Q4 2022 Bilibili Inc Earnings Call
The company.
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Yeah.
Good day, and welcome to Billy Billy fourth quarter, and fiscal year 2022 financial results and business update conference call.
Today's conference is being recorded.
At this time I would like to turn the conference over to Juliet Yang Executive Director of Investor Relations. Please go ahead.
Thank you operator.
During this call, we'll discuss our business outlook and make forward looking statements. These comments are based on our predictions and expectations as of today.
Actual events or results could differ materially from those mentioned in today's news release and this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filing with the SEC at Hong Kong stock exchange.
non-GAAP financial measures, we provide our FERC comparison purpose only definitions of these measures and a reconciliation table are available in the news release, we issued earlier today as a reminder, this conference call is being recorded in addition, an investor presentation and a webcast.
Replay of this conference call will be available on the visibility what IR website at IR felt that'll be the dot com.
Joining us today from Billy Billy Senior management are Mr. <unk>, Chen Chairman of the Board and Chief Executive Officer Mr.
Cali, Lee Vice chairwoman of the board and Chief operating Officer, and Mr. Sam Fan Chief Financial Officer.
And I'll now turn the call over to Mr Fan, who will read the prepared remarks on behalf of Mr. Chen.
Thank you Juliet and thank you everyone for participating in our 2022 fourth quarter and fiscal year financial and operating results conference call.
I am pleased to deliver today's opening remarks on behalf of Mr. Chen.
In 2020, we proactively adjusted our strategies and the <unk>.
Prioritize our gold.
<unk> with the new industry paradigm.
Specifically, we placed our focus on <unk> growth and how to reach profitability.
Digging into our progress on these two fault.
First our users.
Gauge month with our community.
The foundation of our business.
By focusing on <unk> growth, we are bringing higher quality users to our platform.
Which tells the more closely to our monetization potential.
Q4 hour D use increased to $93 million up 29% year on year. This.
This brought our <unk> to <unk> ratio to 28% a meaningful improvement from 26% in the same period last year.
Average daily time spent per user our platform reached 96 minutes driving the total time spend our platform up by 51% year on year.
We will continue to accumulate our do use with optimizer product offerings and algorithms.
To further support our commercial postbox with controlled sales and marketing spending.
Second we improved our commercialization efficiency and elevated across reduction measures to bring us closer to our goal of profitability.
Our total net revenues for 2022 were RMB 21, 9 billion and the total net revenues for Q4 were RMB six 1 billion.
Up 6% year on year, our gross margin improved to 20% in Q4 compared with 18% in the previous quarter.
We continue to take measures to control expenses and improve our organizational efficiency.
Specifically in the first quarter with sales and marketing expenses by 10% to 8% year on year sales and marketing expenses as a percentage of total net revenues reduced from 30% in the same period last year to 21% in the fourth quarter.
We have also streamlined our personnel and the trend our noncore and underperforming businesses.
As a result, our non-GAAP net loss in the first quarter narrowed by 21% year on year and 26% quarter on quarter.
As we move through 2023, our operational goal is to become more efficient company, we will centralize our resources to focus on less but more important tasks.
Typically we plan to continue to grow our <unk>, improving our growth margin and the tightening our expenses.
As we are executing on these actions. We believe we are on the right track to achieve our breakeven target by 2034.
With that overview of our strategic approach and our progress on the now like to provide a brief update our three core pillars of content community and commercialization.
Starting with content.
Our ever growing ecosystem is our most valuable asset in the fourth quarter. Our platform hosted three 8 million content creators.
25% more than the same period, a year ago quarter.
Greater submit $17 6 million reduce up 52% year on year, both on monthly basis to encourage more users to 'twenty ideas integrations, we will provide them with more easy to use tools to get would be equator chartered.
At the same time more traffic well build toward mid and long tail creators.
Our goal is to turn more users into creators driving both our content offerings and the user engagement.
Expanded content scenarios are also attracting more traffic to Billy Billy for.
For the fourth quarter total daily video views were up 77% year on year to $3 9 billion in particular storing more daily video views increased by 175% year on year <unk> video views increased by 56% in the first quarter.
Storing more and allow us to expand into the vertical video market growth during our <unk>, increasing user time spend our platform and opening more commercial opportunities for us to pursue.
Look our commercial potential.
In 2022, we further integrated our commercial channels within our content ecosystem.
The combination has created more immersive advertising opportunities and the various monetization channels for content creators.
Over $1 3 million content creators and income through multiple channels and <unk> in Q4 up 54% year over year.
Looking at our community, our inclusive commodity environment and the recent interaction tooth equating tighter bond between our users and our platform in the fourth quarter users. The average daily time spent on <unk> reached 96 minutes.
Monthly injections also increased by 35% year on year to $13 6 billion and.
As for the core members of our community. The number of official members reached $195 million in the fourth quarter up 34% year on year and that their 12 month retention rate continued to exceed 80%.
Now, let's review, our commercialization progress and how we're thinking about it moving forward.
For the fourth quarter, our total net revenues reached RMB, six 1 billion up 6% year over year, and our full year revenue grow by 13% to RMB 21 9 billion.
We are now more focused on our improving our commercialization efficiency and especially on improving our gross margin at a company level.
