Q3 2021 Zhihu Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to did you who Inc. Third quarter 2021 financial results Conference call.
At this time, all participants are in listen only mode.
Okay.
After the Speakers' presentation, there will be a Q&A session.
Today's conference is being recorded.
At this time I would like to turn the conference over to MS. Zhang thing too.
Head of Investor Relations.
Please go ahead ma'am.
Yeah.
Thank you operator, Hello, everyone. Welcome to all worked out quarter 2021 financial results conference call. Joining us today are Mr. Gilligan, Chairman and CEO of careful and Mr. Suddenly our CFO.
Before we start we would like to remind you that today's discussion may contain forward looking statements, which involve a number of risks and uncertainties actual results and outcomes may differ materially from those mentioned in today's announcement and this discussion.
The company does not undertake any obligation to update this forward looking information except as required by law.
During today's call management will also discuss certain non-GAAP financial measures for comparison purposes only.
For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results. Please see the earnings release, we issued earlier today.
In addition, a webcast replay of this conference call will be available on our website at IR Docs Yahoo Dot com.
Now I'll turn the call over to Mr Sung Lee our CFO.
Okay.
Thank you Gigi.
I'm pleased to deliver today's opening remarks on behalf of Mr. Julien founder and CEO optical.
Thank you for joining Joe Who's 2021 third quarter earnings conference call as.
That's one of the largest online content communities in China, we have always been committed to the development of our content centric ecosystem to continuous community infrastructure any headwinds user base expansion.
Utilization capability improvement.
Our fast growing your user base is it primarily young and the cross generational, it's using our platform with vitality, well, our accountants and chicken monetization model that differentiates us with sizable growth potential.
Against the backdrop of rapidly changing macroeconomic conditions, our distinctive model wider and user community and the continuous accumulation high quality content serve that not only our moat in the competitive pen Entertainment arena.
But as compounding driving force at preparing long term sustainable growth of our user base and monetization channel.
In Q3, we delivered another solid set of financial and operating results with our average I mean youth, reaching 101 2 million.
<unk> 40, <unk> 40 per cent a year over year.
And every monthly viewers growing to 542 million.
That's not the end of the third quarter the cumulative pieces of content on our platform reached 458 $458 9 million.
Including 398.4 million questions answered.
Presenting a year over year inquiries Oh.
43% and 38% respectively.
Additionally, our average number of monthly active content creators increased to $3 6 million.
Of which the average number of monthly video content creators increased 86% year over year.
Meanwhile, our content centric monetization initiatives continue to gain traction.
Evidenced by a 115% year over year increase in revenue to RMB, $823 5 million and a 110% year over year increase in average monthly paying members to $5 5 million.
During the second quarter, we upgraded our high quality content, that's been standard by introducing central fulfillment.
We took further steps in Q3, two updates the mechanisms for our content creation distribution consumption and the platform interaction.
And made remarkable progress.
High quality content with characteristics off I'll broaden the horizon, providing solution and is resonating with mine was widely recognized by both users and the content creators and helped drive the growth of our community.
Categories, which carry more of a sense of humor and content, including engineering economics and law graphics on heavy on the tax views increased by 136%, 58% and 112%.
And it relates to user engagement increased by one 2%, 134% and 111% all within just two months.
The views of high quality video content with a sense of human on our platform increased by over 140% in the two months.
The implementation of the standard or a sense of a few minutes brought user fulfilling content and a prompt higher levels of user engagement on our platform.
Before the final announcement of the winner of the Nobel Prize in physiology or medicine. This year.
Under the topic off a 2021 Nobel Prize tour, a J, who user had a successfully predicted the subjects playing with the highest probability of winning with a subordinate vision.
In addition to targeting a massive user base in the quarter, we focused particularly on engaging content. That's met our new sensor for humans tender to appeal to whereas user communities.
For example.
In October this year, our published children's popular Science cartoon book titled 100000 wide was well received by young parents.
Young heightening user consumption since the whole human content also benefits creators by encouraging more user engagement.
Providing more opportunities for commercial income generation.
A good example comes from shouldn't shock Neil one of our veteran digital content creators.
He had accumulated more than 1000 high quality I'm, sorry over the past eight years Entre who.
Recently released detailed a sharing of entry level watch selection.
Which not only yield 13000 apples, but also provided the creator with corresponding commercial income.
The great challenge of Who's platform has now become an important income source for him.
The successful implementation of the new accounting standard not only providing our users with broadly expanded content coverage, but also demonstrated how our differentiated value proposition you never ability to influence how big direction and discussion deaths.
For example, during the Tokyo Olympics well.
Well Manny community platforms, we're just celebrating team victories are focusing on individual performances.
The Triple community was having in depth discussions on the reasons behind wanes our lucid.
From a prominent topics aren't you who sell under threat like how the Chinese women's volleyball team lost to the United States as they were two or three.
We're whereas perspective were shared on strategies, you economics et cetera.
These types of discussion and the user interests that have given rise to <unk>, whose nickname Chi Tsang with action, which means master of skills our tactics.
After she seen Andalucia was lost at the Pink Palm mixed doubles during the Olympics.
Who use are responding with intellectual curiosity and theorist.
Rather than emotionally driven discussion just what's community gave rise to topics such as the metal theory, and Olympic Spirit, which became the positive and the guiding force online discussion.
As we continue our efforts to improve creation distribution and the consumption of our content with a sense of humans. We have also preserve community complain to.
Through proactive community of governance, and the scrutiny of lung compliance content, we strive to enhance users' trust worthiness by fostering community characterized by so CRT expertise and the respect.
In Q3, heightening content timeliness provider users a better platform experience.
Enabling them to more quickly and easily find who appealing content with timeliness within our massive content library.
This was proven particularly effective with the devastating floods in Florida, which we shared in our previous call.
More than 160 topics related to the sunflower, we're generating within 10 days I'm sure cause platform.
It was nearly 150 million page views.
After the astonishing news about we find book.
Who use us carryout national in depth discussions.
Associated legal factors and other People's use of entertainment industry.
Our economy.
The average number of pieces of content with timeliness generated on our platform on a daily basis.
