Q3 2022 HUYA Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Yes.
Hello, Ladies and gentlemen, thank you for standing by for the third quarter 2022 earnings Conference call for <unk>, Inc.
At this time.
All participants are in a listen only mode. Today's conference call is being recorded I would now like to turn the call over to Smith <unk> Company Investor Relations. Please go ahead.
Hello, everyone and welcome to who yes third quarter 2022 earnings conference call.
Company's financial and operational results were issued earlier today and are posted online you can also view the earnings press release by visiting the IR website at IR.
<unk> Dot com.
Participants.
Replay of the call will be available on the IR website, a few hours.
It depends on today's call will be Mr. Around yet, though chief Executive Officer of Korea, and MBS actually will invest precedent all finance management will begin with prepared remarks, and the call will conclude with a Q&A session.
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 also to increase.
Such the company's results may be materially different from the views expressed today.
Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U S Securities and Exchange Commission.
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 other GAAP financial information as well as our audited non-GAAP financial measures.
<unk> press release contains a reconciliation of the non-GAAP measures to the audited most directly comparable GAAP measures.
I will now turn the call over to our VP of finance Ashley.
Well read today's prepared remarks on behalf of Mr. Dong. Please go ahead.
Hello, everyone. Thank you for joining our conference call today.
Pleased to deliver the building leased remarks on behalf of Mr. Don.
Although Mike who had been continue to impact during the third quarter of 2010 to two.
We managed to further grow our active user base year over year and quarter over quarter.
And improve our top and bottom line on a sequential quarter basis.
Our total net revenues.
Approximately.
Two 4 billion.
<unk>.
And our non-GAAP net income was RMB.
$106 million.
Third quarter.
In terms of user growth.
Yes life average mobile app.
Rich.
Thanks Julien.
Good quarter.
Bingo.
Great.
Relatively high fee in the summer of last year.
The promotion.
This growth is encouraging.
Particularly as we have implemented well.
Change in marketing channel spending strategy to help kind of typical.
Also.
Our efforts to enhance user interactive.
And offer attractive gaming and entertainment content not only contributed to the increase in used to skew.
But also through <unk>.
Engagement across our pretzel.
In the third quarter.
I wish they'd be tight.
Okay.
And the next month or so.
Retention rate stabilized and above 17%.
Next let me share with you some updates about our products and technology advancements.
Embracing the churn of virtual ISG name.
We think developing digital human <unk>, a whatsapp like broadcasting too.
On our platform.
In addition, we have recently booked.
Integrating virtual stream screaming technology with our broadcasting session.
Our goal here is to create more monthly.
Steve Lindsey.
By more interesting interaction and high quality content production for our users.
Specifically when you recently introduced.
Sure lifestyles to encore.
Open platform.
Its been seamless a new license.
In which the image and action of the streamers.
Automatically recognize.
The background and the streamer can also be separated.
Which streamer, Jeff Bob the licensee to a coupon with stage Wednesday testing.
Dan and pray musical instruments on the virtual stage.
The audience also heft there what's your characters.
That they can control and use to interact with us Jean Marc.
This feature has been well received by our broadcasters and drove into summer broadband one Justin virtual events were held on our platform.
Including why sponsor and spin E com.
Which strengthen reaching rough patches and Houston.
Moreover, by partnering with the gang cost vial.
And using on virtual reality technology.
At launch the industry's first virtual willing feature autonomous live broadcasting during the final of course file quality in Orca.
After entering the roadshow equal when you came in late for this game.
You were able to choose.
Scheme. They wanted just recall.
And a lotta raza corresponding team.
And get together with <unk>.
In addition to watching the competition.
This could also really move water around the venue.
And will this be in the game Jeff.
Jeff.
In a life event.
Additionally.
You just expressed support for the spirit team.
Spending on virtual firewalls.
At the competition in those notes.
That's the background of the venue.
Bringing the audience and even more immersive competitive atmosphere.
This new <unk> feature.
Solid traction.
On slide 8% increase in Lisle with engagement.
In the active activity during the finals.
In the 2022 system of League of Legends World Championship August 2022.
Jeff Andy earlier this month.
We also initiated several industry leading upgrades.
First.
Building on our success in the cross fire events.
And enhanced virtual win.
That typically design, whereas 2022.
Hawaii and immersive virtual willing option.
We also extended the HD capable this great.
Thoughtful watch viewing.
