Q1 2022 LIZHI INC. Earnings Call

May 27, 2022

Hello, Ladies and gentlemen, thank you for standing by for the <unk>, Inc. First quarter 2022 earnings conference call. At this time all participants are in a listen only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded I will now turn the call over to.

Your host Ethicon head of capital markets for the company. Please go ahead.

Thank you very much Hello, everyone and welcome to Visa Inc.

First quarter 292 earnings Conference call, we released our financial and operating results, we our newswire services earlier today and they are available online, but he spends on today's call will include all founder and CEO , Mr. Michael like Oh, Oh, yes.

And our acting CFO Mr Jun Zhang.

Mr. Li and Mr. Lu will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded.

Well I'll just highlight presentation and a webcast a replay of this conference call will be available maybe IR section of our website and I also want me to go after them.

Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995. These statements type quality contain words, such as May we all expect target.

Asking me you can live potential continue or other similar expressions forward looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of businesses.

And also 'twenty that could cause actual results.

To differ materially from those projected or anticipated many of which factors are beyond our control the company. Its affiliate the wiser roughly advantages and underwriters do not undertake any obligation to update these forward looking information, except as required under the appia.

Please also note that he just unused press release and this conference call include discussions of unaudited GAAP financial matters as well as unaudited non-GAAP financial measures.

Please refer to the interest earnings press release for reconciliation of unaudited non-GAAP measures to GAAP.

GAAP measures I will now turn the call over to our CEO . Mr. Dong Li. Please go ahead.

So.

Gotcha.

Please proceed.

Yes.

Hmm.

Hello, everyone and thank you for joining our first quarter of 'twenty to 'twenty two earnings conference call.

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Because the processes.

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After becoming profitable for the first time, what GAAP basis in the fourth quarter of 'twenty. One we continue to optimize our organizational structure and technology platform in the first quarter of 2022, which boosted our operating efficiency and contributed to stable operating result.

Notably our first quarter revenue rose four 4% year over year to RMB 517 million or gross margin increased by 700 basis points year over year to 32%.

We have achieved a profit on a GAAP basis for the second consecutive quarter with net income 13, 84% quarter over quarter to RMB 16 42 minutes.

Thank you.

Exactly.

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Some of them coming from them.

So you'll want to yet.

Thank you for the kind of life at home.

What are you going to do all the time here.

Thanks, a lot.

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Tony This is Rob.

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Or does it push out to you about that.

In the first quarter, we remain focused on building our competitive audio centric ecosystem, improving product functionality elevating overall user experience and actively exploring overseas market to implement our globalization strategy.

Meanwhile, we continue to reinforce our new suite of technologies to empower Costar innovation and business development in terms of operational data total average mobile meus amounted to 51, five minutes and average mobile and they use of our audio entertainment business increased by 11.

Since year over year to $9 40 meter that's to the continuous optimization of our operational strategy average monthly paying users maintained year over year growth in the first quarter to reach 480 to sell them now I will share more color on the development of different business segments.

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Sure.

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Being able to do without using <unk>.

Some of opportunities.

With respect to audio entertainment, we continue to enhance the competitiveness of our auto centric ecosystem by focusing on core content categories and the author independent business to drive user growth and commercialization performance in the first quarter of 232 the user penetration.

The rate of our audio entertainment business expanded from 13, 8% in the same period last year to 17, 7%. Furthermore, we continue to launch a series of operational campaign, featuring various trending topics and holiday things.

With our diversified operational strategy more content creators will you encouraged and motivated to engaging content creation, which in turn attracted more users to join real time audio interruption.

The unleashing the commercialization potential of our audio entertainment business.

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Central time anything you would actually help.

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Do you see a possible oil products since I've put on Mueller Tech.

So I'm going to use it.

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In addition, we have been consistently increasing and optimizing our product features and they are into 10 million interactions format to facilitate its business model innovation and it.

Expand the commercialization of high quality content in March we just started collaborating with the designers all your brands quality coal seams of great quality coach brand image into an era of interactive functions in the audio entertainment section of the DJ App, creating online interactive narrow.

Grant IP and providing users with a diversified online entertainment experience.

The collaboration has gotten the traction among the.

Younger generations users and has in fact to be boosted close interactions between content creators and users on the platform.

Going forward did you expect to collaborate with more Grand IP to further diversify usage scenarios for online interactive entertainment leveraging the strengths of both parties to maximize mutual benefit.

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Turning to our global expansion, we continue to refine the features and functions of our global social product here since launching key us real time Interactive group space, we have improved the product versatility and usability by upgrading the proof space interactive.

Based on our insights into user demand, making like connections and the social engagement easier for all users.

We also continue to enrich the features of the crude space in line with all users diversified preferences.

Group Rote out strategy, such as upgrading the acquisition of <unk> connections and simplifying invitation pathways, we optimize that the pro docking mutation mechanism and boosted social efficiency among users, notably building our in house suite of technologies and AI capacity we.

Elevated user experience by improving the recommendation feature giving users direct access to the interactive group with just the one click so that we can attract some more active users to join the group space and promote real time interaction and connectivity.

Furthermore, we unveiled more innovative functions when here, including awards tendered last users to alternate there was using veteran local town and in fact, making real time interactions more fun and lucky.

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And to work for the company.

The optimization and integration of product features and increased interactive functions have further boosted tier user engagement and user activity in the first quarter. The average daily time spent on the App users increased by 42% year over year and the number of daily messages.

Per user rose, 57% year over year.

As of the end of March the number of pairs of grants connections grew 3.8.

Seven times compared with the same period last year.

In addition, the continuous optimization of including interactive functions also effectively drove the crude penetration rate and the user engagement.

In March the group penetration rate grew 257% year over year, while the number of active groups, who was 377 times compared with the same periods of last year. The group penetration rate of new users continuing to life, reaching almost 70%.

Along with a significant expansion in the percentage of new users who are second half groups on their own initiative.

Looking ahead, we will continue to be reached he is product features based on the user experience and launch more innovative functions and interactive features to meet users' social needs more diversified range of scenarios and building a global social profiles with wider applicability with it.

Tennessee and usability.

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He said look I mean, the type of ourselves.

I'm going to jump out sooner or perhaps even in Europe .

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Alongside our substantial progress in product improvement.

In the first quarter. We are also continuing to advance the development of our core technology reinforcing our in house technology its contribution into business growth.

For example by building and improving our it wasn't told product technology Papon, we enhanced the both products Reusability and product development efficiency.

Also by strengthening our smart.

Rising system and optimizing our marketing campaign and the promotional strategy, we effectively boosted our overall operating efficiency. Furthermore, we inclusive download key technical metrics by solidifying our core technology Foundation outlook Hoskinson voice messaging.

Motor Axe, and real time audio and video streaming technology platform. So let me provide I'll call. It out because it does not want to call it support a multiple fronts.

Including enabling with the implementation of customized voice related functions, while also offering a seamless real time interactive experience.

Going forward, we plan to continue expanding the coverage of our in house technologies.

Faster to achieve a 100% of the application of Florida at one P. M. In the second quarter, which will lower all the technology costs, while also supporting the divestments more innovative and customize the function and in <unk>.

Enhancing our costar information advantages.

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Mr Guardiola xiaomi could be acquiring existing car.

Being some consumption of them sooner.

In fact, you could achieve them.

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Great.

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Internally.

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Councillor.

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Our leading suite of technologies and the product optimizations and innovation also bolster the beaches strategic multi device roadmap.