Increased by 40% the September versus this April.
Yeah.
It is encouraging to see more and more users in our community consuming content with time limit with a related T O penetration rate exceeding 40% at the end of third quarter.
To better satisfy user demand for high quality content in various categories and the diverse firm it we encourage creator.
For specialty is to work together and the joined to introduce more content.
Especially with your life content in.
In Q3, the number of average monthly upload their lead he was increased by 290% year over year.
Average number of pieces of content consumed per user and other video tab.
Core Q&A scenario also continued to increase.
As of the end of September.
The number of data users, who consume video content increased to 37%.
In October we launched a new feature named joint creation, which allows tech tax creators to authorize video creators who use their original answers as the basis for our video script and the share the copyrights with them.
Initiatives like this not only amplified our high quality content library, but also prompt more user engagement.
Radio names looking either works or data how far is the gap between <unk> and the boat is an excellent case, demonstrating the synergy effect of content visualization to join creation.
This video was adapt from a blockbuster graphic and text content with 10000 apples originally created by changing a 10 year triple creator of veteran.
The video extension of this content, what's widely spread receding over 2 million views across our platform and are getting loss recognition inside and outside of <unk> whose platform.
Driven by the abundant coverage diversified the permits and the improved timeliness of high quality content.
Our user base maintained its high growth and momentum there.
During the third quarter.
Average may use exceeding 100 million a record high.
Average monthly viewers reached 540 million and a more wage the penetration rate of M. A huge increase too.
18.7%.
More than that the value proposition of our community is steadily attracting users across ages and across regions, making ever user base increase in a more balanced and healthy manner.
In Q3.
The percentage of female users grew to 47% from 44% in the same period of last year.
Along with the improvement of content timeliness how are you.
As a group of those who over 30 also grew steadily in both numbers and the activities.
Further solidifying our unique and vibrant community ecosystem.
At the same time, expanding our content format capabilities enabled us to satisfy younger generation's demand for learning life and entertainment.
In preparation for the school season, starting in September we launched a series of program titled first lessons for University.
Our graduates or anybody to share their experiences and insights.
Delving into six relevant topics the serious resonated strongly with younger users attracting more than 800 million views and the promising massive discussion.
Geographically the number of users in tier two cities are below also continued to increase in Q3.
Two expanding content critically coverage, providing more content timeliness and offering diversified of consumption from it.
Aim to create an inclusive platform where all users.
You need to kind of feel a sense of belonging.
Our message and active user base infuses, our communities with energy and are constantly reinforces it by generating high quality content.
Wishing you return attracts more talented content creators to join us and make a contribution.
As of the end of Q3.
The cumulative number of content creators on the Juno platform.
$53 1 million.
By providing more and better tooth assistance and incentives for the content creators they found their differentiated capabilities and in <unk>, we were able to help them improve their creation experience under the new standard and further gain recognition in the user trust within our community.
In addition to further upgrading the truth, we do sectioning and match the Q&A launched last quarter.
H R rated the function to January the P. P. T V due to one click.
The joint creation feature launched October, whereas designed to well design and aimed to help creators improve their creation capabilities by allowing them to focus on what they do best.
For example, a.
High quality answer about the brain with a 41000 apples generated by edge user. She is your margin.
Adapt it into a video by a video creator tying shoes and.
We received more than 4 million views.
Supported by high quality text content. The video named how big is the impact of college entrance examination on future income.
How to quantify the long term impact of port scores in college entrance exam.
We received more than 2.59 million views and it.
More than 3000 of apples on our platform since its launch.
By the mid of November thousands of a graphic and tax creators participated in content authorization through joint creation.
With the total accumulated authorized content exceeding 1.8 million pieces.
Which demonstrated that this is the right strategy to meet content creators and most real and the pricing needs.
Driven by the richness of high quality content with a sense of humans, the commercial value of our community and our young and a cross generational user base, both maintain their growth momentum.
Further solidifying our community ecosystem.
In recognition of our increasing branding value Yeah October two who was once again named in frenzy.
Our top 100, most valuable Chinese brands for 2021 ranking seven places higher than last year.
And their opinion about trucost increasingly prominent brand and unique content centric monetization model of a commercial efficiency has continuously improved.
More brands and our business partners are recognizing juku as an important platform to gain visibility.
And the more content creators joined the trick with ecosystem.
We were able to cooperate with a huge number of commercial content creators in different specialties.
And together make a human and a shared the benefits by expanding user coverage and improving commercial efficiency.
Q3 revenue from Ccs increased by more than five times compared with the same period last year.
In RMB 278 million.
Average monthly paying members reached five $5 5 million.
Representing 110% year over year growth.
And the revenue from paid membership increased by 96% to RMB 178 million year over year.
Moving forward, we plan to further enrich high quality content and the strength of our content centric monetization solution.
Especially in categories, including E Commerce, and the vocational education.
Further enhancing of our closed loop ecosystem.
Well as increasing our values as a business partner.
Before I was CFO provides highlights and additional color on our financial results.
Like to share with you some major progress we have made centering around our content ecosystem in Q3.
To better serve our content creators and to improve their commercial and our community influence.
In September we updated our chief platform by using composite influence index and the formerly relief the ranking of content creators on cheese platform.
This platform is aimed to help content creators improve their monetization capability by providing a transparent transaction model multi tasking mode and effective data indicator assessment.
In the third quarter, the number of creators who achieved commercial income tripled compared to the same period of last year.
Our creator May now increase their commercial income to six diversified channels, including commercial content paying membership content.
Recommended goody's and it consulting solution et cetera.
The experience.
We're saying you are one of our yen selection authors is a great example of this.
To hit the urban story series, which.
Attracting yearly.
He was able to realize close to <unk>.
1 million RMB income during the third quarter.
And the important platform influencing the young generation's lifestyle and consumption decision, we have becomes the desirable platform with effective content centric commercial solution for thousands of brands and merchants in the future of beauty cosmetics personal care E Commerce F.
M C G vocational education et cetera.
In the third quarter.
A number of brands and the merchants that use our content commerce solutions increased 200 per cent compared to the same period of last year.
And G M. We on our platform reached a new high of nearly RMB 5 billion.
