Q4 2022 HUYA Inc Earnings Call
Speaker 1: Thank you.
Speaker 2: Hello, ladies and gentlemen. Thank you for standing by for the fourth quarter and fiscal year 2022 earnings conference call for Who We Are, Inc.
Speaker 2: At this time, all participants are in the listen-only mode. Today's conference call is being recorded. I'll now turn the call over to Ms. Han Yuliao, Company Investor Relations. Please go ahead.
Speaker 3: Hello everyone and welcome to HUYA's fourth quarter and fiscal year 2022 earnings conference call. The company's financial and operational results were issued earlier today and are posted online. You can also view the earnings press release.
Speaker 3: by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours.
Speaker 3: Participants on today's call will be Mr. Rongjia Dong, Chief Executive Officer of Huya, and Ms. Ashley Wu, Vice President of Finance. Management will begin with prepared remarks and the call will conclude with a Q&A session. Before we continue. If you
Speaker 3: 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 view of the United States of America.
Speaker 3: any obligation to update any forward-looking statements except as required under applicable law.
Speaker 3: to update any forward-looking statements except as required under applicable law. Please also note that...
Speaker 3: HUYA's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. HUYA's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited.
Speaker 3: Directly comparable gas measures.
Speaker 4: I will now turn the call over to our CEO , Mr. Rongjia Dong. Please go ahead. Hello, everyone. Thank you for joining our conference call today. I made the ongoing macro headwinds, and I hope to see you again in 2021.
Speaker 4: Volatile, yeah, for us.
Speaker 4: While we delivered standard user growth for the year, our four-year revenues came in at $9.2 billion showing an annual decline and net loss.
Speaker 4: Our focus has been on controlling the aspects of our business.
Speaker 4: where we can make improvements to show up our solid foundation and prepare for growth.
Speaker 4: in a more favorable market environment ahead.
Speaker 4: In the meanwhile, we have honed our content and product offerings as well as improved our operational efficiency while fulfilling our commitment to cooperate.
Speaker 4: social responsibility.
Speaker 4: I would like to take the opportunity on Cisco today to share with you some of our progress and strategy moving forward.
Speaker 4: On the user side, we continued to bring high quality esports tournaments.
Speaker 4: and the end payment progress.
Speaker 4: to our users. We also further enhanced the broadcast and viewer interactive experience atfnr.com. Thanks again!
Speaker 4: partnering with game studios.
Speaker 4: As a result, we were able to achieve stable user scale and a healthy user engagement level in the fourth quarter.
Speaker 4: At the same time, we adopted
Speaker 4: String-junk policies for our marketing spend to keep our expenses down.
Speaker 4: lowering Q4 sales and marketing expenses by 80%
Speaker 4: 48% year over year.
Speaker 4: In the fourth quarter, we are live mobile and mails.
Speaker 4: $85.5 million, slightly up compared with the same period last year.
Speaker 4: on the annual basis.
Speaker 4: MAOs were 84.3 million, growing by 4% from 88.9 million in the 2011-11-11.
Speaker 4: We also maintained our HuyaLife app as next month's user retention rate above our 70% average for the full year.
Speaker 4: Next, let me share with you some highlights on our recent product updates and collaboration efforts with game companies.
Speaker 4: We have been expanding our portfolio of live streaming interactive features in addition to the popular gift droppers.
Speaker 4: We recently introduced an upgraded Treasure Digging feature.
Speaker 4: This edition is for the linker.
Speaker 4: broadcast as streaming behaviors with suitable audience.
Speaker 4: and allow not only participating viewers to earn the award.
Speaker 4: but also broadcasters to collect rewards for their activities.
Speaker 4: After a broadcaster completes a certain stream time or other streaming related activities,
Speaker 4: All will be released for users to play.
Speaker 4: Users can also obtain exclusive awards by participating in the Treasure Digging live broadcast room via check-ins and posting comments.
Speaker 4: Oaths can then be traded in for a variety of game properties provided by the relevant game company.
Speaker 4: This reward system has been proven highly effective with our users.
Speaker 4: Last December , together with popular broadcasters on our platform, we launched data.
Speaker 4: December , together with popular broadcasters on our platform, we launched the right games.
Speaker 4: Carnival! Treasure Digbing Activities for five major League of Legends IP games.
Speaker 4: The game studio offered 400,000 pieces of free game tools and a cumulative of $1,000.
Speaker 4: 2.8 million users participated in the 10-day campaign, achieving a successful outcome.
Speaker 4: from our innovative cooperation.
Speaker 4: Our collaboration is also a good representation of Guiad's continuous effort.
Speaker 4: to provide more services around games and our ambition to diversify and increase our presence in the game industry value chain.
Speaker 4: In terms of our video business, our broadcasters continue to be the driving force of video content production.
Speaker 4: With more original creators joining our platform to enrich Gui's supply of video content.
Speaker 4: It is also worth mentioning that our AI real-time editing function is being utilized more often by our creators.
Speaker 4: This tool specifically tastes the recreation of live content.
Speaker 4: through automatic
Speaker 4: editing and processing capabilities. We can improve.
Speaker 4: production efficiency and motivate both users and broadcasters.
Speaker 4: Our efforts to support our creators drove the total number of video uploads in 2022 up by nearly 50% compared with the previous year.
Speaker 4: Meanwhile, we have been enhancing users' video viewing, experience, and video content consumption.
Speaker 4: We did this through both embedded videos in our game community and by introduction.
Speaker 4: and emotional.
Speaker 4: vertical video viewing format.
With these enhancements, we achieved about 40% growth in total viewing time for on-demand
videos on our mobile app in the first quarter.
compared with the same period last year. As we build out a more comprehensive video content ecosystem, we believe we can increase user stickiness and also drive community.
community stations across our web platform.
in terms of our corporate social responsibility initiatives.
In 2022, we partnered with over 9,000 people to make this event possible.
1,800 broadcasters and held more than 8,000 live-streaming sessions promoting positive social impact.
Topicals covered areas such as traditional culture preservation, environmental protection and terrifying the online environment from next to influence.
During the year, we also joined forces with a few international NGOs to launch the Protect Our Home Platform campaign.
this included is
included several related public
awareness activities featuring high-profile KOLs and our leading broadcasters.
featuring high-profile KOLs and our leading broadcasters. Additionally...
We promoted the campaign by using a new virtual gallery digital format. Millions of tournament viewers also enjoyed this new format, which was integrated into our tailor-made virtual format.
Virtual Esports annual for the 2022 season for LOL.
Championship Final in Q4.
These efforts have not only enhanced Huiya's brand influence,
but also contributed to the healthy development of the live streaming industry.
Well, we are two, dear, then.
healthy user scale expansion for the year. We were impacted by the relatively weak market.
environment in 2022 which can train together.
in 2022, which can train users to expand power.
Regularity policies introduced during the year have also placed added pressure on the industry by instituting higher compliance requirements for both gaming and live streaming sectors.