In March our in car audio product was integrated into the vehicle operating system of leap modal a technology oriented smart EV automaker through the new car selling quik App platform, bringing selected premium podcast content and mirth is audio experiences to them.

Broader user base.

Looking ahead, we will continue to deepen our presence in the in car audio market, hoping to provide more users with high quality, while the ranking and customized in car audio experiences.

So in the area.

With regard to the yeti structure.

We're entering into a product.

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In summary, our performance in the first quarter lay the solid foundation for our full year development going forward, we will maintain our effective refined operational strategies and remain committed to tapping to more commercialization potential well, attracting with thoughtful location and that mandate.

To boost operational efficiency on.

On the international market in France, we will fully leverage our core technology advantages and localize the operational judges to explore different market discover new business growth opportunities expand our overseas user base and boost the commercialization.

In additional upside to the lead ship groups overall development, we are fully confident indeed launch in development and will continue to dedicate ourselves to creating greater value for our users and shareholders.

Phishing attacks.

Some of them in a fairly simple.

<unk> gone into willingness yourself, Colorado UC.

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

Thank you the tankers alone after all everyone off.

First quarter results demonstrate our growth trajectory driven by the continuous improvement in our operating efficiency and the first culture.

Gross margin grew to 32% up several hundred basis points year over year.

Mike Casually wood chips come RMB 16 Formula you this quarter, representing 84% in Texas to increase.

Going forward, we will carry on building a more competitive all care ecosystem pursuing diversified commercialization avenues.

And advancing our technology capabilities.

Coveted those endeavors with strengthening our core competencies and empower us to create greater value, while users and shareholders.

Laughter and providing a brief overview of our financial results for the first contract and you don't need to.

In the first quarter, our total net revenues were RMB $516 7 million.

Presenting an increase of 4% year over year.

Primarily driven by the increasing the number on paying users and as average amount of uptick in spending or audio entertainment products.

Partially offset by the decreased advertising revenues, which was mainly due to the increase in number of advertising project.

Cost of revenue was RMB $348 6 million in the first call job this year.

Representing a decrease of 6% year over year.

Primarily due to the adjustment of the revenue sharing policies regarding the decrease in revenue sharing fees.

Gross profit was RMB 168, 1 million in the first quarter. After the 22, representing an increase of 34% year over year.

Gross margin.

non-GAAP gross profit was RMB $170 7 million in the first quarter opportunity, Jimmy Choo, representing an increase of 34% year over year.

And our gross margin for the first quarter of this year increased to 32% from 25% in the first quarter up to Jim do you want.

non-GAAP gross margin for the first culture of this year due to a 33%, but 26% in the first contract would you did you want.

Operating expenses.

<unk> by 22% year over year to RMB $153 five minutes in the first quarter of last year.

Research and development expenses were RMB 71, 1 million in the first culture opportunity with two representing a year over year increase of 25%.

The increase was primarily due to higher salary and benefit expenses and original your expenses.

Selling and marketing expenses were RMB 60 million in the first quarter of switched on Youtube.

That's a decrease of 50% year over year.

Primarily attributable to the decrease in the promotion and marketing expenses.

Partially offset by increased salary and welfare benefits.

General and administrative expenses.

<unk> 22 per Formula the first car drop this year, representing a year over year increase of 14%.

The increase was mainly due to increased salary and benefit expenses and <unk> expenses.

And our operating income was up $14 six midnight in the first quarter, often Jimmy Choo compared to a loss of RMB $72 two minutes in the first quarter two did you walk.

non-GAAP operating income was RMB $23 4 million in the first quarter of this year.

Back to your loss of 64 million in the first quarter. After news what you want.

And non-GAAP income was RMB 16 formula in the first quarter, often you Jimmy Choo are compared to a net loss of RMB 70 million in the first quarter of last year.

Our lockup income was RMB $25 2 million compared to non-GAAP net loss of RMB 61, 8 million in the first quarter of last year.

Basic and diluted.

Net income for.

Or or be subject to sanction the first quarter. After interest engine two compared to basic and diluted net loss per ads of RMB 115 in the first product into the duet.

Our non-GAAP basic and diluted net income per ads were RMB 49 cents in the first quarter opportunity to do one a compared to.

So when you're trying to compare to non-GAAP basic and diluted net loss of RMB 133 in the first quarter of last year.

As of March 31, 2022, we had cash or cash equivalents short term investments and restricted cash.

545 minutes.

Okay. This concludes.

Prepared remarks today, and we want to open the call to questions. Operator. Please go ahead.

Thank you if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key for the benefit of all participants on today's call. If you wish to ask a question to management in Chinese. Please immediately repeat your question.

And then in English for the sake of clarity in order. Please ask one question at a time management will respond and then feel free to ask a follow up question.

Our first question comes from the line of Vicki Lee with Citi. Your line is open. Please go ahead.

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She is drinking gin contemplating to do 1 million P. G. Bob Yeah.

I need you just mean shelf.

When a deal gets all them too soon so we'll know who don't want to buy your car the juices, yeah, well My Union, who did you highlight.

Our coordination times you get on the P&L.

What's really funny.

Thanks for management for taking my question. So what does management think of the lights to remove regulations on shipping.

Does that impact or do you like streaming sector and BG.

My second question is make causal.

Optimization, Chad in China Internet sector, how should we think of the balance between investment in overseas demand.

Domestic market. Thank you.

Take care.

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Keeping that to someone that they want to go home.

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He chairs the greedy.

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So on your sheets and loyalty.

Uh huh.

G suite.

You can see both of them.

Okay.

Bob.

<unk> switching going down refunding.

Mhm.

Doug Townsend.

Okay.

With them.

If you simply go to Sheila because it becomes that I saw with the holiday.

Thank you.

I would translate for macro.

Yeah.

The questions were answered by Michael and I will translate for him.

So for the first question at least any competent authorities have further clarify regulatory guidelines on the keeping regarding live streaming we think the growth we're very clear and we believe are beneficial to the long term development of the audio live streaming sector, including promoting.

Standardized operational mechanism and in strengthening the protection of minors, so that will deliver long term benefits.

Benefits.

Uh huh.

Yeah Yeah.

No.

Uh huh.

Yeah.

Bill.

I'm Gonna Youll have with them.

And one of the Altra.

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All of them.

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Right.

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Okay.

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Yeah.

Somewhat a phone call or multi hub because on one side the scrutiny.

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Maybe you can sort of.

Right.

For some specific rules, we have optimized and attractive product and operation to meet compliance requirements and it takes us time to be prepared we have launched a special moment for minor user to earlier, including setting up the inclusive.

Content pool for the miners for auto and determined we have also carried out identity verification staff for almost any established the risk control and staffing mechanism. So overall, we are very well prepared.

Something I kind of say ingredients without each other well leave sorry pardon me.

Total AR.

So I'm going to go meet with you Bill.

It sounds like someone that <unk> teaching juices.

<unk> seen me to answer.

Uh huh.

Didn't want them home.

You bet, two yogurt might tell them.

That's correct.

But you will go to the pool.

Generally before the introduction of the new regulatory requirements. We have already made a positive adjustment to the approach stopped and accretion and will continue to improve our mechanisms. According to the T. Palin and requirements, we will dynamically monitor changes.

Glad to rebrand in work and activity optimized and the adjusted product and operational strategies to better serve our users.

The argument users one years.

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No.

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Pete.

Assuming that you.

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<unk> got a woman.

Ordinarily you would then go you can meet them.

We can then go away.

You called the highway you would've thought that people.

Well many of them can equal to teach them because homes a year without needing to tell me you go you need them.