Representing a year over year increase of 92% as of the end of third quarter.
Yeah.
We released our 2021 Jew, who top 100 list at the end of October.
The list.
Comprises 100 product across various categories, including clothing food housing on the table now selected by participating trickle users based on their professional and personal experience as.
As well as our big data analysis.
Users are not only impressed by items like the payload with the most apples most eat nasal powder and the hundreds of cookware, but also enjoyed fulfilling content, while reading through the selection experience.
Adding to our mutual gains for both users and the creators.
High quality content with the central fulfillment is not only a key factor in inspiring.
The weapon is among users content creators and a Jew who community.
It also eight.
Peter Mensch in strengthening <unk> industry, leading position.
As we forge ahead, we will continue to encourage content creators to produce more high quality and are fulfilled and content and help brands and the merchants achieved achieve healthy business growth.
We believe we believe that the meaningful interplay between users content and the monetization is the driving engine in it.
I don't think a robust community ecosystem, reaching.
Reaching new heights, and achieving sustained long term growth.
This concludes the remarks from Mr. Julien I don't know.
I'll review and to provide more details of our financial performance for Q3, 2021.
That's just imagine we achieved another strong quarter recording total revenue of RMB, $823 5 million, which represented a year over year increase of 115%.
Our unique content centric business model is increasingly showing the strength and the ability to attract to drive our business growth keeping pace with our fast growing and a vibrant user base.
In the third quarter call and Commerce solutions and paid membership combined to contribute over 55% of the total revenue.
Our commitment to our content Commerce solution strategy has continued to gain market awareness.
In Q3 common Commerce solutions contributed RMB 207 to $8 4 million to total revenue.
This five fold year over year increase cost content commerce solution as a percentage of total revenue to grow significantly.
It is further underpinned by the continuous improvement of our commercial content ecosystem.
As well as increasing recognition and the growing demand from our diverse business partners and our merchants.
The number of our Ccs customers tripled in the third quarter compared to the same period in 2020.
As we broaden our recoveries to encompass over 20 industries.
Moreover, we also saw a significant increase in content greater participation in this business line.
Facilitated through our chief platform.
Which launched in late May this year.
In the third quarter, the number of creators who have joined to ever cheese platform and achieve the commercial income exceeded 10000.
We believe this demonstrates that we are on the right track and helping our content creators to reach their commercial goals.
[laughter] advertising in the third quarter maintained its strong momentum despite industry headwinds.
In the quarter advertising revenue was RMB $321 1 million, representing a 39% year over year increase.
And their peanut butter underpinned by our advantage as a comprehensive content platform.
An increasingly wide range of advertisers now consider us as a must have marketing platform do.
Due to our ability to content to connect their edwards with our broad user base.
In the third quarter companies from their views of our e-commerce personal care and cosmetics automobiles.
I T entries he were our strongest growing contributor.
Okay.
Our paid membership contributed RMB 178, 3 million so total revenue in the quarter.
Presenting an increase of 96% compared to the same period of last year.
As of the end of the third quarter.
Our average monthly paying members reached $5 5 million.
Paying ratio of five 4%.
Strong momentum in this business line also benefited from enhanced content creator of commercialization capabilities.
Other revenues, mainly comprising a e-commerce and vocational education achieved year over year growth exceeding 200% in the third quarter.
Increasing to RMB $45 7 million.
Our ecommerce business. However, e-commerce business continued its rapid growth momentum.
G M. We exceeding RMB, one 4 billion in the quarter.
Joey I just mentioned, we made further strides to enhance our recommended coody business.
If I bring more fulfilling content and a greater engagement to a commercial ecosystem, we can better meet users' needs and to create synergies with our other content centric monetization approaches.
Have a vocational education services based business.
Which primarily provides online vocational and professional training for adults.
It's had a great success with this self paced courses, including those covering video production skills and postgraduate entrance exam preparation.
We maintained a strong gross margin of 52% in the third quarter well.
Many dedicated to dedicated to continuous investments in our content ecosystem.
The third quarter also witnessed improvements in operating efficiency as our total operating expenses of RMB $747 3 million decline as a percentage of total revenue.
On both a year over year and quarter over quarter visits.
Our operating expenses in the quarter were primarily composed of the sales and marketing expenses and investments in human resources.
Our user acquisition strategies, leveraging our high quality content library have proven themselves to be a great economic benefits.
We've seen that content is timeliness, including content related to the Tokyo Olympics and other topics related to the start of the academic year and the college recruitment.
Not only drove organic incremental user growth, but also effectively encourage user interaction and cheerful community.
As a result.
Our non-GAAP adjusted net loss, which excludes share based compensation expenses was RMB 100, Tel calling for a million in the third quarter of 2021.
As of September 2021 the company had cash and cash equivalents term deposits restricted cash and short term investments.
RMB seven 6 billion compared with RMB, three 1 billion as.
As of December 2020.
Finally onto our financial outlook.
Looking to the fourth quarter of 2021 the company expects total revenues to be in the range of RMB 1.01 billion to RMB, one 3 billion.
<unk> a year over year increase of between.
94, <unk> 19 for upon 3% and a 98, 2%.
As a reminder, this outlook reflects <unk> current and preliminary estimates.
And is subject to change.
This.
Our prepared remarks.
Operator, we are ready for the Q&A. Thank you.
Thank you.
And we will now begin the question and answer session.
To ask a question you May press Star and then one on your telephone keypad.
If you are using a speaker phone please pick up your handset before pressing the keys and to withdraw. Your question. Please press Star then two at this time, we will pause for a moment to assemble our roster.
Our first question today will come from young Wang song of China Renaissance. Please go ahead.
Good evening management.
My question I have two questions first of course, we are recording a wall.
It's a business.
I noticed there are a number of new products or don't read a couple of years old and promotion.
Oh for example would have thought you would top 100 list.
Oh can you show more come out wrong.
A couple.
A couple of your time on campaign.
And then secondly.
What <unk> tried to true.
Could you discuss in detail from both supply and if a consumption.
Well first of all dose will probably start with the joint.
<unk> joined the upgrade.