Accordingly, we made prudent adjustments to our products and operations and will continue to strengthen our abilities to meet.
compliance regulations.
and ensure are sustainable development.
The STEM path we have taken in 2022 to optimize.
Our operations, hubs and expenses.
place us in a strong position to benefit with the market.
begins to recover.
Although, there are still some uncertainties.
in the market environment in the near term.
We will continue to strengthen our services for users and content creators.
and provide high quality content in 2023 and going forward.
We will also advance our product development capabilities and implement innovative technology to further consolidate via school competition sales.
In doing so, we can maximize our advantages and maintain our leading position in the game live streaming market in China.
In the meanwhile, we will actively explore our opportunities to diversify our revenue streams and broaden our business ecosystem.
With that overview, I will now turn the call over to our VP of Finance, Ashley Wu, to share more details on our operating metrics and financials. Ashley, please go ahead.
Thank you Mr. Zhou and hello everyone.
Following Mr. Dong's remarks, I'll start with some updates on our content enrichment and diversification initiatives.
In the fourth quarter of 2022, we broadcasted over 70 third-party professional esports tournaments.
and the total viewership of those events reached approximately 360 million.
The largest viewership during the quarter was for LOL World 2022, Honor of Kings International Championship, Demosir Cup, and CFS Grand Finals.
While the time zone differences between China and the US for worst 2022 has some impact on the live broadcast views,
The overall viewing data of our core users remains stable.
while Rift League Season 2 also gained a lot of traction.
In particular, with our different cooperation with the LOL, while risking on tournament Otherwise, our relationship was pretty far.
We introduced interactive prediction features and a 4K HDR viewing experience for those matches. These innovative features also make it easier for users to switch between the in-game streaming channel and our platform.
The license tournament content supplied in Q4 was not as high as in peer-risk quarters.
mainly due to event systemality and certain disruption from the COVID-19 resurgence.
As such, we added more self-produced programs during the period. In the fourth quarter, we broadcasted over 45 Hoya organized esports tournaments and entertainment PGC shows.
generating total viewership of approximately $150 million.
In addition to fan favorites such as Peacekeeper Elite All-Star annual Invitational and Thunder Series of Honor of Kings.
We held the HUYA platform qualifier for the Demosir Cup.
which gained great traction with our users. The commentary programs hosted by well-known streamers and former professional players for both World 2022 and HOK International Championship also helped us to create a more inclusive and more inclusive world.
promote the popularity of those events.
Additionally, during the quarter, we launched two seasons of the dating variety show, Happy 72 Hours.
further enriching the PEN entertainment content on our platform.
Under our strip screening process for content procurement and production,
We had over 30% fewer total licensed and self-produced events and programs in 2022.
Compare with the period year.
Our total willing data, however, remains steady.
Although our Q4 terminal license cost was significantly higher due to the worst 2022, which was a major contributor to our growth loss for the quarter, we will stay true to our focus of covering key events that are popular among users.
while striving to achieve better ROIs.
As we disclose in January , we enter into an amended licensing agreement for a series of League of Legends matches.
We believe this will effectively lower our over-terminal licensing costs in 2023.
In the fourth quarter, we also continued to optimize broadcaster-related costs and bandwidth usage.
We became more efficient with our operating expenses in Q4.
reducing our total operating expenses by 35% year-over-year and 10% quarter-over-quarter.
Our savings were primarily driven by lower expenses associated with sales and marketing channels and personnel.
In our overseas business, we further narrow our operating loss.
Thanks to our strategy to concentrate on key markets and promote greater localization.
We plan to continue stressing our prudent costs and expense control strategy as we move forward.
Next, moving on to our Q4 financial details. Our total net revenues were RMB 2.1 billion for Q4, a decline from RMB 2.81 billion for the same period last year.
Live streaming revenues were RMB 1.98 billion for Q4, compared with RMB 2.61 billion for the same period last year.
The decrease was primarily due to lower average spending per paying user.
and a decreased number of paying users on HUYA Live.
as the challenging micro and regulatory environment adversely affected paying users' sentiment. Advertising and other revenues were RMB 127 million for Q4.
compared with RMB 196 million for the same period last year. This was primarily due to soft demand for advertising services resulting from the challenging micro environment.
as well as lower contents of licensing revenues. I also would like to point out that following our amended licensing agreement for League of Legends matches in January ,
We no longer own the sublicensing rights for LPL metrics during the 2023-2025 period.
Since the sublicensing of the LPL matrix was the primary contributor to our content sublicensing revenues in 2022, we expect the content sublicensing revenue to decline significantly in 2023.
Cost of revenues decreased by 15% year-over-year to RMB $2.39 billion for Q4.
primarily due to decreased revenue sharing fees and content costs, as well as bandwidth costs.
Revenue sharing fees and content costs decreased by 12% year-over-year to RMB $2.17 billion for Q4.
Primarily due to the decrease in Gram-New sharing fees associated with the decline in live streaming Gram-News.
This is partially offset by the increase in spending on esports content.
which was mainly related to the higher content cost both for LOL worth 2022 in Q4 2022. Virus cost decreased by 46% year over year to RMB 100 million for Q4.
This was primarily due to improved bandwidth cost management and continued technology enhancement efforts.
as well as less bandwidth usage as a result of strategic adjustments in our overseas business to stay focused on key markets.
Class loss with RMB, 284 million for Q4.
primary due to lower revenue and increase
Content costs related to e-sport content, particularly words 2022.
Gross margin was negative 13.5% for Q4.
excluding share-based compensation expenses.
Non-gap cross loss was RMB 278 million.
and non-gap cross margin was negative 13.2% for Q4.
Research and development expenses decreased by 13% year-over-year to RMB $144 million for Q4.
primary due to decreased personnel related expenses and share-based compensation expenses.
Sales and marketing expenses decreased by 48% year-over-year to RMB $113 million for Q4.
primary due to decreased marketing and promotion fees, as well as personnel related expenses.
General and administrative expenses.
decreased by 13% year-over-year to RMB 79 million for Q4.
primary due to decreased share-based compensation expenses.
Other income was RMB 44 million for Q4, compared with RMB 56 million for the same period of 2021, primarily due to lower tax refunds and government subsidies.
As a result, operating loss was RMB 577 million for Q4.
the result operating loss with RMB 577 million for Q4. Compare with RMB.
457 million for the same period of 2021.
Interest and Sharpton Investment Income were RMB 102 million for Q4.
compared with RMB62 million for the same period of 2021.
primary due to increased interest rates.
Net loss attributable to Huya Inc. with RMB $524 million for Q4.
compared with RMB 313 million for the same period of 2021.
non-GAAP net loss attributable to Huya Inc. was RMB 440 million for Q4, compared with RMB 242 million for the same period of 2021.
Non-Gap net loss margin was 20.9% for Q4.
Diluted net loss per ADS with RMB 2.16 for Q4.
Non-gap diluted net loss per ADS, or RMB 1.81 for Q4.
As of December 31, 2022
The company had cash and cash equivalents. The company had cash and cash equivalents.
short-term investments and long-term deposits of RMB 10.7 billion.
compared with RMB 11 billion as of September 30, 2022.
