a whole bunch out or many gene travelled all your <expletive> all good income.
Oh, Thank you I was wrong.
Ah study they should treat all.
All right.
So I wouldn't change any of them and you know so it's usually even traveled the world Europe Sunday in Yoghurt Yoda and yet.
No.
G. A coke when a woman who was asking them to change at all the woman. She says it's only over cohort woman doses to gel niche here Lance or Jim.
In region, where they're telling me you ship.
A couple of dream.
If you don't answer it again.
Maybe you go a coupon that turned out.
Or should he or she go arches gather them again.
Yeah, you should kind of Daiichi the Yo Yo Yo somebody Josh I'll try to convey denim and yet your shoulder.
Uh huh.
Oh, no sorry Chi.
Especially if you could tell me I'll go to California, you make sure you got.
I'm good.
I don't think the shoulder with shelf and I'm not sure I would agree with it see once you have that kind of don't see that I think oh sure would've been going here in Chicago and shoulder that should take.
So you don't want me I wasn't cheap goods, when we all with a cold winter and the team put a photo I wish I can tell you that you'll wait wait a woman, who me and she's a enterprise solution that yugo.
Jim didn't go quite as well find out and people need to lean on the holiday.
Oh do you want to I feel to be to each other <expletive>. She doesn't need can we all but a couple of what I mentioned that booking.
And then maybe a commentary on women that you could build in the south of the gun. Yet are you would you should I S. T. I mean did you go social CRM there to the time, Inc.
Now we're going to do I don't know what me at that time, so our phones with Thomas Kurian Tau Sue ringing.
Give me one minute.
And Jim who choose.
Bundle with Harman she toys.
Sure thing well change out of Susie's, John that you should go out I mean, the model so check them out an email that tons have been co who are attempting to go to Jim Wilson.
The change in the gym or leaning in French and emotion when they only can do most of your whole Cui paywall, Amanda G or can we all go to Cushing there so.
Now that you've broken daughter, Hugo South, California.
Okay, just a kid yourself later on in the Delaware.
Okay as to your second question about enterprise solution also.
For two parts first is the young key account clients.
And.
We maintain our earlier guidance on the growth of 30 account clients and this year that is this year, we're going to acquire 200 to 300 new clients.
Clients with average upwards of a 150 to $160000.
In the first quarter, we have acquired 40 K accounted in the second quarter.
We've acquired another 40 to 50 K accounts, so actually everything with Amtrak and lofty by the end of last year. We've already had over 200 K accounts and this year. These existing clients will continue to bring 50 to 60000.
<unk> dollars of recurring revenue to us and.
Our key accounts are all clients are concentrated in cosmetics and food and beverage luxury and general retail industry has to meet your clients well, we have been acquiring material claims faster than we expected in the second quote by the end of second quarter, we've already signed over 10 distributions and overseas.
Our nearly 3000 are obsolete and a b and b to your clients I, usually a train stores wastewater tend to 'twenty out maybe even 100 athletes and for these mid tier clients they make payments on a monthly basis.
These are payments need to be allocated among health months until the current contribution.
Current fact limited, but I'll state ROE I believe it will contribute a lot to the development of our enterprise solutions and in addition to sell CRM.
CRM standard stock products to these clients. We also help them manage the private domain traffic. So currently we are exploring the <unk> profit sharing model with them.
I believe that it's going to be.
This model is well developed and it will bring huge opportunities to our enterprise solutions.
Okay.
What's your guidance.
Thank you.
The next question comes from Thomas Chong with Jefferies.
Oh gosh.
Yes.
Uh-huh, Google and that's why I smell golf.
Okay.
Yes.
Okay.
Oh no.
The hotel in London.
Okay.
Uh huh.
Well, if our time doing quite a bit.
Does it mean.
Uh huh.
Oh Wow I wish I had two questions. The first question was about a month ago. So.
Oh My God.
Quantitative number.
Yes.
And then my second question.
Got it.
So what's your strategy.
Okay.
Oh, She's union publisher to do.
So you are going on in the high right. It's just totally in the tissue machine that you shouldn't that tango contango two logical ice smart go.
That's a good time to you.