Well operated a program announced on the.
Consumptions thought it were noticed that there'll be no cap on the homepage. So can you discuss in more details. Thank you.
Yeah.
Okay.
With myself.
Please go ahead.
Oh, Okay, well funded shovel can you hold on to Chipotle. It's unknown there you go.
Oklahoma solution.
Oh completes you're going to sort of push out of a shy woman and suddenly. It goes full featured you didn't hear a single tranche not before Mike Nolan on Twitch, what you how would you go.
What did you find about the Oh, telling them that you call yourself. When you go through your product you go towards Oh, you're.
Once the official in shops, where you cool.
Shellfish Glen can you go on no sugar.
Got you and John Paul people shop at Goldman Corridor.
Or should you should get a cup of tea actually cool so here to tell you where that's.
So don't hold me audio control tool, so what you're going to try especially on Shan Shan.
Sure.
Okay, Oh, just answered the first question in Chinese and Giuliano.
Two.
Sorry.
What's in there and I think I saw the guys who go in and says, yes, but you do that you're losing jobs.
Okay.
Mark So you don't get a call for lithium CCI has nothing to do with just won't be sound dog food or they don't quite public.
As usual I need that kind of you're you could hold them essentially looking down.
Well I'll tell you Joe.
There were some tied up I think it should be.
I'm not so worried you guys made on the shelf, which is supposed to be.
I'll start.
Okay.
Okay, so and they don't even know they salvage and so as you can tell me I.
And I tend to think of you like it.
So I'm Gonna you do at the time that you don't actually don't call basically you get themselves up.
Great.
Okay. So see a sell side such as the first question as we explained in our remarks M. D. C. S. A has been pitched a lot continues to improve a lot, especially in this quarter, we had a and you're you know you're crazy. It's all about 500 times in a corner on quarter increase of over 30%.
And this is basically due to our constant construction also good alcohol system for a high quality content on Jetblue and also we are playing in more and more profound influenza over people are buying decision and there are more brands and merchants and our you know units also commercial commercial.
Those are joining our platform and you'll see that our we have a much better Aberdeen proving reputations in the market to year over year.
Okay.
Either one or two all our final she's the honest.
So who called out how we buy a gentlemen that Oh Gee.
Got you on the use of the tools all without the need to move to that.
Paul back with a meal bundle for teaching celebrate yourself with somebody going back well not yet you ballpark, a genome, sending a dog or something tied to chemicals.
Or can they forgot it you should wuxi in jumbo single family on the summit.
Yeah.
Sure.
It sounds like you're still going to touch on the sort of woman. She told me to go forward with that.
But you get your sense, you don't want a woman the staff when they don't try it on the G. M way. She teaches swisher Julien. She did she was within the pool beat them down sure like I said about mutual shocks.
They send you have joined the team that can beat them down this year.
Alright, because I do not know what the take rate can be a tease them up getting them back to back up sorry junior box relay them, but yeah.
If I had this double 11, south call I, specifically, we have when we have launched our activities such as top 100 list to promote and make recommendations on all I'll comment on our community to help all year says to make buying decisions and purchase the goods they want and we are working.
Together with e-commerce platforms, such as J D Dot com and Alibaba that covers a number at all from you know sectors, including cloud.
Traveling and living and also our users are able to enjoy it he kept for fulfillment during their their decision making process. The G. M. D. We had for the third quarter is four point 97 billion RMB, we shouldn't presented and year on year growth of 92.
Her sense and our daily order number in Q2, we increased by 31% and also at the same time what is worth noting is that Duke was take rate had increased by over 200%.
So that will show in Shanghai Sanya most of the Rins are put on the console.
Thank you.
You can put some gathering.
Generally you don't don't cool I'll say dark from them, but she's only take a user name and not being able to sell a portion of them. You know, we pencil specialties may be one but something that moisture.
She's breathing room there.
Let's look at looping pipe it doesn't mean that it could be fun, but angel.
At the same time, we continue to explore and if all of our business models in terms of E. Commerce will continue to have a further business integrations with regards to our goods recommendations and brand building and all content columnist faced a marketing acting.
But to use by the merchants, so I still make the monetization more efficient and also we are exploring ways to have a close loop ecommerce platform within our community and just thought that'd be all done on a self branded him.
Businesses and brand building activities inside about your food platform.
Although not as chairman you Gotta shipping them and teach them you can totally honest with us.
Paul.
Well, it's really our two dogs.
So you don't get to.
And he truly dollar woman.
Sure.
The younger your household lots of people said well you've got to so far.
Uh huh.
She told me she has that changed.
Shallow down.
But anytime you shouldn't see the poodle.
Who do you guys see on its own legal hurdles.
Okay.
So this is not some C O Joe Young Oh, we're very happy that you have noticed a difference in our prayer that actually does the snotty final version that is just a great version or a bad up a question that we just launched.
Yeah.
I would choose to go enabling all of them, but that's the way you go to enjoy started on such a.
Petrobras to the peso, but its usually people should just didn't do it subsumed a selfie photos, what's it shouldn't have been a T N I G O'connor.
Sure.
Some of them, yet, but you're going to issue at all.
So she mentioned.
So if you go home in the country.
Hi.
I'm the CFO.
And Oh shoot up your partner.
The honest so you don't Miss shifting budget.
Kind of all of them.
Tom.
So let me go for sure.
Sounds probably or not.
Well it depends on the road, where does it go by so.
So I'm going to say a mega ones.
Sharia finished johan.
Sure.
Understood.
Truthful.
Shechinah.
Womens fashion on Digoxin seeing yourself, that's India sooner.
You also have you been getting.
Okay.
Yes.
And just as I said this is just a version for exploration for a new practices and it's not just for a video it's more of that video. So we want to launch those two into it's all we're monitoring on the uses on our community.
To try to understand their attention their behaviors as well as third part that traffic a peptide demand traffic and to understand their interaction and engagement on all community as they can as you rightly pointed out that is that we have the video tab on our homepage and sort of thing.
I went out you know just keep it secret for the time being because you know after we officially launched it in December well. It gives you more details in due time, so all of that stuff starts out to try to make our user experience more simplified and more interesting.
