Q3 2022 iClick Interactive Asia Group Ltd Earnings Call

November 30, 2022

Hello, Ladies and gentlemen, thank you for standing by for all client interactive.

Speaker 1: Hello ladies and gentlemen, thank you for standing by for iClick Interactive Asia Group Limited's 2022 third quarter unaudited financial results conference call.

So group limited 2022 third quarter on audited financial results Conference call.

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

Managements remarks, there won't be a question and answer session.

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

Today's conference call is being recorded.

After management's remarks, there will be a question and answer session.

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

Today's conference call is being recorded.

I will now turn the call over to your host, Ms. Lisa Lee, investor relations director. Lisa, please go ahead.

Hello, everyone and welcome to 2022 likely third quarter on audited financial results Conference call.

Hello everyone and welcome to 2022 iCLiks Third Quarter on Audited Financial Results Conference Code. The company's results were issued earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting the IR section of our website at ir.i-clik.com.

The company's results were issued earlier today and are posted online you can download the earnings press release and sign up for our distribution list.

By visiting the IR section of our website at IR I Hyphen C. L. I C K dot com.

In addition, during the call management will keep their prepared remarks in English during the Q&A session. We will take questions in both English and in laundry and a third party translator will provide subsequent translation.

In addition, during the call, management will give their prepared remarks in English. During the Q&A session, we will take questions in both English and in Mandarin, and a third-party translator will provide subsequent translations.

Please know that old translations are for convenience purposes, only in case of any translation discrepancy management's Cleveland in the original language show creep out.

Please note that all translations are for convenience purposes only. In case of any translation discrepancy, management statement in the original language should

Chin Tung T J Sherman Chief Executive Officer, and co founder of I Click will first provide a high level review of the 2022 third quarter results and share his thoughts on our strategy going forward.

Qian Tang, TJ, Chairman, Chief Executive Officer and Co-Founder of iClick, will first provide a high-level review of the 2022 third-quarter results and share his thoughts on our strategy going forward. Chief Financial Officer, David Zhang, will follow and give us additional insights on the financial results. He will then turn the call back to TJ for closing remarks. Before the call is open for Q&A. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

Chief Financial Officer, David Chang will follow and keep us additional insight on the financial results. He will then turn the call back to TJ for closing remarks before the code is open for its U N eight.

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

Forward looking statements involve inherent risks and uncertainties.

As such the company's results may be materially different from the views expressed today.

Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.

Further information regarding these and other risks and uncertainties is included in the company's 20-F.

Further information regarding these and other risks and uncertainties is included in the company's 20F 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.

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 I place earnings press release, and this conference call include discussions of them, although the GAAP financial information as well as an audited non-GAAP financial measures.

Please also note that iClick's earnings press release and this conference call includes discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures.

I <unk> press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures I will now turn the call over to our chairman and Chief Executive Officer, and cofounder Chin Tung TJ. Please go ahead.

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

I will now turn the call over to our Chairman, Chief Executive Officer and Co-founder, Qian Tang. TJ, please go ahead.

Yes.

Thank you Lisa.

Coming to the call everyone.

I will first share our Australia and.

Thank you. Please stop.

And welcome to the call, everyone.

Execution over the past quarter.

I will first share our strategies and execution over the past quarter.

And after all we innovation our business in the future.

and after how we invention our business in the future. We saw improved performance in the third quarter with 16% sequential growth in enterprise solutions revenue and a 3% modest uptake in marketing solutions.

We saw improved performance in the third quarter.

We 16% sequential growth in <unk>.

Price solutions revenue.

3% modest uptake in marketing solutions, combining four eight.

8% quarter over quarter increase in our total revenues for the quarter.

combining for a 8% quarter-over-quarter increase in our total revenues for the quarter.

These increases were largely driven by the gradual easing of Covid related lockdowns.

These increases were largely driven by the gradual easing of COVID-related lockdowns.

were largely driven by the gradual easing of COVID-related lockdowns. The other half, though somehow the whole next vlogamar of this program isorgeous without

The containment.

