Q3 2022 JOYY Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Joy incorporated third quarter 2022 earnings call.
At this time all participants are in a listen only mode. After management's prepared remarks, there will be a question and answer session I would now like to hand, the conference over to your host today J&J the company's senior manager of Investor Relations. Please go ahead James.
Thank you all preacher.
Hello, everyone and welcome to Joy surgical which had a 2022 earnings conference call. Joining us today are Mr. David <unk>, Chairman and CEO of Joy.
Daley, our CLO and Mr. Alex Liu the general manager of Finance.
For today's call management will first provide a review of took over time and then we will conduct a Q&A session.
The financial results and webcast of this conference call are available at IR talk Joy Dot com.
A replay of this call will also be available on our website in a few hours.
Before we continue I'd like to remind you that we may make forward looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations for.
For detailed discussions of there is uncertainties. Please refer to our latest annual report on form 20-F, and other documents filed with the U S. D C.
Finally, please note that unless otherwise stated all figures mentioned during this conference call on U S dollar.
I will now turn the call that you are chairman and CEO Mr. David Shelley. Please go ahead Sir.
Hello, everyone welcome to our third quarter 2022 earnings call.
Let me start with all real I'll walk off mid resolved.
Despite global macroeconomic uncertainties, we recorded a 586 points by then many meaning dollar revenues include the 483.3 million of revenue from people.
In line with our previously.
Yes.
Our D C U E.
And correct.
Optimization measures to improve our obviously all the operational efficiency has been proven in fact sheet.
During the third quarter.
We generated a non-GAAP net profits of 10.
Cheesecakes are not nearly as as a group level is a non-GAAP net margin.
The key part of 1%.
It's fluting why by line.
The beagles sentiment and recorded.
Q4 dollars 1 million in noncash nonprofit laser and non cat nine margin offered 17 point.
Paul Patterson.
More importantly, our operating cash flow remains strong reaching 117.
Paul you want mainly for the quarter.
I was present in Crazy global macro uncertainty continues to impact our software monetization girls ongoing inflation and unfavorable exchange rates.
And the rest of them in fact gene users purchasing power and.
Decrease in Norway, so pending.
Yeah.
Meanwhile, as international travel restrictions in some regions.
Lifted on the opening scene continue use us time on the spending being closer.
Do you want to that to offline activities.
The slope of half of the 20th onto what we have been comprehensively and are constantly reviewing the cost structure on the management process of our core business.
At the same time, we undertook.
CRE also operational and adjustment to enhance pornography, the synergies improve operational efficiency and our teammates really ensure the health and sustainability of our business.
Our forward looking C T D claims and in.
In fact team execution of our obviously neat optimization Madras too about state.
Stayed here that Coles has equipped us to badger navigates through the current macro challenges.
Either way dolls, we edge.
Full year profitability in 'twenty, 'twenty, one and the phone, but I extend our profits and improve our operational cash flow jewelry fundamentally too.
You bet as a global macro conditions.
D G I reiterate T that still remains a fast that's really congress off of <unk> to our vehicles segment extended its non-GAAP net profit to 200, and the Turkey point for Neely.
Up to 100 and that piece, 3.3% year over year.
Given the current economy.
Oh, I don't know E comm, the Omega arrogant, we will continue to prioritize the.
Sustainable high quality growth well, what is that enhancing our operational efficiency.
Going forward, we are confident that our increasing business.
Feelings wheel positioning us to better capture long term growth opportunities.
Despite near term macro Halloween.
We remain focused on our long term product strategy also delivering value to our users I'm a great choice.
Our accuracy.
Yeah, well the positive result.
People live and ease of use increased by 30 points so team on 2%.
Year over year in the culture, reaching a meal historic high awesome.
<unk> five point for many.
Additionally, girls, who was also encouraging.
All girls comparable shows that two way.
Which means that during the pandemic period.
This is a particularly in pet in pricing.
And as Hillary and starch girls are achieved in the pyramid awesome disciplined marketing spending.
