Q3 2021 iClick Interactive Asia Group Ltd Earnings Call

Hello, Ladies and gentlemen, thank you for standing by for I Click Interactive Asia Group Limited third quarter 2021 financial results conference call.

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

After man regimens prepared remarks, there will be a question and answer session. Today's conference call is being recorded.

I will now turn the call over to your host MS. Lisa Li Investor Relations Director Lisa. Please go ahead.

Hello, everyone and welcome to <unk> third quarter 2021 financial results Conference call. The company's results were issued earlier today and are posted online you can download the earnings press release and sign up for our dispositions I guess the thing the I R.

Section of our website at IR, Scott I Hyphen C. L. I C K dot com.

Speaker 1: In addition, during the call, management will give their prepared remarks in English. During the Q&A session, we will take questions in both English and in Mandarin, and a third-party translator will provide consecutive translations. All translations are for convenience purposes only. In case of any translation discrepancy, management's statement in the original language shall prevail.

In addition, during the call management will keep their prepared remarks in English during the Q&A session. We will take questions in both English and Mandarin and their third party translator will provide consecutive translation Oh translations are for convenience purpose only in pesos.

They need translation Equivalency management statement in the original language shall prevail.

Speaker 1: Jian Tang, TJ, Chairman of the Board, Chief Executive Officer and Co-Founder of iClick, will first provide a high-level review of the third quarter 2021 results and share his thoughts on our execution strategy ahead.

Any time TJ chairman of the Board Chief Executive Officer, and co founder of <unk> Creek will first provide a high level. The theme of the third quarter 2021 for yourself and share his thoughts on our execution strategy.

She's financial Officer, Taryn sleep will follow and gave us additional insights on the financial results for the third quarter and provide guidance for full year 2021.

Speaker 1: Chief Financial Officer Terrence Clee will follow and give us additional insights on the financial results for the third quarter and provide guidance for the full year of 2021.

He will then turn the call back over to TJ for closing remarks before the code is open for Q&A.

Speaker 1: Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties.

Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995.

Forward looking statements involve inherent risks and uncertainties.

Speaker 1: As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's 20-F, as filed with the U.S. Securities and Exchange Commission.

The company's results may be materially different from the views expressed today further information regarding these and other risks and uncertainties is included in the company's 20-F.

<unk> with the U S Securities and Exchange Commission the.

The company does not assume any obligation to update any forward looking statements, except as required under applicable law.

Speaker 1: The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

Please also note that <unk> earnings press release, and this conference call include discussions of unaudited GAAP financial information as well as an audited non-GAAP financial measures I quick press release contains a reconciliation of the unaudited non-GAAP measures.

Speaker 1: Please also note that ICLIC's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

Speaker 1: iClick's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.

G. The most directly comparable unaudited.

GAAP measures I will now turn the call over to our chairman of the Board Chief Executive Officer, and co founder Jim Palm TJ. Please go ahead.

Speaker 1: I will now turn the call over to our chairman of the board, chief executive officer and co-founder, Qian Peng. TJ, please go ahead.

Thank you Lisa.

Speaker 2: Thank you, Lisa, and welcome to the call, everyone.

Welcome to the call everyone.

Our third quarter performance was marked by continued exceptional enterprise solutions growth on the modest growth in our marketing solutions business.

Speaker 2: Our third quarter performance was marked by continued exceptional enterprise solutions growth and the modest growth in our marketing solutions business.

Speaker 2: iClick's enterprise solutions business has achieved an impressive 8th consecutive quarter of record revenue.

Enterprise solutions business.

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Impressive eighth consecutive quarter of record revenues.

Growing 131% year over year to 20 minutes.

Speaker 2: growing 131% year-over-year to 20 million.

We are encouraged by this performance, which continues to demonstrate consistently growing demand for private thalmann topic on the online and offline integration.

Speaker 2: We are encouraged by this performance, which continues to demonstrate the consistently growing demand for private domain traffic and online and offline integration.

Speaker 2: Our marketing solutions revenues for the quarter grew 11% year over year to 67 million.

Our marketing solutions revenues for the quarter grew 11% year over year to $6 7 million.

Which was.

Speaker 2: which was a declaration from the prior quarter.

The provision from prior quarters.

Speaker 2: I want to first emphasize that the challenges we faced in this third quarter in our marketing solutions business were not unique.

Wanted to first emphasize that.

Challenges, we faced in this quarter in our marketing solutions business, where a lot of unique.

Speaker 2: as we have observed this as an industry-wide phenomenon with our key partners and peers having likewise reported similar performance and outlook.

As we have observed this.

Industry wide phenomenon with our key partners on PFS.

<unk> reported similar performance and outlook.

Due to impact from shifting regulations and the uncertain macroeconomic environment.

Speaker 2: due to impact from shifting regulations and the uncertain macroeconomic environment.

Having said this we remain confident in the long term growth of China's digital advertising industry.

Speaker 2: Having said this, we remain confident in the long-term growth of China's digital advertising industry and are evolving to adjust to the changing market conditions.

Involving to adjust to the changing market conditions.

Speaker 2: During the quarter, we adopted a strategy to balance sales growth and profitability in order to maximize long-term client retention.

During the quarter, we adopted a strategy to buy land sales gross and net.

Profitability in order to maximize the long term client retention.

We used is what he believes that a robust and diverse client portfolio puts us in a strong position to benefit from the eventual market recovery.

By contrast.

Speaker 2: The demand for private domain traffic remains solid and we continue to capitalize on this trend through investment in our enterprise solutions business and a robust execution strategy.

The demand for private dominant traffic remains solid and we continue to capitalize on this trend through investment in our enterprise solutions business and the robust execution strategy.

Our leading industry solutions, coupled with our growing loyal client base driving healthy revenue growth while offsetting.

Speaker 2: Our leading industry solutions coupled with a growing loyal client base are driving healthy revenue growth while offsetting volatility in the advertising environment among our brand clients.

Yes, the advertising environment, among all of our brand and our clients.

The uncertain macro environment made resulting a wider impact across business sectors in China, and we expect our enterprise solutions, we are not the exception.

Speaker 2: The uncertain microenvironment may result in a wider impact across business sectors in China, and we expect our enterprise solutions will not be an exception. That said, we have continued to invest in sales and marketing and R&D to support our rentalists.

We have continued to invest in sales and marketing and R&D to support our relentless.

Speaker 2: devotion to developing innovative products and further expanding our market share within key account clients.

Devotion to developing innovative products and further expanding our market share in key account clients.

In light of the demand from brand clients for fully integrated pet Dahlman traffic solutions that go beyond the sauce.

Speaker 2: in light of the demand from brand clients for fully integrated predomain traffic solutions that go beyond SAS.

We will also devote more resources to developing our in house staff plus model.

Speaker 2: We will also devote more resources to developing our enhanced SAS Plus model.

We believe well prevail over Pugh SaaS solutions in China that technology on the market dynamics have been changing rapidly in China and source, we believe our SaaS plus model, which also covers intelligent industry methodology on the full channel operations.

Service is more suitable for help him Brian clients to unlock the market potential in the region.

We believe that these investments will yield high returns.

Speaker 2: We believe that these investments will yield high returns as the microenvironment recovers.

My credit environment recovers, well, we cannot forecast the timing of the recovery. We are committed to our long term strategy and it will continue to work closely with our clients and our partners to leverage our leading industry solutions, we're using enterprise solutions.

Speaker 2: While we cannot forecast the timing of the recovery, we are committed to our long-term strategy and we'll continue to work closely with our clients and our partners to leverage our leading industry solutions within enterprise solutions.

Yes.

Speaker 2: I would now like to share with you two exciting client case studies that demonstrate the growth engines filling our ongoing success in enterprise solutions.

I would now like to share with you two exciting client pay studies data demonstrates the growth engines feeling our ongoing success in enterprise solutions.