Containment measures.

Associated to the resumption of business and.

Containment measures.

Economy activity.

and the associated resumption of business and economic activity.

We are also pleased to see the recovery.

Our enterprise solutions business.

We are also pleased to see the recovery for our Enterprise Solutions business.

We saw revenue contribution hitting a new record hot off.

39%.

with revenue contribution hitting a new record high of

We remain optimistic about the continued risk resumption of economic activity.

39%

We remain optimistic about the continued resumption of economic activity and business fundamentals.

The business fundamentals.

That will drive increased demand for our innovative SaaS plus technologists on the services.

That will drive increased demand for our innovative SAS Plus technologies and services.

On the Union ton further sales growth.

In addition.

And in turn, further sales growth.

We have continued to drive cost optimization across all our operations.

in addition

We have continued to drive cost optimization across our operations.

Following us to reserve sufficient cash.

Our core teams and the products in tact.

allowing us to reserve sufficient cash, maintain our core teams and products intact.

Strengthen our capabilities in offering valuable services to customers.

strengthen our capabilities in offering valuable services to customers.

Where does the <unk>.

Micra economy headwinds.

We believe this positions I click for continued market gives me Paul as conditions improve.

and where does the

microeconomic relevance.

We believe these positions I click for continued market rebound as conditions improve.

This strategy is central to our future success.

We believe our core value proposition rests on our ability to remain a leading innovator in the British.

This strategy is central to our future success as we believe our core value proposition rests on our ability to remain a leading innovator in the breadth of value our solutions embody.

All of our solutions in body.

We achieved notable solution implementations and go out go in the quarter.

We achieved notable solution implementations and rollouts during the quarter that drove exceptional value in assisting clients to accomplish the diverse goals.

Joe exceptional value assisting clients to accomplish.

Diverse skills.

For example, we collaborated with.

Kinda on technology to build a full stack private domain E Commerce solution based upon I cliffs Tong hsing.

For example, we collaborated with

Jindong technology to build a full-stack private domain e-commerce solution based upon iClick's Changxin under

Yeah.

Jim Don Technology Cloud service.

The integration of Kindle, Elias commodity promotion solution or C P as and.

Jindong Technology Cloud Service

with the integration of the Gender Alliance Commodity Promotion Solution, or CPS, and uh...

J D Dodge.

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Tableau, our supply chain services.

J.D. Dodge, help.

This integrated offering.

popular supply chain services.

Yeah.

To empower retailers in the cosmetics F M C G.

This integrated offering aims

to empower retailers in the cosmetics, FMCG and affordable luxury apparel industries.

The affordable luxury apparel industries through all ecosystem smart retail SaaS solutions.

through all ecosystem smart retail SaaS solutions.

We also were recognized through numerous industry awards for.

We also were recognized through numerous industry awards.

For example, we scooped the first third party service provider after the first half of 2022.

For example, we grouped the first third-party service provider of the first half of 2022 by alighting a word.

Our lighting artwork.

We are honored by the strong industry. The explanation, we continue to receive and strive to remain a leader across our industry wide solution mix.

We are honored by the strong industry recognition we continue to receive and strive to remain a leader across our industry-wide solutions mix.

This concludes my opening remarks, I would now like to tens of coal over to our CFO , David Jones to discuss all of a sudden set called her financial results.

This concludes my opening remarks and I would now like to turn the call over to our CFO , David Jeong, to discuss our third quarter financial results.

David Please go ahead.

Thank you Dk Hello, everyone.

David, please go ahead.

Michelle <unk> Chief financial results for third quarter on the 20th tended to compare them to the scene silvia or tons and tons of Mont Belvieu.

Thank you, DJ. Hello, everyone. I will share our key financial results for the quarter of 2022 compared to the same period of 2021.

Well go first to a culture of old tonnage on Youtube was $41 million decrease supply cause just 3% year over year looking at the individual business segments.

Real new fall third quarter of 2022 was 41 million US dollars, decreased by 53% year over year. Looking at the individual business segments.