Moving on to our full year 2022 results. Total net revenue for 2022 decreased to RMB 9.22 billion from RMB 11.35 billion for the prior year.
Live streaming revenues were RMB$8.2 billion for 2022, compared with RMB$10.19 billion for the prior year.
Advertising and other revenues were RMB 1.02 billion for 2022.
compared with RMB 1.17 billion for the prior year. non-GAAP growth profit was RMB 643 million and non-GAAP growth margin was 7% for 2022. non-GAAP net loss attributable to Hu Ya Inc.
with RMB 281 million and non-GAAP net loss margin was 3.1% for 2022.
Non-GAAP-dynnoted net loss per ADS was RMB 1.17 for 2022.
To be mindful of the length of our earnings call.
for additional details on our full year 2022 financial results.
I encourage listeners to refer to our earnings press release issued earlier today.
With that, I would now like to open the call to your questions.
Thank you. We will now begin the question-and-answer session.
To ask a question, please press star 1 1 on your telephone and wait for your name to be announced.
To withdraw your question, please press star 11 again.
For the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English.
Once again, that's star 1-1 for questions. Our first question comes from the line of Thomas Chong from Jefferies. Please ask your question, Thomas. Hi, this is Jeff proliferation.
and the Meanwhile, you know when he that's just one woman come down But how fun kite you hold a in the LCC woman don't go there yourself Thanks management for taking my questions. I have two questions. The first question is about The good a trend up of this year
And number two is about the fan-how approvals. How should we think about the new games getting approved and which might affect our user growth momentum? Thank you.
I will up with Jo in and Gi who, So that I mean champi and Ma the co for my poan, jaz studim, who 13 ancing for time, you two.
from Wirk and God and Dean Rand fighter APO who don't want to timing so audio gave me include acting tiny and then Xiaoph January will lead the slavery summer sourcing the include a king has a movie Woo factor for me I with isn't a while katy approximately Pause.
Thank you. In terms of overall user strategy this year, compared with the expansion of MAU, we will pay more attention to the stickiness and participation of users on the platform through more immersive, community-based, and interactive product strategies that will improve the user's consumption on the platform content.
and also to improve the user retention and interaction rates so as to increase the user's payment on our platform. At the same time, we'll continue to spend prudently on promotion and channels.
The India P kind of carboent transiner also can are from this young Co. yet to the WO and dollars cent are the hold don't require into end to the mmail riing. So, without eating the Asia, the line chanching br ans to be your done.
Thank you.
In the first quarter of this year, due to the fact that the economy was just open up, and a number of broadcasters on the platform had decreased in the short term due to the COVID infections and the Spring Festival in China. So some users have also switched to the offline activities.
the level of MAU at the beginning of this year was affected. But of course, we believe that these impacts are relatively temporary, and we have seen stabilizing signs recently. It is expected that the future user number will return to a more stable trend.
There's point. How P pong some like whatah, you said you a take the Park in. You see, hold P Ha is ING called the G sunship. But what the here? You see the to bone room. Go of the Wine E. So you, just you say you will see the pending side to the P. So, or MUM where, just what you leave with?
centres in Scotia, the public libraries are nearby. You can see shown high load of visuals with graphic photos when ready by radical climate legendary map of the Ontarian
With the normalization of the release of licenses of games, some major games have attained licenses and have been launched or will be launched soon. So the live content of these games is if they are popular and with the launch of eSport Ultimate, they can really create a anew
of streamers or guilds hosting events, cooperating with game studios to provide incentives for the launch of new games, provide traffic and other resources support for new games so as to seize the opportunities of new games in a timely manner.
Thank you. Let's have the next question, please.
Thank you. Our next question comes from the line of Yiwen Zhang from China Renaissance. Please ask your question Yiwen.
And then know I can member to see the judge hand. So bur, is your some Bo ways to work. You CAn't, can do the food, CA can do the solu. I then haveamping TI to bur. ther really Com, some work do the B could only say on then.
From the perspective of live broadcast content, we'll continue to strengthen the advantages of the streamers.
and also to enhance the competitiveness of the platform by providing more services and revenue sources for them. At the same time, the application of more live interaction functions and virtual live broadcast technologies will help us to enrich the live broadcast forms and make the content of UCHC streamers more innovative.
In terms of the esports events, we mentioned in the previous conference call that we will …
and to consolidate IP metrics of self-made content. And we'll continue to reduce the procurement and investment for some relatively poor performing event content.
Want the long the K? P L uring, the P is inpleamment. So the other enside China, cohion is there, the enside for many, a quyou to both the scien p. So yes's L the top two Clo. They F co the en inle the F C? L C K sens group me on you ING the us, see shangguan attending the sideze.
main event. We will also have some exclusive events such as Dota 2 or CSGO series events of ESL and LCK events of League of Legends. So if there are new game related sports events on the market made available we would also dynamically evaluate and introduce new events if that is possible.
ings. English wasn't always proper. refine up his must be if you have a knowledge
in case some other hospital security concerns are not Vitamin E In case there are dance Fry-U In case you still need LPL or OTHER
seah johong's the joh chom and J earn hois siak changang be atong I yo Yu K Y vis young yo L P L sasshe U suchen sheny old Z B ch fr soushow S, hang. But ch town on the show road ang ang B zthe I show o AR you ity changguan SAS the chomand earning assaniianand J earning earn. And mister a iang hergoi B chand show the jand sh Wei more J Yang Le you John H the chbutand Jacob.
As for the operational and financial impact of the supplementary agreements, we reached a supplementary agreement on the League of Legends event in January this year through a friendly negotiation with the copyright owner and specifically in the year of 2023 throughout 2025.
In addition to LPL related events, we added the copyright of key events such as the S Championship and the DMSIA Cup. In terms of the finance, the total cost of the event in the agreement covered will be significantly lower than that in 2022. At the same time, SUIJI will no longer have the right to sub-license LPL events.
our revenue from copyright distribution will decrease. In general, we expect that the cost of the relevant events will decrease more than the reduction of the copyright revenue in 2023 compared with 2022, which is a positive effect on the overall cost structure of our company. The overall cost of the company is $2.5 billion and the total revenue will be $2.5 billion.
bookp who woman act on the one coun? qu is yes, you should that woman mem, my J keepking some curt co Don che your only use their ship. Mention the dolcome on the trum war. bunro, insome kind of Congo fter now, can want xed out. We are cash and you is a hopeful butunchion's. The St should to go the ne on.
From the user's perspective, as there are more platforms covering these events, we do not rule out that there is going to be some dilution in the population watching on our platform.
but we believe that this overall impact is controllable, which will be conducive to better dissemination of the event itself and also help the vigorous development of esports ecosystem.
There are still some top-tier copyrighted events and self-made events only available in HUYA. In addition, we continue to improve the viewing and interactive experiences in our platform for those events, which will be very competitive advantages for us to gain users.