The second question is about the balance between the investments in overseas market and domestic market in.

In the first quarter of this year, we have achieved the profitability on a GAAP basis for the second consecutive quarter with a net profit of RMB 16, 42 minutes, representing a quarter over quarter increase of 84%. So far our domestic business is already profitable.

And providing support to the group's overseas business.

Going forward, we will further improve the operational efficiency of our business and increase our profitability.

So are you how are you with some people rule.

All of a sudden jump.

We can choose how to get the financing or some type of Tulsa.

That's a cool coupon in Hungary that kind of thing.

Hi, why you whether you'll see what goes on at school and high School.

So don't read too.

Well many of you are doing with Honeywell.

Got it.

That's a long time here, but what I will tell you.

Got it.

So we've taken him for that.

You bet.

We are prudent according to the global business without investment.

We'll make fundamental adjustments according to the development of the product in terms of customer acquisition strategy.

I'm, a long term perspective, all user growth for.

Strategy for overseas business. Many focuses on organic growth, we hope to strengthen the network effects of the product through the optimization of product and operational strategies.

Perhaps a more users and they're cheap organic growth.

If I'm here in Wilmington.

I think with all the other.

Oh Boy, Oh Boy Bluebells coupon that you pump.

LIFO impact household payroll.

So yes, it's all formula we used to do de Chile cookies from voting.

In the future.

This is hilary and it goes to the woman.

You don't seem to recall that I need to do so.

Uh huh.

Well known some deep global Hawk with other companies, who sit there on the phone.

On the other hand, we will also fine tune marketing investments based on our product development stages and talk in market conditions.

Research and development, we have been accumulating and elevating our calling health technologies, which may enable us to reduce the cost of business expansion and scale, while providing customer customize the product technology support.

Hum.

Yeah.

So it's all it's very reliable.

So how do you do you will you wait two things on your call.

Maybe a woman sorry like I'm sure you all saw the showroom.

Don can I saw one of them.

You should hold for the year with my father to go on that.

Mhm.

Pat I told him that the pizza.

So I think.

You can do it well.

So literally speaking with them since then.

Yeah, good about com.

We can tell you that's adolfo close enough yeah, we need.

For the future uncertainty.

Yes.

We sampled Linda.

I wouldn't say about that.

For global expansion, it's not only about investments, but also the commercialization opportunities we are expecting the commercialization of our overseas business may agree diversify the revenue stream in the long run you shot we will continue to attract at the old location of resources.

Through the evaluation of different development stages of the business.

Today, we manage at the maximum scale and timing and strategy to maximize operational efficiency and further improve overall business performance and profitability and achieve our state's Daddy's development.

Thank you thank you Ricky.

Thank you. Thank you.

Thank you and again, if you would like to ask a question at this time. Please press Star then one.

And our next question comes from the line of Carol with Southwest Securities. Your line is open. Please go ahead.

Hey, Quentin so how can I think I saw that she wants to be it sounds you're not going to have a lunch only kind of ti.

What are you supposed to go down.

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And with that she found out I have I am don't put to that is no medical and other things in place.

Got it you just started and they go how do I don't want you to help them deal with doctors like to put a real washes. Amanda I think you meant taking my question. My first question that I spoke to all of a system based on timing. After that is that that's meant to also think about headquarters.

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Right.

Of course on maybe what type of pieces.

You don't put you in a way you're pushing box for sure look hey, Chad on finishing that I mean both of them.

Maybe you can pay too much for that.

Since the other's mutual.

Utilized who didn't know what we would see either of them.

I'm done.

So why wouldn't you say.

Did you cancel called ICA.

Uh huh.

I mean that you said.

The young woman.

How do you get that.

Yeah.

I'm Douglas sounds good zynga.

On your closet.

Hum.

For overseas business. Our current focus is to expand the U S market to social profile PR with user experience as a call to meet users' social demands through innovative product functions and features and to promote organic user growth for.

We are also actively exploring and expanding new markets to launch a richer product matrix.

Use the successful insurance auto entertainment business and explore new commercialization opportunities.

A senior person would associate as a bundle, but you don't control.

Okay.

Just a woman change youll find something at a father take them here with a strong team.

I cannot put the wireless because the woman sorry, what's that.

Happy to talk to you about but probably equally split.

Does that work.

She should do that but we have a union right.

What about on the Yokohama sponsored by months tool.

It could be about the deal flow that oil hobbies mutual.

So establishing men to off the Singapore headquarters have helped us to attract.

For more talent.

To support the development of our globalization strategy.

And drive the business innovation.

In addition, we have built a local operational teams in various countries and the region except in Singapore.

We are continuously supporting product optimization and innovation.

Localized operations to meet the diverse needs of local users as well as well as the global users.

Uh huh.

By the way.

Coupons com.

So.

Uh huh.

Yeah, No I'm okay.

How are you with Apache buybacks in two months do you think that chretien being too sure sure woman change you'll have that's out there.

So you're saying you would could you share the father.

Going forward, our overseas business is poised to provide upside to the group's long term revenue growth. Overall, we are confident in the long term development of our work has been done and it will firmly implement the globalization strategy to achieve as a standalone business development.

By its clients on their booking upwards on school, what's up with that.

Thank you.

Please go ahead.

Oh Geez, that's done without doing a bunch of high you don't want to see it really comes down to it.

Yeah Hunter with agile trial.

So did you say you thought were going to go.

How come that you guys have put in motion.

How about just your thoughts I mean, you always had kind of talked about telling me no law, which I don't think that should they choose how much of a time window to the outboard Joshua Alicia.

Alicia on shelf in nature.

So much of it had been high sounding hotline southeast called him with us quite a subordination.

I can tell it to Taiwan.

I'll follow up on catching up on all of the same space.

I should note that differentiation pathway.

Part of that.

Yeah.

Hello.

Sometimes it's how you calculate them.

Well, then conclude central pilots on the coupon in 30 years.

On the call.

Yeah.

Yes.

So Daniel that you usually required for their use sell throughs on nuomi.

So at the other countries.

So those houses are put onto your sales team.

Like two months to ensure that intent or your hobbies.

This feature.

A woman time people watching how ya.

Hum.

Single.

Well, then you should see and she's put a few of them.

You see I think.

Your father son team well known Mueller.

Hum teamed up with unemployment.

So it doesn't just stuck with them should come down.

Switching.

From the perspective of hold out depreciation all global location strategy. Currently focuses on the expansion of my social product with our core audio centric and is committed to creating simple and easy to use audio social tools. He has.

The effectiveness on a real time interaction and meeting the diverse social needs of younger generation users the quad differentiation lysine product innovation and in house technology empowerment.

Through the continuous product optimization and operating we are we have been reached interactive function to make real time interaction more fun and likely.

To Sue a month so he thought the tower you followed your that's incredible.

Yes, thats useful.

If I'm in no way.

I mean, it's all about kind of boardwalk.

So you don't Wanna Associa unless you wanted to.

Beyond the public doesn't come about.

And those who come to quality.

A woman so let's see.

Oh, My bad I am just kind of.

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So you can use opinion.

Certain times, where it needs a lot of options.

Well no matter, how I deal with that.

I mean, New York property, Yeah no.

He will not become cooking pilot piece of it.

So I don't want people to be on the.

On board.

<unk> got some other product weekend.

Bulk Wally on Pmt's Galore Creek, pushing hard to compete.

On the doubtful debt.

Golf sit down there since it was put on this one.

Are you part of the auction.

I think the most important differentiation of our product is about the in house technology. We see there are many other products they are using the <unk>.