When you from marketing solutions was trying to find mini Astana is decreased by 262% comparable to the $56 6 million that Sandoz for film culture tiny tiny one as a result of our strategy.

Revenue from marketing solutions was $25 million, decreased by 62%, compared with the $66.6 million for third quarter of 2021. As a result, O'Hare's threat...

Tragically the suit the strategy shift away from some high risk advertising business and the overall advertising market has slowed down in China.

strategy shift away from some high risk advertising business and the overall advertising market slowdown in China.

Revenue from our enterprise solutions was 15, meaning that all of us.

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Revenue from our enterprise solutions was 16 million US dollars.

Your 1% comparable with the <unk>.

There is plenty of points free mini last August and so it causes 10 do you find it was mainly due to the challenges from the pandemic and the control measurement.

increased by 21% compared with $20.3 million in the third quarter of 2021, mainly due to the challenges from the pandemic and the control measurement.

They should be affected the progress of our new clients on boarding and solutions implementation in 2022.

which affected the progress of our new client's onboarding and solutions implementation in 2022.

Gross profit for the so called her Huntington's two was $9 two mini Isogamous container was $21 7 million for silicones are attending from one language to decrease over revenue.

Gross profit for the third quarter of 2022 was 9.2 million US dollars, compared with 21.7 million for the third quarter of 2021, aligned with the decrease of revenue.

Total operating expenses were $20 8 million for so called here I'm trying to send it to compare it was $24 1 million for the concert with plenty of time to what the changes are primary due to a decrease in share based compensation staff costs and promotional expenses.

Total operating expenses were $20.8 million for the third quarter of 2022, compared with $24.1 million for the third quarter of 2021. The changes were primarily due to decrease in share-based compensation, doff cuts, and promotional expenses.

Goodwill impairment of $3 7 million U S dollars was recorded.

Google Impairment of $3.7 million was recorded for the third quarter of 2022 for marketing solution business.

So counter 2022 for marketing solution business. This partial noncash impairment charge, representing a shortfall between the carrying value and the estimated fair value of this your party unit as of September 30 tons, you tended to do.

This partial cash impairment charge represented a shortfall between the carrying value and the estimated fair value of this reporting unit as of September 30, 2022, due to the slowdown of advertising industry.

The throw down advertising industry.

Net loss totaled 19 claims flow mini you guys, telling us for silicon. So over time, you tended to compare this 2.6 mini golfs onerous Foster a cadre of tiny tiny one mainly resulting from operating loss of $11. Six and then you asked all of us losing any impairment.

Net loss totaled 19.4 million USD for third quarter of 2022. Compared with 2.6 million USD for third quarter of 2021, mainly resulted from operating loss of 11.6 million USD, school-view impairment of 3.7 million USD.

Oh, three point selling mini us on us on the internet or ex the investments of $3 4 million that's on us.

As of September 3200, 22, the company has.

and impairment of equity investments of $3.4 million.

Cash and cash equivalents time deposits and restricted cash.

As of September 30, 2022, the company had cash and cash equivalents, time deposits, and restricted cash of US$99.9 million, compared with US$88.7 million as of December 31, 2021.

99.9 millions last August compared with $88 seven minutes Yosano as of December 31, 2021.

For the non-GAAP measures.

Adjusted EBIDTA sociocultural Tencent the tool was a loss of eight claims for $8 5 million, yes Thanos.

folding down GAAP measures

Just say be that for third quarter of 2022 was a loss of

Comparable earnings of $3 6 million Donuts fulfill concert or 2021 adjusted.

8.5 million US dollars

Compare with earnings of $3.6 million for third quarter of 2021.

Adjusted net loss well fill culture.

<unk> thousand 202 was 10 two.

Two mini yes on us compare was adjusted net income.

Adjusting net loss for the third quarter of 2022 was $10.2 million compared with the adjusted net income of $10.2 million.

Point point 8 million less onerous in silicon from 'twenty to 'twenty one.

