Q4 2023 Yalla Group Ltd Earnings Call
Okay.
Unknown Executive: Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yalla Group Limited's fourth quarter and full year 2023 earnings conference call. At this time, all participants are in a listen-only mode.
Good morning, and good evening, ladies and gentlemen.
Thank you for standing by for you all the group Limited's fourth quarter and full year 2023 earnings conference call.
At this time all participants are in a listen only mode.
Unknown Executive: After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. Now I will turn the call over to your speaker host today, Ms. Kerry Gao, IR manager of the company. Please go ahead, Ms. Gao.
After managements prepared remarks, there will be a question and answer session.
Today's conference call is being recorded.
Now I will turn the call over to your speaker host today Ms. Carrie go arm.
Manager of the company. Please go ahead ma'am.
Kerry Gao: Hello everyone, and welcome to Yalla's 4th Quarter and Full Year 2023 Earnings Conference Call. We released our Earnings Press Release earlier today, and the release is now available on our IR website as well as on Newsvile's website. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor Provision of the U.S. Private Securities Litigation Reform Act of 1995.
Hello, everyone and they'll come through your last fourth quarter and full year of 'twenty to 'twenty three earnings Conference call. We released our earnings press release earlier today and the release is now available on our IR website as well as on yourselves services.
Before we continue please note that the discussion today will contain forward looking statements made under the safe Harbor provision of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such our future results may be materially different from the views expressed today.
Kerry Gao: Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our earnings release and our annual report filed with the S&P. Yalla does not assume any obligation to update any forward-looking statements except as required by law. Please also note that Yalla's earnings press release and this conference call include a discussion of unaudited GAAP financial information, as well as unaudited non-GAAP financial metrics. Yalla's press release contains a reconsideration of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. Today you will hear from Mr. Tao Yang, our Chairman and Chief Executive Officer, who will provide an overview of our latest achievements and growth strategies. He will be followed by Mr. Saifi Ismail, the company's president, who will briefly review our recent business developments. This is Karen Hu, our Chief Financial Officer.
Further information regarding these and other risks and uncertainties is included in our earnings release at our annual report filed with the SEC.
Does not assume any obligation to update any forward looking statements, except as required by law.
Please also note that our earnings press release at this conference call include discussion of unaudited GAAP financial information.
Unaudited non-GAAP financial measures.
This press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures.
Today, you will hear from Mr Italia, our chairman and Chief Executive Officer.
We will provide an overview of our latest achievements and growth strategies.
Followed by Mr. <unk>, the company's President who will briefly review our recent business developments. This is Kevin Hu, Our Chief Financial Officer will then provide additional details on the company's financial results and discuss our financial outlook. Following management's prepared remarks and open the call to questions.
Tao Yang: We will then provide additional details on the company's financial results and discuss our financial outlook. Following management's prepared remarks, we will open the call to questions. Mr. Jeff Xu, our Chief Operating Officer, will join the QA section. With that said, I'd now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead, sir.
Mr. Jeff <unk>, our chief operating officer of withdrawing the QA section if that's that I'd now like to turn the call over to our chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead Sir.
Tao Yang: Thank you. Thank you, everyone, for joining our fourth quarter and full year 2023 Earnings Conference. 2023 was a year filled with changes and opportunities; as a global enterprise, Yalla faced a complex and dynamic international environment with many moving problems. Nevertheless, we forge ahead with our core business strategies and ended the year with robust results. I will begin with a brief overview of our pivotal achievements and financial performance in 2023. We continue to grow our two flagship applications, Yalla and Yalla Ludo. We also deepened our engagement in the medical and hardcore game business, building relationships with global players who are drawn to the surge of development in the MENA region. Meanwhile, we continued to improve our operating efficiency by optimizing costs and expenses through rigorous wonder selection and management, user acquisition strategy, requirements, and greater talent utilization.
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Thank you everyone for <unk>.
Joining a local scooter and full year 2023 earnings conference call.
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We continue to grow our too.
Applications Yeah.
Also deepen our engagement and the new Cowen article game business building relationships with global players who are drawn to the surge of development in the Mena region. Meanwhile, we continued to improve operating efficiencies by optimizing cost and expenses.
Two more.
One day selection and management user acquisition strategy requirements and it's greater talent.
Nation.