<unk>, our mobile App.
Page and PC for both last Jimmy and on demand video.
Offering users more precise is seen.
Across different devices.
Furthermore, we introduced <unk> assistant feature.
The events that greatly increased five users ability to obtain Tom elaborate data information.
It allows user to aetna the historical much nature coloring team in France.
This SKU values and other key data in real time without leasing device page.
User can think refined touched in a mobile screen.
The mall over at our previous profile image Keane.
King.
During the road 2022.
Manny mentioned well.
Mike or R&D.
Morning in China due to the time zone differences.
In addition question Mike.
The replay.
Those competition.
Very popular among users.
Thank you.
Last year's event.
With dose.
Hey.
<unk> top spot in our video banking.
While.
We introduced incentive activity to encourage.
Our original video content.
Asian in relation to the world.
In 2013.
Youll GC available in this tournament discussion.
Our Tiger Chit chat community.
Allowing users to easily participate in events discussion and interaction.
With all of.
Our efforts in operational expertise in esports.
<unk> continued to achieve eating market share for this highly anticipated event.
Sorry.
Pharmacy like streaming regulation.
Introduced in May.
Our technical product and operation adjustments.
Our live streaming revenues.
If the results are.
Our domestic live streaming revenues in Q3 slightly decrease by low single digits compared with the second quarter.
We have been working to mitigate the impact by.
Dramatically adjusting our monetization strength ticket.
We will also continue to comply with regulations and improve our close bonding technology.
And operating practices to support the healthy and sustainable development of our platform.
In summary, we believe our ratliff effort to improve my streaming technology.
Explore new product position.
And in which our quality content.
That's our engage with our users.
This measure at this time too.
In a stronger position to capture future opportunities in.
In the game and like G&A market.
In light of the persistent challenging market condition.
It is also why tool for us to continue to exercise prudent.
Strengthen our business and financial Foundation.
We will strive to further optimize our operations throughout the organization.
And maintain our competitive edge, while we continue to navigate the fluctuating market.
This concludes Mr. Chen's remarks.
So.
Now I'll continue with some updates on our content enrichment and diversification.
In the first quarter of 2022.
We brought <unk> around thank you.
Third party professional E sports tournaments.
The most popular including the summer season of the cough medicine quality L. P M.
Holly PPL and crossbar wholly CFP al.
Yes Cody.
<unk> 16.
Notably.
The number of peak concurrent user.
After our key outbound improved by two 7% compared with the Purist addition.
As we continue our.
Strategic for time alone Pokemon.
<unk> license esports tournaments.
In the first quarter of 2022.
Compared with the same period last year.
However.
Total viewership of those events reached approximately 660 million.
Representing growth of 12% year over year.
On the front end of our self organized esports tournament and entertainment features.
No.
We are broadcasting.
23 events during this quarter.
Generating total real issue.
Approximately $100 million.
The first of a series.
On the off Kings.
And the Peacekeeper elite after Mark Hoppe.
Both our major we have Randy <unk>.
<unk> performed well this summer.
Thomas J <unk>, the appeal of our mobile esports events.
It is also worth mentioning that.
Our long standing we're comfortable carnival.
Thanks Marshall.
<unk>.
How is sixth season.
And become influential IP for us.
Linking the life broadcasting industry and the physical spot.
This time the event also Fisher competition in <unk> setting.
Sonya academic.
I think elements of Chinese traditional culture.
Okay.
It was well received by our audience.
Both the number of events yours.
On our platform almost doubling compared with the peerless season.
Let me provide some updates on our operational optimization efforts.
Beginning in April .
We strategically adjusting our overseas business to allocate resources to key areas.
This initiative has resulted in a more streamlined and efficient business.
Our operating loss in this segment.
We are looking forward to further benefit from these adjustments in our overseas business.
Additionally.
In the fourth quarter.
Our optimization initiative.
It was brought pasture related cost.
And then with usage.
To reduce the total cost.
Driven by savings from sales and marketing expenses.
We are encouraged by it.
The decline in total operating expenses in Q3.
Saving approximately 27%.
Year on year.
Next moving onto our Q3 financial details.
Our total net revenues were RMB 248 billion for Q3.
A decline from RMB 298 billion for the same period last year.
Nice streaming revenues were RMB two Paul you'll go to Ian for Q3.
<unk> was RMB two 6 billion.
Yeah.
The decrease was primarily due to a decline in the number of paying users.