<unk> technology support from third parties, and so the agency, which makes the product more medallions.

And we have got more customize the technological support for the product optimization and user experience through our in house developed.

The voice and messaging platform like water Act and the real time audio and video streaming technology Papon don't make me. So that we have more room to grow customize the product features including the personalised avoid tools and enhanced interactive experience.

<unk> in the premium real time interaction to ultimately achieve the differentiated product performance.

Our balance that I mean, if I'm in Sophia helps us on the whole foods, although yourselves team.

<unk> been watching you are you asking about <unk>.

Glass demand.

<unk> done them.

Uh huh.

So I'm not going to go.

So most of you know.

For about three.

So the other future.

With that I know.

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T J.

So sometime in the Q.

I guess is that you have.

Most of them.

<unk>.

<unk> talking about.

Uh huh.

Thank you.

You can see on the box.

On the 17th Allied comes out of the shoulder the Libra.

We also prioritize the effectiveness of the user interaction.

And by <unk> finally mutation pathways optimizing the mutation mechanism and upgrading the acquisition of brands connections, we hope to make macro for networking more simple direct and efficient and lead the unmatched social needs of users, while bringing them a new micro trends.

As mentioned earlier, we also expect to have diversified innovations and at a time in the business model and the commercialization models to bring more diversify the income sources to the group.

Thank you.

Hi, This is Tony Vaughn, Chief shook my neck out and now they need it.

Only come out sometimes.

So go ahead and take all things home Baby Jogger, Johnny I'll, just assume all the new Washington, whereas you.

Oh My God.

Got it.

It sounds like I always just.

And my third question is about to close part of the module.

And how will that improve go golfing Sharon Cook.

Outdoor entertainment.

No.

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Molly.

Sure.

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So John vulnerable months.

I'll leave you to something that I think.

Yeah.

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Judy you down in women's at Sangamo EBV T cell shipping actually if at all.

So you don't see value leadership in Melbourne.

Through these days.

They go to Europe .

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You bet.

In fact, what you the answer to that Qdoba momentum.

For the kitchen.

G Nancy stuebe, while you're doing that summed up by buying stock.

<unk> continues to achieve some cheap academia.

So you saw a comeback with him when he also license plate meals Homegoods a defense of Akiva.

Sure.

Yeah.

She ran the Readouts shinhan juncture onto you sat down she buys.

You can see how soon do you want <unk>.

So instead of going back on the Q2, but sometimes companies yet.

Yes.

In the previous cost and the unused cost we've been talking about how we have to improve the gross margin and we have been always working on optimizing the cost structure and have seen positive outcome of achieving a steady increase in the gross margin over the past seven.

<unk> consecutive quarter.

The gross margin in the first quarter of <unk> 58 increased to 232%.

700 basis points increase from the center of the last year as for the cross sell revenue mainly comes from the.

The revenue sharing fees to our content creators and the cost of incentive fees. The revenue sharing ratio in the first quarter was decreased by 700 basis points from the same period last year, which was primarily due to our tiny adjustment of incentive policies and optimize the <unk>.

Revenue sharing mechanisms.

Its own culture in Idaho.

Yes.

In Singapore, John diesel Turbo elite switching I'll leave you to fusion.

You probably went home to.

Q4, Q2s that you mean, you don't get what he meant.

Okay. It sounds like people don't cut out.

Hello, Hello, Gal does show that the bleed off of that.

So that sounds good.

It hasn't been something either chemical.

Chemical with a homegrown.

<unk> you.

Gili.

Wonder woman, you guys sort of junk.

So I don't bother you Don.

Congress.

Boston deepened.

Cool.

<unk> model either.

Uh huh.

In the mid to long term, we plan to further reduce the cost of revenue ratio you have to add back to improve our overall gross margin first we plan to continue to implement dynamic adjustment strategy for incentive policies in the onshore and the inland business.

Jewelry effective targeted stocking and diverse supportive policies, we will keep motivating all content creators while also optimizing the revenue sharing ratio along with that we aim to improve the engagement tells me too long tail content creators through diversified operational activities.

And optimize the cost structure to achieve higher gross margin.

Okay.

Maybe if I'll marijuana.

Watching this as well.

For similar kinds of nice we can't get samples at the pumping.

<unk> you always see them all.

Sure.

You saw some good about it.

Okay, and then what maybe I was thinking that it doesn't come cheap.

Are you seeing equal your bottom, but well.

Thank you.

Excuse me sorry.

You bet.

Yeah.

In addition, we also plan to realize the innovation of the monetization models through entering new markets and the incubation of new product <unk>.

Including the introduction of revenue streams, we have higher gross margin to improve the overall performance.

So in summary, we are confident that we are able to further optimize our cost structure in the medium to long term and improve the operational efficiencies and overall profitability.

Thank you that concludes Michael Allison.

Thank you. Thank you.

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

Thank you once again for joining us today.

You have further questions. Please feel free to contact me, we investor relations through the contact information provided on our website at <unk> Dot FM or the Piacente group Investor Relations. Thank you.

This concludes the conference call you May now disconnect your lines. Thank you.

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I will now turn the call over to your host Effie Kohn head of capital markets for the company. Please go ahead.

Thank you very much Hello, everyone and welcome to the <unk>, Inc. First quarter 292 earnings Conference call, We released our financial and operating results, we our newswire services earlier today and they are available online.

At this point on today's call will include our founder and CEO , Mr. Michael <unk>.

Mr Lalonde, and our acting CFO Ms <unk>.

Mr. Li and Mr. Lu will begin with prepared remarks, and the call will conclude with a Q&A session.

A reminder, this conference is being recorded in addition.

As highlighted presentation and a webcast a replay of this conference call will be available on the IR section of our website at IR thought needs to go at that.

Such as May will expect target estimate.

But the potential continue or other similar expressions forward looking statements involve inherent risks and uncertainties.

Accuracy of these statements may be impacted by a number of businesses.

And also certainties that could cause actual results.

To differ materially from those projected or anticipated many of which factors that are beyond our control. The company is affiliate advisors ratcheted back a bit and underwriters do not undertake any obligation to update these forward looking information except as required under the act.

Please also note Debbie is unused press release and this conference call include discussions of unaudited GAAP financial matters as well as unaudited non-GAAP financial measures.

Please refer to the interest earnings press release for reconciliation of unaudited non-GAAP measures.

Unaudited GAAP measures I will now turn the call over to our CEO . Mr. Dong Li. Please go ahead.

So.

Sandra please forgive us.

Yes.

Hello, everyone and thank you for joining our first quarter 2022 earnings conference call.

So you sound like you do.

So yes.

Okay.

<unk>.

So with regard.

Please Luca <unk> CEO Bob <unk>.

So that piece alone.

Okay.

Thank you.

Yes.

So it won't be zero carbon incident.

Yes.

Now, let me start with Keybanc. Thank you Dan.

The fiber et cetera.

Gross earnings.

To see the guests have been very weak.

Due to a bumpy start pretty soon.

By the boxes.

You can go back to <unk>.

That maybe.

After becoming profitable for the first kind of on a GAAP basis in the fourth quarter of 2021, we continue to optimize our augmentation on structure and technology platform in the first quarter of 2022, which boosted our operating efficiency and contributed to stable operating result.

Notably our first quarter revenue rose four 4% year over year to RMB $517 million or gross margin increased by 700 basis points year over year to 32% and we have achieved a profit on a GAAP basis for the second consecutive quarter with net income.

<unk> 13, 84% quarter over quarter to RMB 16 $42 million.