Our recent partnership with right now the French beauty brand, obviously 10 exemplar.

Speaker 2: Our recent partnership with the renowned French beauty brand, OC10, example

Fly.

Speaker 2: by iClick's ability to tailor cross-border smart grid solutions. We utilized our iSmartGo solution to launch an O2O-focused WeChat mini program called O210 Travel Buddy that enables travelers to connect with brick-and-mortar duty-free stores.

Ability to tailor cross border Smart retail solutions.

We utilized our smart <unk> solution to launch.

<unk> Oh.

Focused wechat mini program.

Also 10 travel body that enables travelers to connect with break on the molto duty free stores sauce, providing access to a wide range of products.

Speaker 2: starts providing them access to a wide range of products they otherwise would miss, and driving sales growth for cosmetics within China's growing domestic travel retail market. It also paves the way for OC10's

Otherwise would mace what it means is on the driving seals gross floor cosmetics wheezing, China's growing domestic travel retail market. It also paves the way for Oc tests.

To boost to revenue was from duty free stores throughout the entire APAC region to serve Chinese outbound travelers as international travel restrictions are lifted.

Speaker 2: to boost revenues from duty-free stores throughout the entire APEC region to serve Chinese outbound travelers as international travel restrictions are lifted.

Speaker 2: We also look forward to leveraging the modules we have developed for the travel retail industry to provide customized solutions for additional clients in the region.

Also look forward to leveraging the modules, we have developed for the travel retail industry to provide.

Customized solutions for additional clients in the region.

In addition.

Speaker 2: In addition, iClick helped CN Logistics, a Hong Kong-listed company, to launch its first mini-program providing quality wine products and successfully helped them tap into the enormous market potential of cross-border e-commerce. In the future, we expect

<unk> helped to see and logistics, a Hong Kong listed company to launch its first mini program, providing quality wine products and successfully helped tap.

Tap into the enormous market potential of cross border E Commerce.

In the future we expect to generate.

Speaker 2: Further synergies with C&N Logistics beyond the current collaboration, utilizing C&N Logistics' expertise in the global logistics solutions to add more value to our current integrated enterprising and marketing solutions.

Further advantages, we see logistics beyond the carbon collaboration utilizing data and logistics expertise in global logistics solutions to add more value to our current integrated.

And the pricing and marketing solutions.

As you know <unk> has formed a number of partnerships that allow us to deliver available full stack customer solutions for clients and also generate strong cross selling opportunities with high profile multinational brands.

Speaker 2: As you know, iClick has formed a number of partnerships that allow us to deliver valuable full-stack customer solutions for clients and also generate strong cross-selling opportunities with high-profile multinational brands.

Speaker 2: We will continue to leverage these valuable partnerships to capitalize on the digital revolution sweeping China.

We will continue to leverage this valuable partnerships to capitalize on the digital Revolution, So vaping China.

These impressive successes demonstrate our replicate ability scalability and flexibility in utilizing <unk> off the shelf products and our experience in tailoring solutions to meet the.

Speaker 2: These impressive successes demonstrate our replicability, scalability, and flexibility in utilizing iClickers off-the-shelf products and our experience in tailoring solutions to meet the individual needs of multinational clients to expand both online and offline market share in China across new and growing sectors.

In the video needs of multinational clients to expand both online and offline market share in China across new on the growing sectors.

In addition, we are proud to report several awards received during the quarter, that's recognized <unk> outstanding accomplishments and our strong efforts.

Speaker 2: In addition, we are proud to report several awards received during the quarter that recognize iCLICC's outstanding accomplishments and strong efforts.

Speaker 2: Among the awards received are two I believe merit special mention, including an award for E-Commerce Retail in the 2021 Hong Kong Business Technology Excellence Awards, which honors outstanding companies that made exceptional contributions in pursuit of technological innovation.

All of the awards received.

<unk> I believe merits special mention including.

For E Commerce retail in 2021, Hong Kong business Technology Excellence Excellence Award, which honors outstanding companies that made exceptional contributions in per suite of technology co innovation.

We also received the first mine site team over highly commended by the job alerts for digital advertising APAC, which highlights the very first all digital media and technology that sits behind that the worlds most effective.

Speaker 2: We also received the Best By Site Team Award, highly commended by the Drum Awards for Digital Advertising APEC, which highlights the very best of digital media and technology that sit behind the world's most effective campaigns, just to name a few.

<unk> just to name a few.

We are very proud of this outstanding industry recognition and wherewithal to continue driving excellence in all we do.

Speaker 2: We are very proud of this outstanding industry recognition and will work hard to continue driving excellence in all we do.

Speaker 2: Before I end my opening remarks, I want to reiterate that we are encouraged by the continued outstanding growth in our enterprise solutions and remain

Before I end my opening remarks, I want to reiterate that we are encouraged by the continued outstanding growth in our enterprise solutions under agreement.

Speaker 2: vigilant in preserving our market share in marketing solutions. We also continue to be encouraged by our iClickers.

As you learnt in preserving our market share in marketing solutions.

So continue to be encouraged by our iconic Carter's deep.

Speaker 2: deep commitment and we appreciate the continued support of our loyal shareholders.

Deep commitment and we appreciate the continued support of our loyal shareholders.

Speaker 2: This concludes my opening remarks, and I would now like to turn the call over to our CFO , Terence Lee, to discuss the third quarter financials.

This concludes my opening remarks.

I would now like to turn the call over to our CFO parents sleep to discuss the third quarter financials terrorists.

Thank you T J Hello, everyone I'm pleased to share with you our financial performance in the third quarter 2021.

Speaker 3: Thank you, TJ. Hello, everyone. I'm pleased to share with you our financial performances in the third quarter of 2021. Our third quarter financials include record results for enterprise solutions for the eighth consecutive quarter. Let me briefly walk you through the key findings.

Our first quarter financials include backup yourselves for enterprise solutions for the eight consecutive quarters.

Let me briefly walk you through the key financial figures.

Revenue for the third quarter of 2021, great tool $86 8 million up 26% from $68 9 million for the same period of the power of year attributable to the increase in contributions from marketing solutions and enterprise solutions.

Speaker 3: Revenue for the first quarter of 2021 grade to $86.8 million, up 26% from $68.9 million for the same period of the power year. Attributable to the increase in contributions from marketing solutions and enterprise solutions.

Speaker 3: Revenue from marketing solutions grew to $66.6 million for the third quarter of 2021, up 11% from $60.1 million for the third quarter of 2020, primarily as a result of growing market demand from specific action marketing campaigns.

Revenue from marketing solutions grew to $66 6 million for the first quarter of 2021.

11% 464 1 million for the first quarter of 2020, primarily as a result of growing market demand from specific action marketing campaigns.

Speaker 3: Revenue from enterprise solutions was $20.3 million for the third quarter of 2021, up approximately 131% from $8.8 million for the third quarter of 2020, primarily due to the increasing need for online and offline consumer behavior, data integration, and digital transformation.

Revenue from Enterprise solutions was 23 men data for the third quarter of 2021.

Approximate 800, 141% from $8 8 million for the first quarter of 2020, primarily due to the increasing data for all night and off line consumer behavior data integration and digital transformation.

Gross profit for the third quarter of 2021 was $21 7 billion.

Speaker 3: Gross profit for the first quarter of 2021 was $21.7 million, representing an 8% increase compared with $20.1 million for the first quarter of 2020.

Representing 8% increase compared with $20 1 million for the first quarter of 2020.

They need due to contribution from higher margin enterprise solutions.

Speaker 3: mainly due to contributions from higher margin enterprise solutions.

As of September 32021, the company had cash and cash equivalents time deposits and restricted cash of $20 96 7 million.

Speaker 3: As of September 30, 2021, the company had cash and cash equivalents, time deposits, and restricted cash of $96.7 million, compared with $94.5 million as of September 31, 2021.