Tao Yang: We sustained our robust financial momentum as a result of this effort, ending the year with strong growth across our revenues from gaming services as well as net income. Our fourth-quarter revenue was 80.9 million RMB, exceeding the upper end of our guidance, while revenues from gaming services in the fourth quarter reached 28.5 million RMB, representing year-over-year growth of 35.2%. For the full year 2023, I will love you. We're 318.
We sustained our robust financial momentum as a result of this effort ending the year with strong growth across all of our revenues from gaming as well as net income.
Oh fourth quarter revenue were.
9 million.
Exceeding the upper end of our guidance well revenues from gaming dilutive in the fourth quarter reached 28 point o'clock meeting with team.
Representing year over year growth of 35, 2%.
Yeah.
For full year 2023.
Revenue.
318.
Tao Yang: .9 million yuan. Well, our net income reached 113.1 million yuan, representing a significant year-over-year growth of 43%. Our strong financial performance reflects the excellent execution of our effective quality growth, supported by our Solix Business Fundamentals and healthy cash provision. We will continue to expand our services, stretch the boundaries of our business, launching innovative social networking and entertainment products to prove to you MENA users' evolving needs online. I'm also proud to share that thanks to our robust and consistent financial performance. Yalla Group was recognized by Fortune magazine as one of the 2023 top 500 Arab companies, according to the Fortune 500 Arab Arabia list. The Fortune 500 is a distinguished list showcasing the 500 largest companies in the Pacific region based on revenues.
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The significant year over year growth of 43%.
Our strong financial performance is not the excellent execution of our effective royalty growth strategy.
Reported by our solid business fundamentals and healthy cash position.
We will continue to expand our services.
The boundaries of our business launching innovative social networking and entertainment Buda.
You mean, our users' evolving needs online.
I'm also proud to share that basketball was robust and consistent financial component Yellow group was recognized by Fortune magazine as one of the 2023 took 500 olive garden companies. According to the Fortune 500.
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I know it is a distinguished showcasing the 500 largest companies.
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Tao Yang: This year marked the inception of the Fortune 500 Arabia. Highlighting companies in the Middle Region, we would like to extend our heartfelt gratitude to Fortune 500 Arabia for recognizing the Yalla Group's contributions and achievements with inclusion in this esteemed list.
Earmark to the inception of the approaching 500 Arabia, highlighting company has seen in the Mena region, we'd like to extend our heartfelt gratitude to fortune 500, Arabia, well recognizing nigella groups.
Users and achievement with inclusion in the east.
Okay.
No.
Tao Yang: Let's turn to Yalla Games' development and future strategy. Yalla Games made several crucial moves this year, including the launch of our first two hardcore games. In the process of developing and operating these games, we gained vast experience across key aspects of MENA's gaming market, including product selection, product design, and user acquisition, among others. Our comprehensive understanding of this market has proven invaluable as we continue to organize and train our professional team for this specific reason. In turn, our growing expertise and capabilities strengthen our determination to expand our footprint in the mid-point hardcore game business in MENA. Moving forward, we will continue investing in Bitcoin hardcore games and enriching our games; Miracle Games will be a particular focus. As we believe they will... to optimally leverage our enormous pool of experience.
Let's turn to yellow game development and future Jackie yellow game established crucial crucial moves this year, including the launch of our first two hardcore game.
In the process of developing and operating this games, we gain but I think experiences across key Mena.
I mean gaming market, including prudent action now.
Design and user acquisition among others.
Our comprehensive understanding of this market has proven invaluable as we continue to Okinawa and training our professional team who has a specific region.
In turn our grilling.
Cooling.
And the capabilities.
Our determination to expand our footprint in the mid core game business in Mena.
Moving forward, we will continue investing in bitcoin hustled games.
He Qing our game pipeline.
<unk> games will be a particular focus.
As we believe maybe you.
Ultimately that will lead our numerous who excuse me.
Tao Yang: Additionally, we are actively communicating with global top-tier gaming cities to explore potential joint monetization of Synthesis in the region. We will keep you posted on our program. Not only that, we also plan to enhance our social networking products this year's iteration, including innovative new features and a host of creative design upgrades will allow us to explore monetization while better serving MENA users' diverse and evolving needs.
And resources related to capital gains in the region.
Additionally, we are actively communicating with Globo talk to you again soon.
It's no potential monetization opportunities.
We will keep you posted.
We are a proven.
Notably.
Also plan to enhance our social networking products.
The tuition, including innovative new function and a host of creative design.
Upgrades will allow us to explore monetization well better serving our users the worst and evolving and stuff.