Thank you. Next question, please. Thank you. Our next question comes from the line of Ritchie Sun from HSBC. Please ask your question, Ritchie. Hello, everyone. My name is Ritchie Sun. I'm a professor at the University of Chicago. I'm a professor at the University of Chicago at the University of Chicago.
The new growth expectation. Thank you, uh. How the now is that when you show from in ation Te one that you Bo from me, not UN, you show you borther the UN 22 woman country re you out the Y things you med ical lo just your child joun. Do you woman sure the income Jo hunction you re from cash up.
The damaging cones DU now earin Orion champagan, the corate tripoal route tissue. An should be coun insuamity tia champagan and tripoal route. Home be her. camero is here.
In terms of live broadcast revenue, after the launch of the new policy last May, we subsequently implemented a new technology called it V french.
revenue in the first half of this year will be weaker year-on-year. Moreover, from a seasonal perspective, due to fewer activities and the Chinese New Year Festival and other factors, Q1 is generally a off-season for live streaming revenue and this year will also be affected by some factors after the COVID open up as well.
uh woman, you want home reality to trial will not go to Wood, you one now you found me and told: be the D. how is there in Ian woman you that she should do chuning her P to So that more childrenre campaign and not me? You which re esting the TRI who don't want up? How do you ually need need? That is a your partity.
So we hope that the revenue of subsequent quarters will gradually stabilize because on one hand the year-on-year base will be better and we are also continuing to polish our product and operational activities so as to enhance the overall revenue of the year-on-year.
environment and the launch of more games.
Woman that you Bo show Ro Man. You IM friend. You E good ialualisly hardware. You'll see you the show lo.
Now your eurans, So your cashi. So say year will form in the cal joum. Take a year with the show road on or line orian cure ashhi similar say such J now MO ans. Should she comp to quading in the T Ho sho or money year day demot have a tria able year will remain the sign without neghouroutine in co room.
A small part of our live revenue comes from our overseas business NIMO. And due to the business optimization since last April , the revenue had experienced a year on year decrease.
improvements for commercial performance and overseas revenue for our business.
Where jeboy you, we the show look reting and she out funing easy. Your LL see up how the wayful will M walk a show T like you fulussothen. Your U L o? L start, but chan said it, the youothing way out through woman side. But ch and show shp. Some are on for your child da you start down.
insu it take junk the work car ithelp up. Quite the should do colnow, who you also sat down.
laor tho sh bko yosly found in the usase singi WO I hissiang Mini that Tan PH pan. Yet you want NA goh kok ong yo Choong.
In terms of other revenues, with the recovery of market environment and the licensing coming up again this year, we believe that advertising revenue will have some opportunity to recover this year. However, because of the supplementary agreements, we signed it.
including GANs and et cetera, hoping to get to some success.
Okay, thank you. Next question, please. Thank you. Our next question comes from the line of Lei Zhang from Bank of America. Please ask your question, Lei.
Thank you for taking my questions about our WeDo business. Can you give us some updates on the...
Thank you.
We recognize I it. You will acumcome for the bonneto. Her say the NA with slepping nao on the javphone. ch to G, Italian and suact.
So what I'm going to again. You WOn't get the wi. Well and AI's G G create on board. Ai should be suitency to go seping your ne, row. So don't put all tier to go to the cand and goes sent. Think TI seping the pender to the eating delay. You will see who sidze ne on the. They were seppping the time too.
Great to sit 1, your other SIs you two it is a no co to Bo the tomp to the ce we J you IC onit, we are under spping some timea, So sambe our UN it and down eighting bandu us just ch? Ing D? Ing on the further do.
In terms of our video business, in terms of the content production, in addition to our live streamers, we also have a lot of video content creators joining for us. And we have been able to accumulate large volumes of original materials for video content processing.
And in addition to conventional editing tools, we also have AI real-time editing function that can analyze the live stream content in real-time through AI recognition technology and automatically capture the highlights in the live streaming processes.
to generate video clips which can provide effective support for video production of competitive games and events and help to improve the creation efficiency and enthusiasm of the users and streamers. In the year of 2022, the number of video uploads on Tuya has increased by nearly 50 percent.
enriching the content that are available in our platform.
It's a very good meeting with them, and also a wireless weather and complex weather response Clean Energy administrator and HAS InstrumentalNeo Thank you.
we will be discussing this forming and looking at the impact ofovens on the environment. polar disruption technology is not enough to stop. the very first session of released laboratory earth'
and the digital media. At the same time, as we continually optimize our video content ecosystem, combined with immersive vertical screen viewing format, a video content being embedded in the GAN community is a great opportunity to help our community
Our HUYA users' consumption of video content had also significantly increased. In the fourth quarter of last year, the penetration rate of video content on HUYA apps reached a new high. At the same time, the total screen time on application increased by more than 40% year-on-year.
So the development of our video business has promoted a community-based development of Huya. And for an overall content ecosystem in Huya, we believe that it will develop to where the pen live broadcasting format and form an ecosystem for video consumption that will be further integrated with live broadcasting.
This will also help to increase the attractiveness of the platform to users. In the long run, it would help us to expand the channels to obtain users and increase revenue. Thank you very much.
The bme of the years. thom toually take on sppking of the B the countryi bar. So why, when WA to can the volume and then suated day to Bo, as it is us, it trans P the Board.
chandli would of who Le other to both siz, she o his San. Then on the where you us? ually being her tr? B, she WOn't come do the chances.
We will continue to promote product upgrades, consolidate the advantages of Huya's core businesses, and continue to promote video community.
In addition, we will also attach importance to upgrading our operation capability for a pan-livestreaming full-length services for the streamers, events, and game companies. Utilize our expertise in new games and streaming, events, and game companies to provide more value for the operation and promotion of the games.
so as to prepare ourselves for the growth of our game-related service revenue in the need and long term.
Thank you. Next question, please. Our next question comes from the line of Felix Liu from UBS. Please ask your question, Felix. Please ask your question, Felix.
Let me translate myself. Good evening, management. Thanks for taking my question. This is Daniel Heng from UBS on behalf of Follux Law.
I have two questions today. First, could you please briefly tell us about the current competitive landscape in game live streaming sector? How would the competition impact the revenue sharing ratio and the content cost? And my second question is, how is the margin outlook for 2022-23? Can we expect a sequential improvement on margins from last year? Thank you.
Jared Flay Someone asked about Hungarian Culture. He is a veteran of Tin Bond US Marine Kevin
So people like me will come to the European Chamber of Commerce with our own partnerships with all the help we can Hands-On Research Fund to help access a knowledge machine for all several non-profit triage materials. I think we can
Thank you for this question. Our HUYA market share is still relatively stable and we have maintained a dominant position in the field of games and live streaming of esports especially in the core games.
Overall, the market competition still exists, but the behavior of each platform is more rational than that of the peers here or two. We believe that Huya's competitiveness lies in our more vertical game user group and a more professional esports content ecosystem, which benefited from our mature content production system, the stable supply of high quality live content, and the
through guild cooperation and copyrighted games as well as self-made content. And also we had close cooperation with the game companies.
uh hal network is BU chumper holy pang and the je an Y uh n to bothss fr ch her teenu chumpeper from yet uh to townong irian to Bo ch B ly also teach sho to hona, or in irian work, the two Bo chom ly unky should be up in work out.