Compared with $94 5 million.

As of September 31st 2020.

Speaker 3: For the rest of my discussion, I will focus on our non-GAAP results. You can find reconsiderations of these non-GAAP results in the past release we posted earlier today, which can be accessed at our Investor Relations website.

For the rest of my discussion I will focus on our non-GAAP results you can find with installations of these non-GAAP yourselves in the past release, we post earlier today.

Which can be assessed at our Investor Relations website.

Adjusted EBITDA for the third quarter of 2021 was <unk> 6 million compared with $4 7 million for the first quarter of 2020.

Speaker 3: Adjust EBITDA for the third quarter of 2021 was $3.6 million, compared with $4.7 million for the third quarter of 2020.

Speaker 3: Adjustment income for the first quarter of 2021 was $0.8 million, compared with an adjustment income of $2.4 million in the first quarter of 2020.

Just let income for the third quarter of 2021 was <unk> 8 million.

Paired with an adjusted net income of $2 4 million in the third quarter of 2020.

Global constellation of the company's adjusted EBITDA and adjusted net income from net.

Speaker 3: For a concatenation of the companies that adjust EBITDA and adjust their income from debt loss, its most comparable GAAP measure, please refer to an audit concatenation of GAAP and non-GAAP results.

Loss its most comparable GAAP measure please refer to and all that because the nations of GAAP and non-GAAP results.

Speaker 3: The spilling was $195.4 million for the first quarter of 2021, representing a 17% increase compared with $167.1 million for the first quarter of 2021.

Well Sterling was $195 4 million for the third quarter of 2021, representing a 17% increase compared with 167 1 million for the first quarter of 2020.

Speaker 3: The increase was the result of increasing marketers' demand, especially from the fashion, food and beverages, premium and luxury sectors.

The increase was a result of increasing market as demand is actually from the infection food and beverages P M and luxury sectors.

All the financial performance in the third quarters continues to be positive. Despite the slower growth in our marketing solutions sector, which is as TJ has indicate is largely due to macro conditions in China.

Speaker 3: Overall, the financial performance in the third quarter continues to be positive, despite the slower growth in our marketing solutions sector, which, as TJ has indicated, is largely due to macro conditions in China, and appears to be settlement-wise.

And it needs to be satisfied.

Speaker 3: For further information, please see the detailed recap of other financial metrics in the past release we issued today.

For further information please see the detailed recap of other financial metrics in the past release, we issued today.

I would now like to conclude my remarks, with our outlook for full year 'twenty 'twenty. One we have maintained our 2021 guidance unchanged with total revenue ranging from P&G 10 million to <unk> hundred three.

Speaker 3: We have maintained our 2021 guidance and change with total revenue ranging from $318 million to $338 million.

$138 million and revenue from enterprise solutions falling in the range of $62 million and 68 minute personal data our outlook for revenue is based on current market conditions and reflects.

Speaker 3: and revenue from enterprise solutions falling in the range of $62 million and $68 million.

Speaker 3: Please note that our outlook for revenue is based on current market conditions and reflects our current gauge of the COVID-19 pandemic impact. These assumptions are

Karen Gate of the COVID-19 pandemic impact.

These assumptions are subject to change.

Speaker 3: With that, I now turn the call back over to TJ for closing remarks.

With that I'll now turn the call back over to TJ for closing remarks.

Okay.

Okay.

Thank you Terence.

Our data driven solutions are clearly driving scalability on the sustainable gross and.

Speaker 2: Our data-driven solutions are clearly driving scalability and sustainable growth, and the cross-selling opportunities we are seeing from our existing marketing solutions and through multiple partnerships continue to fuel strong growth opportunities despite the challenges of the microenvironment.

The cross selling opportunities we are seeing from our existing.

Existing marketing solutions and through multiple partnerships continue to feel strong gross opportunities. Despite the challenges of the macro environment.

We remain proud of our performance. So we are all to 'twenty to 'twenty, one and I believe this growth will continue even if uh huh.

Speaker 2: We remain proud of our performance throughout 2021 and believe this growth will continue, even if at a slower rate than experienced in the first half of the year.

It has slower rate than experienced in the first half of the year.

Speaker 2: We are confident that our core value proposition for brands and our innovative SaaS Plus approach will be among the cornerstones for our ongoing growth.

Our confidence that our core value proposition for brands and our innovative SaaS plus approach will be among the.

Cornerstones for our own Korean gross.

Speaker 2: We also remain optimistic for continued strong growth in our higher margin enterprise solutions segment. We will continue to pursue a balanced approach to retaining clients until advertising demand rebounds in our marketing solutions segment.

We also remain optimistic for continued strong growth in our higher margin.

Enterprise solutions segment, we will continue to pursue a biologist approach to retaining clients and tiered advertising demand rebounds in our marketing solutions segment.

Always our eye toward continuing to improve the overall profitability of the company.

Speaker 2: always an eye toward continuing to improve the overall profitability of the company.

I wish to thank all of our key stakeholders partners clients and the shareholders, who see what we see in heidrick.

Speaker 2: I wish to thank all of our key stakeholders, partners, clients, and shareholders who see what we see in iClick.

<unk>.

The promise for a very bright future.

Speaker 2: the promise for a very bright future, the promise of delivering true innovation against the backdrop of the digital transformation overtaking China.

<unk> of delivering true innovation against the backdrop of the digital transformation overtaken China.

We remain focused on executing our clear strategy.

The weather.

These changing dynamics and are confident that we are pursuing the correct Pos.

Speaker 2: To all our devoted iClickers who help us to deliver excellence every day, I say thank you to each of you, for it is with you that our success truly rests.

To all our devoted Icarly cars, who help us to deliver excellence every day I see thank you to each of you for Eddie with you that's our success truly rests.

Speaker 2: Thank you for your continued support. This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.

So thank you for your continued support this concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator. Please go ahead.

I will begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speaker phone. Please pick up your handset before pressing the key to withdraw your question. Please press Star then two for.

Speaker 4: begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then 2. For the benefit of all participants on today's call, if you are a Mandarin speaker, please raise your questions in Mandarin and then immediately repeat your questions in English. Please limit your questions to only one each time.

For the benefit of all participants on today's call. If you are a Mandarin speaker. Please raise your question in Mandarin and then immediately repeat your questions in English. Please limit your questions to only one each time.

The first question is from.

Nelson Cheung.

Speaker 5: Nelson Chung of City.

Please go ahead.

Oh yeah.

Speaker 3: Hello, TJ, Terrence, Lisa. Thank you for accepting my question. Let me ask a question about marketing first.

Yeah TJ Terence.

You bet.

Well, Oh listen when you got a marketing.

Uh huh.

Speaker 3: It seems that the performance of many peers in this quarter is relatively weak. I would like to ask Guan Yichen if the situation will improve in the future quarter. If we go to 2022, what is our current outlook? Which Simon will perform better?

So that you do.

Uh huh.

Yeah.

And then do it up here on the whole it does not.

So if you do a kind of a huh.

Uh huh.

So I thought I heard you in Ohio.

Right.

Is that one thing that you hold.

Isn't that good.

Right Okay. Okay.

Speaker 3: I'd like to ask you about the enterprise solution. First of all, congratulations on your very good results in SaaS. The question here is about your business model. Because I've seen a lot of big companies recently, such as Tencent, Baidu, etc. They have launched their own SaaS services one after another. For example, Tencent, Tianhuang, etc. So I'd like to ask you about your business model.

Oh, one question when you got you.

I'm glad you want you can enterprise solution that works.

So I think we'll see but.

Thank you Daniel.

Oh two data when do you think when you Oh.

Do you think that you said you know what kind of accusing you got it.

Hum sooner.

Sundar I do what they've been telling you.

You'll see that especially when you get a kind of duty that sounds cool.