Thank you.

Exactly.

In some parts of it.

Some do come and go ahead Ken.

Yes.

Thank you for that hotel.

Thank you Robert.

Chancellor.

Well thanks appreciate that.

This is an issue.

Great.

You brought up excellent.

Sorry, you issue would be permitted.

Tony You don't Brian Kingston.

Right.

It will change.

Yes.

Thank you.

Yes.

Sure.

Thank you Linda revenues.

Fuel prices go up.

So.

In Kenya.

Thanks, Tony.

I'll leave it there.

Got up to support the rollout.

Hey, Scott.

Well thanks al Thank.

Thank you Joe about asking.

In the first quarter, we remain focused on building, our competitors' audio centric ecosystem, improving product functionality elevating overall user experience and actually exploring overseas market to implement our globalization strategy. Meanwhile, we continue to reinforce.

Our new suite of technology to empower product innovation and business development in terms of operational data total average mobile meus amounted to 51 five minute, an average mobile app and use of our audio entertainment business increased by 11% year over year to $9.

$14 million.

Thanks to the continuous optimization of our operational strategy.

Average monthly paying users maintained year over year growth in the first quarter to reach 482000, net I will share more color on the development of different business segments.

Sorry <unk>.

Well, Nancy Zhou Sandra, Indiana, So Jason Tiger three.

So we're thinking late.

<unk> you look at.

Jonathan.

Yahoo tender.

Gotcha.

Yes.

Sure.

Well then.

On the Yahoo centrally.

Shimon.

This is sandeep.

Revenues for chicken feet.

Thank you.

Well, let's see.

Good day.

Copy purchase outlet boutiques.

Another thing Thats actual theater.

Sure.

<unk> had to incur.

Sealy minimum transalta.

Steven cargoes that are trying to beat the consortium.

Okay.

Being able to look at anything.

Some of opportunities.

With respect to audio and infotainment, we continue to enhance the competitiveness of our auto centric ecosystem by focusing on core content categories and the audio entertainment business to drive user growth and commercialization performance in the first quarter of 2022 the user penetration.

Rates of our auto independent business expanded from 13, 8% in the same period last year to 17, 7%.

Furthermore, we continue to launch a series of operational campaign, featuring Theyre trending topics and holiday thing with our diversified operational strategy more content creators will you encouraged and motivated to engaging content creation, which in turn attracted more users to join real time.

Audio interaction.

Unleashing the commercialization potential of our audio infotainment business.

Sure.

Okay cool.

Youll Cross Huntington Com.

We don't think so.

So most of the tungsten.

Tore the ideal scenario.

Bob.

All right.

<unk>.

Please read our Omnipod political.

Yes.

Colony Cove tease out from the crowd.

Cause you at all.

Tom Polen go ahead.

Hi, Jonathan.

Our total target.

Great.

How does that relate to yet.

Since our combination.

You'll start with Dana Kingarth to avoid agenda.

Great.

This is John <unk>.

In our IP protocol.

Appreciate it.

So hats off to them.

Sure.

So I'm going to use it.

So simple.

In addition, we have been consistently increasing and optimizing our product features and they are near 10 million interactions formats to facilitate business model innovation and expand the commercialization of high quality content in March we just started collaborating with the designers all your brands.

On a vehicle to integrate quality calls brand image into an era of interactive functions in the audio entertainment section of the DJ App, creating online raptor narrow for the brand IP and providing users with a diversified online entertainment experience.

The collaboration has been the traction among the leadership at younger generations users and has in fact to be first data close interactions between content creators and users on the tablet.

Going forward <unk> expects to collaborate with more Grand IP to further diversify usage scenarios for online interactive entertainment leveraging the strengths of both parties to maximize mutual benefit.

Sorry, changeover put us on mute.

We're launching a buoy ocala changeover, so dot com.

Thiago coming woman.

So thank you.

Okay.

Hi.

Well Nancy.

Additionally, the botox.

<unk> put on congenital Donaldson.

Thank you Sir.

Yes.

Got it.

Gary You said you also don't classes.

Hello, and thank you for that.

Especially of Franco Nevada.

Thank you <unk>.

Joe Bob and good day gentlemen.

Johan <unk>.

You sound a little tender so Dr. Kelly.

CVR.

Anthony.

Thank God.

Bob.

Johan.

So we don't see that.

Against the dollar.

Since the local governor Hogan, Dr diagnosis or put under <unk>.

Sure.

<unk> taken that into a transition agreement.

Alcohol.

Yeah. Thanks, Jason.

So how quick on <unk>.

Sure.

Conduct Cumulus alone.

Turning to our global expansion, we continue to refine the features and functions of our global social product here.

Launching kiosk real time interactive group space, we have improved the product versatility and usability by upgrading the proofs based interactive functions based on our insights into user demand, making online connections and the social engagement easier for our users.

Also continue to enrich the features of the approved space in line with our users diversified preferences.

Through our growth strategies, such as upgrading the acquisition of grass connections and simplifying mutation pathways, we optimized the product mutation mechanism and good social efficiency among users, notably building our in house suite of technologies and AI capacity.

We added dedicated user experience by improving the recommendation feature giving users directly to attack to the interactive group with just the one click so that we can attract some more active users to join the group space and promote real time interaction and connectivity.

Furthermore, we unveiled more innovative function going here, including awards tendered last uses to offer their wife, using venmo, Kolkata and in fact make.

Real time interactions more fun and lucky.

Coming from Linda Youll, probably have not.

With a lot of other clinical trials.

Thiago Yahoo trying to carefully.

Third our payable that Houston.

Hi, Peter.

<unk> can be.

The other thing wages back office can.

<unk> revenue was achieved.

Yes.

Yeah.

Yes, Hello, Thanks, Julien that issue.

Chan from Keith <unk> occupied.

Sure.

Chamberlain, who don't especially yoga.

Thank you Sundar change absolutely.

Thanks for the time.

Sorry, Jonathan.

Change.

Dr Gordon with Keybanc.

We're working through.

You bet.

Senior debt.

Santa Barbara adhesive.

So Yahoo searches didn't seem to believe that without Houston.

Hello.

Well Linda.

Yes, sure banquet Thiago coming online.

Who controls Chang from Goldman.

Who don't Alonso.

Thanks.

Our total accounting Kevin.

So it does visuals.

Got that.

Hey, Ghansham.

Okay.

Go ahead Jim.

Rob so they'll come in.

The optimization and integration of product features and increased interactive functions have further boosted tier user engagement and user activity in the first quarter. The average daily time spent on the app per user increased by 42% year over year and the number of daily messages.

Per user rose, 57% year over year.

As of the end of March the number of pairs of grants connections grew 387 times compared with the same period last year.

In addition, the continuous optimization of UN global interactive functions also use activity drove the crude penetration rate and the user engagement.

In March the group penetration rate grew 257% year over year, while the number of active crews crew 377 times compared with the same period last year. The group penetration rate of new users continuing to delight, reaching almost 70%.

Along with a significant expansion in the percentage of new users who are second half groups on their own initiative.

Looking ahead, we will continue to be reached as product features based on user experience and launch more innovative functions and interactive features to meet users' online social needs more diversified range of narrows and building a global social product with wider applicability with it.

Tennessee and usability.

Hello Guy.

Camping gear with Amdocs is reflecting.

Thank you.

So I don't want hosting fees with the product.

Being able without obviously and diesel yields and competition.

Hello.

Well then thank God.

Oh, I'm, sorry, I'm being issued opinions.

So Shannon founder time influencing Keith.

So look I mean the.