So T and the junk judis up or uity ating the to PO trum. Her tenor: Trump nutrition is be without what thing. Now how you jora your country neg what can also tell on the conent tunsho, uld dcha and H out the first trum, the yok what uity chain and the mal's out. Ear on who you thought his young tunction maly 30 to childrenen the Porto, you young be. Ear on.
competition, we expect that this year's sharing ratio and signing cost trend will remain relatively stable. And the future will depend on the market situation and updates, but so there will probably be some room for adjustment. At the same time, based on the optimization of the cost of the...
between quarters will be smaller than that of 2022.
uh thating in faay far or her ch she should. She joct's the T? ong uh toong ear in onion to pass their town down. But ter, some fam in Nat ia was should and in FA ong and she's that to to bit str which she set up. That are Son yet or whole tissue about. She got you some country to go quite faay no part est Tong go.
In terms of operating expenses, we'll continue to strengthen our measures to improve the operational efficiency.
Since the second quarter of 2022, we have started to strengthen the cost reduction and efficiency improvement measures. And operating expenses have declined by double digits year-on-year for three consecutive quarters already. And in the year 23, we'll continue to maintain a strict budget control.
and consolidate the results of cost cutting. Reducing losses and improved profitability will be the focus of this year's finance work and we hope that this will lay a good foundation for the subsequent return to growth and long-term profitability of our company. Okay thank you. Thank you. As there are no further questions now I'd like to turn the call back to the company.
This concludes today's conference call. You may now disconnect your line. Thank you.
The think of.
you
Hello ladies and gentlemen, thank you for standing by for the fourth quarter and fiscal year 2022 earnings conference call for Who We Are, Inc. At this time, all participants are in the listen-only mode.
Today's conference call is being recorded. I'll now turn the call over to Ms. Han-Yue Liu, Company Investor Relations. Please go ahead.
Hello everyone and welcome to HUYA's fourth quarter and fiscal year 2022 earnings conference call. The company's financial and operational results were issued earlier today and posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours.
Participants on today's call will be Mr. Rongjia Dong, Chief Executive Officer of Huya, and Ms. Ashley Wu, Vice President of Finance. The call will conclude with a Q&A session.
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. Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. Securities and Exchange Commission.
The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please also note that the company does not have any obligation to update any forward-looking statements except as required under applicable law.
HUYA's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. HUYA's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited.
directly comparable gas measures. I will now turn the call over to our CEO , Mr. Rongjia Dou. Please go ahead. Hello, everyone. Thank you for joining our conference call today. I made the ongoing macro headwind.
2022 was a volatile year for us. While we delivered standard user growth for the year, our four-year revenues came in at $9.2 billion, showing an annual decline and net loss.
Our focus has been on controlling the aspects of our business where we can make improvements to show up our solid foundation and prepare for growth in a more favorable market environment ahead. In the meanwhile, we have honed our content and product offerings.
as well as improve our operational efficiency while fulfilling our commitment to cooperation.
social responsibility. I would like to take the opportunity on this quarter day to share with you some of our progress and strategy moving forward. On the user side, we continue to bring high quality esports tournaments and entertainment progress.
I would like to take the opportunity on Cisco today to share with you some of our progress and strategy moving forward. On the user side, we continue to bring high quality esports tournaments and entertainment progress to our users.
We also further enhanced the broadcast and viewer interactive experience by partnering with game studios. As a result, we were able to achieve stable user skill and healthy user engagement level in the fourth quarter. At the same time, we adopted string
policies for our marketing spend to keep our expenses down. Lowering Q4 sales and marketing expenses by 48% year-over-year. In the fourth quarter,
We are live mobile and mails reached 85.5 million, slightly up compared with the same period last year. On the annual basis, the mobile mobile is
MAOs were 84.3 million, growing by 4% from 80.9 million in 2021. We also maintained our HuyaLife app as next month's user retention rate above our 70% average.
for the full year. Next, let me share with you some highlights on our recent product updates and collaboration efforts with game companies.
We have been expanding our portfolio of live streaming interactive features in addition to the popular gift droppers.
We recently introduced an upgraded Treasure Diggy feature.
These additions further link broadcasters' streaming behaviors with suitable audience and allow not only participating viewers to earn rewards but also broadcasters to collect rewards for their activities.
After a broadcaster completes a certain stream time or other streaming related activities,
Oaths will be released for users to play. Users can also obtain exclusive oaths by participating in the Treasure Digging Live broadcast room via check-ins and posting comments.
Oats can then be traded in for a variety of game properties provided by the relevant game company.
This reward system has been proven highly effective with our users. Last December , together with popular broadcasters on our platform, we launched it.
Riot Games, Carnival, Treasure Digbing Activities for five major League of Legends IP games.
The game studio offered 400,000 pieces of free game tools and a cumulative of $1,000.
4.8 million users participated in the 10-day campaign achieving a successful outcome from our innovative cooperation.
Our collaboration is also a good representation of Guiya's continuous efforts to provide more services around games and our ambition to diversify and increase our presence in the game industry value chain.
In terms of our video business, our broadcasters continue to be the driving force of video content production.
with more original creators joining our platform to enrich the quality of our video content. It is also worth mentioning that our AI real-time editing function is being utilized more often by our creators. This tool facilitates the taste.
the recreation of live content. Through automatic editing and processing capabilities, we can improve.
production efficiency and motivate both users and broadcasters. Our efforts to support our creators grow the total number of video uploads in 2022.
up by nearly 50% compared with the previous year. Meanwhile, we have been enhancing users' video viewing, experience, and video content consumption. We did this through both the fact that videos.
in our game community and by introduction an emotive vertical video viewing format.
With these enhancements, we achieved about 40% growth in total viewing time for on-demand
videos on our mobile app in the fourth quarter, compared with the same period last year.
As we build out a more comprehensive video content ecosystem, we believe we can increase user stickiness and also drive community.
get nice community station across our web platform.
in terms of our corporate social responsibility initiatives.
In 2022, we partnered with over 9,800 broadcasters and held more than 8,000 live streaming sessions promoting positive social impact.
Topicals covered areas such as traditional culture preservation, environmental protection, and terrifying the online environment from next to influence.
During the year, we also joined forces with a few international NGOs to launch the Protect Our Home Platform campaign.
This included a series of related public awareness activities featuring high-profile KOLs and our leading broadcasters. Additionally, we promoted the campaign by using a new virtual platform to help us understand
for the 2022 season for LOL. World Sat Revolution
Championship Finals in Q4. These efforts have not only enhanced Huiya's brand influence, but also contributed to the healthy development of the live streaming industry. Well, we are too, dear.
healthy user scale expansion for the year. We were impacted by the relatively weak market environment in 2002, which contributed to user expanding power.