Demonstrating the increasing efficiency and the effectiveness of our user acquisition strategy.
Looking ahead, we will continue to cultivate.
Everest.
Premium content in a way to interact you products features and organize activities Tina.
Yeah, two long haul market.
Yes.
These initiatives will further improve our user experience and all the teammates here facility.
Facilitate the growth of our user community and monetization to fact that it should correlate to Grail.
Great Lakes, it positively with user satisfaction overtime.
In addition, our diversified operations across all remember all the regions, including North America, Europe , the Middle East and the South East Asia and has given us greater overall flexibility and allow us to meet you gauge the.
Yeah.
Race to that to raise the from relying on the seaborne market.
Marches and the governments employees easily matter to contain the pandemic and tackle car into my whole talent, we will closely monitor market conditions and devote mall resolved the words.
Alta performing markets.
Compared with a single market vocals, Nissan refine the strategy at all.
So dynamic.
Justin as adjustment will enable us to generate a higher or are against us.
Basketball awful natural.
Whoa.
Well well lag T netease.
Going forward, we remain to me T that two hour a globalization strategy, we will continue to enhance our international and the local law is the operational abilities by further strengthening our local talented teams.
Tackling equal technology call it was a parrot ice.
That's first.
Global vision and.
Local knowledge.
Now, let's take a closer look at the developments in each of our product line.
We will start always be go lives. Despite the macro hideaways and monetization challenges people alive maintain that is user growth suggest to Jean Jacques to rate. Thanks to.
In fact, you have local operations and product features upgrades.
You're in the sub caught her big go lives I'm, a use increase the faulty 14 point to.
Year over year to 45.4 million.
Notably and.
The us Europe and in the Middle East increased by 9.8% and a 7.8% respectively.
Well I may use in southeast Asia, and other emerging market increased by 19.2% year over year. We also.
So all her well deserved.
Recovery Chin in people lives the number of paying users across various regions.
As the number of paying users in Europe , North America, and the Middle East.
The Asia assume sequential growth this quarter.
Deals in the quarter people alive further policy D. G E. It's a content ecosystem.
By emphasizing local lies the operations and is developing.
Diverse.
Premium content for example in Malaysia, These old law and the law.
The Beagle Gogga.
All Neil online, they're 18 show pizza.
Hey, Tony infotainment content, including Amy and Savannah.
Hum comedy the show started ERP go lives most popular.
Paul Keira streamers, and some of the malaise, there talk radio broadcasters and that combined elements all for live streaming with a greatly to this team falls off.
<unk> media to create a fresh and unique appeal will be experience.
It was a neat don't use to be go lives. Once again collaborated with the Mon power maintenance.
<unk> Banca <unk>.
<unk> one of the largest fall professional share is meant.
Middle East and.
North Africa region.
I've also held a word sure for is.
Next court.
So the 16 full HOTT H foods why not.
Nice Cogs, neither chi the landmarks.
Thousands of all four.
Countries across our global Inc.
Including <unk> 10 in the U K, Italy, Germany, France, and the U S.
But generally I see.
Sierra has also wind sites, even to interact to its local users still remains a chore. They go live in my T. The popular law closed streamers to pause remember all procurements for uncle Aldi is this helps it stimulate T.
Interest in our turnout and a promo T. The brand awareness among local communities.
And at the same time. They go live we launched a number of well sure related to the video videos and online challenges encouraging local users who joined the best.
That's T V piece, and then meets their friends at these events.
Your faults combined to create a unique memorable experience for <unk>.
The go lives users.
Bringing online and the offline exactly.
Our integration of the community feature and the local lives.
Please her support continue to contribute to content and diversification and the user engagement.
Improvements in the bar channel potentially the volume off bars video content increased by.
14.5% and the average wheels per user increased by 16.4 per cent.
Next let's turn to like as I mentioned the inquiries.
Walters full of products, that's a <unk> deal loss.
19.
So that has lucky and the harmful way.
We continue to focus on the steady improvement all should there is back to monetization have abilities and.
Awesome Archie.