Tao Yang: We captured and capitalized on the area of growing opportunities in 2023 as MENA's role on the global stage and its digital transformation, growth, and advance. We are pleased to see more and more visionary industry professionals and investors from around the world allocating more resources to the UN and participating in Searching Development, and piloting the program across the region.
We kept yours and capitalized.
Eliot growing opportunities in 2023, and so all of the global stage and eco transformation grow in Gabon.
We are pleased to see more and more regular way industry professionals and investors from around the world.
Road.
Allocating more resources to be there and participate they need searching cabela's.
Preparing programs across the region.
And the number one minute based online social networking and gaming company, we're deeply committed to this market and.
Saifi Ismail: As the number one MENA-based online social networking and gaming company, we are deeply committed to this market and surely understand its unique advantages. We are building our business horizon as we build the most popular destinations for online, social networking, and entertainment in Munich. Now I will turn this call over to our President, Mr. Saifi Ismail, for a closer look at our recent developments. Hello, everyone.
So we really understand its unique advantages.
Specific he was sharing with you.
We continue to leverage our profound local insights to broaden our business who either as we viewed as the most popular destination for online social networking and entertained.
And we mean it.
No I would tell you just go over to our president Mr. Southeast MA Yu for a closer look at our recent developments.
Hello, everyone.
Saifi Ismail: Thanks for joining us today. Let's take a closer look at our fourth quarter operations and our product performance. We delivered another solid quarter with average monthly active user rising by 13.3% year-over-year to $36.2 million. Our average revenue per paying user also increased to $6.5 USD in the fourth quarter from $6.01 USD in the same period last year.
Thanks for joining us today.
Let's take a closer look at our fourth quarter operations and our robust Portland.
We delivered another solid quarter with average monthly active user rising by 15 going to be better than you had already at 236 2 million.
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They're being used that also include the 6.5 U S dollar.
In the fourth quarter.
Kicked boring or when you are going up in the same period of last year. Additionally, our ongoing adjustments to all again mechanism and roofing, Oh, but all user engagements and delivering better to use that experience and have proven effective.
Saifi Ismail: Additionally, our ongoing adjustments to our game mechanism aimed at boosting overall user engagement and delivering better user experiences have proven effective; paying users increased by 6.2% quarter-over-quarter, demonstrating users' growing willingness to pay on our platform. For our flagship application, Yalla, we continue to improve gaming features in the fourth quarter. We also rolled out a series of operational activities, including the football carnival event, which was recommended by the App Store. With respect to Yalla Ludo, I am pleased to announce the resounding success of our Yalla Ludo Champion Tournament. More than 150,000 players registered to participate in an intense series of over 1.8 million preliminary matches online, an overwhelming response that ultimately produced 32 exceptional finalists.
<unk> increased by 6.2 best quarter over quarter, the administrating users.
Really nice debate on our platform.
But our flagship application yellow we've continued to improve gaming features in the fourth quarter. We also rolled out a series of operational activity, including the football cut in Nevada.
Which was recommended by the App store.
It's basically a little dog I am pleased to announce that he something sectors of our yellow Moodle champion tournament more than 150000 players, but it just the two boxes debates and intensity of all but 1.8 million, bringing leonetti matches online and all.
Overwhelming response, that's ultimately produce 52 exceptional finalist.
Saifi Ismail: These skilled players engaged in a highly competitive offline final at Saudi Arabia's Riyadh VOV Gaming Center on December 1, 2023, where three top winners emerged amid enthusiastic live audience participation. The Yalla Ludo Champion Tournament was more than just a competition. It was a celebration of the Yalla Ludo community. Events like these not only enhance our brand impact but also underscore our commitment to creating memorable, engaging experiences and fostering a sense of camaraderie and connection. Next, we have two additional highlights.
His skill players engaged in a highly competitive offline screen.
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Whereas three top windowed a marriage made in.
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The El Dorado Champions Tour, and the man was more than just a competition.
It's a celebration of the El Dorado community events like these not only enhance our brand and back but also underscored our commitment to creating memorable engaging experience and fostering a sense off.
Come out of the air and connection.
Nick do additional highlight.