Regularity policies introduced during the year have also placed added pressure on the industry by instituting higher compliance requirements for both gaming and live streaming sectors. Accordingly, we made prudent…
at adjustment to our products and operations, and will continue to strengthen our abilities to meet.
compliance regulations, and ensure our sustainable development. The STEM path we have taken in 2022 to optimize our operations costs and expenses.
place us in a strong position to benefit once the market begins to recover. Although there are still some uncertainties in the market environment in the near term.
We will continue to strengthen our services for users and content creators and provide high quality content in 2023 and going forward.
We will also advance our product development capabilities and implement innovative technology to further consolidate via score competencies. In doing so, we can maximize our advantages.
and maintain our leading position in the game live streaming market in China. In the meanwhile, we will actively explore our opportunities to diversify our revenue streams and broaden our happiness ecosystem.
With that overview, I will now turn the call over to our VP of Finance, Ashley Wu, to share more details on our operating metrics and the financials. Ashley, please go ahead.
Thank you, Mr. Dung, and hello everyone. Following Mr. Dung's remarks, I'll start with some updates on our content enrichment and diversification initiatives. In the fourth quarter of 2022, our
We broadcasted over 70 third-party professional esports tournaments, and the total viewership of those events reached approximately 360 million.
The largest viewership during the quarter was for LOL World 2022, Honor of Kings International Championship, Demosir Cup and CFS Grand Finals. What are the time zone differences?
between China and the US for worst 2022 has some impact on the live broadcast views. The overall viewing data of our core users remains stable.
While WRIF leaks season 2 also gained a lot of traction, in particular, with our different cooperation with the LOL while risk game on tournament viewing, we introduced interactive Furthermore as watchingewet's
and a 4K HDR viewing experience for those matches. These innovative features also make it easier for users to switch between the in-game streaming channel in our platform.
The license tournament content supplied in Q4 was not as high as in peer-risk quarters, mainly due to event seasonality and certain disruption from the COVID-19 resurgence. As such, we added more self-produced programs during the period.
In the fourth quarter, we broadcasted over 45 Hoya organized esports tournaments and entertainment PGC shows.
generating total viewership of approximately 130 million. In addition to fan favorites such as
Peacekeeper Elite All-Star annual Invitational and Thunder Series of Honor of Kings. We have the HUYA platform qualifier for the Demosir Cup, which gain great traction with our users. The commentary program...
hosted by well-known streamers and former professional players for both World 2022 and HOK International Championship, also helped promote the popularity of those events. Additionally, during the quarter, the
We launched two seasons of the dating variety show, Heartbeat 72 Hours, further enriching the pen entertainment content on our platform. Under our strip screening process for content procurement and production, we had over 30% fewer total licensed and self-produced events and programs in 2022.
compared with the previous year. Our total viewing data, however, remains steady. Although our Q4 terminal license cost was significantly higher due to the worst 2022, which was a major contributor to our growth loss for the quarter, we will stay true to our focus.
of covering key events that are popular among users while striving to achieve better ROIs. As we disclose in January , we enter into an amended licensing agreement for a series of League of Legends matches.
We believe this will effectively lower our over-terminal licensing costs in 2023. In the fourth quarter, we also continued to optimize broadcaster-related costs and bandwidth usage. We became more efficient with our operating expenses in 2020.
channels and personnel. In our overseas business, we further narrow our operating loss. Thanks to our strategy to concentrate on key markets and promote greater localization, we plan to continue to confident Let our clients calculate the relationships and trends of our Ten Sandra Bullock project.
expressing our prudent cost and expense control strategy as we move forward. Next, moving on to our Q4 financial details. Our total net revenues were RMB 2.1 billion for Q4, a decline from RMB 2.81 billion.
for the same period last year. Live streaming revenues were RMB $1.98 billion for Q4 compared with RMB $2.61 billion for the same period last year. The decrease was primarily due to lower average spending per paying user.
and a decreased number of paying users on Huya Life, as the challenging micro and regulatory environment adversely affected paying users sentiment. Advertising and other revenues were RMB 127 million for Q4 compared with RMB 196 million for the same period last year.
This was primarily due to soft demand for advertising services resulting from the challenging micro environment.
as well as lower contents of licensing revenues. I also would like to point out that following our amended licensing agreement for League of Legends matches in January ,
We no longer own the sublicensing rights for LPL metrics during the 2023 to 2025 period. Since the sublicensing of the LPL metrics was the primary contributor to our content sublicensing revenues in 2022,
We expect the cotton sub-minancing revenue to decline significantly in 2023. Cost of revenues decreased by 15% year-over-year to RMB 2.39 billion for Q4, primarily due to decreased...
revenue sharing fees and content cost, as well as bandwidth cost. revenue sharing fees and content cost decreased by 12% year-over-year to RMB $2.17 billion for Q4.
primary due to the decrease in Gram-News sharing fees associated with the decline in live streaming Gram-News.
This is partially offset by the increase in spending on esports content, which was mainly related to the higher content cost, both for LOL vs 2022 in Q4 2022.
decreased by 46% year over year to RMB 100 million for Q4. This was primarily due to improve bandwidth cost management and continued technology enhancement efforts.
as well as less bandwidth usage as a result of strategic adjustments in our overseas business to stay focused on key markets.
Gross loss was RMB 284 million for Q4, primarily due to lower revenues and increased content costs related to e-sport content, particularly words 2022. Growth margin was negative.
13.5% for Q4. Excluding share-based compensation expenses, non-gap gross loss was RMB 278 million and non-gap gross margin was negative.
13.2% for Q4. Research and development expenses decreased by 13% year over year to RMB 144 million for Q4. Primary due to decreased personnel related expenses.
and share-based compensation expenses. Sales and marketing expenses decreased by 48% year-over-year to RMB 113 million for Q4, primarily due to decreased marketing and promotion fees.
as well as personnel related expenses. General and administrative expenses decreased by 13% year over year to RMB 79 million for Q4.
Primarily due to decreased share-based compensation expenses. Other income was RMB 44 million for Q4, compared with RMB 56 million for the same period of 2021. Primarily due to lower tax refunds and government subsidies.
As a result, operating loss was RMB 577 million for Q4.
As a result, operating loss was RMB 577 million for Q4. Compared with RMB, the operating loss was RMB 577 million for Q4.
$457 million for the same period of 2021. Interest and short-term investment income were RMB 102 million for Q4.
compared with RMB62 million for the same period of 2021, primarily due to increased interest rates. Net loss attributable to Huya Inc. was RMB524 million for Q4.
compared with RMB 313 million for the same period of 2021. non-GAAP net loss attributable to Huya Inc. was RMB 440 million for Q4, compared with RMB 242 million for the same period of 2021.
non-GAAP net loss margin was 20.9% for Q4. Diluted net loss per ADS was RMB 2.16 for Q4.
Non-gap diluted net loss per ADS, or RMB 1.81 for Q4.
As of December 31, 2022, the company had cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits of RMB 10.7 billion, compared with RMB 11 billion.
as of September 30, 2022. Moving on to our full year 2022 results.