Whilst feeding was $51 7 million.

$0.8 million in the third quarter of 2021. Gruss feeding was $61.7 million for the third quarter of 2020 groups.

So Carter country tended to compare with the 190 flying plus 5 million U S dollars by so called from 'twenty to 'twenty one.

compared with $195.5 million for a third quarter of 2021.

For further information please see more details in the press release, we issued today.

I'll now turn the call back to TJ for closing remarks. Thank you.

For further information, please see more details in the press release we issued today. With that, I now turn the call back to TJ for closing remarks. Thank you.

Thank you David.

Well Chinese governments recent announcements such as signs of easing.

Thank you. David.

While Chinese government's recent announcements suggest signs of easing

Hum.

Our return requirements on the time of restrictions that might bode well for economic activities supply chain disruptions.

Pony.

Quarriting requirements and the tribal restrictions that might bode well for economic activities, by chain disruptions.

In Tommy tenant Lockdowns and T O.

Joe political conflict conflict, Iran's a world steel out of our adversely.

intermittent lockdowns and G.O.

Geopolitical conflicts around the world may still adversely impact consumer sentiment.

Pack consumer.

Sentiment.

Way own companies' operations and the further.

Curtailed business performance in the short term.

weigh on companies' operations and further

We are.

Nevertheless, cautiously optimistic on the expect recovering consumer sentiment to be greatly beneficial to the overall economy as well as our consumer centric total solutions as conditions improve.

cut health business performance in the short term.

We are.

Nevertheless, cautiously optimistic and expect recovering consumer sentiment to be greatly beneficial to the overall economy as well as our consumer-centric total solutions as conditions improve.

In the longer term, we remain highly confident in the intact mega trends of digital transformation in China.

In the longer term, we remain highly confident in the intact mega trend of digital transformation in China.

Supporting our strong conviction is so does fast commitment from the Chinese government.

Supporting our strong conviction is the steadfast commitment from the Chinese government.

<unk> Party Congress report.

Please safely indicated the importance and the acceleration of digital economy development.

The Twentieth Party Congress reported...

explicitly indicated the importance and acceleration of digital economy development.

Therefore, I click well continue implementing its SaaS paas strategy by further upgrading the.

Therefore, iClick will continue implementing its SAS Plus just to solve this we'll continue running the scaffolding strategy.

Product offerings of enterprise solutions, and enhancing our top tier clients servicing capability.

by further upgrading the

product offerings of in-price solutions.

So that we can better seats.

and enhancing our top-tier clients' servicing capability.

Enormous opportunities ahead and deliver sustainable growth for the future.

so that we can better see the enormous opportunities ahead and deliver sustainable growth for the future.

Before I end my closing remarks, I would like to provide a recap of how our execution in 2022 has been anchored by the strategy. We defined at the end of last year.

Before I end my closing remarks, I would like to provide a recap of how our execution in 2022 has been entered by the strategy we defined at the end of last year.

Even though.

Government regulations.

My throat environment and.

Even though...

Jill political conflicts hives.

government regulations, macro environment and

Constitute too.

Geopolitical conflicts have...

The uncertain operating environment for us since the second half of last year.

constitute an uncertain operating environment for us since the second half of last year. We have remained.

We have remained.

The rest of it which in ensuring that we maintain sufficient cash resources to help us with.

in ensuring that we maintain sufficient cash and resources to help us.

Stan This is my first shocks.

Our strategy to wind down high operating cash.

withstand these microshocks.

our strategy to wind down high operating cash.

Lower.

Margin on the higher risk business, we're using our marketing solutions segments.

lower

Margin and high-risk business within our marketing solution segments is the basis of this approach.

The basis of this approach.

Consequently, our cash on cash equivalent.

Reached almost 100 minute as of the end of September compared with.

Consequently, our cash and cash equivalent have reached almost 100 million as of the end of September compared with the previous year.

Approximately 89 minutes.

End of 2021 as.

As well as a reduction in.

approximately 89 million at the end of 2021, as well as a reduction

Bank borrowings.