I'm going to actually grows we aim to see Jason to D. C line, the sales and the marketing strategy.
And optimize their local doctor.
Alder to steadily narrowed their risk back to operation loss and.
Ultimately choose shelf.
The C 17.
In the third quarter are in line with our inspections, we made further progress in narrowing of Nike's operation loss.
The operating loss in the first us recall address this year was reduced by 86%.
Compared to the same periods last year.
On the paradox updates frumps following the.
Sure launch after the loop feature in the U S.
And in Europe in the second called her life.
He also easily.
So look to other regions around the world.
This feature has helped the users who use a similar interest that's it connected to share content.
And our eyes are further improve the quality of like Ifs user interactions.
As a result.
The number also at user videos to share that.
For user per day in the.
Pardon me.
Community increased by 370 17, 9% sequentially.
Well in App instant messenger user rose by seven 1% in the impair it.
Overall average user time spent online increased by.
21.5% sequentially.
In addition to its regular local lives activities like expanded its operational efforts to include it.
Activities that have a positive.
Impact on local communities for example, after flow flooding in South East Asia countries Lanky, along should the N U K T. The page four local users to share information on government relief emergency room.
POS in the Adler Brachium details after the disaster in real time.
That's virtually is a member of our lives.
User are currently facing and energy increases Nike partnered with.
Many school to launch a 10 P M inches raised poverty around this offer.
Energy conservation.
You'll read the campaign teach us from 10, <unk> school and the other creatures post the videos about power saving chips and the importance of the survey.
Cecity.
For why the user as Luisa convened themed access to important and useful information.
The campaign attracted the participation of <unk> 1 million users.
Next the weekend tend to Hangzhou theories of so called her almost love seeing the revenue and the number of paying users both increased year over a year well its operating loss, the Florida natural substitute essentially over the previous quarter. Thanks Atul.
He has the monetization and disciplined spending.
Although launched a Y O Y voice feature and upgraded.
User loyalty benefits.
Which is trauma Ot that you.
Interaction and eat food the loyalty off is some payers are both initially choose drove growth in long tail users spending.
I will also introduce the further updates to its you'll feature I won't space user will grant you that greater of freedom in.
The signing the.
Our parents and the customers of the us really a lighthouse and gave the opportunity to engage and interact meals three D virtual.
As such as apparel cheap.
Both of these contributed to increasing.
In Asia too.
You know in in elite.
Immersive and.
Interactive experience.
Thanks to these upgrades.
Today's penetration rates, and then I'm really G user time spend both improved as he can essentially over as a true this call her.
More importantly revenues from Hugo space increase in Aby.
400, and then 9% sequentially.
Although hochul space revenue contributor to us are still relevant today small when seeking to bring more innovation in OE cheese.
Innovations to the feature to further improve its user experience and further diversify hobbles monetization streams.
Finally, some updates on capital return during the third quarter, we brought back in addition, no.
Right.
15 four.
14.1 million of our shares.
As of September 30, we have purchased.
A total of 342 many of our shares.
Also off the previous announced.
Really approaches for run off 1.2 billion.
Our board has extended its Perry cheap, it's Perry states after the prove up on.
Their reach we may repurchase the opt to.
U S dollar 800 mini.
Until November 'twenty 'twenty three.
We will continue to accumulate utilize our share repurchase program in order to reward the long term support of our our shareholders.
To conclude the combination also our world for low teens strategy.
Lenny and the effect to execution of our optimization Magyar Golden drove a further improvement in our profitability during the so called her in span of the.
Volatile macro economic.
He can on it.
Yes.
Yeah.
That and adhering to our long term growth strategy vocals, the products, the Apis and the iron for sizing localize that.
Diverse content offerings, we achieved a steady at recent grows oswego lives user community, we will remain flexible and adapt to the macro and minutes continue to invest in building our longtime the probabilities are on the phone calls.
<unk>.
Delivering value to users and the creatures there our price.
We are confident that as we become increasingly efficient and the resilience to ceilings, we will be April be better positioned to capture long term growth opportunities.