The average spending per paying user Oh, we allies.
The recent.
Michael and regulatory environment, but the Wesley effective paying user sentiment.
Our tightening and other revenues.
I M D 361 million for Q3.
Compared with RMB 374 million for the same period last year.
Primary due to soft demand for our tightening illnesses.
Resulting from the challenging micro environment.
In Q3 2022.
<unk> licensing revenues.
A relatively large contribution to.
Advertising and other revenues.
Mainly due to the fact that revenues from licensing.
Esports tournaments broadcasting.
Are recognized according to events scheduled.
And experience fluctuations between different theory.
Okay.
Cost of revenue decreased by 17, 6% year over year.
To RMB two four.
4 billion for Q3.
Primary Youtube.
Sure.
Tech and content cost as.
As well as bandwidth.
This call.
Revenue sharing fees and.
Content costs decreased by 15, 7% year over year to RMB 117 months Elian for Q3.
Primarily due to the decrease in revenue sharing fees.
Both the AP was the decline in <unk> revenue.
And Lacoste.
Great.
How does that cost.
Kris by <unk> five points.
Year over year to RMB 115 million for Q3.
Primarily due to improved bandwidth cost management.
And can you.
In the half.
Okay.
Net is open bandwidth usage.
Okay.
It is now.
Awesome.
Okay.
Yeah.
Yeah, I would like to.
At the close out 2020 to broadcasting.
Yeah.
Well.
Our Q.
Okay.
N O ran through.
Sure.
Yeah.
Period last year.
Yes.
Therefore.
Bulk.
Gross profit was.
Okay.
For Q3.
Primarily due to lower revenues.
Gross margin was 14 four for Q3.
Excluding share based <unk> from China.
Okay.
Yep cloth steak.
Was RMB 351 million.
And non-GAAP gross margin.
Was.
Got you.
Our Q3.
Please go ahead.
<unk> expense.
Yeah.
Hello This is Linda.
Per year.
179.
<unk> million for Q3.
Primarily due to decreased personnel related expenses and share based compensation expenses.
Sales and marketing expenses decreased by 45, 8% year over year to RMB 124 million for Q3.
Primarily due to decreased marketing and promotional fee.
As well as personnel related expenses.
General and administrative expenses decreased by one 8% year over year to RMB 79 million for Q3.
Other income was RMB 44 million for Q3.
Pam with RMB $95 million for the same period of 2021.
Primarily due to lower tax refunds and government subsidies.
As a result.
Operating income was RMB Chow.
Millions for Q3, compared with I M D.
$83 million for this thing peeling off 2021.
Interest and short term investment income.
M 72 million for Q3.
Compare with I M D.
$63 million for the theme here of 2021.
Income tax expenses were RMB 20 million for Q3 comp.
Compared with RMB 41 million for the thing up 2021.
Primarily due to lower taxable income.
Share of income in equity method investments net of income taxes were RMB <unk> 5 million for Q3, compared with RMB 379 million for the same period of 2000.
'twenty one.
Primarily due to the investment income.
Two a disposal of equity investment in the first quarter of 2021.
Net income attributable to <unk>, Inc was RMB 68 million for Q3.
Compared with RMB 524 million for the same period of 2021.
non-GAAP net income attributable to <unk>, Inc was RMB 106 million for Q3.
Compared with RMB $180 million for the same here with.
2021.
non-GAAP net margin was four 5% for Q3.
So I look at net income per ads was RMB yoga quantified.
Q3.
non-GAAP diluted net income per ads was RMB yellow.
144 for Q3.
As of September 32022.
The company had cash and cash equivalents.
Short term deposits short term investments and long term deposit of approximately RMB 11 billion comp.
Compared with RMB 10, 7 billion as of June 32022.
With that.
I would now like to open the call to your questions.
Thank you management.
We will now begin the question and answer session to ask a question. Please press star one on your telephone and wait for them to be announced put about their pets of all participants on today's call. If you wish to ask your questions to management in Chinese. Please immediately to repeat your question in English.
One moment for the first question.
We have our first question.
Comes from the line of <unk> Zhang of China Renaissance. Please proceed.
Hey, good morning Sanjay.
Or demand Alan Shaw theaters do you guys recall you asked finally, Dan you wake up and we'll put you much so much as well.
10 years. After they were telling me that Pls catch Bill I'll tell you something I know now Antonio your corn share thats somebody older adults.