Total net revenue for 2022 decreased to RMB 9.22 billion from RMB 11.35 billion for the prior year. Live streaming revenues were RMB 9.22 billion for the prior year.
8.2 billion for 2022, compared with RMB 10.19 billion for the prior year. Advertising and other revenues were RMB 1.02 billion for 2022, compared with RMB 1.17 billion for the prior year.
non-GAAP Growth Profit was RMB 643 million and non-GAAP Growth Margin was 7% for 2022.
non-GAAP net loss attributable to Huya Inc. with RMB 281 million and non-GAAP net loss margin was 3.1% for 2022.
Non-GAAP-dynnoted net loss per ADS was RMB 1.17 for 2022. To be mindful of the length of our earnings call.
for additional details on our full year 2022 financial results. I encourage listeners to refer to our earnings class release issued earlier today. With that, I would now like to open the call to your questions.
Thank you. We will now begin the question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced.
To withdraw your question, please press star 11 again. For the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English.
Once again, that's Star 1-1 for questions. Our first question comes from the line of Thomas Chong from Jefferies. Please ask your question, Thomas.
But somehow one H what here and when your land govern't he vehicle? Should want you thining in who and ne go ship mean why you wouldn't here. Should want you woman come down, but how P kaer, hold in the Y thir you woman Don who they you himself friends, manure botaking my questions.
I have two questions. The first question is about the user trend for this year, and number two is about the fun how approvals. How should we think about the new games getting approved and which might affect our user growth momentum. Thank you.
I LL up with J and then Gi to So that iit shampi Ma to coun for my coan jamson co 13 aning for time to.
From work juds andendbeing PA soir CPA, who don't want the timing, sothat tfam good that think. tening on the childlphic T good those and who don't be somewhere's an good. That P that, untrveated than J Thor were, may await to see that table without ans boor. e't the tosu.
Thank you. In terms of overall user strategy this year, compared with the expansion of MAU, we will pay more attention to the stickiness and participation of users on the platform through more immersive, community-based, and interactive product strategies.
will improve the user's consumption on the platform content and also to improve the user retention and interaction rates so as to increase the user's payment on our platform. At the same time, we'll continue to spend prudently on promotion and channels.
You may inst it ute you it sankong Kong punkan. So the to bokanah her turnj theing Su the englang pink kind, the carboan transanchiller also G out TH suicion K here the.
In the first quarter of this year, due to the fact that the economy would just open up and a number of broadcasters on the platform.
had decreased in the short term due to the COVID infections and the Spring Festival in China. So some users have also switched to the offline activities. The level of MAU at the beginning of this year was affected. But of course, we believe that these impacts are relatively temporary, and we have seen stabilizing signs recently. It is expected that the future user number will return to a more stable trend.
But thanks and I hope that you will stay to the virtue of dreams not only of honoring everybody else. As youIDE A don't it at all, please.... LOVE If you came to see our work photography service, words that you in China
This Thomas one over the single the's sh. So talk to the C B it Ro to both the P by tummo jvan C to bor the her UC trans an two with hpo T 1, three way singor T on, and then three and the first she 1, numbergo is D o singile that gy had.
With the normalization of the release of licenses of games, some major games have attained licenses and have been launched or will be launched soon. So the live content of these games is if they are popular and with the launch of useful events of these games, we believe that it will be conducive to the growth of the users of live platform.
and we will also have the opportunity to bring us more additional user growth. At the same time, we'll make sufficient preparations for the launch of new games, such as the recruitment of streamers or guilds, hosting events, cooperating with game studios to provide incentives for the launch of new games, provide traffic and other resources support for new games so as to seize the opportunities of new games in a timely manner.
Thank you. Let's have the next question, please. Thank you. Our next question comes from the line of Yiwen Zhang from China Renaissance. Please ask your question, Yiwen. Hello. I'm Yiwen Zhang from China Renaissance.
S actually the judge hand. tosubo is J also some ways ort he do the food CA condo the solo right then champing TI it posing very Com work. Do suboth put on the sha Com then E G a to fin both and J het. So I happ food ING U G C the tosubo Bo take the neroom they go judge hing.
From the perspective of live broadcast content, we'll continue to strengthen the advantages of the streamers and also to enhance the competitiveness of the platform by providing more services and revenue sources for them. At the same time, the application of more live interaction functions and virtual live broadcast technologies will help us to enrich...
the live broadcast forms and make the content of UCHC streamers more innovative and interesting for the users.
In terms of esports events, we mentioned in the previous conference call that we'll continue to
strictly screen the investment opportunities in copyrighted and self-run events. And in a copyrighted championship, we will strive for better commercial terms with all the copyright owners. And in the self-made content, we'll focus more on forming high quality Huya competition brand and to consolidate IP metrics of self-made content. And we'll continue to reduce the procurement and investment for some relatively poor performing event content.
Which an gang missing the, the engineer to F develo ment which is you ininter P L's such that one the long other K P L huring, the P is ininterment. So the other inside China co, hes is there other the inside for many qu to both the sens P So's L the top two clos F co the sens in F C L C K, fion.
We will continue to cover the LPL-Afghan Games of the LOL, the KPL, the PEL of PeaceElite, the LOL Mobile, and the Cross-Flat Professional League as our main event. We will also have some exclusive events such as Dota 2 or CSG.
in Chinese and semin Happy Veterans Day.
The woman, her bunch, and found T go your harbest thirging a are other in UN Y sess chun E uh's session that fam earing a andend the earin AL ownion through L P L youngang. one sess with Jo. What woman's gala's ide. The must YA Bay UN and sess the ban.ch another's have o fam Ian.
seah joong's the johpt. But Ja earnam kis AK senujang I atoi yo Yu kyap B? Y L L? O SAS U suchchen shenney oz ban ch? fr sousocial shangar. But joh cent joion on the show road Jan o Jang I.
As for the operational and financial impact of the supplementary agreement, we reached a supplementary agreement on the League of Legends event in January this year.
At the same time, as HUYA will no longer have the right to sub-license LPL events, our revenue from copyright distribution will decrease. In general, we expect that the cost of the relevant events will decrease more than the reduction of the copyright revenue in 2023 compared with 2022, which is a positive effect to the benefit of corresponding office conditions given WEA in 2020. In 2019, CA architect contraceptiveassment become policymaker's twin clients,
On the overall cost structure of our company. So Y good the way, do I sure you opencome to the kingink P should both on this fion who P who you want, and catch on the one CT qu you should that woman, memmy Jun teking some cur Co. So gener, your leady's ship mentioned the docome how the trum war.
From the user's perspective, as there are more platforms covering these events, we do not rule out that there is going to be some dilution in the population watching on our platform, but we believe that this overall impact is controllable, which will be conducive to better dissemination of the event itself and also help the vigorous development of esports' ecosystem.
There are still some top-tier copyrighted events and self-made events only available in HUYA. In addition, we continue to improve the viewing and interactive experiences in our platform for those events, which will be very competitive advantages for us to gain users.