And generated.
So the bowl sustainable shareholder value.
This concludes the man.
Pre par remarks, I will now turn the call to our general manager are all finance, Alex Smith for financial updates.
Thanks, David.
Hello, everyone now let me go through the details of our financial results.
Please note that the financial information and the non-GAAP financial information disclosed.
Or in your press release is predicted to.
Continue you appreciate it.
Unless otherwise specifically stated.
But let's see what my life was substantially completed on February 2021, with certain customer eight megahertz to be completed in the future. We have Sip consolidator, while my life business since February 2021.
Yeah.
Our total net revenues for the third quarter was just dollar five pounds of art and 86.7 media.
Character taller 650.5 media you use that same period of 2021.
Primarily due to macroeconomic uncertainties.
And unfavorable exchange rates.
Negatively affect opinion their sentiment.
We continue to execute our sustainable growth strategy and proactively implemented a series of cost up and my mother.
Maintained a healthy growth trajectory.
And operating profitability.
Cost of revenues for the third quarter.
By 16, 7% year over year to 365 media.
Revenue sharing fees and content costs.
U S. Dollar 245, eight media in the third quarter compared to $8 298 on my immediate use that same period of 2021.
Primarily due to ultimate decent revenue selling cost.
Other operating costs sub add bandwidth costs also decreased year over year as a result of our continued optimization of original episodes it.
Gross profit increased to U S. Dollar 222 media you the third quarter, our gross margin improved to 37, 5% from 32, 4%.
The period of 2021.
I'll briefly explain this all of the third quarter Arctic grip bought street posted 1%.
Dollar $202 2 million from Euro dollar time, Gerard it constantly media means that sale period of 2021.
Among the operating expenses sales and marketing expenses decreased $2 96.8 media Tom your tone of 106 call extreme media due to disciplined and faith in spine do you agree.
Good day Sir.
Our GAAP operating income for the third quarter U S. Dollar 19, 8 million compared to $6 9 million in the same period of 2021.
Operating income margin for the third quarter was three 4% compared to one 1% in the same period of 2021.
non-GAAP operating income for the third quarter, which excludes share based compensation expenses.
A market of in.
Intangible assets from business acquisitions.
We are an impairment of goodwill and investments and disposal.
Disposal of subsidiary and business.
U S dollar 43, followed by media.
In the quarter.
Compared to U S dollar suddenly one onstream media in the same period of 2021.
Yeah.
non-GAAP operating income margin for the third quarter was seven 4% compared to four 8% in the prior year period.
GAAP net income fault continue we are breathing attributable to controlling interests of joy.
Third quarter authentic 22, what's your color, but contura and 15 3 million compared to net income of U S dollar, but the important part media in the same period of 2021.
Mainly due to the but I'll re measurement gain.
Our equity investment recorded upon the company consolidated of invested another Oh gosh 20 to 2022.
Net income margin was 87, 8% in the third quarter up 2022 compared to net income margin of one 2% in the corresponding period of 2021.
non-GAAP net income from continuing operations attribute both control the intake of joy in the third quarter U S. Dollar 76.9 media compared to U S. Dollar 35 pointed by media in the same period of 2021.
The group's non-GAAP net income margin was 13, 1% in the third quarter of 2022.
Compared to five 4% in the same period of 2021.
Okay.
Notably because non-GAAP net income expanded to eight people portable media in the third quarter with non-GAAP net income margin improved to 17, 4% from eight 7% is the prior year period.
Okay.
That followed the FERC three courtyard plenty tools because segments accumulated.
non-GAAP net profit has right.
So hunter at a certain point on media U S startup.
Up by 193 straight per se year over year.
Together with our improving profitability they have maintained a strong operating cash flow bill.
The third quarter of 2022 they book net cash inflows.
From operating activity of U S dollar while him correctly 17.1 million.
They remain a healthy balance sheet with a strong cast great thing.
Allah ballpoint.
Two 8 billion as of September .
2022.