One of the Joe Schwartz Atlanta marker.
Hi, Scott Schneeberger, so yeah.
So thanks for taking my question I have a couple of questions regarding the <unk> O R.
Turning now to performance so how much did that help.
You thought tropics pilot and then second on the other day.
Christian will hopefully about 20 months cost versus benefit.
Thank you.
Hello.
Great.
Richard and then there would appear to us at all.
Yes.
So there's another facet to the Goldman Sachs.
Sure.
Sure.
Jin Guan.
Does that make more attention.
Uh huh.
Thank you David.
For that one kind of just a broader sense.
Sure.
So I'm gonna closing older than one kind of surgery.
Hello, everybody.
So most of it opened yesterday.
Yes, Jason so.
So Japan pool than women.
It gives us time to live in New York.
You have been doing is <unk> been there in Virginia.
Neither classes.
That's 12 ended in early November .
This year's event, we once again maintained our leading market share throughout the entire tournament.
Although the event was held in the United States and a time zone differences between China and the U S had a certain impact on the users watching the life broke on the overall viewing data of our core users remained stable, especially some key data even improved.
These achievements came as a result of our continuous optimization of the technical products and operations and our years of experience in cultivating the east esports content.
Hello, Joe.
Both of them doing well.
China Digital times.
So that's how you want us who's able to you're going after there.
And I'll hop off.
Oh, <unk> I'm sure that she needs.
My name is handler.
John .
It should be out of the hubs of the Cana core that dollar.
Is that.
Yeah.
P P code than the simple course, sweeping Bullock Banca <unk>.
The vehicle Samsung came this uncertainty banking shanda <unk> yeah. So.
In terms of the whole game or mill in Villa cause yourself.
Tom do you know who the technician Visionchina orchard.
More specifically, we are struck to several industry, leading live broadcast technology product upgrades to this event and these differentiated services has further enhanced the users viewing experience. These include the establishment of as 12 weeks.
Lucid virtual lighthouse the expansion of HDR capable display support for our live broadcast and video on demand viewing on App web pages, and Pcs and the realization of user selected for his commentary through the online audio real time analysis technology.
Based on the in depth cooperation with T. J sports. We have also added to the tournament assistant feature which greatly simplified you viewers access to historical match data.
Right.
Forget it in limbo.
Linda.
Tien Tsin Jeanie.
Teachers are so that isn't going away.
So that a woman.
Panda hunger, keeping pulling down the road.
Thank you Lee.
So I'm gonna in Poland Ping Chen at that time, though Shanghai and the shipping so knowable.
Bill can chime in as hunger.
In addition, our cooperation with the league of Legends in the league of Legends esports manager continues to be welcomed by users at the same time. The Tiger Cheech has community that we have launched earlier covers video and graphic communication, which is conducive to users participate.
<unk> in the event related discussions.
The creation of events related videos and other content allow a more in depth committed participation from the users.
So oh brother.
So the tariff.
Yeah.
So.
The other thing is although person since huh.
How do you think or you don't want to admit as Williams.
Marathon one in Omaha.
But the longer knowing who does anything it's all about you that things will be things that are beautiful.
So thanks for your attitude is going to shut off all their names.
So say top tier tournament as well has a positive effect on the user traffic of the overall Q4 platform, but this year due to the time difference of the event and other reasons its effects on mobile and a you may not be as obvious as in preview.
His years and of course, the user level is also subject to other factors such as opposed to summer seasonality and other activities.
Uh-huh malware with is that when you asked your other chombo well show you the insight.
Sure.
Sure Thanks to the Charlotte each of these I'll call. Thanks.
You said you would like to sleep. They want you to the needle chapa with that I will turn the T shown Joe a junior S. G.
Charles.
Okay.
Yes.
You'll see it when you talk about why John P. Tusa, the shopper Hammami shrinking.
Thank you Tanya.
That shows you what you did a showroom with Tianjin <unk>.
Yes, Josh.
<unk> seen that says your crush ore shoot.
So oh God attach it.
Oh shoot ore mined it was issued.
So essentially that Julian it's Jim.
Just found woman, who can do that.
What about the sexual health news all women, how either bookings should let Judith hopper for Sogou.
Julian E T C. What's that you can.
In pricing now Jean Pascal a sore thumb bufano.
Oh sure well when do you wish you don't shoot for that cohort of those hotels.
She is in charge of the show.