Now I'd like to share more color on each of our commercial business line.
First our vast and as revenues from Vas was RMB, two 3 billion for the fourth quarter and RMB eight 7 billion for the year up 24% and 26% year on year, respectively.
<unk> in particular has shown solid growth for 2022 revenue from LIBOR cutting increased by over 30%.
Our strategy to integrate LIBOR casting with our video ecosystem has prompted more creators to tap into live broadcasting universe.
This has helped to penetrate more video users converting paying users and optimize our revenue sharing structure organically.
In the fourth quarter, the number of monthly active LIBOR cutting holes increased by over 70% and MP use for LIBOR cutting grew by over 40% both on a year on year basis.
Looking ahead, LIBOR cutting well continue to be one of our primary revenue growth drivers, we expect to optimize our revenue sharing ratio and further improve lateral cost in gross margin.
By the end of the first quarter, we have added nearly 1 million premium members from the prior period, reaching a total of $21 4 million in premium memberships.
We launched multiple Chinese anime titles during the period.
Including the highly anticipated <unk> the three body problem.
In January 2023, our co produced the traditional Chinese Bell graphic enemy Yao Chinese folktale, Congrats <unk> become smash hit generating over 200 million video views our platform.
As for our advertising.
We continue to gain market share in 2022.
<unk> revenues were up by 12% reached RMB five 1 billion in 2022 and.
In RMB, one 5 billion in Q4.
Our top performing verticals in the first quarter, while mobile games E Commerce digital products and home care Alliance automotive and skincare and cosmetics.
In 2022 with further open up our ecosystem to embrace more advertising opportunities across various reduced building scenario.
The new scenarios that we introduce installer mode and improve sales conversion modules has proven our success and performance based AD and carry higher AOI.
In the fourth quarter, our performance based AD revenue grew by over 50% year on year.
In addition, as our users getting mature and into new life stages, the new consumption needs such as automotive and home appliance also attract more advertisers and AD budget.
Allocated to our platform.
Moving into 2023, we'll continue to invest in and improve our AD infrastructure and further integrate our capabilities within our content ecosystems.
Turning into cans.
Revenue for the year were RMB 5 billion and RMB, one 1 billion for the fourth quarter. We are committed to the strategy of development in house digital build globally.
In Q4.
We restructured our game development.
Effectively align with this call.
Specifically, we eliminate underperforming <unk> projects and a centralized our resources focused on genres, where we are already experts.
In 2022, our self development games contributed 5% of our total game revenue.
We expect this ratio will continue to expand in 2023.
We roll out more self development gap.
Looking at our pipeline, we are planning to launch two south Elmont, Ken <unk> and <unk> as well as six exclusively licensed titles in the second quarter of this year.
As Jim license approvals.
Totally resume in China, we expect to engaging more opportunities in the domestic market.
In summary, the new industry dynamics.
More efficient operations.
In 2023, we will continue to centralize our resources to grow our data use.
Increase our gross margin and narrow our losses.
Throughout this process, we will continue to strengthen our execution and tighten our spending while selectively impacting R&D, where improves our commercialization efficiency.
With these measures in place. We believe we are on the right track to reach our financial goals and become a stronger more resilient and efficient organization.
This concludes Mr. Chen's remarks, I will now provide a brief overview of our financial results for the fourth quarter of 2022 and outlook for the fiscal year of 2023.
For a review of our fiscal year 2022 results. Please see our press release issued earlier today.
Total net revenues for the first quarter were RMB six 1 billion up 6% from same period of 2021.
Our total net revenues breakdown by revenue streams, while pushing mentally.
8% that 25% of its highly 19% mobile games and 18% for our e-commerce and other business.
Cost of revenues increased by 4% year over year to RMB four 9 billion.
Our gross profit in the fourth quarter, while RMB, one 2 billion and our gross margin was 21, 3% up to one percentage point sequentially with our tightly controlled cost structure. We expect to show continued margin improvement throughout 2023.
Total operating expenses were RMB, three 6 billion up 15% from the same period in 2021.
As we work on increasing our commercial prospects. We are also keeping a lean cost structure the cost sales and marketing expenses in Q4 by 28% year on year to RMB, one 3 billion, while <unk> grew by 29% year over year.
Marketing expenses as a percentage of total revenues was also down to 21% compared to 30% in the same period last year and will continue to control our sales and marketing expenses, while delivering solid EBITDA growth in 2023.
G&A expenses were RMB $870 million up 52% year over year.
The increase was primarily due to the one of surveillance PE of RMB $252 million related to our organizational restructuring.
R&D expenses was RMB, one 5 billion, representing an 87% increase year over year.
Which was primarily due to increased R&D personnel and one of cancellation cost of RMB $470 million related to our certain <unk> projects.
As we move through 2023, we will take additional actions to reduce our operational expenses.
We think our overall operating expenses peaked in 2022.
Well start to decline in 2023.
Net loss and adjusted net loss was RMB, one 5 billion and RMB, one 3 billion narrowing.
Narrowing by 29% and 21% year on year.
Respectively.
Our net loss ratio in the fourth quarter was 24%.
Notable improvement from 36% for same period a year ago.
We expect to continue to narrow our losses in 2023.