Saifi Ismail: First, we launched the Yalla Visible event on the App Store across 13 countries in the MENA region this February, a milestone achievement in our development that further strengthened our brand awareness. This collaborative effort with the App Store, featuring five of our flagship products, not only underscores Apple's recognition of Yalla products' popularity in the region but also validates our efforts to meet MENA users' growing entertainment demands. Moving forward, we will remain dedicated to developing more social networking and gaming applications tailored specifically for MENA users. Furthermore, we will keep nurturing strong relationships with global channels to ensure that we continue to reach users effectively and provide them with the best possible experience. Last but not least, we are honored to announce that Yalla Group has been invited for an interview with Dubai's Department of Economy and Tourism, DAT.
First we launched they all love it it really depends on the App store.
Do you any country in the Mena region distributor already.
Milestone achievement and Arab development, that's fair to strengthen our brand awareness. This collaborative effort with the App store featuring five of our flagship products not only in what's called I've been.
Mission of yellow product's popularity in the region, but also validate our efforts to meet me and now you've got a growing entertainment demand.
Moving forward, we will remain dedicated to developing more social networking and gaming application tailored.
Specifically for me you know you always get more over we will keep nurturing strong relationship with global channel to ensure that we continue to reach you effectively and provide them with the best possible experience.
Last but not least we are honored to announce that group has been invited.
Third a view with debate the bachman of economy, and tourism B E T.
Saifi Ismail: With the ultimate vision of making Dubai the world's leading destination for commerce, investment, and tourism, DAT supports the government in positioning the Emirates as a major hub for global economic activity and tourism, as well as in boosting the city's economic and tourism competitiveness. Notably, DAT is committed to transforming Dubai into a regional gaming hub, as evidenced by the 2022 launch of the Dubai e-Sports and Games Festival. As the first Dubai-based technology unicorn listed on the NYSE, Yalla Group serves as a key contributor to Dubai's dynamic landscape and is poised to promote the government's vision for the area.
The ultimate vision of making Dubai, the world's leading destination of Broadcom Mezz investment and tourism do you support the government and positioning the emirate as that major hub well.
Global economic activity and tourism as well as in boosting the city's economic and tourism Competiveness indicated, notably B E. T. It's committed to transforming Dubai into a regional gaming.
But as.
Evidenced by the 20th wanted to launch over the Dubai esports and gaming.
As the first debate based technology Unicorn listed on the NYSE Yeah, let groups here are the key contributor to.
Nobody's dynamic landscape and its voyage to global the government's vision or the area. We are dedicated to leveraging debates strategic location as a business hub and its exceptional infrastructure to further develop our gaming product facility I think the gaming.
Saifi Ismail: We are dedicated to leveraging Dubai's strategic location as a business hub and its exceptional infrastructure to further develop our Yalla gaming products, facilitating the gaming sector's development while driving the city's growth. We are profoundly grateful for DEC's invitation to this interview and for recognizing Yalla Group's leading role in the social networking and gaming industry in the MENA region. As we reiterate every quarter, Yalla aspires to become the number one online social networking and entertainment platform in the MENA region.
Victor development, while driving the cities.
We are profoundly.
Grateful for the invitation to this interview unfolds it could be rising yellow like groups, leading growing and the social networking and gaming industry in the Mena region.
As we iterate every quarter.
But to become the number one online social networking and entertainment platform and the Mena region.
Yang Hu: We continue to build relationships locally and globally to broaden our business horizons and embrace the opportunities brought by MENA's digital transformation. With the entire region set to embark on a new era of growth, we are more committed than ever to providing the people of MENA with better access to digital life. We believe we are well positioned to capture the potential growth opportunities in the MENA region, and we look forward to delivering value to all of our stakeholders as we strive to achieve our mission. With that, I will now turn the call over to our CFO, Karen, who will discuss our key financial and operational. Thank you, Saifi. Hello, everyone.
We continue to build the relationship locally and globally.
Broadening our business horizon and embraced the opportunity brought by digital transformation with the entire region.
Bob.
You are Oh, gosh, we are more committed than ever to providing that people may not.
With bits at Axis.
Our life, we believe we are well positioned to capture the potential growth opportunities and that may not Egypt, and we look forward to delivering value to all of our stakeholders as we strive to achieve our mission with that I will now turn the call over to our CFO Karen.
He will discuss our key financial and operational data.
Thank you Sophie Hello, everyone. Thank you for joining us today.
Yang Hu: Thank you for joining us today. We delivered a robust financial performance in 2023, with 4-year revenues rising to $318.9 million, another testament to our ability to drive growth in a rapidly evolving environment. In the past year, we continued to actively optimize costs and expenses and improve our overall efficiency.