That was how much headroom do so.
Sure Jacob.
And I kind of Oh.
Sure.
Travel restrictions that are you kind of just shifting the top of the J V, especially Don.
Sure Tom.
Oh cool shipyard.
Sure.
So how should be auctions, which are harder.
You'll get to know them yet as I showed you some.
One quick Omnichannel.
No.
Question would be it.
So since we are a testing that where you saw very nice feedbacks, such that both from the consumer side.
The consumer side from the consumption of the videos you see that we have very nice evening.
Nice metrics, including very nicely and in retention rate. So less time spent in car show. They all had displayed very nice potential and we keep heating.
He says why are they a feedback that we have there really quick updates and iteration sometime after that that a fashion that we have.
Uh huh.
And Lucas tunnels, I know she'll do a controversial just for women tickled to doors.
Something else won't be sure at some juncture.
Talbott Roche about them to somebody.
Yeah.
Jacob.
Tell me that the only trouble dog patterns that Youll ship.
No.
That's useful.
Got it.
What sort of hold it out in their own buildings.
What kind of dollar to Michelle Qi.
Talladega fit home door, you'll you'll G. You'll try to use a whole T J.
Just how much of them.
Copy on China, So she financial applying the C U E.
From the content creation side of the story you can see that our daily upload video has increased by nearly 300 percentage points and our monthly active video content creators increased by 86%.
And after we have a push forward the standard Oh.
Phil and then we're making video content. We have received very good support from the content does especially those who have a heightened sense of creativity and you know great imagination, who actively joined us as a content creator for videos and the.
Ecosystem.
Yeah.
Hopefully towards the soldiers.
So those would be all junk homes that sometime soon.
I mean, it's always a funeral or central you know you can toggle up and we're starting to see signs that you're doing on a hot topic on the fish.
What's it been for Jacob.
Oh, I'm sorry to come back.
Hi.
Sure.
Stood at five times or so.
Yep Yep.
Goodbye.
Shouldn't it be I'm not saying.
It's just all ships.
Natasha.
Daniel just yeah of course at a J.
Uh huh.
How much is it took about two times or the false tanja.
Sundar.
Nagel.
I did my part.
A couple of Indians, especially goes how much have you since you talked to you. So you go sometimes it's also herself as a function, especially should ease.
Okay.
I wanted to say something more about joint creation as you know that on the content creation part a we have very nice video makers together with very nice you know all users who has some nice job views and ideas. So they went together.
Sharing copyrights are they de Levered very nice video content. So we believe that it is not only a new product, but it's just a new format self generation of content and called steel consumption of content and I also wanted to share two numbers with you that is the consumption of videos on our part.
All in all community keeps increasing.
The video consumption do you penetration rates in D E U.
That's why this quarter was 37% versus 30% in the last quarter.
Okay.
Although she is here.
Okay.
Our next question today will come from Ashley Hey of Credit Suisse. Please go ahead with your question.
Well. It seems you claim you told US you don't want to keep our garage sounds like Manhattan.
Oh I see.
Oh gosh I can assure you that I found a shovel Oh God you can't tell I'm sure that you're working like it should be it I realize that you can't tell her he or she shops.
Oh, Yeah. Thanks management for taking my question is mainly related to our lower tier city penetration.
Want to understand how each hour mutualization, helping us engage regions and how each day user behavior different between higher and lower tier cities and you can look forward, what's our plan and our strategy to expand our penetration in lower tier cities. Thank you.
Although that doesn't get you all took.
Shipping your own.
Social generally Jim Jong.
For sure.
Sure.
They're gonna toss them yet.
Sure that she's only Ocado got ships.
Good sure sometimes trying though.
Sure Sophie does.
You should check them off the table for now yes, it's a whole Chapin Tsang Chi.
Tier five.
Uh huh.
Okay.
So the focus of our video as to to focus on getting more videos with sensor fulfillment all community, especially.
Pi and consumption of such videos, we believe that this is not some strategy that we will stick to for the longer term to differentiate ourselves you know so to be able to hold core competitiveness.
And we're gonna Geological photo got Hollywood.
So I would start first choice so it's a whole dogon tushar.
Children's holiday Eagle.
Don't you know you could do so.
But that's really to sue them.
She was talking to you at all.
There you go.
I'll toss it over the quarters you can see it all in June.
It's easier to teach them the needle.
No no no.
We won't go into the but once you do it.
Okay.
So some fulfillment as a new standard they would propose for video content has been very well received and very well recognized by all uses as proved by our survey recently.
Yeah.
But as you do our young woman.
So the attitude.
Just starting off with a guy named Oh, No woman she was a condo.
Children.
Who'd only though I just want to be on T.
She says beautiful Jade.
Engine of Finjan muscle, Tom I don't know just yet.
It's just what else would you do that.
Sure.
You'll see them up to you or did you lose something you feel.
So there's a CFO loosen.
I.
Something that you will not be something that you do a top of mind you should choose.
You can find it.
Okay.
As we are cracking down on low quality and deal with them.
Our focus and priority to high quality video as you can see that we have seen improved.
Popularity of high quality video, especially those who have a that has a sensor fulfillment and as we improved our discover and distribution mechanisms. Besides those videos. They are those videos has had been saved.
Four more times she had four more times and has also help us to improve the retention rates of use it, especially you see these taking my retention right. What you said.
<unk> improved one percentage point this quarter.
Hum.
Coupled with what I saw was homes. So can you send your line is open.
I'll put it on mute.
Oh, okay. Okay.
Cause sugar.
Each one of them.
Well they seem to either digitally transform.
Should we go for it I took a pause yesterday at the time since you're not just doses.
It's too early to gauge it.
So you're going to come to a dog.
And most of that old.
The assumption there on that it pushes up Crestwood sometime.
She was a woman sorry, 700, honest, Virginia horned toad Wala you're.
Do you like Bosch event.
Sure.
Fitting on the other day it goes up enough weight on it because this is holiday call.
God I should say.
It's a hot temperature that type of pressure that 'twenty, one person or two in catastrophe.
Well look I don't want to eat all the essential margin.
You guys tend to hold up well.