Importantly, we have continue to your highest return to shareholders through dividend and share repurchase.
In accordance with our Premier enough calculate dividend plan approved in August and November take care.
We will be distributing a dividend of U S dollar 0.5.
All of that said quarter 'twenty to 'twenty two.
The holders of record at the close of business on December 23, and 20.
22.
Additionally, we have reported U S. Dollar 14 point Y media of atmosphere, and Ara previously enough share repurchase program during the third quarter.
As of September 2000.
Until 'twenty two we have in total we repurchased approximately USD 342 immediate.
One point to beating share repurchase programs.
Given our current kept pretty soon we should be able to balance between keeping so fixated cats to invest in building, our long term capabilities and enhancing our returns.
Yeah.
We will continue to actively utilize share repurchase to create valuable, but I must say a holder and as the current market conditions.
Going forward, we remain committed to delivering value to our users and create Harris.
Maybe they'll get may adaptive to the macro environment continue to prioritize investment into building our long term capabilities.
And to drive effective and high quality growth.
Of our community and the global business.
Well our business outlook.
Expect our net revenues for the first quarter of 2022.
Between U S dollar five AUM dirt and not people media and U S dollar 690 media.
We currently have limited visibility surrounding the macroeconomic uncertainties, I'm, a business and as a market in which they operate.
Therefore, this forecast only reflects our current and preliminary views on the market and regional basis.
They are subject to change.
That concludes our prepared remarks, operator, we would now like to open up the call to questions.
Yes.
Thank you if you do wish to ask a question. Please press Star then one on your telephone and wait for your name to be announced and if you wish to can see request. Please press star and then two if you are on speakerphone. Please pick up your handset before asking your question when asking a question. Please state your question in Chinese first and then repeat your question.
<unk> in English for the convenience of everyone on Nicole Thank you.
Your first question comes from Thomas Chong of Jefferies. Please go ahead.
So somehow they said plenty of times its old upheaval I'm wondering why you chose though that tightens the typhoon.
And then kind of vehicle that you should realize that finally.
Let me tell you.
Some yellow your shoe Goldman can kill sport.
So the phone so sure permanently E G. One Io triangle I found that the vehicle I Oh good.
He truly Elisa.
Well you see so much along.
Thanks management for taking my questions. My question is about the two all our revenue guidance of 10 management wise the breakdown among people and other business trends and also if we look into the parent mantle and bottom lines as well as the are we opening Uh huh.
Should we think about the trend of course are influenced to August . Thank you.
Oh <expletive> hitting the limit yet.
Do it sometimes.
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We don't need the crude all I owe me Randy.
Holton too lumpy Laguna Beach are shown here.
How easy Lithia, who cheerfully hold or do those who treat illnesses nutritional.
So as you mentioned that Oh, no woman down Shannon. This is Dennis what's usually the chassis and the guidance finally equals a nice little one for me Keith.
You said you do not so little known.
Quite a lead people, who they choose with juice Union AUM from that until they absolutely have loosened, you're all doing well.
Eugene.
E D shull equals to one or two names now.
Home because of cheese or the timing of icon.
Time charter change over time, but we will come once we get input hormone one Colorado.
<unk> started that you can rely on us.
Oh, Yea, often don't shoot issue, although yo Yo Yo over a year or so.
Some of them not usual.
And I have each year all Xi'an.
<unk> she'll.
She older Gorda Eagle Valley.
This is Tom.
So she has all Canadians to school lunches home the Lumpiness, yes, Hello, so they're gonna tightened them up on eastern Utah is equal to the total sugar.
And finally on the Chinese question, Yeah, you didn't go as usual women's outlet Jennifer change you want a pure biofuel, Michelle illegal or more locally he or she go in each of the geos to gamma.
I don't have this 120 trillion, John so yeah, Paula who calls on this economy.
Have you been in Washington, the all right.
Yes.
Yeah.
Thank you Thomas This is David I will take your first question is.
From our latest observation, we can feed it macro uncertainties, such as inflation aggressive appreciation of the U S dollar against local currency and reopening trends has lifting of travel restrictions.