Turning to our capital allocation and the liability measurement, we are keenly aware of our cash reserves and have taken steps to improve our balance sheet, which gives us the flexibility we need to reach our breakeven target by 2024.
Actively managing our liabilities and to improve our balance sheet.
In the fourth quarter, we repurchased and retired a total principal amount of U S. Dollar 547 million notes for a total cash consideration of USD $420 million.
As a part of our liability management plan in January 2023, we completed a 409 million U S dollar equity offerings and note exchange program we.
We withheld a principal amount of $385 million of convertible notes for a consideration of $331 million cash funded by this offering.
The remaining $69 million in proceeds were used to replenish our cash reserve. After these transactions. We currently have three outstanding CBS Dot totaled one 6 billion U S dollar.
As of December 31, 2022, we had cash and cash equivalents time deposits and short term investments.
19, 6 billion RMB or $2 8 billion U S dollar.
We believe this amount is sufficient to cover all of our remaining convertible bonds and fund our future operations, while we take further actions to narrow our losses and our reach non-GAAP breakeven by 2024.
With that in mind, we are currently projecting net revenues for the full year of 2023 to be between RMB 24 billion and RMB 26 billion.
Thank you for your attention we will now like to open the call to your questions. Operator. Please go ahead.
Thank you we will now begin the question and answer session.
To ask a question. Please press star one one on your telephone and wait for a name to be announced.
Withdraw your question. Please press star one again.
For the benefit of all participants on today's call. If you wish to ask a question can management in Chinese. Please immediately repeat your question in English. Please.
Please limit your questions to one at a time.
If you wish to have follow up questions.
Please rejoin the queue.
Our first question comes from the line of Daniel Chen from JP Morgan. Please ask your question Danielle.
Bonnie.
<unk>.
Yes.
What does this sound way to the audience.
<unk> seen that will may have kind of out there.
Alright.
What is a high bar in the hall.
Tim to your point on it at the top.
Thanks, Alethia is sharp and of course the pricing there.
Just a woman so we are in compliance with their system.
Sit here, what's the defining Shanghai.
Thanks management for giving me the opportunity to ask questions. So my question is on your <unk> outlook. So with the macro economy is gradually recovering.
Our core business strategy in <unk> history, and whatnot, the key focus quite from a management point of view. Thank you.
Okay.
Okay.
Anheuser some locally Aloha.
It seems really equal synergy.
So from a javelin two quick one too.
Alexander <unk>.
Our tier purchaser cornetto golfer when we'll kind of make what were putting on growth. Fortunately on this front.
Starting from last year with notice that the Internet industry has entered into a new era of.
Every company is more focused on the quality of the growth and quality of revenue as well as improving gross margin and focus on cash flow not just Chinese Internet company.
We noticed many U S company are doing the same thing.
<unk> gone through that quicker consortium.
Please for Tim Conder.
As for US our key objective for 2023 would be to grow our top line narrow our losses and.
Focus to achieve higher quality of user growth.
Please see the changzhou prototypes.
So those are the funds in their heart panel harbour.
And he went out of Virginia, <unk> fundings, how quickly those remarks.
That's usually not the planting.
Councilwoman.
Because it seems like let's call it this.
This will be our long term strategy.
Not changing.
Because the change in the environment, but of course as you mentioned the recovery of the overall economy will help us better executing on this strategy.
<unk> for the year.
<unk> Nikko.
So taking all of those are typically opt in Dayton, Ohio. Unfortunately.
Sure.
To her connection.
Overall, our business will be more focus there will be two important task one is to increase our top line and narrow our loss number two is to increase our <unk>.
So even though we're convinced to serve small either equal from job.
We're mostly confined to T cell mod chunky, Queensland, but all of them okay.
We're mature further Molly <unk> zone.
However that increase will come.
John D passenger oxygen.
Danielle will remember 20 equivalent number of Sandler O'neill.
Our plan.
Including automobile.
Number one task increase our topline topline.
When I say increase our top line.
Referring to the increase our top line as well as our gross profit will be focusing on improving our gross margin and narrowing our losses.
In the fourth quarter with net with achieved gross margin improvement from a year over year and quarter over quarter basis. We also narrowed our net loss by 29% year over year.
Expect that in 2023, our overall net loss will narrow more meaningful and to achieve our breakeven target by 2024.
No comment.
And from the <unk> trade show <unk>.
Sure.
We're mostly gone through Q2.
The download DAA order from China.
He will tell you the charts I showed you the T cell.
On the user aspect, we will no longer just pursue.
The absolute number of miu, but rather to focus on the growth of our da yields as well as the south conversion of each deal that can bring to the company.
Tanya we're mcquay Tucson woman.
<unk>.
The whole answer.
Patrick talked about woman Luckily pedal patterns.
In 2023.
We are expecting our Ta Youtube miu's ratio will continue to improve currently we're at 28%, we expect to increase to 30% level.
Cologuard two <unk>.
And I think each year.
Q1 was higher touch.
This will mean.
Engagement better stickiness of our company as well as higher commercialization potential.
Please go to our <unk>.
Sure.
Xander lethal cheaper each format.
Sure Colby.
Lower than tier one.