Hi, Bob.

Got that.

Okay.

Europe , I think Obama took office.

So you said listen Keybanc.

Jody.

Sure.

Thank you Susan.

Yeah.

He set up towards that project.

Recently, I am excluding Huntington Guy.

Hum.

Ingo Destocking at Tanami.

With him in the company both on the diesel pushers.

How close is the sungard going to Barcelona.

Got it.

He goes to a simple.

They will come to you.

Great.

Four months, we have seen.

We've got about three additional dose.

You die.

Common language.

Yes.

<unk>.

Sorry, some of these geographies with <unk> Suisse.

So this is going to be pricing in the paper.

Since our founding.

<unk>.

Alongside our substantial progress in product improvement during the first quarter. We also continued to advance the development of our core technology reinforcing our in house technology contribution into business growth.

For example by building and improving our <unk> product technology platform, we enhanced the bulk product reusability and product development efficiency.

Also by strengthening our smart housing system, and optimizing our marketing capacity and the promotional strategy, we effectively boosted our overall operating efficiency. Furthermore, we increased the value of key technical metrics by solidifying our core technology Foundation.

Our <unk> voice messaging platform mobile App and real time audio and video streaming technology platform. So let me provide our product with does not look to call support on multiple fronts.

Including enabling the implementation of customize the voice related functions, while also offering a seamless real time interactive experience.

Going forward, we plan to continue expanding the coverage of our in house technology, we expect to achieve a 100% of the application of Florida Act on here in the second quarter, which will lower our technology costs, while also supporting the divestment of more innovative and customize the <unk>.

Option and enhancing our product differentiation advantages.

The tender issues are coming to you.

Local currency.

So the total balance.

You will need us.

Yes.

Well, Linda Cook our engine company.

Mr Guardiola xiaomi could be timing of the contract.

Being a concern.

And then just on.

Cheetah impact each other.

Sure.

John .

The coconut oil <unk> linking tiger congrats on the geology and Keith.

Great.

Well no doubt issue for you so.

So that easily.

Sure.

I'll go through our Turkey, the young woman sequel, Godzilla Boy I'll call. Good thing product so the idea here.

Our leading suite of technologies and the product optimization and innovation also bolster the beaches strategic multi device product roadmap.

In March our <unk> car audio product was integrated into the vehicle operating system of lease model, a technology oriented smart EV automaker through the new car dominant quik App platform pre selected premium forecast of content and an important market other experiences to.

A broader user base.

Looking ahead, we will continue to deepen our presence in the in car audio market, hoping to provide more users with high quality, while the ranking and customized in car audio experiences.

So I'm here, yes.

The society to the Yeti.

Sure.

And in Nevada.

We will adjust for the diesel.

Sure.

Yes.

Tissue processing.

And you should believe some caution even walking.

Understood.

Hi, Jonathan.

<unk>.

T cell gene target.

Sorry boutique cros that have done.

Hello, John .

Thank you so you're also hoping before you can sell it.

Councillor put on desktop.

Roger.

Two questions.

Can you somehow along the way.

More.

That's very helpful.

Well as Steve Anderson.

I can do that.

Well, one thing you need to do.

Some of the thinking.

Thank God.

We don't know who don't turns out Jonathan.

In summary, our performance in the first quarter laid a solid foundation for our full year development going forward, we will maintain our effective refined operational strategies and remain committed to tap into more commercialization potential while attracting with thoughtful locations dynamically to.

<unk> operational efficiency.

On the international market fronts, we will fully leverage our core technology advantages and localize the operational strategies to explore different markets.

Discover new business growth opportunities.

And our overseas user base and boost the commercialization, bringing additional upside to the <unk> group's overall development.

We are fully confident in the long term development and will continue to dedicate ourselves to creating greater value for our users and shareholders.

They should adopt.

So I mean to them and therefore.

Therefore.

What's your thoughts.

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

Thank you the think of the low ash Hello, everyone.

Our first quarter results demonstrate our growth trajectory driven by the continuous improvement in our operating efficiency first culture.

Gross margin grew to 32% up several hundred basis points year over year.

Casually with Chipotle come RMB 16 formula in this quarter, representing 84% in Texas to increase.

Going forward, we will carry on.

Im guilty of more competitive akio ecosystem pursuing diversified commercialization avenues and advancing our technology capabilities.

We're confident that those endeavors with strengthening our core competencies and empower us to create greater value for our users and shareholders.

Locke and providing a brief overview of our financial results for the first call jobs into 'twenty two.

In the first quarter.

Our total net revenues were RMB $560 7 million, representing an increase of 4% year over year, primarily driven by the increase in the number on paying user and as average amount of this spending our audio entertainment products.

Partially offset by decreased advertising revenues, which was made due to the increase in the number of advertising project.

Cost of revenue was RMB $348 6 million in the first culture of this year, representing a decrease of 6% year over year.

Memory due to the adjustment of the revenue sharing policies regarding the decrease in revenue sharing fees.

Gross profit was RMB 168, 1 million in the first quarter after 'twenty two.

Representing an increase of 34% year over year.

Margin.

non-GAAP gross profit was <unk> hundred $70 7 million in the first quarter opportunity, Jimmy Choo, representing an increase of 34% year over year.

Our gross margin for the first quarter of this year increased to 32% from 25% in the first quarter up to interest into us.

non-GAAP gross margin for the first culture of this year due to a 33% 46% in the first contract would you did you want.

Operating expenses decreased by 22% year over year to RMB $153 five minutes in the first quarter of last year.

Research and development expenses were RMB 71, 1 million in the first culture opportunity into two representing a year over year increase of 25%.

Increase was primarily due to higher salary and benefit expenses and original your expenses.

Selling and marketing expenses were RMB 60 million in the first quarter. After an extended two representing a decrease of 50% year over year.

Primarily attributable to the decrease in the promotion and marketing expenses.

And partially offset by the increased salary and welfare benefit.

General and administrative expenses.

<unk> formula in the first quarter of this year, representing a year over year increase of 14%.

The increase was mainly due to an increase in salary and benefit expenses at a rate of expenses.

And operating income was up $14 6 million late in the first quarter opt entered into two compared to a loss of RMB $72 two minutes in the first quarter due to new work.

non-GAAP operating income was RMB $23 4 million in the first quarter of this year.

And back to a loss of $64 million in the first quarter after neutral to us.

And non-GAAP income was RMB 16 formula in the first quarter. After Newton you too are compared to a lot of them be 70 million in the first quarter of last year.

Our lockup income was RMB $25 2 million compared to non-GAAP net loss of RMB 61, 8 million in the first quarter of last year.

Basic and diluted.

Net income.

For RP subject to its actually in the first quarter up 10 to 22 compared to basic and diluted net loss per ADR.

<unk> one was flat in the first product and into July .

Our non-GAAP basic and diluted net income per ads were on.

The 14th <unk> in the first quarter opportunity to do one a compared to.

So when you're trying to compare to non-GAAP basic and diluted net loss of RMB 133 in the first quarter of last year.

As of March 31, 2022, we had cash or cash equivalents short term investments and restricted cash of RMB 545 minutes.

Okay. This concludes our <unk>.

Ill prepared remarks today, and we will now open the call to questions. Operator. Please go ahead.

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

Our first question comes from the line of Vicki Lee with Citi. Your line is open. Please go ahead.

Bonnie turns alcohol. She says just all of the two lung Oyola Michelle Linn T. He just.

Sure Bonnie Togs tender woman she bought Ashok Mcqueen.