T O negatively affecting users paying sentiment at the lower end of our current Q4 guidance reflects concept of negative macro impact yet in Q4 as average tradition biegel will host its annual gala and together.
With an increase in number as operational activities in various regions around the world.
Panera she's a M create activity. So we expect that she's upset some of the macro negative macro impact.
And we if we had to take a closer look at our respective regions. We can see that each market is currently facing different level shifts of the macro challenges, but at the same time, we could also see that.
Three quarters of 2022 I think.
Like still managed to achieve.
Positive year over year glass and some countries like some countries in Asia Pacific regions, such as Australia, and New Zealand and also Philippines and also some western European countries, such as the UK and Italy.
So that might sometimes be related kits that we expect the macro environment. The tours that the government has been in place to control.
And and their fiscal policy and now so it could be related to the level of development of our business in those markets but.
Ultimately, we believe that at a pace that it's meaningful to remain diversified across Japan market. We will continue to closely monitor the shifting market conditions and people like smaller veins only says to was theres market to outperform as compared to.
In order to generate a higher ally. Thank you.
Yeah.
Is it.
Yeah.
Thank you. Your next question comes from Alex Poon of Morgan Stanley . Please go ahead.
Uh huh.
Bunnies Hunt fish or the T. One window once you seek wanted your opinion does.
Did you say you want to search and when you shop, our Sarnia woman guide from our Concho marching the outlook. This year. My question is related to margins 10 minutes, where you share with us the progress on our.
Cost discipline and how should we look at launching in 2023. Thank you very much.
So this isn't about humana.
Nick what I quit I found your intervention.
Thank you to all my computer vision, So how are you.
She does picosecond might see shell up by face back then just since you said that non cap that you continue to look.
You cannot buy things just to send out E are not capped at 10 a M D.
Tend to come because secondly, it took a while thank you do eagle, but quite a multi do you see your thought she sundar chances when she's a biosynthesis.
What types of Backbenchers substitute our suit she said Oh, Yeah, Joel I'd say no no no.
E G. She thought that simply come back with you, but I need to come back with you yet.
Yeah, Mike this is.
Well I'll tell you when somebody just said that you pointed out.
That's the kind of switching from here you go lives.
Gotcha.
Uh huh.
Let's say you do corridor and also what do you hearing you reach out when we see equal by inquired the multi use non captive DRAM, which I'll kill start doing.
Okay.
Just looking at Chase Bank like you do that you could see us yeah igo.
Eagle Bancorp aren't yet it sounds like you do like he got that you need to you you can buy it all up I E.
E. W E T H N, yes by vintage.
You don't want to sufficiently yet.
Total AUM what might you you said that you could shoot.
Some of them Yeah, Yeah, well my high school, playing each other things don't change would've loved ones you Oh excuse me I'm. So glad that you got your what's your.
Gold's down sometimes Sylvia.
Somebody coffee on that Sushi you want.
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We'll take the liquidity that you go to Australia, you had I guess the other countries you can call you can call well My second you don't see it right now kind of put that yeah, yeah yeah.
Yes.
Thank you Alex for the question. This is Alex you know I will take your questions.
On our profits.
Her than expected in the third quarter with Eagle assessment Ashish.
That margin at 17, 4% and the group achieved a non-GAAP net margin of 13, 1%.
And if we take a closer look at the peak or Sackman and you can see that FICO segment gross margin was in previous year over year from 34, 5%.
Not yet.
Uh huh.
And 13 nine 4%.
Cool.
<unk>, 5% and that was mainly due to our continued optimization.
Content costs, no way payment channel expenses as well as lowering operational personnel costs.
And I'll show you can see that even when we stick to our disciplined marketing spending and of course, we still managed to achieve our effective and fishing grounds of go lives and they use.
For the first quarter considering.
The impact the seasonality impact of our annual Gala, we expect our gross margins and non-GAAP net margin for the Eagles Sackman Chi decrease over the previous quarter. Yeah. If you look at the first sequel, which is accumulated non-GAAP net margin for Pico Seckman has.