Ananda patents earlier.
And then also impact social P tenner PT.
I still want to emphasize that our community and content ecosystem as the cornerstone of our business no matter what kind of strategy.
The community and the content ecosystem, that's the foundation of the business.
Can you answer Byzantium lead that is a threat.
So joining us is element singular standard.
Two for Pizza Codell on the dose you don't put elements.
This is al.
So there you go.
Got it should only on lithium Katya zhukova.
<unk>.
Yeah.
Hershey those particular patterns appear.
The agenda.
Qt way then there were some package assortment they want some thunder Nathan.
And this year, we'll be celebrating our <unk> anniversary in the past 14 years, but having experienced three industry cycle, which is the mobile and PC era mobile era and as we go into the AI powered era.
No matter, how bad the technology industry is evolving we're busy building the community and the <unk> content ecosystem aspect.
What has kept us going while others come in and go well Michelle's team culture down there on the Johnson <unk> Johnson <unk> Johnson, so either hardware or would you look to Honeywell.
You just saw them until you also the teams will delay the assortment we're doing so let's see the tissue.
We believe the value of high quality content. We also believe in that.
Values are high.
Talented content creator bring that is.
Biggest moat for our business. It is also the biggest competitive advantage.
We all in this ever changing landscape, where many synching or.
Sometimes <unk> Sidoti.
Habanero <unk>.
Looking on the roads.
So youll see in Taiwan.
Sweet of hydro so let's.
Let's see what types of these ando who's in charge of Homeaway.
Super.
We found that the whole lot sort of pseudo Tien.
No doubt.
We believe in that our unique content ecosystem that can continuously generate high quality content.
And.
The talented content creator and the value of this content that bring to visibility is our core competitive.
We will continue to cultivate that and continue to.
Build on that and high quality growth to our company.
Operator next question please.
Thank you next question comes from the line of Shred Chang Jiang from C. ICC. Please ask your question stretchy.
A question.
Youre climbing trenches with.
Wisconsin is now growing retail channel other than showing the rental rates on air to construe consisted of Tito Martins should.
Sure no one megawatt <unk> GT the tissue.
Thanks Scott.
Chairman there show that gene.
Nimble maintain Shenzhen franchise.
Oh, the hydrocarbon come down even tunnel from Canberra, Trinian, clearly cheap cheap cheap.
Yes.
Thanks management.
For taking my question and my question I've got two financial outlook.
I think John mentioned before we see the company's gross margin has continued to increase in the past few quarters.
Ill hop out management think about the chain of margin in country.
And it's not really even the full year revenue guidance.
As each segment that would imply and lastly on the bottom right, what's the optimal explore the anonymous.
In detail. Thank you.
This is our fifth quarter as me.
Can measure the key objective of the company.
This is to employ our gross margin and a narrower loss. So that's why for 2020 discrete revenue guidance.
We are cutting down low module vendors, such as esports content sublicense revenue business.
Certain low margin e-commerce business.
As a result.
We expect our e-commerce and other revenue line, what undertone is free to decline by 20% to 30%, However, with better gross margin and gross profit for e-commerce and other business to improve year over year.
And for the non ecommerce goodness.
Revenue, including our Gan.
As an advertising so if we compare these together we still expect to grow by 20 plus year over year in 2023.
Regarding to the gross profit overall.
Overall, the increase of the revenue will drive the increase of the gross margin, especially for certain fixed costs such as server as bandwidth.
Staff costs and content costs.
In 2023 as I mentioned.
We'll be more selective and our focus in terms of the content investment.
We also expect the percentage of the silver.
Annabel, let costs stockholder with a cloth.
In terms of the revenue sharing cost where despite each business lines gross margin will improve year over year.
At a high margin venues gradually increased contribution there will be more meaningful improvement our revenue sharing costs.
For Opex total Opex have peaks in 2022, we expect Opex will start to decline in <unk> III.
With comp sales and marketing expenses by 15% in 2022, we expect further cost cut down for sales marketing and clinical history.
Meanwhile, G&A and R&D expenses in terms of the absolute dollar amount. We're also declined slightly in <unk> III.
We expect gross margin to gradually improve to mid country throughout 'twenty three and then we also expect meaningful and narrowed our non-GAAP operating loss in <unk> history.
Thank you operator next question. Please thank.
Thank you Scott.
Question comes from the line of.
When John from China Renaissance. Please ask your question.
According to tell us what how many Coca Cola relevant here.
I was hoping that constitute only south Atlanta, my kind of on your own.
Sure.
Walnuts are towards sustained and attractive total loans.
So remote that the cancellation of our team to focus on low to Oklahoma.
Unchanged.
Sure.
So my question is on advertising.
Advertisement can you discuss about the outflows as market in 2013.
And then what the kind of change.
<unk>.
And then secondarily on the product side can you give us the latest update onto story mode, and I would a kind of a development of <unk>.
That's been asked on the product side. Thank you.
Also here how essential is a story about bottomed out hunting showpiece Zhengzhou Guangzhou.
Yeah Ali on yes, yes.
Yes, sure about Japan.
The June quarter.
Just a little central so John .
Do you see yourselves.