That's really all I'll translate your whole.
So you can tell us about on both on the J code.
Okay.
So the supply side is that video content. So we have done joint creation mechanism as well as the answers by videos. So all of this are the upgrades to the product side and now towards flight to how people provide more video content so right.
Now our joint creation.
Our are increasing very quickly we now have over one 8 million authorization. So if a text and images or video, making a that helps us to translate more and more highly voted answers and texts and images to our highly voted videos AR by way of example.
The cooperation between tissue imaging and I'm sure.
They delivered eight four Neely N viewed video by you know jointly by creating based on a you know how he voted answer with over 410 votes.
It is a very good example of how joint operation has been in fact lately working for us and the supply side of the content.
Hmm.
Sure they suffered a heart tissue when we are kind of.
Shifting yourself Oh, My Gosh I'm told me is that you got a new.
Anyway, if I'm in a shipping shelve it.
Took a young who had oh I'm not going to stop handle you'll probably put it in there. She is also the talk and Tony I was what I was going to cause opinion. She's yet. So you are willing to kind of just touch on grocers, who thought pattern.
Yeah.
But she knows the history of <unk> sulfate excuse me I'm, sorry, hydro fish on the pulse of what's going to take us.
Now let me take the name that you don't forget though going.
The wall.
So you know who she won't change.
Okay.
Yeah.
On the consumption side of the video content, Oh, well actually the consumers of the deal with a pretty much the same as the general use says that we have in terms of the profiling.
Usage is that that they are younger well they have a three percentage higher intent. So those who are under 30 years old or video consumption, especially as the general users. So on that Ah I believe that does said.
Actually minutes that our video content is pretty much in line with those who are with us with the demands of those on our own community, especially we had been able to you know cover more uses and kind of where are their demands with our video content creation.
Okay.
Okay. That's it.
Okay.
And our next question today will come from <unk> mobile <unk> of Goldman Sachs. Please go ahead.
Thank you for taking my question.
First on the third quarter on a combined advertising. It's EPS you grew 117% despite the pressures on the advertising market in general.
That's true.
The vertical did it come through very nicely for the quarter.
If you go to your guidance for the fourth quarter and for almost 100% right.
Give us the building blocks of that benefit.
You as well as how strong you expect advertising to grow.
Okay.
And while this is very early.
Could you maybe also look forward to its 2022.
It's very preliminary but nonetheless, and give us a feel for it.
Greg you would expect on a preliminary basis.
Possible. Thank you bought a bunch.
Okay. Thanks, Trish are going to be taken out.
With regard.
Guangzhou the vertical to grow a Cuban elements in the country, that's a cute Samsung or people that you do.
Yeah, So you got to be able to come to pass.
Sure Victor.
On the zoom phone calls talking about your diet and telephone TCR T. Good policy and as usual at all Jim Glen.
So they're trying to EBIT, so you Julien.
I will talk to you later on of course in front of them.
Thank you very much for your question in terms of media in terms of the advertisement and advertisement vertical as well four accused me you'll see that the most affected sectors, such as K 12, education and insurance well they I used to have a very small percentage point.
So in our advertisement contribution there why are the impact.
And so very minimal 12 business.
Oh, well filling you like kind of shocked a G.
Quite feel well.
I T N C J E T.
T shirts.
So who's the CFO.
It'll be all with deep within countries, you're Gonna Union opinion at some job they'll talk all of them.
I'll show you the CTO to cope with the Halloween selling cycle I don't know, maybe if you can kind of show mango chicken tortellini downtime being new T shirt.
Nathan.
You'll find the geometry and privately.
Okay.
Yeah.
If you look at the breakdown of the advertisement vertical by sector or you see that e-commerce consumer goods I'm the Internet savvy case ITM. So he sees out there and then sectors that we have advertisements from and they all had very stable in nice we're always open.
The 80% year on year.
And I think we benefit does we benefited a lot because our you know our merchant quiet. They the advertisement clients are switching their marketing expenses from traditional media platforms to some.
Some platforms like us, which we can produce very nice content and deliver a nice holiday stayed content commerce solution.
But close enough that she took off on a job well.
Sure.
Yeah.
Hi.
Okay.
For automobiles and housing my friend insurance, we had that very nice and then how about just the benefits and registered double digit growers and those two factors and more.
Well go on to urology.
The one little girl Jacob.
Yeah, the T golf shops.
Jacques.
So the above mentioned factors put together accounted for over 60% of our advertisement.
See what kinds of acute a woman and Michelle can show quite sharp falloff rule I T E. G you hung yet.
We bought sugar.
That's useful.
Josh you're dragging you were going to tease all of who should they go well then you could do.
Okay.
Some people talk about well if you like.
In short though.
Wind down the FICO fit onto them for the telling each other overtime.
Sometimes people don't realize how he is.
Me too.
Debate going on in Asia, and as you know, it's how you bother you should use in the budget.
Sure.
Hum.
Hmm.
And it will believe that going into the fourth quarter. We will continue to have very nice growth coming out of E call minutes F. M. C. G. H E. A D C I T and etc, and a reason as I explained before are that we as a content our COO.
Immunity are able to provide a platform where people can you know do you.
Their brands.
To deliver a very nice and quality content off by their marketing efforts and to have a diversified advantages in helping us be our advertising system to market themselves.
But.
They're kind of Rd Army, Oh, well near me that already are in yen Triple-tongue Tito So I'm not sure you've got how you bought frigo passenger Joe Shoen.
Uh huh.
On the revenue side Heiko already Arnie, you've got high single policy can be out parcel to themselves not well not really.
Hum.
I kind of.
Two months out.
Oh, gosh, well Ccs tabulate say Gee already arguing your heartbeat put up at the tissue. She said that she is telling you something.
So going into 2022 I believe that all of the total revenue will continue to grow in a fast pace.
And the percentage points, that's contributed from Ccs and advertisement well again accounting for about 70% to 75% of the total revenue would make.
Oh gosh with attendees a CUSIP.
Alright odd percentage points actually amongst the number for Q4 not for 2022 sorry.
Yes.
Okay.
Thank you.
Yeah.