Because of all the trend change yet.

Uh huh.

But kind of where you think that gets you there so let me translate myself.

Speaker 6: So let me translate myself. So first, thank you for taking my question. My question is on.

Great. Thanks for taking my question my.

My question is on marketing information about your outlook into the fourth quarter and our industry hasn't been through where do you believe that the worst situation is already behind us.

Speaker 6: marketing solutions. It's about your outlook into the fourth quarter and into 2022, whether you believe that the worst situation is already behind us or we are going to face greater uncertainty in the future.

We are going to face.

We're going to face greater uncertainty in future and which verticals were impacted.

Speaker 6: verticals will be impacted more severely. And my second question is about the enterprise solution. I just wonder, given the rise of other big players, like Tencent and Baidu, on their SaaS development, what do you think about the latest competitive landscape in the market? Thank you.

And then my second question is about the enterprise solution.

Wonder if you can right.

Players like Tencent, and Baidu, Oh, gosh, you've got them and what do you think about the.

Make us competitive Thanksgiving you the market. Thank you.

Uh Huh, well sure TJ Sushi Nielsen.

Oh, we don't need it do you go back to Bob.

Do you go and you shouldn't blame you them in a.

Marketing solution.

So Glenn you reach them go to why don't you go Guangdong, Hong you'd Oh man you should kind of how we're doing this with Genesis, Chile cut you do a teach out either.

Speaker 2: I think in the short term, which is the next quarter or the first two quarters of next year, we think that the whole advertising industry will be affected by the overall macroeconomic situation, especially the strict regulatory measures that have been implemented year after year, and the continuous outbreak of the epidemic.

So what does that do sell a mini and the chairman you know what do you do well when it's only carnival drillers and will go Oklahoma. We showed all do go journey she doesn't want to go the.

You said you would usually do good junior Oh, Lord either just yet.

And Jim one push it Oh, how youll have done I should put on ball father did good evening.

Speaker 2: We think that in the short term, the advertising business will still be under pressure. So in the next few quarters, we think that the advertising business will still be in a relatively low-profile state.

Women data.

Uh huh.

Do you see the balance sheet, we should show, though you go you see y'all, either John or you can call them. So yes.

That's what you called.

Good how are you.

I simply a tool that you're going to be all deem either you could draw impact our children. As you said a woman a well not all of them to kind of Logan, while also telling him in the you should assume it should be all each.

Speaker 2: We think this is very similar to the participation of advertisers in the advertising market, including some of our media partners, as well as some other participants in the industry.

Each of that puzzle I mean, the issue it makes it a little robot Oh called Yugo hung into Menlo UCH toddler issue to timeshare.

Speaker 2: Speaking of ourselves, we are more used to serving big KA clients.

No tunnel woman, so G, though Paul all woman third one you already mentioned should be.

Yeah sure.

Sure.

Won't you don't create a quick with y'all do issue. So you tissue COBOL notional unrealized shortly.

Speaker 2: So these customers are relatively healthy and stable in terms of financial situation.

Tayo would oh sure be Joe Jim.

And Jim I don't see a woman the Cornwall woman, the marketing solution and forgot a hungry it you shouldn't be dull Oh, yeah, well show me that you often see.

Speaker 2: And our marketing solution covers a wide range of industries. So even in a challenging market environment, we can still make some adjustments to the marketing solution. We can balance growth and profit.

Just to say Jim good they should have on you.

Children are two good small shop all women.

Sure.

Hygiene cleaning.

Digital marketing solution and man quite so easily detergent.

Could you touch it.

Gross syndrome, what are you doing a unique formula in place. It's always you Qinghong Jamul Hall.

Speaker 2: In this way, we may be able to choose to increase some profits or give up some profits to increase some market share in the short term. In this way, we can expect better results when the market recovers.

Oh womanhood towards your own agent P. I don't know I'm canonically a bunch you name it.

Little gobbled up usual trends or should I.

EMEA order should <unk>, Neil I think you guys usually don't.

Oh, John of all <unk> Shutoff wastewater Shoal Creek on the holiday would you go to.

Oh My God. This is Henry Maier hold up Yahoo did you go playful.

Speaker 2: to get a better response in the market. At the same time, we are also paying attention to some new forms of advertising and marketing in Marketing Solutions, especially some QoL short videos. I guess this will also help our Marketing Solutions in the future.

Tuition, Oh I'm sorry.

So I wanted to walk into a solution a niche in the <unk>.

Chico, Guangdong and shoulder you shouldn't you shouldn't you shouldn't see a pea will then shipping Adriano <unk> combo.

Would you say that.

You only do them in a marketing solution you will use your foundry.

Speaker 2: In terms of the long term of the advertising market, which is at least one or two years or even longer, we are still optimistic about the development of China's digital advertising business market. We think this is still a market with a lot of room.

So.

Anyway, you could disappoint some good Oh sure Sean the challenge she like hub Cianci as usual.

You don't you shouldn't.

I'll, let you go she can do what you will not get any I'll call. Tom why don't you go she was a harder Guam Gall you shows how long does it go further.

Yeah sure you go to talk to you guys.

Sure.

So what.

What do we need to get the Eagle.

This is TJ. Thank you Nelson for asking questions I would like to take your first question about marketing solutions as well as the outlook of the entire advertising industry short term speaking that is in Q4. This year and the first two quarters of next year I believe the advertising industry will still be effective.

Speaker 1: This is TJ, thank you Nelson for asking questions. I'd like to take your first question about marketing solutions as well as the outlook of the entire advertising.

Speaker 1: Short-term speaking, that is in Q4 this year and the first two quarters of next year, I believe the advertising industry will still be affected by macroeconomy, the tightening regulations in some industries, as well as the resurgence of the pandemic. Short-term speaking, the advertising industry will be put under some macro pressure. And therefore, in the next following quarters,

My macro economy.

Tightening regulations in some industries when those data.

Researchers from the pandemic struck and seeking the advertising industry will be put under some macro pressure and therefore in the next following quarters.

Speaker 7: the entire advertising industry will remain.

The entire advertising industry will remain weak and actually I'll review is in line with the market players in this industry.

Speaker 7: And actually, our view is in line with the market players in this industry, as well as some of our media partners. And as to our advertising business, you know, our advertising business mainly targets key account clients who have very solid financial positions. And in addition, our marketing solution has clients diversified in different industries.

Some of our media partners and as to our advertising. This as you know our advertising business, mainly target key account clients, who have a very solid financial position and inhibition. Our marketing solutions has a client are desperately fighting different index.

Therefore in the face of the changing challenging market environment.

Speaker 7: Therefore, in the face of the challenging market environment, we will be resilient enough to adjust our client mix and strike a balance between growth and profitability. We can choose to increase profitability short term or we can choose to sacrifice profitability to gain market share so that when the market rebounds, we will be able to actually make better returns.

Will be resilient enough to adjust to our client mix or.

And to strike a balance between growth and profitability. They can choose to increase profitability short term or we can choose to sacrifice profitability to gain market share.

That's a when the market rebounds, we will be able to actually make better returns. Then we will also continue to pay attention to new forms of advertising.

Speaker 7: Then, we will also continue to pay attention to new forms of advertising in the marketing solutions business, such as KOL and short-form videos.

In the.

Marketing solutions business, such as parallel and short form videos, which I believe will help our marketing solution business in the future as to the long term outlook of the advertising industry that is the in the next one or two years or even longer we are still optimistic about the digital advertising industry.

Speaker 7: which I believe will help our marketing solution business in the future. As to the long-term outlook of the advertising industry, that is in the next one or two years or even longer, we are still optimistic about the digital advertising industry in China. We still believe that the digital advertising has a great potential.

In China, we still believe that digital advertising has a great potential here.

How you all are going.

Speaker 2: I understand your second question is about the market competition pattern of enterprise solutions.