Let me answer the cost and revenue impact of the event the cost of US 12 tournaments is indeed relatively high and the competition took place mostly in Q4. So he brought about a significant increase in our Q4 content costs. This is similar to the seasonality impact.
As 11 on the content costs last year. So it might also affect our overall Q4 costs and margins.
In terms of revenue did direct income from live events is still relatively small of course. This year, we have made more attempts and business promotion and cooperation and launched some innovate innovative.
And then specific virtual gifts.
Future will continue to explore the diversified approach for monetization.
As we mentioned before for some important content, we not only consider short term direct cost and income, but also focus on its impact on user value brand image.
One cooperation and et cetera.
Sometimes we'll continue to strive for better terms of corporation to achieve long term benefit.
Yeah.
Hi.
Please take next question.
Thank you very much.
For the next question.
I would like to invite the next question is from Thomas Chong of Jefferies.
Please proceed with your question Thomas.
Thanks, Tom James I'll walk you in.
Sure.
You can see that you bought or sold.
Well I always joke.
Dan.
One that I can be.
Sorry that was tied.
Try to like you said like that one.
Need that starts out.
Theres one instrument, but taking my questions. My question is about the firm.
Outlook about our live streaming revenue and order ahead, given the macro backdrop. These days.
The matters that we will prepay Ken.
Medicaid the impact coming from Debride delisted loses.
Loses spending thank you.
Oh.
Mcguinnes, if all of those who could benefit so with all of them seem to hit a home run one being <unk> in dogs visitors in Hong you also there are some cool.
So Hudson Realty hung in sundry killer T V Telecom Suzanne mill, so the gel hold the single Hey, Dave.
Good you seem to vote, yes.
Thanks Kim.
Total yogurt alpha.
Oh, yeah yeah.
So the songs sequential gain this year.
Uh huh.
The solar then watches are kind of how the fat.
Tissue that one Scott.
Thank you for your question recently, the monetization of our domestic live broadcast business has been affected by the overall macro environment and adjustments based on the latest industry regulations. This relative weakness of the game industry and the lack of new major games.
For a long time has also had a certain impact on the game live broadcast businesses. So Q3 is our lives broke Haas revenue declined.
Prison due to the continuous impact of the above reasons, we will keep an eye on the trend of live streaming income changes.
So I know that had been one on one on one thing you got to hustle prepare things here.
And then in Cologne Mclaughlin going to consider.
Yeah.
And then in liver cancer.
Tissue, the JV Johan Neil Ortho tissue.
Oh, Thank God and then go to your own concern for that you'll see then Jean <unk>.
How do you think is your own call co them in a digital wall.
Yeah.
So on Monday and Tuesday.
She needs a ball Taiwan.
Hum.
I mean, there's no need to vote in the time to walk or you're going to have everything for the lodging sector.
The cell phone that Cindy.
Although there are still some uncertainties in the macro environment will pay more attention to the improvement of the company's own capabilities to continue to optimize the content and technological products and.
<unk> are used as well, but they're fighting rich content in games E sports and other entertainment, bringing users and content creators with better experiences.
For example in the third quarter, we further upgraded the application of virtual life World Class technology on our platform through our virtual lives how seen these streamers can intensify their interactions with the users.
Oh, I'm embarrassed pencil the kids at home here, So Thomas I guess, you need both of the devote here.
I'll take 10 minutes who's on the phone.
Yeah cause there.
So we don't have a dollar change in the Hong Kong. So it's all of the tier they're bound to subordinate on been there the timken value chain.
And you'll see you'll join me and moves to the consumers, who don't Wanker E G.
A lot of attention at this time.
Yeah that is either European kind of sitting right on the center Shuang Congress keep him.
Sure.
And then only angle in which is the local needle.
<unk>.
So I won't.
King had her women.
Young the Tucson man to Chicago saw an angle.
Contango turnkey.
Hello, How's the buzzer.
So as we launch the industry's first virtual tournament lighthouse in August , which fully upgraded the experience of watching events. These technologies, bringing users a new viewing and interaction experience, making library has content more interesting and I'll also.
Conducive to the introduction of Novo interactive game play and monetization scenarios.
We're also optimizing the video content ecology of the platform and third the synergy believe between the lifeblood of cancers and the video content, we can prolong the duration and add to the richness of our use of content consumption.