Firstly on the story mode or a multi screen multi scenario is one of our key strategy, that's driving favorability user growth the 28% <unk> ratio and 96 minutes daily user time spend means the strategy is working effectively.
Let's start in tissue.
Sure. So you guys seen a challenging.
<unk> welcome the OTT adoption the Changi why should I say constantly I think about <unk>. When we acquired <unk> starring Eli well managed under <unk> for the truck Washout Cautiousness, you mentioned power that Chad.
It sounds like it's at <unk> one.
Yeah, that's right.
I mean, a lot of our year long trend out there both on that.
This is Joseph.
Yes, it does how it <unk> show you beat on the Yahoo.
So that's hurting the.
The official <unk>, but certainly yourself ashish.
Star mode of newly added scenario ethane.
Supplement to our existing <unk> broadcasting and big screen OTT scenario, we noticed that since the launch of story mode. He has played a vital role in terms of increasing user engagement, especially for user who are not as active.
It has also helped us to attract new content creators across the industry.
At the same time, it has driven better than expected increase in terms of video views as well as user time spent.
Sorry, Moda has essentially allows user to access their favorite availability content anytime anywhere.
These are all of those so youll just hangzhou.
He also Naomi so seamlessly.
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Vincent teams, each or high ship Arcella Tien, Colorado partial Jones.
<unk> turns out how about Lucia so you won't enhance it I'll start with well why don't you on the <unk> Shanghai is that Suzanne Collins.
I'll start it off by another 20, Jonathan Toggle up I think you bought <unk>.
San Diego Costa Rica.
Yes.
People that that's somehow again, Jim College yourself.
They were really has always put high quality content and content creator at top priority.
Inception.
<unk> ecosystem and have maintained a very healthy growth. When we are mentioning in the startup mode grow at a fast pace don't forget that <unk> TV also grew by 50% year on year and maintained a very healthy growth rate.
Yeah.
Charles.
On the shelf as a tissue the ones have come on very suddenly and this should show you Gautam. So you won't see anything starting today, you won't see who appear to be the Shanghai <unk>.
I think that sounds like it has really no you should.
<unk> seen the easy.
Yes, I don't have that yet.
So what is our thought that seagull shortly yes, great Shigella Ebola in Guangdong <unk> daughter seamless.
Whether it's content creator our content consumer their need for high quality content won't evolve so will their sense of style, we think that storm.
It has served a very good baffled to Kerry do you would you be content to support our ever growing ecosystem. In addition, the combination of Starwood topic and our existing ecosystem has helped us to increase our AD efficiency and this has also brought new commercial opportunity.
For live broadcasting and advertising.
It also they usually have one call no Ali on yes.
That's also a tortured this is carlos.
Oh, that's also a kind of a shopko issue that sounds right.
Hi, Dan.
So you can influence it should be done the junk.
So I don't really see Akshay the T cell <unk>.
As you may already aware it has been a very challenging market for advertising in 2022, the overall AD market only had low single digit growth in under this challenging market. We continue we're continuing to gain market share globally. There is full year.
Advertising revenue, we have reached $5 billion.
Oh, yes, sorry.
Firstly I will go through <unk>.
Yes.
Yeah, Jonathan Hi, shook way.
Great.
Food and that's also first of all go through high soybean you aren't going to sure. Yeah go Guangzhou co founder two totals are what.
Looks like you've got this is.
Well so the turnkey.
As for 2023, they there has been a recovery of confidence for advertisers.
Maybe overall industry can achieve a double digit growth we will see that however, we also noticed that for all advertisers there will be more cautious and ultimately focusing more on the core value of their as investment and their App investments Inc.
Patiency that doesn't show much of a timeshare Congo, choosing mainly in total Youre cynosure.
Thank you Shashank tissue Mitchell guilty Italish imagine you cannot Joseph Washington.
Since you're not just shipping Paypal issue.
Sure the Centaur decided that just shifts.
Michelle could you tease that out.
So hopefully that's helpful.
Quite as high as <unk>.
Shanghai Tang.
Forgot it sounds like why not official trading well I shouldn't say James is one <unk> yeah <unk> Yeah. That's also there.
The key reason for advertisers to invest in ads, we have categorized for three main areas one is new product launch.
<unk> two is brand rejuvenation number three is continuously to increase their bat brand perception and drive sales conversion.
Advantage for it but we're really advertising is that we can cover all above three core needs and.
We are confident our outgrowth rates will beat the industry growth rate.
So there was some element of it yeah, that's my sincere sympathies and Chelsea, that's a heightened our usual high school zones.
Turns out they don't seem so his ego okay Cai.
How should really now.
Now my thinking.
<unk> population.
So powerful Michelle she that Youll see the southeast Roma Yo Yo.
It leaves about tissue.
These assets how long Youll see trade that is so true.
Yourself in your Forty's engaging that you'll tell us that answer is yes, you said, you'll keep at Hawk, yes, if all of our cash is high.
Those are going to tell you don't need it you got Charles Yeah, No QE.
You'll see again youll see it wont go up although you will see layer Santa.
Such homes about them hope you're all well.
Well <unk> Youll see charge offs, you won't go away.
Sure.
So youll see youll.
You'll see that that's actually the <unk> salary.
How does she want young, but you're quite youll see things will be done to the strategic okay.