According to the Nielsen data that the argument you are what do you should we should go enterprise solution.

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Speaker 2: In fact, we think that the market of SaaS or enterprise services in China is still at an early stage of development, and the market is still scattered.

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Speaker 2: And different SaaS suppliers are trying different business models.

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The only like how long do you think the enterprise solution to let US do something if we don't do that Oh, well then it's just a mechanical switch one and Oh it's.

Speaker 2: In general, we think that the entire market of enterprise solutions is very huge. How do we look at the market? In fact, since 2019, when we launched the enterprise solution, it was officially disclosed in the financial report.

You should assume equal and yeah woman to shoot to go enterprise solutions have already been interested pillow passion.

Speaker 2: We are more focused on helping large KAs to provide them with SaaS solutions and to help them better use these SaaS solutions and operations services. We use the SaaS Plus model to help large KAs to adapt to China's new media ecosystem.

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Speaker 2: and that include many online influencers with Qual specialization. In this industry...

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Speaker 2: We can use some SAAS solutions and some corresponding operations services to help these big brands to adapt to China's new media ecosystem better and to discover new business opportunities in the new media ecosystem.

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Speaker 2: So from this point of view, we chose a clear client group. Then we have our own...

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Speaker 2: I think the path we have chosen is still a long way to go.

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Speaker 2: Because we see a lot of big brands in the traditional platform e-commerce have already encountered some difficulties in their growth. But in the new media ecosystem, such as WeChat's private domain,

Speaker 2: such as QoL and Internet of Things e-commerce and content strategy in Internet of Things. These enterprise solutions and services are essential for the future growth of the brand.

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Speaker 2: So in such a SaaS market that we have chosen, we think that iClick has accumulated some very good competitiveness. For example, some of the experience that we have accumulated over the years with our top customers, our observation in this market, our data analysis ability, and our observation of consumers in this market, our ability to have both SaaS products and services.

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Speaker 2: And we can provide some customized solutions to some KE clients. In fact, we have accumulated a large number of clients in the MS marketing solution. They can do cross-sale or up-sale. I think these are some of our advantages in this market.

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Speaker 2: And in response to what you said, there may be some giants in this market that will also launch some SaaS solutions, such as Tencent or Baidu.

Speaker 2: In my opinion, the entire enterprise solution market is very large. The customer groups and the service models are all thought-provoking. For example, many of our SaaS products

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Speaker 2: We also have a deep cooperation relationship with Tencent. For example, we have several products on Tencent Cloud. In fact, we have selected Tencent Cloud's????. They are all deployed on Tencent Cloud and provide our SaaS products and services to many customers on Tencent Cloud. So in this regard,

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Speaker 2: I think, especially for the large group of KAA clients, what they need is not just...

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Speaker 2: This is the position of iClick on this issue.

Cut out.

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Our financials the opportunity okay as to.

To your second question about the competitive dynamics in the enterprise solutions business. Our view is that the Sars industry in China is still at its early stage of development and this market is still very decentralized different suppliers have been exploring different business models.

Speaker 7: have been exploring different business models. And the enterprise solutions business actually is a huge market.

Enterprise solutions business actually is a huge market since we've launched our enterprise solutions in 2019, we have been talking to key accounts clients, we have been helping them by providing them with a SaaS solutions as well as <unk>.

Speaker 7: Since we've launched the enterprise solutions in 2019, we have been targeting key account clients.

Speaker 7: We have been helping them by providing them with a SaaS solutions as well as operation services, that is the SaaS plus model, and so as to help our clients adapt to the new media ecosystem in China. New media here refers to WeChat and other social media or the KOL and the other online celebrity ecosystems.

Operation services that GSD fast plus model.

So as to how about clients adapt to the new media ecosystem in China, New media here refers to wechat and other social media or they'll kill L. B.

Any other online and celebrity ecosystems.

Speaker 7: And for key accounts, clients, or the big brands, by providing them with the self-solutions, the operation services can help them to identify new opportunities in the new media environment.

Oh for key account clients or the big brands.

By providing them with a sound solutions operation services can help them to identify new opportunities in the new media environment. So I think the data we have a clear target customers and we have a well established enterprise solutions strategies and based on our years of development rebuild found out.

Speaker 7: we found out that there are quite a lot of opportunities in the enterprise solutions market.

That there are quite a lot of opportunities in the enterprise solutions market.

Speaker 7: And for the big brands, actually it is very difficult for them to grow further on the e-commerce platform.

As far as the big brands actually it is very difficult for them to grow further on the e-commerce platform and facts.

Speaker 7: on the WCAG, on the KOL or other live streaming platforms, they still have more opportunities to grow. And so by using the enterprise solutions as well as the operation services, the big brands will have a greater opportunity to grow in the future. And I think that our company has great competitive edge in these

The wechat.

You kill all or other live streaming platforms, they're still have more opportunities to grow and just so bye.

By using the enterprise solutions as well as the operations seven seas.

Big brands will have a breakout opportunity to grow in the future.

Think about our company has great competitive edge in these.

Speaker 7: Because we have years of experience serving key account clients, and we have a great data analytics and consumer insights. We offer both SaaS products and operation services. And we also can customize solutions for key account clients. And we also have thousands of marketing solutions clients, who we can cross sell or upsell products to them.

Because so we have yes up experience serving key account clients and we have a great data.

It takes and the consumer insights we offer both products and operations services and Joe. We also can customize solutions for our key account clients and we also have thousands seltzer marketing solutions clients, who we can cross sell upsell products to them and so.

Speaker 7: And so I think that you also mentioned that some tech giants, such as Tencent and Baidu, are also launching their SaaS solutions. Our view towards that is that the enterprise solution market is big enough, and we actually target different customers, and we use different service models.

I think that you also mentioned that some tech giants, such as Tencent and Baidu are also launching their SaaS solutions.

Or would it be what towards that is that the enterprise solution market is big enough and are.

We actually target a difference.

Customers and we use different service models and many of our SaaS products already are already included in the chip on plan of Tencent and have been deployed on Tencent cloud and to serve the clients of Tencent. So for key account clients, what they need it's not for me.

Speaker 7: And many of our SaaS products are already included in the transform plan of Tencent and have been deployed on Tencent Cloud to serve the clients of Tencent.

Speaker 7: So for key account clients, what they need is not only SaaS products, but also operational services. So in this regard, I think there are more opportunities for us to cooperate with Tencent and other tech giants than competing with them.

SaaS products, but also operational services, so and in this regard I think that there are more opportunities for us to cooperate with Tencent and other tech giants been competing with them.

But this is our position.

Thank you.

The next question is from Thomas Chong of Jefferies. Please go ahead.

Speaker 4: The next question is from Thomas Chong of Jeffries. Please go ahead.

Oh go ahead.

Speaker 8: Thank you for accepting my question. I have two questions. The first question is about the personal privacy protection policy that came out a few days ago and the impact it has had on our advertising business. The second question is about the progress we have made with Baozun.

Got it.

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Sure.

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Okay.

The woman.

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Okay.

So I would talk about myself.

Speaker 8: So, I will translate myself. My first question is, how do regulations on data privacy and the rules of a PIPL will impact our advising business? And my second question is about the updates on corporation exposure. Thank you.

My first question was how to regulation data privacy.

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And my second question about the apples our cooperation with Biogen.

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Speaker 2: Thank you for your question. My first question is about the data security of the Personal Information Protection Act.

John.

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Speaker 2: In fact, we don't think there is much change in the environment compared to the last quarter.

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Speaker 2: Because we understand that this kind of spy network is more to get some of the original gray or even black data transactions.

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Speaker 2: In fact, we have already obtained the third-level certificate of information security in China a long time ago. This is actually the highest certificate of information security that the domestic government can give to other industries other than banks.