In addition.

In support of the strong long term.

In bank Power facility

Prospects after the digital transformation trend in China, we have continued to invest in our higher margin enterprise solutions.

In addition,

in support of the strong long term

prospects of the digital transformation trend in China, we have continued to invest in our higher margin enterprise solutions.

[laughter] positions I sleep well too.

Capitalized.

Oh rebounding economic activity and the improved business sentiment.

which positions I click well to...

capitalize

on rebounding economic activity and improved business sentiment.

Is associated to the recovery in client demand.

Yes.

Our.

and the associated recovery in client demand.

R&D expenditure has been.

Sauce?

<unk> relatively constant this is core to our long term strategy as we believe the investment.

our

R&D expenditure has remained relatively constant. This is core to our long-term strategy as we believe the investment.

He is what's fundamentally will drive our future growth momentum.

Lastly.

is what fundamentally will drive our future growth momentum.

We have in parallel beans stream.

Lastly,

Streamlining our operations on the driving cost optimization.

We have in parallel been...

streamlining our operations and driving cost optimization.

Reducing expenses in a number of areas installed we are proud of our solid execution with a clear vision to carry I click forward, so rude to use.

reducing expenses in a number of areas.

In sum, we are proud of our solid execution with a clear vision to carry iClick forward through this

Volatile periods.

With that I wish to acknowledge and thank.

volatile periods.

Our clients partners shareholders and all our stakeholders for our continued support.

With that, I wish to acknowledge and thank our clients, partners, shareholders, and all other stakeholders for our continued support.

And of course <unk>.

Our I'm pretty cars, who have been so dedicated to the work sue seek honesty.

And of course, all our eye clickers who have been so dedicated to the work through SICK and SIN.

Backed by our sound management on the clear strategies, we believe we will be able to deliver better results on the further establish ourselves in the digital transformation market.

Backed by our sound management and clear strategies, we believe we will be able to deliver better results and further establish ourselves in the digital transformation market.

Thank you Ole.

Again for participating in today's conference call on the for your continued support.

Thank you all again for participating in today's conference call and for your continued support.

This concludes my remarks.

Remarks on that we will now open the floor for questions.

This concludes my remarks and we will now open the floor for questions.

Please go ahead.

Thank you if you wish to ask a question.

Operator, please go ahead.

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For the benefit of all participants on today's call. If you are a mandarin.

If you are on a speakerphone, please pick up the handset to ask your question.

Speaker please right.

For the benefit of all participants on today's call, if you are a Mandarin speaker, please ask your questions in Mandarin and then immediately our translator will repeat your questions in English.

Please ask your question in Mandarin.

Obviously, our translator will repeat your questions in English.

Please limit your questions to only one each time.

Yeah.

And our first question will come from Nelson Cheung of Citi. Please go ahead.

And our first question will come from Nelson Chung of Citi. Please go ahead.

Hey, How's it going again, just so what if you want What'd you go when she was a quite a U S. O. So this has had a teach.

Say the quantity, just over the T one uh, the T one is the qualantity, as the uh sices have told they take is a woman, and to the G ennergy in two woman, the sound, more the gating, the uh uh P, and say who you was, something Ma self start to do de ING, but whole the one the one is quant coun, the sub, what uh.

Uh huh.

Have you seen that.

Three of them and they tell me the D C U E.

It seems like it was in the lead.

So since you do have you do you mean, you Oh do you want to olympias.

It's not what a beat up but he tenant but as I said, yeah that city to each evening in that you can't see.

So let me translate myself that's mechanism for taking my question. My first question is regarding the U S business I'm wondering what would be the impact of Covid on the project implementation of the business in fourth quarter and next year and my second question is related to the advertising Oh look into fourth quarter.

So let me translate myself. Thanks, Benjamin, for taking my question. My first question is regarding the ES business. I'm wondering what would be the impact of COVID on the project implementation of the business in fourth quarter and next year. And my second question is related to the advertising outlook into fourth quarter.