Generally you should think about.
And we all believe should quickly Judah wasn't until we all wish you all a Florida could go to school electro should bango issue Highway Shiloh to toggle the general Egypt and pipe are you would you should.
Yeah like northern weren't sure twitching.
Real quick just caught my ear.
Alright, I'm trying to think I shouldn't that you're only teaching people yellow so either for all women kill parole woman I smuggled your time here.
You can find out when would you wouldn't come in clean Oh, what does he go Oh, you're waiting somewhat weaker without John that you grew up on me all.
I mean, the time he introduced you walked all of them.
Opinion uncle, a wafer with Venezuela that you go create a magical question.
We seem to go.
So you know she's all at one time, even people like you Wanna English law, Jim John and so if you don't quite Oh, one machine then tell them no dig a script in the mail and its usually you don't you don't.
Uh huh.
Hum.
You don't react to sugar filled Eugene you're reshaping Piet here I'm sure all of them.
And she's already.
So you will not have a tradition that ginger soda and I'm sure you.
Your woman type well need a partner.
That's usual champion plugging the zinc.
Uh huh.
We are pushing them to suit women box high Union and I'll highlight how general doing without telling me you shipped them hi.
Sure John that you go to like Hollywood.
So when a woman, it's usually a year over there you shouldn't I should say I want that highlighted by marketing solutions.
The other issue of Copel <unk>, unless you have done a woman a chunk.
Jim.
You know each and logical chief woman, Josh I'm commentary off sale I couldn't do it for me.
So Michael we wait till they usually it starts with a turnkey, particularly sure well there you go.
Okay.
Got it.
Thank you for your question TJ.
T K M's overseas strategy currently we are using.
So she has a target mid tier clients and our strategy.
What are your friends to enter the Chinese market, because I think the parts on Chinese consumers.
Right.
Vishal P.
Thanks to the pandemic and they can't do it anymore. So I'm still ice muscle, we can provide opportunity to foreign brands.
Who can then use the wechat ecosystem to sell your products.
To the Chinese consumers and also maintain the relationship with the members in China.
And after launching the product we've seen very good progress and currently we are working with brands in Korea, Japan, and Southeast Asian countries and we've already shared two places in the script. So overall speaking our overseas strategy is to leverage our products in.
Taking granting methodology to help bring brands and our advantage is in overseas market is that our marketing solutions business already has a big customer base in the overseas market. So we actually can take the opportunity presented by the pandemic.
Our.
Soft products, including a smart go to this client base.
Okay.
Sure.
Thank you.
Mhm.
Yeah.
Thank you and the next question comes from Colin Lu with China Renaissance.
Okay.
Oh, Oh Oh.
And then when he says he or she was glad you and Tony I'll go with that.
Got that.
And I'm just trying to think how women do you view that.
You know what yourself with the school doesn't mean, you don't know what you call them.
Oh, yeah that might keep Allergan, Germany central and.
John you're doing some oh.
Oh more shouldn't you get a group of our country.
Junior people wait no, Utah become you can't live without it without talking about the whole company, which doesn't meet him and he's right.
So I just translate for myself.
We saw very good progress in terms of the.
Our progress starting with entrepreneurs are close to the Montney is just wondering Oh, Steve.
Kind of targets regarding didn't amber retail all of that it's not the number of merchants that want to sign up at the end of this year.
And then regarding the J.
Crude revenue model, Oh, we didn't see any sort of meaningful contribution this year or is that something we should be more forward looking to 222 phone calls on that.
Oh sure TJ.
Well I'm not too sure Jimmy.
M E T. What usually teetotaler element to me I'll go a couple of or somebody in the Q are done with that.
P. R E rate you don't want me to say anything.
Commodore.
Sunday in Yoghurt them again, Eugene channel a number of training I don't know I mean, whats your own Colorado sure.
Uh huh.
Uh huh.
They go into total woman.
Shovel quota order neutral agree Shonda gosh, what's the Orange a challenge either.
Uh huh.
The Covid sure sure junior and commercially you forgot to change them at all.
And so these are all well then tenure or would you. Please talk about it with 10 Jarman.
Yeah, and that should wouldn't keep a daughter.