Cool <unk> batches to kitchen, how clean is that these are shopping center, that's not quite that simple that you moved out.
In 2023, where we'll be looking to upgrade our sales model for different industry verticals.
I believe the integrated marketing will continue to be our long term growth driver.
For our leading industry verticals will continue to build high barriers and upgrade for our product matrix such as for games <unk> and digital product take gains for an example.
There, we have the largest gamer and game content community in China, and we're near 90 million unique users consume content gain content on a monthly basis.
We think the recent regulation of.
Also a favorable tailwind for us in Q1, we have unified the okay. Ars four three key game team, including gained distribution gain as in game content in order to provide a more comprehensive service to game company.
Improved efficiency for game distribution. Our goal is to enable every game company to reach their target audiences in time, and also achieved long operation cycle and higher conversion rates on visibility now.
Now the other tissue, okay quarter yet.
Yeah, Yeah yeah.
Sure Keith.
We'll conduct by shell, especially at those two.
He has signed the Italy, you'll get it.
It's only a teacher you'll need to.
Sure.
<unk> is all about HIFU under shooting nail Shanghai should shift to chin, yeah, well unless you've seen it linger Adam Tyndall DAK in single tool.
Hi, this is shallow water <unk>, yes, sorry, I think Singapore sure Joe on top so hard gel either your machine.
Yes, <unk> seen a pin pad.
<unk>, therefore, the fastest homegrown sofa Lasalle John .
Oh, yes.
You can see the social change I think.
So it shouldn't be England, Fortunately decision hinge on cool pass will show you the pipeline Joe either more schedule table two buses are much broader.
Yeah, yes, it sounds that yeah, a quick question Kishore.
It sounds as though you shop.
Secondly, we expect to further gain market share and attract.
Larger budget from areas like E Commerce, automotive and general F. M C G.
Take E Commerce for example, busy billing is.
Hello.
Hello, operator.
Please carry on.
Yeah.
This is coming up here for a second.
<unk>.
As a military.
The new community openings.
E Commerce collaboration last year together with Alibaba indoor MTV, we have optimized our brands getting conversion model.
Our traditional brand and performance ad.
In 2020 to over 1000, new brands and over 10000 Teu has pivoted on David.
That's a function.
<unk> also recorded better than expected performance based AD revenue.
We will continue to integrate video and e-commerce like Libra.
Live Broadcasting E Commerce system and explore delivers unique okay.
Action model.
We also expect to quickly expand our market share in E Commerce, App and their budget this year.
Patricia why the hop alcohol woman, Sean father, Yes, she shop, so aig's either you know yeah biopharma children in need of T shirts, you won't get cocoa consortia, they say Intel shortage enjoyed how much easier it powerful amazing content.
Xiaomi is haunting the tissues are paid for our T cell or Michelle kind later somebody or somebody does it also limits our alteon, yes, yes, I saw that don't have the shifting your salvage tissue. So am I understanding that don't yet.
On top of all that we're also working to improve our algorithm and infrastructure and invest in AICPA application and also improve our greater capacity to provide our customers with more scientific marketing data point.
Also we will continue to explore in more at scenario enhance AD friendly atmosphere in our company all of which are the right thing to do and we have but that's what we have done in 2022 and will continue to carry into 2020.
Operator next question please.
Thank you. Our next question comes from the line of Lei Zhang from Bank of America Merrill Lynch. Please ask your question Lee.
Oh, Hi, Glenn anytime I found how I'm supposed to just show that to you Oh well the ones you can also corner, you'll see the same kinds of them, our semi and trunking or C O.
That's not what she said that its currently at 13.
Joe sure about how can we hold off up you've got mail phishing, there you'll see that.
Thanks, John Thanks management for taking my question. My question is mainly about your gaming business.
Can you share with us your in house, Okay, and strategy and outlook and any new game. We can expect further with fewer mass gaming licensing. Thank you.
Okay.
Okay.
R&R again.
So seasonally.
Oh.
Do you still believe that emerges.
<unk> harvested.
Building blocks, which doesn't bother us too.
Sure sure because you don't.
At least we can shelter.
The holywell not just for one job.
Youll reception to the yards have good ideas.
Now I'll tell you what she said.
However, even without hydro.
You may have had to get out there you go.
And I think you'll see us a little teaser PTC, you'll see those facilities et cetera.
We believe we have entered a new era of hurricane business last year, but how is one of the reason. Another reason was the increasing penetration rate, where mobile gamers in China and also gamers involving pace and they are increasing.
Demand for higher quality game.
Shaping the overall gaming industry.
Production cost prices the success rate for games is declining.
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As you know.
John .
Daniel Cedar Javier basically the pronounced as hungry as a whole.
And go from chemical Ctrip penetration caveat.
These two portfolios how do you see.
Oh God, we're not too sure that freight Eddie mentioned withholding so.
Number two Hangzhou, China <unk> shooter leader.
In the era of lower gain their penetration rate.
It's easy to make money for things company has the lowest they have good quality of titles.
I really believe in this new era, there will only be two kinds of the game.
Can make money as well.
One is the.
Super Micro's Tayo remember to be the number one title in the segment by segment in China.