In addition, we will also continue to strengthen the compliance capabilities of the platform and invest in corresponding technologies to establish a better foundation for the long term healthy development of the platform.
I'm here, yes.
Paul.
Disagree with your way of craziness and he's done it shuang pool mango contingency consortium.
Hum.
Sunday Mattel. It then goes into booties and we won't go there okay.
Yeah, So the open pit.
So.
That's all or change on the horizon, you don't forget that <unk> is helping them.
Oh, no hole with users streamers scams as the quarter will continue to improve the user interaction indicators and retention rate through more in Memphis, where our community based and more interactive product strategies, so as to gradually increasing.
Empower after users on the platform.
Thank you can we have the next question. Please.
One moment for the next question.
Our next question comes from the line of Lei Zhang from Bank of America Merrill Lynch. Please proceed.
Uh huh.
Uh-huh autistic disorder.
Once you take or she's out ways that you are making your hydro toll lodging door that anything they locked up so you put it all on enhance Daniela My grandkids argue about dancing their own poles without toysrus or something that you got Joseph Goldman Sachs I realize what boards are vehicles that don't hit us.
Fisher matches, Yeah, I'll tell you find out Oh, Thanks management for taking my question two.
Two questions here of course to like Oh can you share with us your esports content strategy for next year. When we have our investor are allowed to or this year and secondly, how shall we go cats, our revenue sharing ratio Shannon. Thank you.
Okay.
Hadar Muffin Alco and he will ask me Bang.
I'll keep going through she is still thinking new component of our yen Junkie Nashville.
Our Sanya Shan Shan Shan Julia without culture allow us thinking session fashion cause tissue to Joshua football.
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So she has some with all I can single generating Olsen with <unk>.
Sure Tom.
It's just what's your thinking on how to tell Joe.
Okay and I'm sure. Many industry also ship action before about handmade shrinking.
<unk> been Shaffer, Brooklyn high to begin with.
Ooh Boy I'll jump out of concern for me at where tissue bushels housekeeping possible.
As far as esports content strategy is concerned.
Overall, we will continue to strive for the copyright of mainstream high quality esports events in the market in the year 2023 and at the same time, we remain as a selective as we have been this year.
D. R. I of the project is a nano analyzed and evaluated in detail.
And a J.
Dynamically adjust our strategy according to the market situation.
At present, the acquisition of the copyright of the main events for the next year has not yet been decided the specific form also depends on the decision of the copyright owner and the negotiation with each broadcasting platform.
If there is any major update will also synchronized with the market in time.
We'll see you'll see through 1000, Teu ctrip royalty junk grocery junk email Washington about yeah.
Well you asked tissue bullshit dangle seats, you're wanting Utah since.
Uh huh.
All in I'm interesting, one virtual workbench LTE adoption.
<unk> completed a sure Jason Thanks for watching a shock me yesterday.
I'm.
Well when you keep watching how close she founded attrition.
Somehow or might get something sushi Youll March was I think a cultural thing yeah cool. Thank you Yep homework ATRA, what's that I am not sure Linda Hey, Yeah, just shift before.
He will get called U sleep onto portfolio Macioce ball.
And to work with loan pay the pumping for Wednesday.
Mkay tissue function in satcom for Yadkin.
Two four months in Germany.
The overall competitive landscape of game live streaming has not changed significantly recently.
<unk> continues to maintain its leading market share in the field since the beginning of this year, our streamer revenue sharing ratio remained relatively stable and through more detailed data analysis, we have achieved some savings in assigning costs weeks.
We expect this chance to continue in the short term and of course, we'll keep optimizing the cooperation fee structure with the streamers.
Same time by providing them with more comprehensive training support and services such as providing operation analysis was promoting diversified income channels with streamers and strengthening the binding partnership between live streamers and platforms in order to maintain and strengthen the competitive.
Most of our platform for live broadcasters.
Yeah.
Thank you next question please.
A question from one moment for the next question.
Yeah.
Our next question comes from Richard <unk> of HSBC. Please ask your question.
Got it home and watch how close you see I mean generally what the pier one.
The one piece you wonder why are you choosing.
She search will scan like she'd kill Jon Greaves Sunshine charge, reaching the themed drama legal.
Sure sure.
She got home early lasagna.
Would it won't be all that that should be somewhat younger.
So I will translate myself. My question is about the overseas business. So we have been tweaking the strategy recently and can management update us on the progress and specifically on the revenue and also the losses and what is our goal into 2023 for the expenses. Thank you.