And next year as well thank you.

Yeah.

She didnt need them.

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One more meal kit Lee, it's one of the Hanmi that wasn't the English acquiring Rodrigo, yes, unless the chiller.

Thank God, John what you Tricia.

At a later stage, TRIGS will quickly power up.

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that I'm KorNow the

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As it operates, Q3 isNT programming a customer even though this customer is enterprise as it is Long

So he's a PA to go or should you saw Digyny man the good uncle year, Tricia, Yeah, both of them and not know Copel TJ I'll say she wishes diet total fund me until I should should be yellow gene Schindler E E. Ben so he be unkind to handle should somebody you got tight.

I feel it has been a part of looping trainees to solve the problem. I may say that I truly respect the I will see you in the next video.

So you know the ones you sounded icon Tricia.

We sure are quite Mandel with Tasha you nailed two of your thought or you go to a to go with.

stuffing cards like corn Johnson p.m. your India Miranda way Tableau stormy adopted a master WordLabel. And that was one of the key things. I'll see you next time.

So once you did wrong hydrogel Linda.

Cynthia.

There's no question. This is TJ if I understand correctly. Your questions are about the outlook will trend up, yes, and MFS business well compared with Q2 Q3, so performance among our businesses I think the reasons I'm very clear in the second quarter due to the.

Cynthia.

This is TJ. If I understand correctly, your questions are about the outlook or trend of ES and MS business. Well, compared with Q2, Q3, full performance in our businesses, I think the reasons are very clear. In the second quarter, due to the COVID, a lot of cities were under lockdown. And so though libraries weren't even there during this period, the paran Thank you so much for joining me today. Give us a special shout out to the part-time webinar.

A lot of cities, where we're under Lockdown and in Q3. These COVID-19 related control measures were eased.

However, the trend the future trend of Florida clothing related control still remains unclear and four therefore many industries.

and in Q3 these COVID-related control measures were eased. And however, the trend, the future trend for the COVID-related control measures still remain unclear. And therefore many industries, including many other clients' industries, are still prudent in making the investment. Overall speaking, we've seen some slow recovery, but not very...

Including many of our clients industries are still prudent and maintain our investment overall speaking it seems from a slow recovery, but not very strong.

Ah well he's always Jon how are you sure you should enterprise.

Solution to your partner.

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Hardworking Shelby George is here for them.

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Just as a tissue the yesteryear when I showed up.

Cynthia.

Okay.

Kidnapper rate rally.

Relatively speaking, yes business has performed better.

To elaborate, relatively speaking, the ES business has performed better because the demand for ES business is always there. In our ES business, we help meet the digitalization needs of our customers by providing them better opportunities to interact with their consumers and manage their digital assets better.

The demand for your business is always there and you know it yet.

How could you meet people.

Vision needs of our customers by providing them and better opportunities to interact with their consumers and manage their digital assets better. So there is always a strong demand so far yes.

Therefore, our pipeline is quite good however, due to the COVID-19 related control measures.

So there is always a strong demand for our ES businesses. Therefore, the pipeline is quite good. However, due to the COVID-related control measures, some clients' demands have been put off because it usually takes a rather long time for our clients to make a decision about working with us and then onboarding.

Our clients' demands have been put off because on our it usually takes a rather long time for our clients to make a decision about working with US and then Onboarding and then Uh huh.

Solution implementation and the Lockdown and other control measures have thought actually delay the entire process and Oh, and therefore and and also during the Onboarding of new clients. It's a requires a lot of interaction.

and then solution implementation. And the lockdown and other control measures have actually delayed the entire process. And therefore, and also during the onboarding of new clients, it requires a lot of interaction with our clients and...

With our clients.

Hum.

But overall speaking our Q3 performance is better than Q2.

Oh, yeah whole Guangzhou Guangzhou.

But overall speaking, our Q3 performance is better than Q2.

Yeah, Yeah sure. The claim that you could go from here you should quantify about Tricia.