Because we will have a longer lifecycle.
And only.
To kind of gain will be able to gain market share and survive in this new era.
Mm 300, 100 piece under your receiver.
It's Andrea so we live in.
Sure.
Total labor.
Well hopefully contending choosing.
Two things that we were in Q2.
Robotics.
With the receiver.
So you will see the start of the hunger towards ship Bcl two.
Rajiv panels go to detail Youll see a capex number for alcoholic liver zero.
<unk>, two <unk> patent or some way to go no go Tanzania, Laos, Cambodia, even harder.
All right.
There was a risky strategy is designed to serve the mark the next market.
The market trend in next few years, we will be firmly executing the strategy of developing house and distribute globally.
This will be the month Tvs or the next industry cycles, because only global distribution can cover the increasing production costs.
Only the highest quality of gain.
We'll have one operation cycles.
Sure.
Higher ROI.
Okay.
You will note that it has rolled into three women don't get resolved that format.
Legally Joseph Pujol Akshay.
I hope the three Anthony on the hardware.
Yes.
Young woman and global controller, <unk> rollout with regards to incur similar type margins.
In terms of genre, where we'll be more focused whether it's a draw on the operating gain or our self developed game will be focused on the areas that we hope the most advantaged.
The ACP parking will be women.
In Shanghai will be focusing on.
Also we'll be looking to cut down the number of projects.
Looking at Comcast, our best resources.
On the metrics.
Two zero tons over three annual salary goes from license amendment protections for Shinhan.
Solar PV.
<unk> TGT zone.
From a results perspective, the investment we made in South development gains is starting to bear fruit.
22, our self developed games revenue is already contributing.
5%.
Total gaming revenue, we expect this ratio will continue to increase in 2023.
At Park, Ohio.
Hello.
About how to keep our <unk> refinery.
Okay.
So it won't go away.
Sure.
Which particular business, we don't do you want to <unk>, how do you see it totally.
How do you Orlando, usually every year, where you'll see portfolio, yes anyhow.
Silver sales.
Awesome.
As for the button how are we building.
The releasing of funds in our house.
Already normalized.
It has been quiet.
Vancouver, whereas on mass spec.
How to be really on a monthly basis, we have also the imported titles.
There's also been a batch estimate.
So we believe that this has been an industry tailwind favorable to deliberately not only our self development games. It's also being it will also be favorable for our game join the operation as well as for our game advertising.
Oh, sorry, sorry, you've always got the relevant senior Archie do particularly around class three I know you will see shortly.
And also we're looking to launch two self developed titles in the second quarter of this year.
Please remain on the line your conference will resume shortly.
Please remain on the line your conference will resume shortly.
Yes.
Okay.
Hello, Operator next question. Please can you hear me.
Thank you.
Our next question comes from Lincoln call from Goldman Sachs. Please ask your question Lincoln.
Hey, guys. Good morning talking with you in the queue.
So I wanted to just go ahead I was going to slow down our tissue kind of just how about Macquarie.
Sure.
Timna integrating ITC tissue contour.
Okay.
To see that.
That's requiring ITC is required.
Understood.
You see that either.
<unk> bin this is Joey.
Yeah.
So.
Thanks for taking my question. So my question is about.
Yes, ITC. So basically this is a pretty hot theme for this year Ken.
Can management elaborate a bit more on how.
How we think hopefully pretty comply.
<unk> front and the potential.
The product monetization opportunity.
Thank you.
Well really as you say.
So there are some good <unk> from the software, though you know quench, whether you call. It neither should you do with how you guys are something that uhm, neither on Transocean leader <unk>.
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<unk> sure Chattanooga shorts, you certainly thats very helpful.
Eventually, though Shannon, who will talk to you.
Yet none go. Please proceed either shoot potential narrow.
What you don't need the <unk>.
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Jay the soil and that should go down change when they lose Jody.
Attitude towards a combo had neither jumpy young daughter doesn't don't go too far down the road.
I believe that.
Opportunity that AIG C. Kim Greene is it's a mega event not only for the industry players. So that's where the when the whole society to pay attention. We believe will bring a huge productivity increase in terms of content generation.
First.
And knowledge it would be the invention of so mobile mobile phone camera.
It has low.
Everyone to record video every time anytime anywhere and the.
GCE can help to increase the productivity of those content and significantly lower the production cost due.
Due to the PJM.
<unk> seen them go get beta in Tyler.
Leif.
As it relates to just these are the highlights.
We're really just a soil in Danone goes home Nico Aig's it down to just a quarterly issue.
Well you may be John Halamka timber thievish within that actually the highlight on the male and female within country Eagle <unk> legal team.
Well really as you said, Don I'm going off of that or do you go.
But truly.
We believe it has brought a very big opportunity for availability as well as for many other players.
In this industry, but especially so for availability is because.
For one we our massive content off one number two we are our UGC platform.
Tahira, what or treat sick leaves about <unk>. So let me just.
Total U S. P S O.
Is it tighter than Gogo you guys have now that you've got your <unk>.
So as it relates to <unk> now to a tenant goes from here.
So for the other day ago saltwater English visual Peugeot is that something Youll corridor championships in first Ricky.
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Peter.
So what are you seeing any that are part of it goes to the <unk>.