It delivered a robust financial performance in 2023 with full year revenues rising to $318 9 million U S dollars.
Another testament to our ability to drive growth in a rapidly evolving environment.
In the past year, we continued to actively optimize costs and expenses and improve our overall efficiency.
Yang Hu: As a result, we greatly enhanced our profitability, recording significant growth for both the fourth quarter and the full year. Specifically, fourth-quarter net income increased by 79% year-over-year to $29.7 million, while four-year net income increased by 43% year-over-year to $113.1 million with a net margin of 35.5%, compared with 26% last year. As we head into 2024, we will continue to pursue quality growth, improve operational efficiency, and invest in our Yalla ecosystem. We believe our solid business fundamentals and healthy cash position will empower us to capitalize on future opportunities, driving sustainable and long-term growth. Let's move on to our detailed financials for the fourth quarter of 2023. Our revenues were 80.9 million U.S. dollars in the fourth quarter of 2023, a 7.7% increase from 75.1 million U.S. dollars in the fourth quarter of last year. The increase was primarily driven by the broadening of our user base and our enhanced monetization capability.
As a result, we greatly enhanced our profitability recording significant growth for both the fourth quarter and for year.
Specifically fourth quarter income increased by 17, 9% year over year to $29 seven meaning U S dollars, while full year net income increased to $5, 43% year over year to 108, a $13 1 million U S dollars with a net margin of $35.
5% compared with 26% last year.
As we head into 'twenty 'twenty four we will continue to pursue quality growth improve operational efficiency and investing our yellow ecosystem.
We believe our solid business fundamentals and healthy cash position will empower us to capitalize on future opportunities driving sustainable and long term growth.
Let's move onto our detailed financials for the fourth quarter of 2023.
Our revenues were $80 9 million U S dollars in the fourth quarter of 2023, or seven 7% increase from $75 1 million in U S dollars in the fourth quarter of last year the.
The increase was primarily driven by the broadening of our user base and how's the monetization capability.
Yang Hu: Our solid revenue growth has also partially been attributable to a significant increase in ARPPU, which grew from $6.01 in the fourth quarter of 2022 to $6.58 in the fourth quarter of 2023. Now let's take a look at our costs and expenses. Our total costs and expenses were $57.6 million in the fourth quarter of 2023, a 4.1% decrease from $60.1 million in the same period of last year.
Our solid revenue growth has also partially attributable to the thinking EBIT.
A copy to you.
Which grew from $6.01 U S dollars.
In the fourth quarter of 2022 to $6.58 in the fourth quarter of 2023.
Now, let's take a look at our costs and expenses.
Our total costs and expenses well.
50, 557 6 million in U S dollars in the fourth quarter of 2023 or four points of 1% a decrease from six two points one in U S dollars in the same period of last year.
Yang Hu: Our cost of revenues increased by 11.4% to 30.6 million U.S. dollars in the fourth quarter of 2026, from $27.4 million in the same period of last year, primarily due to an increase in incentive compensation and a one-time game cost related to UI design. Cost of revenues as a percentage of total revenues increased to 37.8% in the fourth quarter of 2020, compared with 36.5% in the same period of last year. Our selling and marketing expenses were 10.4 million U.S. dollars in the fourth quarter of 2020, a 27.3 percent decrease from 14.3 million U.S. dollars in the same period of last year, primarily driven by our more disciplined advertising and promotion approach and lower share-based compensation expenses recognized in the fourth quarter of 2020.
Our cost of.
Revenues increased by 11.4% to $13 6 million in U S dollars in the fourth quarter of 2023 from 27 4 million U S dollars in the same period of last year.
Primarily due to an increase in incentive compensation and a one time gain cost related when you I design fees.
Cost of revenues as a percentage of total revenues increased to 37, 8% in the fourth quarter of 2023, compared with 36, 5% in the same period of last year.
Our selling and marketing expenses were 10 4 million in U S dollars in the fourth quarter of 2023 or.
27, 3% decrease from $14 3 million U S dollars in the same period of last year.
Primarily driven by our more disciplined advertising and promotion approach and a lower share based compensation expenses recognized in the fourth quarter of 2023.