Thank you. Next question, please. Thank you. Our next question comes from the line of Ritchie Sun from HSBC. Please ask your question, Ritchie.
I will translate this myself. My question is about the live streaming revenue recovery situation.
one country without the Y choosing ical law should So your child job do you woman in show the in some Josh Hong ction and new your on cash up. So the Te coun just Y now ear ling, or in your shpan end the one tribostal roade tissue should be your girl insumility thing. Your shm an and tribboal road home be her amo is yet a someth iation like CAn't your, you don't be their. She eight Y 20 years grning.
In terms of life-roll cost revenue, after the launch of the new policy last May, we subsequently implemented it according to the requirement. And the impact of these adjustments on revenue mainly began in June . So in this case, the domestic life-roll cost revenue base
in the first half of 2022 was relatively high. So we expect that the revenue in the first half of this year will be weaker year-on-year. Moreover, from a seasonal perspective, due to fewer activities and the Chinese New Year Festival and other factors,
Q1 is generally a off-season for live streaming revenue, and this year will also be affected by some factors after the COVID open up as well.
We hope that the revenue of subsequent quarters will gradually stabilize because on one hand the year-on-year base will be better and we are also continuing to polish our product and operational activities so as to enhance the monetization of our business operations such as introducing so you will have to be really0 only 0.5% of our operations are....
And cure cash. Should similular say such Jo now more Tian. Should she their jump to quiring in the tish Ho sho or mind yet the they not have a TRI Bo the year willing and the side without neighbour out things in coat room, some into young Y you sh, your kappins. Yet if you had a tripo, the superficshoroom.
A small part of our live revenue comes from our overseas business, NEMO. And due to the business optimization since last April , the revenue had experienced a year-on-year decrease since the second quarter of 2022. And at present, on the basis of continuing to strengthen the localized operation, we also expanded NEMO's pan-entertainment content.
In terms of other revenues, would the recovery of market environment and the licensing, would the recovery of market environment and the licensing,
may decline. At the same time, we are also exploring new business opportunities, including GANs and et cetera, hoping to get to some success. Okay, thank you. Next question, please. Thank you. Our next question comes from the line of Lei Zhang from Bank of America. Please ask your question, Lei.
Thank you for taking my questions about our WeDo business. Can you give us some updates on this WeDo business?
fiance only your looking for the subpoena network theumberstal as Meteor failings governing elchain talent A. So the MandR A.(S.D camouflage that will yeah Who do you think they are sustainability then go sentence in time to sitting the panda
In terms of our video business, in terms of the content production, in addition to our live streamers, we also have a lot of video content creators joining for us and we have been able to accumulate large volume of original material.
In the year of 2022, the number of video uploads on Tuya has increased by nearly 50 percent in reaching the content that are available in our platform. Today's summary of previous video will only Major
You Learn the channel we are gettingIn plotted, she mentioned the teacher We are a clinic especially this one.
the There is empty the we are named the same time We're moving away that the bullet is a man how the fans evil my father She's angry it's voting for uncle the sleeping the shelf is in time When the sensing so quite in town in title you include the scene me time cheese I can't know bound to put on what are you doing? Who then they are you so that she down?
At the same time, as we continually optimize our video content ecosystem, combined with immersive vertical screen viewing format, video content being embedded in the GAN community, our Huya users' consumption of video content had also significantly increased. In the fourth quarter of last year, the penetration rate of video content on Huya apps reached a new high. At the same time, the total screen time on application increased by more than 40% year-on-year.
So the development of our video business has promoted a community-based development of Huya. And for an overall content ecosystem in Huya, we believe that it will develop towards a pen live broadcasting format and form an ecosystem for video consumption that will be further integrated with live broadcasting. This will also help to increase the attractiveness of the platform to users.
And in the long run, it would help us to expand the channels to obtain users and increase revenue.
The otheran number tissues taking time in the data. ingy Congo we are closing the volme of the years TH 3, take on slipp year the B, the 30 bar. So why number to J volume and the centuate to both, as is ucsee times P the Board.
And for the year of 2023, we will continue to promote product upgrades, consolidate the advantages of a PUYA of course.
companies to provide more value for the operation and promotion of the GAMS so as to prepare ourselves for the growth of our GAMS related service revenue in the mid and long term.
Thank you. Next question, please. Our next question comes from the line of Phillips Liu from UBS. Please ask your questions, Phillips.
ok twent too much. How Thank So money? 20 years older T would you be a spend your hand DI about seex year like T would have been driving guarantee children and 14 twent, twent years, without your ssuurable hung year, the ingency and drop Google. Can CT done since teeninger twentteen, actual F? Ion and then children T Sue.
Let me translate myself. Good evening, management. Thanks for taking my question. This is Daniel Heng from UBS on behalf of Felix Liu. I have two questions today. First, could you please briefly tell us about the current competitive landscape in gaming live streaming sector? How would the competition impact the revenue sharing ratio and the content cost?
And my second question is, how is the margin outlook for 2023? Can we expect a sequential improvement on margins from last year? Thank you. Hello everyone, our Shannon County CD is anticipating a vengeance HUNG Cheung Egyptian on Jim Was fun as always.
and the market share is still relatively stable and we have maintained a dominant position in the field of games and live streaming of esports, especially in the core games. Overall, the market competition still exists, but the behavior of each platform is more rational than that of the peers here or to the players.
Both ch? ly also Te sho to hona all in on work. To Bo chum tely junk should be ay one dun and the she junk J is upout or my youity thing and the to Bo trum ly her Te. The rition is be wor thing. Now how should joy your coun'? She ne get I child on the conent, So should retain and H out the's trum the yo what?
and the market share rate is about $2.5 billion. The market share rate is about $2.5 billion. Ms. Wu will cover the cost and profit trends. In terms of the commission sharing and contracting costs, since the proportion of commission sharing increased in 2021, our sharing ratios have been relatively stable in 2022. Under the current market competition, we expect that this year's sharing ratio and signing cost trend will be higher than the previous year's.
Smaller than that of 2022. the Union FA from or her she should your junct sud the tsho to on onion to pres woman that town down. But some fam in Nat was she in FA young she's Y do be strong. She should set down that then ia or whole tise about she young, the you, some con.
In terms of operating expenses, we'll continue to strengthen our measures to improve the operational efficiency. Since the second quarter of 2022, we have started to strengthen the cost reduction and the improvement measures.
and operating expenses have declined by double digits year-on-year for three consecutive quarters already. And in the year 23, we'll continue to maintain a strict budget control and consolidate the results of cost cutting. Reducing losses and improved profitability will be the focus of this year's finance work, and we hope that this will lay a good foundation for the subsequent return to growth and long-term profitability of our company.
Okay, thank you. Thank you. As there are no further questions, now I'd like to turn the call back to the company for closing remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact Who You Are Investor Relations through the contact information provided on our website or the Pearson TAE Group Investor Relations. Thank you. This concludes today's conference call. You may now disconnect your line.