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Speaker 2: For the advertising industry, the protection of personal privacy may have some impact on the advertising industry. For example, it can be seen that the media needs to provide some options to let this...

So you cannot this is what makes you feel that you're going to see a screenshot.

Young people.

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Speaker 2: the consumer to decide whether they can use the consumer's data to promote some personalized advertising information. So it is very likely that in some time, some consumers will choose to close this thing.

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Speaker 2: However, this may reduce the accuracy of advertising in the short term.

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Speaker 2: But we don't think this will reduce the advertisers' demand for online advertising as a whole.

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Speaker 2: In other words, the whole industry may be more accurate. In the next short period of time, the accuracy of the whole industry may drop. But the needs of the entire advertising team are still there. So we think this may form a new balance.

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Speaker 2: how to put it in, how to use the data better. Maybe after a new round of balance, it will reach a new stable state. And after a while, consumers will find that the option is closed does not mean that they can stop watching ads. They will still watch ads. So some people may open it again. Of course, this is not necessarily the case. Let's wait and see.

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Speaker 2: So, from the perspective of data security, I would like to say that our company, regardless of whether it is a

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Speaker 2: We are basically a 2B business model, not a 2C model, so we don't get data directly from the consumers. We usually collect transparent data from media partners, our clients, advertisers, or data partners.

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Speaker 2: Especially in our mapping solution, we usually use PII data, which means we can't identify...

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Speaker 2: We are all non-PII data, which cannot identify the customer's personal identity information.

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Speaker 2: What's the technical difference between Taiwan and the US?

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Speaker 2: that need to keep in mind for the organization's protection.

Oh, Oh Oh.

Speaker 2: So this is a question about information security and personal information protection. This is the first question, I understand.

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Okay. Thank you for your question and the first question is about the Ti T al and a data security.

Speaker 7: Okay, thank you for your question. And the first question is about PIPL and data security. I think compared with the last quarter, there are no big changes.

X in comparison with the last quarter or they are no big changes in China now is a catch me the data regulation and lots of speaking I think it's good for the healthy development of the entire <unk>.

Speaker 7: And China now is tightening the data regulation and long-term keeping, I think it's good for the healthy development of the entire industry. And I also, and I think that the purpose for tightening regulation is to eliminate those gray or some illegal practices.

And I also and I think I think that's the purpose for tightened regulation is to it.

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John.

Illegal practices.

Speaker 7: in data transactions, which actually has hurt the entire industry. And our company has always been compliant in collecting and using data.

Data.

Total transactions, which actually has hurt being tightened his team and our company has always being compliant and collecting and using data.

Speaker 7: We have already received a Level 3 certification in Information Security, which is the highest certification that can be given to non-bank institutions.

We have already received a level three certification.

Information security, which is the highest.

Our certifications that can be given to non bank institutions and.

Speaker 7: And as to its impact on advertising industry, yes, the PIPL will have some impact on the advertising industry. It means that the media needed to provide options to consumers and let consumers to decide whether they agree to authorize the advertisers to use this information in their advertisements. And short-term speaking, it may affect the advertising position.

Its impact on advertising industry, Yes, PRP al will have some impact on the advertising industry.

It means that the media and needed to provide options.

To consumers and that consumers to decide whether they agree to a spicy advertisers to use this information in the advertisement and shorten speaking it may affect to the advertising position, but.

Long term speaking.

Speaker 7: But long-term speaking, I don't think that it will actually affect.

I don't think that it will actually affect the brand's demand for online advertising and I think that it actually will lead to a new it clearly I E.

Speaker 7: the brand's demand for online advertising. And I think that it actually will lead to a new balance and as long as people have figured out how to better use data. And in addition, sometimes when customers opt out this option, they found out that they still receive advertisement.

Adam.

Our friend as people have figured out how to better use of data and in addition.

Sprint customers opt outs. This option they found out that they still receive a thought took months so probably they will opt in later.

Speaker 7: So probably they will opt in later. So we need to wait and see. And as to the data security, both our marketing solutions and enterprise solutions targeting to be customers, not to see.

So we need to wait and see and as to the data security.

Both our marketing solutions and enterprise solutions targeting to be customers not to proceed. So we don't have directly collect data from customers that we collect masked data from advertisers and the media Center data partners and before messaging solutions.

Speaker 7: So we don't directly collect data from customers. Instead, we collect mask data from advertisers, and the medias, and the data partners. And for marketing solutions, the data we've collected is non-PII data.

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Speaker 7: That is that data cannot identify the identity of consumers We use some of virtual symbols and use our algorithm to place the advertisers

That is that data cannot identify identity off consumers.

Some of it you think Bose and use our algorithms to place advertisements and checked.

Speaker 7: and we checked the current laws and regulations and these are not actually forbidden or regulated according to the latest law.

Correct.

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Speaker 2: I understand your second question is about our cooperation with Baozun.

Speaker 2: Baozun is a very important partner for us, and we have mentioned it many times before. Our cooperation with Baozun is mainly on WeChat Ecology, which helps the brand to build a private e-commerce system. Both sides use their advantages to create a full-chain private e-commerce solution. At present, our cooperation is still going on steadily.

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Speaker 2: We have a dedicated team between our two companies, and we are constantly working on some customers, and we are also promoting some customers.

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Speaker 2: We've done a collaboration before onquition prices for food.

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Speaker 2: My explanation of this case actually combines the results of iClick which turns this technology into a security condition as you can see in caption here and then it detects of all the alarms and clicks the source. A security system used to avoid detecting firearms in the case of other security animals

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Speaker 2: a SaaS solution for private e-commerce. In addition, Baozun provides a warehouse logistics service in the backchain.

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Speaker 2: So we help our clients to cover all the services they provide, from front-end to back-end, from front-end micro-channel, private-channel ecosystem, to back-end e-commerce delivery.

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Speaker 2: In fact, we can help our customers to implement the whole chain.

Speaker 2: In fact, we still have some clients who cooperate with us, but because some of the clients' brands are relatively large, their authorization is very strict, so it is not very convenient to talk about it in the current period.

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Speaker 2: Overall, we think that there is still a lot of room for cooperation between K&A and Baozun in the market. However, it does take some time to integrate the technology and services.

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Uh huh.

Hey, Tycho.

Well look on the Baldwin Oh geez, the Hulu look when you're you're not sure. If we don't bother Dan Fisher, Virginia men don't go to T. Shaw go food or some cool Tricia harsh reality here gosh agenda.

Not just a political about to kick off on me and the trip all demolished.

Speaker 2: In fact, in this aspect, in addition to ensuring that we should say that some time ago, we have also opened up more and more cooperation with many other partners. For example, we have some cooperation with HubSpot through the acquisition of an iPad-type product, which helps many overseas customers to connect to this WeChat ecosystem solution.

But he muscle changes you don't want me to go from Deutsche is hotter than you see at a hotel.

Are you already told us little a beautiful woman.

Pingo she'll go they go I apologize Henry hub spot.

Where do you go hurdle.

Andrew handle highlight a cool geological reasons and hydro gigamon.

You're fine.

Speaker 2: We have established cross-border e-commerce with C&N Logistics, and we are using their international logistics solution to provide better services to our customers. The cross-sale between our marketing solution and enterprise solution actually helps our enterprise solution to attract more customers.

Oh, cool and who can keep go see them logistic Jimmy get them caught in getting Shang.

Oh, okay.

Commonly here of what do you believe or what does he see the fund doesn't elite.

Now looking at holiday week cohort, you're going to hear the full.

Yeah, Bob Lento Geological mapping solution called enterprise solution. So Jim that you go cross sale. She says don't bundle a woman the enterprise solution I'll call your daughter or Copel.

Articulate what that should do you think that'd be the Diablo when she does her ego play data.

Speaker 2: This is probably our answer to your second question.