It already reached a 15, 1% up from seven 8% for the full year of 2021.
And then when it's quite significant and has profoundly outdone our original expectations.
So for the coming year in 'twenty to 'twenty, three we want steel I remain flexible and adaptive to the global macro environment will continue to prioritize high quality growth and optimize our costs and expenses.
To further improve our operational efficiency.
Belief that as an increasing number of salaried products timing self sufficient we will be able to steadily improve our <unk>.
non-GAAP profitability on a constant currency basis.
<unk>.
Okay.
Thank you <unk>.
Next question comes from Jasmine Wang of Credit Suisse. Please go ahead.
So why do you think there's no one that's more what I wanted to use a woman who could come down at all in our son Yankee were neither yes, sometimes you don't.
Cool.
Management for taking my question. My question is on the user side. So what is our youth as well its almost like next year and beyond and what are the drivers. Thank you.
Yeah.
Oh, no I'm, David when I think of it on your own.
Sure well general women's or the tie ins at Eagle life.
Even though people alive.
It can be sued by relevant to sundar.
Pardon Me Jones will you finance that.
Urged him, okay, how does that need a pentium or Chicago.
Zoned out and that's even attempt to pass them up we envision a woman you'll be at waters and she is doing well.
Turning to the Holdco to the Saudi also zone, two of whom are Muslim beauty, you're enjoying one of the huge New York times pool funds in those you know she's telling you well north of that one Sheila.
He runs that Gung Ho young adult we'll move that changed so we are actually sure. It does.
DVR genes with you won't see any change out there as a whole new leads with a T shirt toss you the change out up until such future things.
Don't you want to give you at either Tomba I'm kidding, So Vodafone I'm sure she's always been attending a bundle.
I mean, I know a month, we should have some good survey on those because I sit on the Torrance you almost can't tell me if I'm gonna change out of idle time inguinal hernia on that policy in Florida, There's no problems with people like Suzanne golf, So the culture wasn't done.
Quite easily go like T at mahogany no Michele.
Okay Sandoz argon two.
Question here in terms of you know what.
Even though John Chinese of course, she long time here.
Sheldon do the whole kind of neat.
It sounds you're doing them turns down that's Huntington, though sometimes you don't.
Deep water short guy.
Oh Gee cheeseburger, because you believe you can run.
So nothing.
Uh huh.
Well, it's actually I don't have them on the.
To whom we've fool GSE into the English in home selling them deeply exactly like you will do enough of them, yet and I assume the way there.
Hi, Thank you for your question. This is David I will take your question and especially we can look at P. Go lives. We can see that in the third quarter Eagle life and May you increase by.
14, 22% with a Q on Q increase of eight 4%.
Achieved without meaningful increase of marketing spending and the product in a culture.
Is that a large proportion of its wireless with organic and that our user acquisition strategy has become more effective.
And that was mainly contributed to our continued cultivation of Spiegel lives diverged and premium content offerings and our continuous efforts to innovate our localized operational activities.
Example, west I've just highlighted in my prepared remarks, and the quota we organized a world tour for V go lives with our local teams and.
Chile visiting dozens of cities.
And in various countries around the world interacting with our users outlined and promoting.
Our brand awareness among the local.
Our communities in a cost effective manner.
We will continue to explore innovation in our localized operation activities.
Offline and online together with innovation.
In our product features and contents.
In order to help you go life sustaining its high quality and.
Inefficient use of close for.
For Nike and Hugo our current priority of these products is still Ah.
To enhance your monetization capability and to achieve self sufficiency at the same time, we will continue to focus on the fundamentals of these products and increase their organic growth.
If you look at the operating loss of these two products in the recent quarter. We can see that both products operating loss has narrowed and one step further to choose a breakeven at quota level and their user retention rates will also increase.
On a sequential basis. So we believe that with this like in Hangzhou.
Ching self sufficiency, there would be in a better position to chewy visits user base expansion after the adjustments. Thank you.