Our next question today will come from now the level of high tongue International. Please go ahead.
Hold on some cautious Uruguay. He just does all the cure all along is how long Shaggy goes shouldn't go into Colombia, and when do you have a follow up to show quite curious about John long bound jaws, I'm also local and cosmos its Walter.
Tissue voucher should go down or you go to Chicago.
But don't shop in the mall.
How's that.
Well we're still.
You go to lung cancers are diagnosed how long they generally have.
Doors long screw somebody would go because you can always prided yourself on the P&L follow me sure Glenn. Thanks, Shaul just shoot me an E mail.
So I'm just wondering how should tune all children with the garage and blocking surely caught my blog was wanting to do this in doing something with the Jamba either go to a shop.
All the time, some piloting meaningful sushi Thunder, a little larger combating agenda it'll jump Washington.
I will translate myself.
Okay.
Thanks for taking my question and I have two questions here. The first one is just a follow up to that last question. So just wondering if what I'll call them off once called the outlook almost gonna Triple digit golf can you help us breakdown among.
Each business line as exactly what Oh, so there's less itchy like membership in e-commerce and are honest.
Licensed revenue growth for the for the fourth.
For the fourth quarter.
Secondly for the.
E Commerce business.
We noticed that.
You have ramped up your lumpy business recently, but just wondering for your E Commerce G. M D in the third quarter.
How much comes from your lumpy business, which initiated.
I think December.
So just curious how should we think of the strategic conversation for you all are lumpy on CPE business going forward and also huge now loves cool cool Lucky for.
G&A goes.
Keith.
Yeah.
Hello.
Hello, It's the Speaker line open I'm not able to hear you sorry.
Sorry, sorry, I was on mute just now they are going to sue. The jingle showed you go Oh, Jacob if I got your dollar women duh.
Golf course, Ccs Jujamcyn Tricia.
Yourself.
She traveled around and she said she was awarded yet.
No I wouldn't know who the actual shipment traveled with agenda that I'm Joshua there's so much other others behind him the job shop, which and I usually show the food agenda, Doug I heard was that about.
I, just don't grow Chooser, though when they go to.
I'll go ahead, and that's only one look when you take a disarmament yeah.
What youre going to see good stuff without being some unusual you Dougherty dollar retention on these you had you got Pandora.
<unk>, which is owned by a tornado.
I don't see it I, just want to assure Djibouti and showing them what do you see the need.
Or do you believe what he called and they don't do it cautiously.
Sounds like you would on me you'll then she thought it was a basically telephones.
T. He tells you you're glad I got in a.
I'll now and kind of go Gingerly champions Baseball hockey team wishing him at Ottumwa Triple does it go into our teachers you want them to do that.
So you got the whole travel schedule change already because you know I was going to something that should go away.
He was hoping to talk about.
So you don't you believe you could show you the eventual.
Tissue to cool it seems on the yield.
But similar to go get on only one side, though so I'm Joshua.
Sure.
Uh huh.
Yeah, She bondwoman accordions nicotine patch.
What's under our control.
Who are you that you got that number before.
And all of that coupon as a whole.
Good food you'll go ahead Sheila.
So you could triple the shining towards release I'll be doing so.
We don't want to touch on the GM leisure because we didn't see it won't be the Valkyrie program Joe Shockley.
All of them to cycle.
He created when we teach them about your bad, especially on a true triple the 10 shoulder more sure.
People don't pencil.
What's your hydro for Hugo.
Eat anyone, but which tells you that you're tweaking them to go.
Cool.
I had some down and they don't even shock Geelong City Mitchell cool.
She wants with others to grow crinone to teach them huge needle that'd be himself personally all kinds of what you guys are still junior people in Beijing and Shanghai.
Sure.
She got tons with doses that you can see here.
Don't know how to me is that just your opinion on the Duke.
And then you got to go to complete the journey if you wanted to.
I'll just ask a question on the on those lease a woman or Julie zeiler discharge chicken washer pushing back can you. Please repeat dosing once a day is actually a few times.
Yep. Thank you say a question well as I mentioned in Q4, our revenue outlook will be 70% to 75% coming from since he is an advertisement together and 20% of our membership and for the others Education E Commerce and others coming together it will be five percentage.
Point so.
So for them more on our E Commerce business, we believe that our ecommerce development will continue to center around good content because we believes good content is good business.
And we believe that our one question. This one seat and one answer is a good shop. We are keep Oh, we continue to help the consumers and use those to identify those those goods that are worth buying by our voting system to select the most.
Reliable answers and then continue to help them with the transaction and we believe that that's going to deliver wow and to been to bring benefits to both content creators merchants and so as that you quote.
Community as a whole and as I mentioned at the G. M. B, we had for the third quarter is $4 97 billion RMB and with a daily whatever increased on a daily basis of 31 percentage points and I would take rate also increased by more than 100% and all of those efforts.
Are you now helping us to improve the monetization efficiency and we're all one P business well we are try now.
In helping the brands and also it will help them to create an all content based on marketing and promotion.
And this is still by far the final version of one P. E. Commerce that we have with kids are revolutionizing the models as we going forward and we believe that those will deliver a better and better results going forward in the future.
Yep. Thank you.
Okay.
Our next question will come from Alex Yacht Club J P. Morgan. Please go ahead.
So when it's all going to wash are wound down.
Yeah.
How do you go in a few minutes you assure woman should come from Jacob.
It sounds a little bit of.
Dan Schumacher.
George Holmes.
Any color you can put home.
Now what do you need pool anyway huge longshoreman.
Shipping drums.
Sure sure Ghansham.
On the weekend.
Sure Sean.
Absolutely.
Hum.
Two quarters, you're going to hold you up.
Thank you.
And should you could show up on the Haynesville shale.
Zhejiang juncture to neutral.
Lots of people.
Tom.
But you're going to be a needle.
There you go.
Well, if you remember when she mentioned.
Hum.
Oh yeah.
It would be.
Let me start you do.
People, who probably would be at home.
Sean.
Sean.
Sure.
Hum.
Ginger hold each year.
Thank you Michelle.
So my first question is about the strategy.
Our strategy to attract content contributors.