Speaker 7: Well, second question is about our cooperation with Baozun. As Alba mentioned previously, Baozun is an important partner of iClick. And our cooperation mainly lies with the WeChat ecosystem. That is to help brands to increase their private domain e-commerce. And both companies have leveraged our advantages.

The second question is about the cooperation with <unk> thousand as Safra mentioned previously.

Is an important partner, although I think and all of a corporation, meaning lies with our wechat ecosystem that has to help.

Brand too.

Increased yeah private demand.

Thomas and both companies have leveraged our advantages.

Speaker 7: in providing the omni-channel private domain solution.

Providing the Omnichannel private domain solutions to.

Speaker 7: to clients. Currently, our cooperation is underway and we have dedicated teams on both sides to jointly serve customers. Previously, we have released a case.

Currently our corporation is underway and we have dedicated teams on.

On both a five two were trying to serve customers.

Previously with our release Okay.

That is the tax yeah.

Speaker 9: that is charged here, we've actually combined... ??

We've actually combined.

[music].

That's why I know south Boston, So our warehousing and logistics.

Speaker 7: as well as Baozun's warehousing and logistic capabilities in serving the entire lifecycle of our customers, including the WeChat ecosystem to the delivery of e-commerce.

Ts.

Serving the entire lifecycle of our customers, including the wechat ecosystem to the delivery of that in your comments and we are also trying to be serving some other customers for these customers.

Speaker 7: And we are also jointly serving some other customers where these customers are.

The big and we have very stringent authorization policies. So.

Speaker 7: big, and they have very stringent authorization policies, so we cannot disclose now, but we think that there are great opportunities to cooperate with Baldwin in serving key account clients.

What can we cannot disclose now and but we think that there is a great opportunity.

To cooperate with mostly in certain key account clients.

Speaker 7: And also it takes some time for both companies to integrate technologies and services.

And also it takes some time for those companies to integrate technologies and services.

Speaker 7: And now we are working with other partners, too. For example, through IE Poly, an acquired product of us, we have been working with HubSpot to providing overseas customers with the WeChat solutions. And we have been also building a cross-border e-commerce for CN Logistics.

And now we are working with other partners to for example.

Through eye palette and acquired products.

We have been working with a hot spot two providing overseas customers Lisa Wechat of solutions and we have seen also a building a cross border E Commerce for logistics we are.

Speaker 7: We are at the same time using the cross-border logistic capabilities of CN Logistics in serving our customers.

At the same time, using the all cross border logistic capabilities Oxy and logistics in serving our customers and also they are some cross selling between our marketing solutions from NGL processing solutions customer base and this kind of a cross selling has to help us too.

Speaker 7: And also, there are some cross-selling between our marketing solutions and enterprise solutions customer base, and this kind of cross-selling has helped us to actually convert more customers into the enterprise solutions customers. So this is my answer to your question.

Actually convert more customers into enterprise.

Enterprise solutions customers. So this is my answer to your question.

Okay.

Okay.

The next question is from Brian Kinsinger of Alliance Global Partners. Please go ahead.

Speaker 4: The next question is from Brian Kinslinger of Alliance Global Partners. Please go ahead.

Okay, great. Thanks for taking my question can you talk about the surprising gross margin pressure, especially with a much stronger mix of enterprise revenue is the new baseline and and how long do you think it'll take to recover back to that 29% range and then my second question is.

Speaker 10: Hey, great, thanks for taking my question. Can you talk about the surprising gross margin pressure, especially with a much stronger mix of enterprise revenue, just the new baseline, and how long do you think it'll take to recover back to that 29% range? And then my second question is.

You mentioned you are maximizing long term retention what are those steps, we're taking and what is the incremental expense.

Speaker 10: You mentioned you are maximizing long-term retention. What are those steps you're taking, and what is the incremental expense, and will that increase, decrease, or flatten out going forward, that spend? Thank you.

Well that increase decrease or flatten out going forward that spend thank you.

Yes.

Hello, Brian This is Terry so maybe let me get back to you on the gross margins.

Speaker 3: Hello, Brian . This is Terence. So maybe let me get back to you on the gross margins, you know, the questions about that. So basically, as TJ has mentioned, during the quarters, we do face a lot of unusual

The question is about that so basically as TJ has mentioned during the quarters, we do face a lot of new shows.

Issues would be in the market and overall the sentiment and a lot of pressures coming from different verticals, we've been missing some of the major verticals like education and some of the you know kinds from some of the gaming sector as well. So we've been trying to capture new demand and also trying to compete for new.

Speaker 10: issues within the market and overall the sentiment and a lot of pressures are coming from different verticals. We've been missing some of the major verticals like education and some of the, you know, clients from some of the gaming sector as well.

Speaker 3: So we've been trying to capture new demand and also trying to compete for new projects.

And I guess in this process, we also trying to reaching our long term customers and we've been providing a little bit more discounts towards these clients and that's why.

Speaker 3: And I guess in this process, we're also trying to retain our long-term customers, and we've been providing a little bit more discounts towards these clients. And that's why it pressures our margins.

As a person much on margins and at the same times because of media is probably also have some changes. So we're also trying to capture.

Speaker 3: And at the same time, because the media's policy also has some changes, so we're also trying to capture more benefits. But it seems that the tension is there, and that we're trying to structure the balance between the profit and also the growth and the retention of clients. And it leads to a kind of job in terms of gross margin in the quarter.

More benefits, but it seems that the attention is there and that we're trying to strike the balance between deposit and also the growth in the retention of clients and it leads to a ton of job in terms of the gross margin in the quarter.

The company would last fall you know until the next quarters and maybe in the next year, we will have more visibility as TJ mentioned I think this is only a short term phenomenon that we are observing right now and as you said the enterprise solution side still growing pretty strong and you're still maintaining a rig.

Speaker 3: And it probably would last for, you know, until next quarter, and maybe in the next year we'll have more visibility. As TJ mentioned, I think this is only a short-term phenomenon that we are observing right now.

Speaker 3: And as you said, the enterprise solution side is still going pretty much strong and is still maintaining a very decent margin overall. And so we've been forecasting or looking forward to that going into the next year, hopefully when the enterprise revenues do keep growing and that will be growing to right now is already hitting like 20% in the mix.

And margins overall, and so we've been forecasting or looking forward that going into next year, hopefully when the enterprise revenues keep growing and that would be grow into right now is already hitting 20% in the mix and when going into next year is probably going to 30, 40% makes sense.

Speaker 3: and when going to next year is probably going to 30-40% mixed in, I think we'll be able to recover over the margin and also the market solutions margin will also be improved. As Peter also mentioned, the business is only relatively short-term and that we've been able to recover when the market turn backs and getting some new clients and new business, also some new solutions as well.

We've been able to recover over the mountain and also the marketing solutions margin will also be improved as TJ also mentioned some businesses only relatively subprime and that we've been able to recover when the market turned back and getting some new clients and new business also some new solution as well.

So regarding your second questions on how do we maximize the non term retentions and whether there will be incremental expenses going forward.

Speaker 3: So regarding your second questions on how do we, you know, maximize the non-term intentions.

Speaker 3: and whether there will be incremental expenses going forward. And I think specifically that would be for the enterprise SaaS model. I think on the market solution model, we basically keep it gradually back in terms of how we manage overall the growth with the operating expenses.

And I think specifically that would be for the enterprise SaaS model I think on the marketing solution model, we basically keep it relatively fast in terms of how we manage overall to grow with the operating expenses, but in terms of the enterprise distributions basically we still need to sustain in a relatively some incremental expense.

Speaker 3: But in terms of the enterprise-based solutions, basically, we still need to sink in relatively some incremental expenses, and not just for retentions, but also for growing the segment and growing more client base as well, and still pretty much a key accounts reference at the point, and we still pretty much are trying to capture more demand from the market. So it's more abstract at this moment, and hopefully we've been able to discuss more next.