Well not kind of logic that builders, having tissue they found out enough at all or do you think you.
Just don't want Michigan deal that you've done.
Coaching you should think of a bunch of them come in so you could answer a gene a triage woman digital social selling.
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With how many engineers shall be hopping to ensure.
Sure that you don't Wanna Siri to Green.
Chico's should tongue in cheek.
Oh forgot it and yeah, so I think formulary.
Don you show that your.
Junior unless you go you know what they're going to say well what do you think.
Thank God changes.
Yes, you know Archie you don't see all the pumping dollar Shah.
So either follow maybe changing in a turnkey can we almost couldn't it doesn't kind of show you end up ultimately it could be a thought.
I thought that like would you the Ohio Kenosha go away.
Again, that's always true when he used.
There you go.
You've got you got you.
So how do you address it a T D.
Jim on the G M belief in Europe, GMO refinish, unless you get more ships to this year's show them and if they don't call. The moisture Oh no you Didnt say you. She has told me all of them are calling them to jump out at you.
A couple of weeks.
Thompson.
So you see a couple of feet on claims you know Moshe can we check all women tumble I think a woman so he'll say I'm not sure how many how many tens I see pinch hit.
Sure, let's see where the green bond with him and bacci, the tinder social Fortunately she's a theme you Jay she.
Yes, but again she says she go.
I'm going to show you got somebody on the show.
So he's home and food at home occasions, I think Oh really particularly on the Shaw Cleveland.
Oculus is humming and she says or feet on T. He shrugged them, so hopefully not sure if I need more ships.
Oh geez chicken emotion.
Condensate from more Wishy washy.
Yeah, I mean, you're telling me boiler chicken.
So, but you beat your chest humans longer excuse me anything should pool, a few cohorts the north sea.
But you would use a Jewish alcohol how much of that is from months usually ship Paul Toms you should be hearing you for that.
The woman telling them what is the most of the golf club, but that being said he's a G M leader.
Toilet wishes David hop charge, that's only on the showroom Oh, well I'm not sure that's even more should quit talking about she goldcup with ammunition anyway, what must be taught it potentially.
Or it's just going to charge them convenient her phone excuse me touch yourself and not all of them in Q1.
But as you wanted it so you just want me Timna, Colorado Begrudge them Paul.
Sure.
I think your final question.
So P J and Safra mentioned by the end of second quarter, we have already signed nearly 3000 athletes and for the full year I expect to acquire well find out more outlets than we predicted.
Yes, because I need to see a restocking to.
To sign up a four to five stars.
But I think that for the full year are we we will be very likely to have 80 to 90000 outlets signing with us and that means that the standard product.
<unk> are very attractive.
Two these are mid tier clients and because these are clients. They are chain stores. So they need our CRM products will help them connect with consumers and upgrade to their private domain traffic contribution you know we are still signing up.
The outlets and also the contribution.
It needs to be allocated a long tough months. So the current contribution would not be a big for the full year.
And maybe like a single digit or high single digit <unk> profit sharing model. We are very optimistic about this model and currently we are tried with mid tier clients and they all are welcome it.
And because they can use the CRM too.
They'll probably domain traffic and also operate their communities and therefore, bringing extra revenue to these merchants. Therefore, they are more than willing to share the profit with us and I think this model will be better for the.
Market, because if we simply selling soft tools to them.
These claims would not be a very sticky because after all.
Each will incur costs for them, a long time, they're not willing to pay it as to the Gen Z model since we can bring extra revenue to them.
Chinese will greatly greatly improve the stickiness of clients.
And therefore, our clients, we're not willing to actually jump the ship and then find other partners.
Uh huh.
Thank you and the next question comes from Brian Kinsinger with Alliance Global partners.
Great. Thanks for taking my questions and nice results first can you quantify the revenue from education in the first half of the year.
As a percentage of marketing solutions and then based on your guidance.
What are the assumptions in the second half of the year and then similarly, there's been discussion around new regulation in the China gaming sector can you tell us if there's been any impact on your marketing solutions business from gaming customers.
And any expectations in the near term or changes of advertising budget specifically.
Typically within that customer set thank you.