Q4 is currently a bit earlier than before. W appeal held a talk toamo beb

Q3 will come off.

Cologne, Germany in Q2 show me how are you doing this is TJ on your books as Tobi mentioned, Oh, what do you.

Uhm Yokohama, Yeah, it's you should.

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I hope to see you in the next video.

Well as to the marketing solutions business or the entire advertising business. We've seen some sign of recovery in Q3, but not very strong actually this year the entire advertising industry is weak.

Well, as to the marketing solutions business or the entire advertising business, weíve seen some kind of recovery in Q3, but not very strong. Actually, this year the entire advertising industry is weak. Since last year, many industries have been adversely affected, and in particular some industries have been affected by the pandemic. So, weíve seen some kind of recovery in Q3, but not very strong.

In fact, yeah, a mini industries have been adversely affected and in particular some industries.

Such as the education or the gaming industries, just disappear because of the tightening of governmental regulations and due to the logistics hiccup or facing E. Commerce company, even some big brands have started to do adjust their advertising budget Hillsboro speaking.

such as the education or the gaming industries just disappear because of the tightening of government regulations. And due to the logistics hiccups facing e-commerce companies, even some big brands have started to adjust their advertising budget. So, broad speaking, the Marketing Solutions business remains weak this year.

Yeah marketing solutions business remained weak this year and that's actually in line with our strategic decision to wind down some of these commodity solutions business and we can say that we have forecasted this trend and made our choice early this year.

And that's actually in line with our strategic decision to wind down some habits from marketing solutions business. And we can say that we have forecasted this trend and made our choice early this year.

Okay.

Yeah.

David You said digital wouldn't you know to go if we don't ship.

Thank you for hoursossing us till the end,

This is my answer to your question. Thank you.

Yeah.

Our next question comes from Thomas Chong of Jefferies. Please go ahead.

This is my answer to a question. Thank you..

The next question comes from Thomas Chone of Jefferies. Please go ahead.

Thank you ladies and gentlemen.

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And Jay Olson.

Hi, Thanks management for taking my questions. So I have two questions. My first question is for the enterprise solution business housing with potentially from new and existing clients and household.

Kwasan, thanks management for taking my questions. So I have two questions. My first question is for the enterprise solution business. So how do we concentrate for new and existing clients and how is our client acquisition services so far? And my second question is also for the enterprise solution business and how should we view the competition landscape and our competition advantages? Thanks.

And my second question is also for the enterprise motion business and how should we deal with the competition landscape and our competitive advantages.

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Thank you for your attention. I hope you enjoyed this video. If you did, please like and subscribe. Please like and subscribe.

Well Oh. This is David let me first take your question about our retention compared to what we saw Q2. Then Q3 you saw a good retention rate you can see that in terms of the customer number or the retention rate, whereas the 65% and dollar amount. The retention rate was 95% are quite high.

Well, this is David. Let me first take your question about retention. Compared with Q2, the Q3 saw a good retention rate. You can see that in terms of the customer number, the retention rate was 65%, and dollar amount, the retention rate was 95%, and the Q3 saw a quite high level, and many existing customers.

Level and many existing customers have contributed more to ourselves and as to the question about competitive landscape I would like to invite a TJ to answer a question.

have contributed more to ourselves. And as to the question about competitive landscape, I would like to invite TJ to answer your question.

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Sure.

Okay. Let me answer your second question about competition landscape I think in China. The digitalization process is still at its early stage and there are a lot of our players in these attracts including SaaS providers, some giant companies and also service providers.

Thank you for your attention.

Okay, let me answer your second question about competition landscape. I think in China the digitalization process is still at its early stage and there are a lot of players in this track including SaaS providers, some giant companies and also service providers and these companies have different business models and customer bases. I think the next three to five years.

And these companies have different business models and customer bases I think the next three to five years will be key for these companies to build out their competitive advantages and for US. Our advantages lies with the fact that we have accumulated great expertise in serving medium too.

will be key for these companies to build up their competitive advantages. And for us, our advantages lies with the fact that we have accumulated great expertise in serving medium to large sized customers through our MS business. And our SAS plus X product plus service model is very helpful for us.