Yeah.
Thank you. Your next question comes from U N Zhang from China Renaissance. Please go ahead.
Hey, social hook, one size fits in order to give oney batches holiday Chacha pay too, it's a mentor to deal with it and it sounds like Maryland, or Virginia, you talked about you're talking about your so called Mcgowan Kronos, just huh, John kind of got to a good summer, you'll probably be up a wholesale payroll somebody's shallow.
Thanks for taking my question I'm I'm, continuing to kind of get the World Cup.
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Yes.
Thank you. This is David I'll answer your question I believe that the world caught those have positive and negative impacts on our business. During the World Cup, we expect users to spend more time watching the game is changing.
Traditional media such as T V.
Engage and an increased number of offline entertainment activities, which would add back some of our UK time span from mobile products, such as our social entertainment products.
Like do you mean short videos.
Therefore, there might be some negative impact on our a D. A.
Time spent especially in the middle East clarity Adventist health and possibly in countries with a participating team.
Dishes get after it could be an opportunity for us to try to bring in a a special contract activity for our users for example to how are you guys that you're enjoying the World Cup, we have lunch serious special activities.
The themes, such as and Viking football Kols to host local commentary sessions and become a knife in there. So oh and also with Nike and also launching World Cup team specific and events specific night streaming.
So considering that in Q4.
Uh huh.
Annual gala together with an increased number of operational activities to promote user and creator of activity. We expect the impact from World Cup on user activity and monetization should be neutralized. Thank you.
Yeah.
Thank you. Your next question comes from Brian <unk> at Citi. Please go ahead.
Oh sure sure quantifying that for what she was a true sensually shall close something which I've actually its going to issue one that theoretical truthful and send someone cut.
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We see a constant of where you want us to ship, although frustrated myself hooked us management feels are to play take risks to our business.
And then they teach the regulatory trend in different overseas markets and also commencement update and it Oh uses of our strong cash flow. Thank you.
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Okay.
Thank you Brian for the question. This is David I'll answer your questions for your first question.
I'm jumped electrical risk I would say that our global insurance.
Political risks has that's not just imagine today, but they are always a long lasting.
Mr for a global company and we like to say that it's.
And normal operational Ah that's factor for a global company with a great spot with a global exposure, but.
But we would say that it's also created a positive impactful global player compared to a single market player because of the fact that we have operations in various museums and usually it means that for some reason so boutique where there's opportunities for some regions are in.
Sometime.
Such geopolitical risk my image and then when you look at the global level, it's actually.
Each lives and that's.
When it comes to risk diversification.
We are in a better position as compared to a single market player.
The industry.
With regards to our cash usage on given the current macro uncertainties, we have been reviewing and sharpening our focus on on a clear set of priorities.
And become more selective in an hour expenditure, we have prioritized investments in our.
Our core businesses and also businesses that we believe will be crucial for our mid to long term growth. So it's a matter of balancing allinson between making sure that we are.
And sure on that.
Sufficient capital for other organic.
Organic growth of our core businesses and also making sure our.
That's we have enough capital to see to return to our holdings you can see that from our operating cash flow we happened very healthy me in.
Improving our operating cash flow and have very strong cash position.
As a company that is seeking brands, which have been very generous in enhancing shareholder returns. If you look at the first three quarters, we have already distributed in total our U.
U S dollar.
$216 7 million via dividends and share repurchases, which is equivalent to 145% and non-GAAP net profit in the first three quarters and as of today, we still have some remaining.
Share repurchase program of up to 800 million and dividend program of approximately $150 million, which is very sizable, especially when you compare it to our market cap.
So to sum up we will continue to remain financially flexible and strike a balance between keeping sufficient cash to invest in our business and enhancing return.
Sure.
Yes.
So I believe that we have already taken one of your questions and thank you very much for joining our call. We look forward to speaking with everyone next quarter. Thank you.
Thank you everyone.
Thank you. The conference is now concluded. Thank you for attending today's presentation you may now disconnect.
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