<unk>. This is Terence I I think I could first answer some.
As you know above the numbers for US and then I think I would posit that impressions to TJ to comment more about the industry.
And how the gaming sector.
You know may impact our second half results are first of all on the education whats being what the later scenes actually last quarter from the first quarter.
And so it has been adjusting the numbers.
Essentially so in the second quarter, it only takes around 2% to 3% of our.
Our total gross billings, so it's really small numbers and we actually believing or projecting a minimum numbers in the second half or even 280 numbers at the moment and so the gambling actually is a relatively big set of velocity it took around 15% to 20% of our total.
Total numbers in terms of the cross selling and some of the revenue is from business wrong.
So.
I guess I would then.
Pass the questions.
TJ to answer on the second part.
About the industry kind of outlook on the gaming and education et cetera.
Yeah.
Uh huh.
Hi.
She didn't need it wouldn't do y'all, what's your T J.
As long as you take a just a oh you were marketing solution a shop on me and that deal and you've got your online that you should.
Oh, well knock on doors you know you made to me was just how long until the temporal Jim von <unk> again.
I'm Gonna make it easier for me attrition should show do you see yourself.
B, which will integrate television and games.
Oh Gee should tell you how many to say well you wouldn't even than that you've got Nissan Ah. She says should tie to our acuity and TJ and keeps yep.
So young children Honeywell syndrome paid some good oh.
Fees on top of only the javelin and she said you're fucking budge Salvador Kusanagi perishable essential to us.
If I had called G. Excuse me, how I'm doing in Portugal.
It's actually a woman dying to arch Mi, which what I think was the Sealy 4 million Chin-hsien Chico tool, you'll you won't see the hollow hung yeah, they're showing that people are key part.
Oh Jacob.
Some of the junior and she said you need to sort out between ancient cheat.
She'd holiday on your bubble you wish it on your phone call that you'd had a home you don't you're kind of a show dog a gen. One are you seeing yourself suite.
So we feel good I kind of hop yeah, Baltimore shortly each of them just that.
So you do.
So please don't go to like kind of on a woman who had a shot by man tissue Guangzhou, Washington that because they don't talk to you about treating C O.
So young woman tenancy, the Oklahoma, you will forget Hungary, they'll do especially when the high shouldn't wait you don't tend to choose a combat judiciously.
And then shot on the element, where you go up in Europe.
Household so you've got to go to like why any woman, Oklahoma you almost like many doctors yells at me here.
I think our total unfunded she's talking about one way when you are through the all day. He's here you go.
So you shouldn't assume that you see a Hong you Oh.
I should have a young woman that's a good point.
Hum.
Crusher, Tom G on the Yugo for me and I'll call you wouldn't be so once you go quantity fruition Glenn in your house and you knew Covid Y'all do I come back to you.
Thank you your final question.
Yeah.
He has to be I don't know cause marketing solution in the second half.
Well due to the late two recollects me policy changes some teeth were adversely affected in particular online education, we've actually seen the income on the advertising.
A bunch of your telephone lines.
Indications in Q2 and ability.
The tightening of the regulation happened in Q3 and in fact, you know in the second quarter. Many of our online education clients are different.
He doesn't play any advertisements anymore, but we werent I'm not affected.
Second quarter because of their revenues from other ingots to actually laid off the GAAP and in the near future other industries, such as gaming and tourism will also be affected by the regulatory policy changes. So looking ahead at the second half.
We would see a lot of uncertainties.
And that's in the Atropine solutions Christmas, Although I don't know if these solutions business have a lot of industries will be more cautious and prudent in developing in the second half we will focus more on industry leader, that's one of our industries with more certainty and we also will focus.
More on risk management and cash flow management, so as to maintain the healthy growth in our marketing solution business. Thank you.
Okay.
Okay.
Thank you.
And this.
A question answer session. So I would like to return the call back over to the company for closing remarks.
Yeah.
Thank you once again for joining us today, if you have any further questions. Please feel free to contact <unk> investor.
Investor Relations Department.
The information provided on our website.
This concludes the time thank you.
This concludes the conference call you May now disconnect. Your line. Thank you.
Okay.
Okay.
Okay.