And not just for patients, but also for growing the salmon.

And Boeing Board, you know find data as well and stupid and MOSFET key icons triptans at a point and we still can do much trying to capture more of the month in the market.

It's more of an asset at this moment, then hopefully being able to discuss more next.

Speaker 3: And here will be my answers and proceed if TJ has anything to add on, but these are for my remarks.

Here, we'll be my answers and casino TJ has anything to add on but piece of for my remarks.

Yeah.

Hum.

Hello, operator can we open up the question to the next.

Speaker 1: Hey, hello, operator. Can we open up the question to the next participant?

Participant.

The next question is from Colin Liu of China Renaissance. Please go ahead.

Speaker 4: The next question is from Colin Liu of China Renaissance, please go ahead.

Okay.

Speaker 11: Thank you for the opportunity to ask this question. I only have one question. I want to ask, in this quarter, we see that the??? in the Q2Q comparison has dropped a bit. I want to ask, what is the reason behind this? Is there any impact of this macro factor?

We don't see any people wait to see what's 19 tell you Chad.

To those people they came down maybe.

Thank God I'm sure that you don't view doesn't mean, you're going to send it to them.

We've had to go back what are your children.

Yeah, Gabriel who runs the data.

Well, so I'll just translate for myself.

Speaker 11: So I'll just translate it for myself. Thanks, management, for the chance of asking the question. I only have one. If we look at gross margin for this quarter, it is actually declining on a two-on-two basis. I wonder what's the reason behind it. Is it anything to do with the broader macro weakness? Thank you.

Well the Chancellor upstream good question I don't have one.

If we look at gross margin this quarter.

It's actually.

Declining two basis I wonder what's the reason behind it is it anything to do with the broader macro weakness. Thank you.

Okay.

Uh huh.

Oh Wow.

Speaker 2: Okay, let me answer your question. Terence, if you have anything to add, please do so.

So wouldn't you bought you all from your parents or whether you were hit with one of the Hot you are Muslim parents of life with $20.

Speaker 2: The decline of Maolili is mainly due to the advertising business. In Q3 and the second half of the year, we feel that the advertising business and the market environment are still facing a big challenge.

And shortly the multitude of shut in while I mentioned that you should all come down or how should can we oh you are.

They are two three bulk wasn't Michelle Daniela WOMAC on beauty.

Well you can go to shut up on me I shouldn't be an ego. Neither you gotta catch up Ah Tony chime in here too, we automate E comm and thoughtful that you guys have all of them, but you should.

And I'm kind of just Oh, Guangzhou, you would say Gee shallow water, Mexico corridor confusion mini hit Tilda.

Speaker 2: In the next few quarters, the advertising industry may face some challenges. In the short-term, the softening of demand has led to some major competition in the marketing industry.

I'm going to kick of marketing and it should oh hernia like shorter haul she should cheetah Chico switch. It would appear you Tyler I loved your good ginger data at least here do.

So you.

Speaker 2: So our current strategy is to balance the sudden change in the market. We may be inclined to use a strategy of sacrificing some capital.

He says Gee, the Xiaomi and a woman with you unless you could truly she says do we should we looking homes I think Sean the Turan there you're gonna be involved all of them economically can you tell them to go.

She's an easier more either John or you could put it like Oh holidays country or co who are alive Archie or Kim.

Speaker 2: Light trigger, howwthe K trigger alcohoop or line bul trigger trigger.

Oh, God legally and Sheila channeling the Fob, yeah as long as you're gonna cohort that mold onto a little wrong. So I should take a cold where should Yamaha she won't she's Oh do we not know Shoal Creek.

Speaker 2: a better relationship with our customers. This way, we can spend more time with our customers, and we hope to have a better recovery when the business warms up.

Youll you go Gung Ho logical recovery.

Speaker 2: We feel that there is a change in this industry, because there are many customers in our marketing solution.

The Yamana well Linda.

When you look unusual so you'll see the whole either you're going to be helpful.

A woman a woman the marketing solution and the man, who guy, though do go a cohort of hernia Cheetos shipyard daughter.

Three a woman she says that you may see or you gotta be punchy clean <unk> syndrome <unk> market to go find me a la go go haul luger piano.

Speaker 2: So we can have a better balance in terms of growth and GP margin.

Speaker 2: In addition, there will be more and more strong synergies between our marketing solution and enterprise solution. What we are doing now is to combine more and more marketing solutions with enterprise solutions.

I mean, why not you should Oh, and then the marketing solution.

Enterprise solutions again, she should Uh huh.

Our China Asia synergy.

Joining me on women tissue tender authorities, you're going to like it should.

Good idea daughter easier marketing solution.

And there's a enterprise solution that you go each year that go no.

Speaker 2: But these exchanges aren't just dedicated to pay, they provide services that can solve the learning loss of new users.

Good morning, Sheila Lingo Chunghwa JD metallurgical. So you don't show you our agenda hard configure Emmenia woman got yourself marketing solution that John that you got a GP market in <unk>.

You know when you go through the holiday.

You can find them.

Sue will mention that color that you could do.

Okay I'll, let me take your question first and then see whether Torrance has anything to add you've mentioned about the declining gross profit margin and I think that actually and this is largely due to the entire.

Speaker 7: Okay, let me take your question first and then see whether Terence has anything to add. You've mentioned about the declining gross profit margin.

Speaker 7: And I think that, actually, this is largely due to the entire sentiment in the advertising industry. You know, in Q3 and even in the second half of this year, the entire marketing advertising industry has faced very severe challenges. And you can see

Sentiment in the advertising industry in Q3, and even in the second half of this year entire marketing and.

Advertising.

Interestingly has faced a very severe challenges and you can see that in the financial statements in the mainstream media and.

Speaker 7: in the financial statements in the mainstream media. And due to the weak market sentiment, the weak demand actually has intensified the competition in this industry.

Due to the weak market sentiment.

The weak demand actually has intensified the competition in this industry. So our strategy right now.

Speaker 7: So our strategy right now is to adapt to this changing environment.

Is to adapt to this changing environment by sacrificing some gross profit margin. So that we can maintain the long term healthy relationship with our customers we want to share the rose of customers. So that we can.

Speaker 7: by sacrificing some gross profit margins so that we can maintain the long-term healthy relationship with our customers. We want to share the roles of customers so that we can recover in a healthy manner when the market rebounds.

We cover.

Healthy manner, when the market rebounds, and in addition, as I've mentioned previously our marketing solutions actually cover a wide variety of industries. So we are resilient enough to strike a balance between growth and gross profit margin. In addition, we are currently working to.

Speaker 7: And in addition, as I've mentioned previously, our marketing solutions actually cover a wide variety of industries, so we are resilient enough to strike a balance between growth and gross profit margin.

Speaker 7: In addition, we are currently working to connect data of marketing solutions and enterprise solutions so that we can create more synergies.

Connect data of marketing solutions and enterprise solutions. So that we can create more synergies from these two businesses I believe that it will help our insurer.

Speaker 7: from these two businesses, I believe that it will help improve the gross profit margin of our marketing solutions in the future, so this is my answer.

In truth be a gross profit margin of <unk>.

Marketing solutions in the future. So this is my answer.

Hum.

Thank you.

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

Speaker 4: As there are no further questions, I'd like to turn the call back over to Lisa Lee for closing remarks.

Thank you once again for joining us today, if you have any further questions. Please feel free to contact <unk> Investor Relations Department through the contact information provided on our website and see you next time. Thank you bye bye.

Speaker 1: Thank you once again for joining us today. If you have any further questions, please feel free to contact iCLICS Investor Relations Department through the contact information provided on our website. See you next time. Thank you. Bye-bye.

This concludes the conference call you May now disconnect. Your line. Thank you.

Speaker 4: This concludes the conference call. You may now disconnect your line. Thank you.