Besides the customers Sue.

Through our Ams business, and our SaaS plus X product plus service model and is a very of a hassle for us to serve these kind of customers and this is the competitive edge that we have been built up over the past two to three years and for me too.

to serve these kind of customers. And this is the competitive edge that we have been built up over the past two to three years. And for me, to be business is very different from to see business. To be business is not a market for winner takes all. And the digitalization market in China is big enough to accommodate more big players.

<unk> business is very different from to see business to be a business is not a market for winner takes all and the digitalization market in China.

To accommodate them a more a big players and that that's why we think that our south plus X model will have.

A big room to develop in the future.

That's why we think that our SAS Plus X model will have a big room to develop in the future.

Okay.

The next question comes from Bryan Kipp Springer of Alliance Global Partners. Please go ahead.

The next question comes from Brian Kisslinger of Alliance Global Partners. Please go ahead.

Great. Thank you for taking my questions. My questions are financial related. The first one is DSO has dramatically improved what is the lead you. This much better collections and can you continue to improve DSO, which is still quite high and then second can you discuss why the gross margin in the third.

Great, thank you for taking my questions. My questions are financial related. The first one is, DSO has dramatically improved. What has led to this much better collections and can you continue to improve DSO which is still quite high? And then second, can you discuss why the gross margin in the third quarter is lower than the second quarter? The revenue in both segments is increasing.

Third quarter is lower than the second quarter. Your revenue in both segments is increasing you have a much better mix of the higher margin enterprise revenue. So I'm trying to understand when we'll start to see the margin recover.

you have a much better mix of the higher margin enterprise revenue. So I'm trying to understand when we'll start to see the margin recover.

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Thank you very much. Thank you all. I appreciate your ten-minute time. I appreciate your time and am grateful 5 years to Thanks to everyone who has participated from Christ's law.

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700 of our Florida cycle.

Well, let me take them to all of your questions. The first question.

In Q3, our accounts receivable to numbers is around 120 days compared with Q2 is already like 30 to 40 days.

Let me take up two of your questions. The first question, in Q3 our counter receivable turnover is around 120 days compared with Q2. It's already like 30 to 40 days improvement. And as to Q2, due to the COVID-related control measures, a lot of the cities were locked down and that's why the counter receivable date.

Actual flint and Oh, that's to Q2 due to the Covid related control niches a lot of cities were locked down and that's why the E. Comm receivable days has increased for the Q3, we've seen some improvement and we have putting a lot of efforts to improve the.

The collection of receivables and we also have some maintaining good relationships with our valuable customers trying to increase their contribution to our revenue and the second question about the gross profit margin and the gross profit margin has decreased in Q3 because.

We have provided more enterprises solution services to existing customers in order to retain these are valuable customers.

and the gross profit margin has decreased in Q3 because we have provided more enterprise solutions services to existing customers in order to retain these valuable customers. When the economic condition is poor, these customers usually have a higher bargaining power. Therefore, we offer some discounts to them. As to new clients, we have a higher bargaining power.

When the economic conditions before these customers usually have a higher bargaining power. Therefore, we offered some discounts to them as two new clients. They may not contribute a lot to our Q3 revenue because our strategy is to retain those high value high value.

Our customers. So that some are in the future will have the chance to increase their contribution to our revenue. Thank you.

Okay.

Yeah.

There are no further questions at this time.

There are no further questions at this time. I'll now hand the call back to Lisa Lee for closing remarks.

I hand, the call back to Lisa Li for closing remarks.

Thank you once again for joining us today, if you have any further questions. Please feel free to contact I quakes in her investors relations department through the contact information provided on our website. Thank you.

Thank you once again for joining us today. If you have any further questions, please feel free to contact iQIC's investors relations department through the contact information provided on our website. Thank you.

Okay.

Yeah.

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

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

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Q3 2022 iClick Interactive Asia Group Ltd Earnings Call

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