Just as a dredging Jim Guadeloupe waiting to do a million P. G go yeah, I'll lead you usually shop.

When a deal gets LNG traveled Holy Aloha.

Yeah, well, maybe we can.

Did you highlight.

Our coordination times you get on the P&L.

What's really funny.

Thanks for management for taking my question. So what does management think of the lights to remove regulations on shipping.

How does that impact or do you like to the main sector and BG.

My second question is make causal.

Optimization, Chad in China Internet sector, how should we think of the balance of the Jeep between investment in overseas demand.

Domestic market. Thank you.

Paul <unk>.

<unk>.

Without going into the winter.

So Marco.

So in Kansas because of that.

So what I'll call the greeting.

Keeping that though.

Oh.

We bought that Shakopee swallow.

He chairs the greedy.

So it kind of took a wait and see.

Yeah I'll call it that.

So new shades of loyalty.

Thank you.

So as I said the income supported hub.

How do you tie that to be a leader.

Bob.

Two switching going job refunding.

You bet.

Doug Collins.

Okay.

With them.

Basically the chinchilla.

What I saw with the holiday.

Thank you.

I will translate for macro.

Yeah.

The questions were answered by Michael and I will translate for him.

On a standardized operational mechanism and in strengthening the protection of minors, so that will deliver long term benefits.

Uh huh.

Yes.

Bill.

Golden State.

Okay.

Mr Doyle.

You'll have with Tulsa.

That's why the altra.

That's the minimum.

With Goldman Sachs.

He was on the other malls it publicly.

Well the deal Tonight.

Thank you.

Yeah on that one.

Or.

As you can tell I'm glad that somebody soon.

Yes.

Someone a phone call or multi hub we go on.

<unk> excuse me the future.

G suite.

Well sort.

Thanks.

For some specific rules, we have optimized and attractive product and operation to meet our compliance requirements.

And it takes us time to be prepared we have launched a special moment for minor users earlier, including setting up the inclusive content pool for the miners for audio entertainment. We have also carried out identity verification staff for almost any established the risk control.

And across staffing mechanism. So overall, we are well prepared.

Sounds good I cant say ingredients without E channel well leave sorry pardon me.

This appointment so solar.

You bet Charles.

Thank you Bill.

It sounds like it's <unk>, it's useless to see me to answer.

Uh huh.

Don.

We didn't want them holding things up there.

You bet to yoga, but tell them I mean.

That's correct.

But you will go to school.

Generally before the introduction of the new regulatory requirements. We have already made a positive adjustment to the approach stock and operations and we'll continue to ensure mechanism. According to the key talent and requirements, we will dynamically monitor Tianjin.

Later, roop, groundwork and actually optimized and adjust our product and operational strategies to better serve our users.

They are going to use two one years. So my so they'll have I close the vote.

One of the issues.

Alright.

So julien.

Cool.

Well many things.

Yes.

That does come in.

Lee.

It seems like you can do a biopsy.

Im pleased those off the balance sheet.

Processes.

Which got a woman.

Maybe it was in <unk>.

We can lever.

We can then go away.

What do you call. The highway you would've thought that people goose.

Well, John can equal to teach them because that's also a year where the EBIT.

Hugo.

The second question is about the balance between the investments in overseas market and domestic market.

In the first quarter of this year, we have achieved the profitability are calculated for the second consecutive quarter with a net profit of RMB $16 42 million, representing a quarter over quarter increase of 84%. So far our domestic business is already profitable.

And providing support to the group's overseas business.

Going forward, we will further improve the operational efficiency of our business and increase our profitability.

How are you with some people rule will then all of a sudden.

<unk> gone through the financing.

How's that.

It's a holdco bond man hung on that kind of thing.

Hi, why you whether you would go down that's cool.

Yes.

Well many of you on pool with Honeywell.

Hi.

That's the one time he will tell you.

Oh the Yoplait.

Schedule for that.

You bet.

We are prudent according to the global business without investment.

He will make dynamic or trough months. According to the development of the product in terms of customer acquisition strategy.

I'm, a long term perspective, our user growth strategy for overseas business, mainly focuses on organic growth, we hope to strengthen the network effects of the product through the optimization of product and operational strategies and attract more users and achieved organic growth.

Okay.

If I'm here with me.

But on the other.

Yes.

Oh Boy, Oh Boy Bluebells coupon that you bump.

So in fact I was out.

Yes.

So yes, it's all formula when they used to do de Chile Keystone goes in the future.

Houston.

The woman.

If you go into the product.

Due to that.

Understood.

Women equally ballpark with other companies.

On the other hand, we will also fine tune marketing investments based on our product development stages and talking market confusion as to research and development, we have been accumulating and elevating our quality technologies, which may enable us to reduce the <unk>.

Cost of business expansion and scale, while providing customer customize the product technology support.

Hi, why are the usual format.

Sure.

Yes.

So it's all it's very reliable.

However, you will you'll hear two things on your call.

So every woman sorry, like I'm sure you all saw the shoulder of the laser.

Don can I saw what you said.

Cool.

Here with my father did go up.

Yes.

But we also see on the page.

Uh huh.

So you think <unk> again here.

Okay.

With.

Yeah, good about com.

We can't tell you, that's an awful close enough yet being equal.

Thank you Doug.

Suzanne will Linda.

It would have been positive.

For global expansion is not only about investments, but also the commercialization opportunities. We are expecting the commercialization of our overseas business may agree diversified our revenue streams in the long term you shot we will continue to adjust at the old location of resource.

Do the evaluation of different development stages of the business.

Thank you thank you Ricky.

Thank you. Thank you.

Thank you and again, if you would like to ask a question at this time. Please press Star then one.

And our next question comes from the line of Carol with Southwest Securities. Your line is open. Please go ahead.

Hey, Glenn it's all how can I think I saw that Sheila Oh, do based on Tonight going to lunch or handouts.

<unk> G I Joe.

What are you supposed to go down.

Oh, I'm, sorry, I, just I'm not sure it will.

Or should we say neutral hi, Tony got samples.

I got that abated, She's got Outta have I end up with two delays no milk and all the things in place.

The one that just got started and they go how I don't want you to help them deal with doctors.

Book to Bill was Amanda.

Thank you management, taking my patches.

First question I thought all of assistance based on timing after that is that that's meant to help think about headquarters.

Yeah.

Do you how are you.

And that's one thing that has its own GOR so Joel.

<unk>.

Cause that maybe brought up at this hotel.

Yeah, Yeah, Great question box for sure look Hey, Chad on changing that I mean, both of them.

Maybe you can tie two months you don't do that.

So Douglas mutual.

Utilized.

CPW either themselves.

So why wouldn't you say.

If you cancel called ICA.

I mean that you said.

The young woman.

Okay.

Hello, Nathan Yeah.

The hotels the kingdom.

Don't get caught with you.

Hum.

For overseas business. Our current focus is to expand the U S market to social product.

With user experience as a call to meet users' social demands.

<unk> product functions and features and to promote organic user growth.

Furthermore, we are also actively exploring and expanding new markets to launch a retreat product matrix.

We use the successful issuance of audio entertainment business and.

We explore new commercialization opportunities.

Yeah.

A senior person would associate as a bug or maybe youll control accumulated.

So a woman change youll have done it a father.

I'm here with a strong team.

With the wireless because the woman who would that be to back them up with you probably he quickly.

Uh huh.

The issue that we have a unique right.

What about on the Johan sponsored tool.

But the deal flow that oil hub, it's mutual.

So establishing <unk> to offer Singapore headquarters.

Have helped us to attract more talent.