So you probably youll not see cancellations.
After this issue Noma will meet your Pizza theater budget is shifting anemia, you attach that you thought kickoff a willingness of Sabine, Canada hydro things from Jacob Lundberg.
First aspect would be on the search from.
The Chad GBT similar experience will help users to find the videos that they want more efficiently.
Such as product reviews, let's say people want you to look for a new Airpods review.
<unk>, who has our own data, we can easily accumulate and spa.
<unk> and organize and structure, a useful information and present to the user and whether it's in the format of video clips or in formats.
Tax it will largely hence the user experience when they use the search function.
With that said our business that may open door.
Just the labor.
<unk> shipped in April .
Shifting their own partially or how the lease attached to reaching any hope that what you kind of give me tushar.
Sure.
Nathan console, what she'd other children.
I'll try the GPT jamba social they get here, how creep up agenda did you Leland.
Later on the Chile to catastrophe and looking to open to the public schools.
Yes, I'm, calling on vehicles go solely that your shelf Apis and literature.
They go out later.
That's fair.
Because we have a massive amount of knowledge really bad content and.
Knowledge knowledge content in a constructive.
Way it has more time value even after a few years back we can still find that historical video continues to generate views and bring value to users.
Catchy Ricci like search experience will help us to enlarge the value of our historical video content at the same time to improve the consumption and efficiency for our users.
Technical utilization Hydrocodone man.
The AIG signal conduction.
Congrats on do the Chico tundra.
It fuels our role in that.
101, treating it from an anyway, ICC xiaomi, but useful hockey's consortium.
And essentially you know 12 O'neill Hi, alarm goes off.
There's two types of put on the stripping it you'll put on a bunch of sense yet.
Cigarette traditional go to choose only the triangles are that you've got going.
Daughter Charger.
Turning to our <unk>.
With regard to trade issues and not just for this year, how much of that can only work with your people this way.
In terms of content.
Content creation tools, we believe are the aig's he can bring revolutionary experience.
Allow more users to start creating content for example, the same material can be presented.
Well, Matt in different in different videos and also allow many.
Users, who used to just be content consumers now they can easily create a content makeup of fashion.
<unk> got that out.
Harsco inertia.
To the senior bridge with EMEA.
And then you mentioned a piece actually use a football cleat other shinya absolutely with him.
And then just on your <unk>.
Senior to abortion issues hopefully here that these Amazon now agitation on Golar LNG Ashish seems yes.
Coincident opportunities you want.
Without what other people until of course, you're kind of looking.
Looking at each of them does it seems like local news agenda on the book and make we don't want to you want and I'll tell you why that maybe don't use of 210 million now I'll take that.
<unk> General counsel.
Sure.
Crinone car tenders are essentially <unk>.
So in that Georgia would you look that she neutral both senior hour tool from your AIC seen ago, maybe touch on whether you got you got you.
The whole woman that Guangzhou benzene.
Lastly on virtual content creators as you may know deliberately is already currently the largest.
Virtual content creator platform in China, we have tens of thousands virtual content creator virtual live brockhaus curse arm deliberately and GC can swing more automatic and more efficiency and.
More higher higher user experience to the virtual characters for example.
For example, our virtual content.
Virtual content host <unk>.
What aig's he can bring us transform her to a real person.
And that.
And that will bring revolutionary experience for people, who are fine and this is this has massive imaginary space now, but what I can do with it so well.
We believe AIG C will serve very positive is that in terms of the virtual content creator virtual Libra housing and the virtual idols that deliberately can offer.
These underpin <unk> hired alitalia in theaters.
South Asia, Selena, just a soil and then go down.
She got some handy none go down tango two hold outs useful totally these actually Eagle had another show Tucson dung Antoine <unk> thought you don't know.
Hi, Joshua you go Jacob Charger quarter corridor Charger P&L comment on each of those shipping ultimately you've got now lets you go beyond high touch did on makeup agenda Nikko chemical coat Alice Shebang, So you're what you're the aig's either John that you would be able to.
Sure shipping locally Google couldn't daughter, and they'll go through the numbers in Q1, and I'm going to touch on.
Good afternoon.
Currently seeing.
So it was you could see that GC.
Alright that excite you should either to go project.
Yeah.
As a platform connecting content creator with users the better.
Evolution of production tool will serve us very positive bring very positive change to our platform. The change probably will be similar to the PC to mobile era.
Oh, that's allowing more people to access internet allow more user to be able to create content easily and that's why our user has.
Increased by 10 folds in the past few years.
And I am.
Personal we'll be very looking forward to the day.
Involvement of AC aig's it towards in terms of Ah.
Improving the video production efficiency, allowing more people to create content more easily now will definitely surf.
Visibility asset as a content platform the most.
Okay. I think that's the time, we have for today operator, we can wrap up the call.
Thank you.
I would now like to turn the conference back to management for any additional or closing comments.
Well. Thank you everyone for joining us today. If you have further questions. Please feel free to contact our IR team or TPG Investor Relations. Our content information was presented in our news release earlier that were issued earlier today. Thank you everyone and have a great day bye bye.
Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
The conference will begin shortly to raise and lower Johan during Q&A, you can dial star one one.
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