How about Huawei diagnostic a warranty.
Now I'll, let you channel Q4, new coordinate wash out hunting, new shipyard block continue to well the Nemo TV since I'm here with Marc Jim you touched on you know what.
You don't begin to doubt Julien hotline choosy about project well.
Well, you'll watch all I'll say on 19, Shanghai year without Lisa.
Yeah, Hi, right here with us, but she should project.
So all the telecom you can keep a watch on southern Asia beet sugar.
So looking lighthouse will mainly do cheaper than the truth of the child well.
He was my shoulder. So you don't see way more shutdowns.
How are you.
Congrats yourself.
Oh yeah.
Hilton is it's lumpy.
As we mentioned before based on the changes in the domestic and foreign market environment, We have made strategic adjustments and optimized the BMO television business since April .
With concentrated resources on the development of key overseas regions. It is hoped that by optimizing cost and expenses to reduce the loss of overseas business and achieve over this business sustainability.
Major adjustments are now largely completed with reduced business operations in some southern region.
So far we have achieved some initial results although overseas revenue and use the skills have been affected to a certain extent overseas business has become more focused and the amount and proportion of losses have also significantly reduced.
How are you.
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Thank you Mr <unk>.
In addition to a live game broadcasting we also provide richer Pan entertainment content as well at the same time with more localization work. We can provide characteristic interactive features in operational activities targeting the local market.
With this as our efforts, we hope that overseas business can achieve self sufficiency businesswise as soon as possible.
Moreover, while also dynamically adjust the operation strategy. According to the overall market environment.
In the future, we hope to Nemo being able to broke constant live games around the world as a key participant in the market.
Thank you next please.
One moment for the next question.
Next question comes from Brian Gong from Citi. Please proceed.
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Other trusted myself. Thanks management for taking my question. My question is regarding about cost.
Cost and margin trend convergent elaborate the progress.
Cost and expense optimization.
How should we expect a margin trend.
And also can management share some updates on that as a part of our ratio risk tension. Thank you.
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Since the beginning of this year, we have made continuous efforts to control costs and improve operational efficiency.
From overseas strategic adjustments to more focused strategies, where domestic businesses and at the same time increase the effective use of technical resources. We have achieved some initial results in the third quarter streamer related costs as well as bandwidth costs for both optimized.
And total operating expenses for the quarter were down approximately by 27% year over year, driven by sales expenses savings.
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Therefore on the premise of maintaining that stability and leading edge of our acquired businesses will continue to implement cost reduction measures, including our ROI optimization of streamers and events content and live streaming of operating expenses. This will also help.
To better consolidate the company's businesses and financial foundation in a current environment to support the long term development and so on.
Earlier due to the large scale event the margin level of Q4. This year might expect a loss, but we expect also that the subsequent profit margin level will gradually improve.
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In addition to continuing to promote tax reduction.
I will also actively explore and upgrades to all business ecology products and commercialization in the future based on but not limited to live broadcast will keep strengthening our profit level by enhancing the monetization ability.
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C Corporation.
This continues to be actively carried out and there is close cooperation and games events content and products.
Specifically in terms of the combinations games and interactive futures by continuously deepening its incorrect the interaction of the account data users can interact and flow between the platforms.
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So there are things in the Delaware.
In terms of the in depth cooperation in games and tournaments, who we are in the league of legends mobile again, how so collectors it put us a collaborated and product promotion as well as operation and community, including jointly building in game live streaming and interactions and then a promo.
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Interactions in a live broadcast room that will lead to <unk> exclusive virtual trucks provided by the game owner and all this will help us to improve the user experience and consolidated we are its leading position in these games.
So I'm as I answered to you.
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Yes.
So to even contain thinking can send to the stay at home okay.
Kim K don't go into the two best selling and most of it isn't.
Our technology and operation know, how an accumulation in the audio video and game content industry is conducive to more and deeper collaboration with Tencent group, which will also help promote and upgrade of our companies in this format and modal.
Okay.
Yeah, that's all for our assets.
Question I found no further questions now I would like to turn the call back over to the company for closing remarks.
Yeah. Thank you once again for joining US today. If you have further questions. Please feel free to contact our Investor relations.
Contact information provided on our website or TPG Investor Relations.
Thank you.
This concludes today's conference call you may now disconnect your lines. Thank you.
Okay.
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Okay.