To support the development of our globalization strategy.

And drive the business innovation. In addition, we have built a local operational teams in various countries and the region except in Singapore.

We are continuously supporting product optimization and innovation.

Localized operation to meet the diverse needs of local users as well as well as our global users.

W. R Y ear buds that viewpoint.

Viewpoint cheap to do so.

Got it.

No.

Here with Apache buybacks in two months do you think that chretien.

Christian being too. So you said a woman change you'll have the tundra.

You can't you would could you share the father.

Going forward, our overseas business is poised to provide upside to the group's long term revenue growth overall, we are confident in the long term development of.

Work has begun and will firmly implement the globalization strategy to achieve as a standalone business development.

And why it's why it's on their networks on school.

Thank you.

Please go ahead.

Alexandria is natural hedge.

Without doing a bunch of high you don't want to really come down.

Yeah Hunter with agile trial Joseph how are you. So did you say you thought why don't you don't have the time that you guys have with them.

Well, how about just your thought Shanghai <unk> Chongqing with Nomura.

Notwithstanding I don't think that should lead to how much of a time window to the outboard Joshua Keystone Alicia harsh alginate, Alex you. Those of you attending have foundry hotline at those shows that these call it for the quarter subordination.

All I can tell it just higher quantities.

I'll follow up a question about all of the states. Please go ahead.

I'd like to know about differentiation.

Pathway.

Jeff part of that.

Yeah.

Hello.

Sometimes it's higher quality jobs.

Well, then conclude central pilots on the coupon there. Thank you.

Yes.

I need to put that.

Yes.

So again, yes, so you're quite right. So do you sell throughs on Nuomi.

So at the other countries.

So those houses with Omega.

Like two months, we'll show.

Killed on Indiana Harbor.

So the other future.

A woman time people watching how're you doing.

Oh Haynesville.

Well, then you should see entities.

Well, let's see.

Your father son woman ULA.

Hum.

On a bundle.

So it doesn't just work with them.

To go down.

Twilio Qingdao.

From the perspective of product differentiation, our globalization strategy. Currently focuses on the expansion of my social product with our core audio centric.

Is committed to creating simple and easy to use audio social tools enhancing the effectiveness on a real time interaction and meeting the diverse social needs of younger generation users.

Quad differentiation licensing product innovation and in house technology empowerment.

The continuous product optimization and operating well.

We have reached the interactive functions to make real time interaction more fun and lapping.

To Sue a month so he thought the tower you apologies.

Yes, thats useful.

Okay.

Yes, I'll handle times and bubble.

No other country, so long that those should be some pharma if you wanted to see.

They don't know how much does it come about.

And those who come to a quality issue.

Woman, so let's see.

Monday I am thinking.

All.

Thanks, Susan.

You can use opinions to slipping type or any seller.

One of the highlights deal with it.

Yeah no.

Thanks, Tom Good some pilot.

Sure.

So the woman.

Maybe on the well.

Good to know how to put it.

Yeah.

Bulk Wally on Pmt's will appraisal Clifton.

Yes.

On the double T yet.

Golf sit down as you can see.

Different opinions, how you're probably okay.

I think the most important differentiation of our product is about the in house technology. We see there are many other products they are using the <unk>.

Technology support from third parties and third the agency, which makes the product more homogeneous and.

And we have got more customize the technological support for the product optimization and user experience through our new house developed.

The voice and messaging platform like quarter Act and the real time audio and video streaming technology platform don't really so that we have more room to grow customize the product features including the personalized avoid tools and enhanced interactive experience.

<unk> in the premium real time interaction to ultimately achieve the differentiated product performance.

Our balance sheet.

So it would be helpful.

So it's gene.

Yes.

<unk> are you asking about <unk>.

Sounds good glass demand.

On them.

Uh huh.

Since almost the doubling up.

Thank you Dirk also modestly on pool.

Three months.

Got it.

When you heard that right now.

Thank you.

Yes.

Sure.

I guess is that you have.

Most of them.

Control.

Talking about Tom.

Thank you.

Yes.

Okay.

Some few highlights comes out of that.

So that alignment.

We also prioritize the effectiveness of the user interaction.

<unk> finally mutation pathways optimizing the mutation mechanism and upgrading the acquisition of <unk>, we hope to make macro for networking more simple direct and efficient and lead the unmatched social needs of users, while bringing them a new national training Center.

As mentioned earlier, we also expect to have diversified innovations and at a time in the business model and the commercialization models to bring more diversify the income sources to the crude.

Thank you.

Hi, This is Sam.

If you go out and make them all they need.

Come out since I'm sure go ahead, a J Goldman company hasn't gone out yet I assume already knew Washington, What was your question Mike.

Oh really.

Go ahead.

I think it goes back I was at the end.

My third question is about to close part of the module when and how will that improve Telegraphing Sharon Cook.

Outdoor entertainment. Thank you.

Thank you.

Molly.

Sure.

Algeria and elements that hopefully the kind.

What kind of woman. She just I thought it's useful John Bolla woman I'll leave you to something that I think.

Okay.

She says a woman computer Italia women's at Sangamo EBV T cell shipping actually if at all.

So you sum P value leadership in Melbourne, Sydney site.

Come and they go to your.

Kind of La Quinta.

Feedback.

I think what you the answer to the Qdoba woman dose, we can obviously do that with both the teach them.

<unk>, that's all about buyback stock.

<unk> continues to achieve some cheap academia.

So you should come back with him when he also likely see Niels.

Homes with a sense of a theater.

Sure.

Yeah.

Q Dan.

<unk> 20th shotgun Chew bags.

You can see how soon do you want.

So that opens.

Opens on the Q2, but since I was hoping that you get.

Past the several consecutive quarters.

The gross margin in the first quarter of this year increased to 232% with the 700 basis points increase from the center of the last year as for the cost of revenue and net income from the.

New sharing mechanisms.

Thank you sung <unk>.

Yes.

In Q4, John diesel, sometimes a few tweets in Mali.

<unk>.

Your appointment.

Q2s that you'd be you don't get what he meant.

Sometimes people don't quite yet.

Hello, Hello, Gal does show that these going out.

So that sounds good.

Sorry, I tell them okay.

Chemicals.

Tom.

Gili.

Wonder woman you guys John .

So I don't bother you well done.

Congress.

Your question Steven.

Thank you sung <unk>.

Sure.

King and diverse supportive policies, we will keep motivating all content creators, while also optimizing the revenue sharing ratio.

Along with that we aim to improve the engagement of mid to long tail content creators through diversified operational activities and optimize the cost structure to achieve higher gross margin.

Yes.

You have been watching this as well.

For all of our teammates.

Campbell's soup accounting.

<unk> uhm.

All of the political.

<unk> won some good about it.

Okay.

Thinking back to <unk>.

<unk> your bottom but.

Well from that.

Yes, I mean, Saudi.

You bet.

Okay.

In addition, we also plan to realize the innovation of the monetization model through entering new markets and the incubating new products are going.

Including the introduction of revenue streams, we have higher gross margins to improve the overall performance.

So in summary, we are confident that we are able to further optimize our cost structure in the medium to long term and improve the operational efficiencies and overall profitability.

Thank you that concludes Michael Anthony.

Thank you. Thank you.

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

Thank you once again for joining US today. If you have further questions. Please feel free to contact me Investor relations through the contact information provided on our website at <unk> <unk> or the Piacente group Investor Relations. Thank you.

This concludes the conference call you May now disconnect your lines. Thank you.

Q1 2022 LIZHI INC. Earnings Call

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