On the video content sites.
I wouldn't read anything different of computing.
Hum comes from strategy.
Picture in the Tech sites, particularly China video marketing predominantly driven by Entertainment Tourism Conference.
So on the video comes inside and we are using is to broaden the content genre in the club, reaching two entertainment oriented the comps and Hum.
Conference apart.
Or are we sticking to our Oh problem in the Comanche attributes and SKU for Christian.
<unk>.
[noise] knowledge base of content for us.
Second question is about the implementation of ERP L. A which took place on first of November are you done.
Before and after the implementation of the Pier G. R O.
How should we think about the impact on accretion and monetization. Thank you.
Okay, So I'm not sure what.
What else without having that once you're out and you're gonna sure.
Claims it as soon as all the other.
I'm not sure how are you doing.
A woman she should be in bushes.
So it's really Matt should some Josh opinion little tissue.
But should that suggest a tripling or somehow the suddenly oh there you go.
The woman that says it should.
Well, Jacob Bosch and Oh, no more no shipping.
I suppose it is somehow.
Welcome to do that.
Sure sure sure sure well there you go.
Don't you dig a mood.
Okay.
And so from C O Joe Young so that's my first question on video and smart the without a video it's not a you know what we do by choices and natural resolved Oh, if I were you know strategy of running the community we believe that.
Video is indispensable part and partial of all community and by building a nice alcohol system, we are able to to be video content to organically grow well out of our good community.
She means one of those Oh, well just haven't you shortly.
Uh huh.
Sure.
Woman.
Commvault daughter.
But that's what I'm talking about job.
If I have to tell me no one know how you want them high shipping.
Uh Huh eligible generally don't want us to stay on the promos on it she says.
Daughter.
Well, that's home shopping for a car.
Well I mean with fashion too.
I told him he's yeah mediation Cai.
Jacques how long to hold on them although itself at the.
Opposite to meet you.
Okay.
Our video content traders, we believe that they are burst of power that is just called them a full stack of video content Quay here, they're very good at making videos that are very good at answering questions that they can also do a live streaming and by utilizing different formats.
<unk> they were able to deliver the best possible way south and attract the most attention from the community.
Some of them, it's a hum.
Function by function to the <unk> you saw.
Sorry to take so.
You should go to the country.
Greensville no more commentary just how are you.
Sure Jake.
Goldman the shipping.
That's just bullshit.
Tim Dunbar Jacob.
I guess you can say about you go without even she took on a tablet to China by money.
I was just hanging wall shipping a functionally shortly the outdoors.
I just didn't catch.
Linda just yet.
When she doesn't.
She doesn't want eager Sundar you go out 10 minutes sue them at that shipyard.
Right.
They also have their own its disciplines, Josh at all especially Matt.
Let me.
Josh with him, but I was on hold now there's a couple of comments about Ala.
No.
You don't function.
Retention shouldn't illegal not to hold on.
People should ABS M B I should you'd be into HIV.
Touches.
The commercial ammo faster the truth is it should've been through financial funding through the course of the Bill.
For the time being you see a lot of upgrades in terms of the tours that we give to content creators and operational you know transformation that gets more attention to.
The video content and totally answered by video is not just something new we believe that video is just a more suitable format of people, giving answers and does just grow very fast naturally chicken is the joined Gration I would believe that it is by no means are you know using videos to replay.
<unk> tax and images, we believe that by putting them at the point that we could deliver you know one plus one is more than two kind of a lease out and I'll community.
So what took us sometime on pacifico tolling sometime.
This is sherman.
70, either you're going to own a home legal.
But as I said it on the ships and made them ships you know Jake Jake.
Charles will should be jaw tongo, what's it called.
Well, they've got I'm, assuming there's going to be on somebody Alejandro Pablo.
Say job well done the quota.
Hi.
Yeah.
Okay.
The topics and discussion a discussion as you'll see on all communities have there's all kinds of sectors and a with an umbrella pressed up all of that is a sensor fulfillment. So by you know are asking and encouraging constant quiet estimate videos that can bring sense of fulfilled.
And then you can see very nice engagement and very nice growth.
Oh, well, that's what I thought.
To go to one of its users.
Right.
So I'm wondering you kind of show the heart.
Just jumping too much.
Yeah, that's a hernia the.
Yeah, that's a cookie cutter.
Looking at our conference.
Oh, that's okay, you guys have.
Tracing matching of Haryana yield how do you go continuing hunger for Michelle.
Well talk about it you go public with yet okay.
Okay.
Now with regard to new regulations P. A P. L. We believe got the the purpose of having you know.
The businesses are like us to be compliant as why are the better grades of the entire industry to make it healthy to make it more sustainable for the longer term.
Okay.
Uh huh.
Oh no.
Oh gosh, Tim on the joint that way she bought solar fish from each other.
So Jason bundled are finally frankly.
Gotcha.
Oh, Yeah, two payable should she ends up Oh Jacob.
Okay.
But what are you going to go with it.
I showed you the.
Especially.
Yeah.
Sure Jake.
Okay.
Could you walk us soon.
What is it you have it.
How are you going to complete from our Cushing syndrome shouldn't hang tag.
If I'm an element to that as a consequence do you can do at home you know oftentimes you see shingles engine issue.
How do you actually see.
Hum.
Critical.
I'm going to take.
Further we'll.
Sounds good I'll come to how can he should go up.
Okay.
In terms of our own compliance efforts that we keep talking a very very frequently with our regulators and I think this is a long term thing and our own internal all practices or operations, we kept the.
Trying out a good solution for you say experience and testing all the data that dropped it belief that this will become a new normal and we are we have always been a proactive and cooperating with the regulators and make sure that we are coping with all the requirements.
Thank you and ladies and gentlemen at this time, we will conclude our question and answer session.
I'd like to turn the conference back over to Jim King for any additional or closing remarks.
Thank you once again for joining us today and if you have any further questions. Please contact our IR team directly or TPG Investor relations. Thank you all bye.
Thank you.
At this time the conference has now concluded and we thank you for attending today's presentation.
You may now disconnect your line.
Yeah.
[music].
Yes.
Yes.
Okay.
[music].