Yang Hu: Selling and marketing expenses as a percentage of total revenues decreased from 19% in Q4 2022 to 12.8% in Q4 2023. Our general and administrative expenses were 11.3 million U.S. dollars in the fourth quarter of 2023, a 13.3 percent decrease from 13 million U.S. dollars in the same period of last year, primarily driven by lower share-based compensation expenses recognized in the fourth quarter of 2023. General and administrative expenses as a percentage of total revenues decreased from 17.4% in the fourth quarter of 2022 to 14% in the fourth quarter of 2021.
And the marketing expenses as a percentage of total revenue decreased from 19% in the fourth quarter of 2022 to <unk>, 8% in the fourth quarter of 2023.
Our general and administrative expenses were $11 3 million in U S dollars in the fourth quarter of 2023.
A 13, 3% decrease from 13 million in U S dollars in the same period of last year, primarily driven by the worst shared based compensation expenses recognized in the fourth quarter of 2023.
General and administrative expenses as a percentage of total revenues decreased from 17, 4% in the fourth quarter of 2022% to 14% in the fourth quarter of 2023.
Yang Hu: Our technology and product development expenses remained stable at 5.4 million U.S. dollars in the fourth quarter of 2023 and in the same period of last year. However, technology and product development expenses as a percentage of our total revenues decreased from 7.2% in the fourth quarter of 2022 to 6.7% in the fourth quarter of 2021. As such, our operating income was $23.3 million U.S. dollars in the fourth quarter of 2020, a 55.2% increase from 15 million U.S. dollars in the same period of last year. Excluding share-based compensation expenses, our non-GAAP operating income in the fourth quarter of 2026 was $27.1 million, up 34.1% year-over-year. Our interest income was 6.5 million U.S. dollars in the fourth quarter of 2020, compared with US$2.3 million in the same period of 2022, primarily due to an increase in interest rates applicable to companies' bank deposits and a continued increase in the company's cash position. Our income tax expense was 539,000 U.S. dollars in the fourth quarter of 2026, compared with $416,000 in the same period of last year.
Our technology and product development expenses remained stable at $5 4 million U S dollars in the fourth quarter of 2023 and in the same period of last year.
Technology and product development expenses as a percentage of our total revenues decreased from seven 2% in the fourth quarter of 2022 to six 7% in the fourth quarter of 2023.
As such our operating income was $23 3 million U S dollars in the fourth quarter of 2023 or 55, 2% increase from 15, meaning U S dollars in the same period of last year.
Excluding share based compensation expenses, our non-GAAP operating income in the fourth quarter of 2023 was 27.1, meaning U S dollars up 34, 1% year over year.
Interest income was $6 five meaning U S dollars in the fourth quarter of 2023, compared with $2.3 million in the same period of time.
22.
Primarily due to an increase in interest rates applicable to companies Baxter call dates and the continued increase in the company's cash position.
Our income tax expense was 539 four in U S dollars in the fourth quarter of 2023.
Pad with 415000 U S dollars.
Of last year.
Yang Hu: Moving to our bottom line, our net income increased by 79% to 29.7 million U.S. dollars in the fourth quarter of 2020, compared with $16.6 million in the same period of last year. Next, I would like to briefly review our liquidity and capital resources. Our cash position remains solid. As of December 31, 2023, we had cash and cash equivalents, restricted cash, term deposits, and short-term investments of $535.7 million compared with $453 million as of December 31, 2022. Under our $150 million share repurchase program that began on May 21, 2021 and has since been extended by our board through May 21, 2024, we have accumulated repurchased $3,972,000 of 876 ADFs or Class A Ordinary Shares in Open Market Cash Reporting, totaling approximately 35.5 million U.S. dollars as of December 31, 2026. Moving to our outlook for the first quarter of 2024, we expect our revenues to be between $72 million and $79 million. The past poll look is based on... Current Market Conditions and Reflects the Company's Management, Current and Preliminary Estimates of Market and Operating Conditions and Customer Demand, which are all subject to change.
Moving to our bottom line, our net income increased by 17, 9% to $29 7 million in U S dollars in the fourth quarter of 2023.
Compared with 16.6, meaning U S dollars the same period of last year.
Next I would like to briefly review, our liquidity and capital resources, our cash position remains solid.
As of December 31, 2023, we had cash and cash equivalents restricted cash term deposits and short term investments of $535 7 million in U S dollars.
Paired with $453 million as all December 31 2022.
Under our $150 million share repurchase program that began on May 21, 2021 and has since been extended by outdoor still may 'twenty, one 'twenty 'twenty four.
We have accumulatively, we put chess three meeting 972000.
800, and the <unk> 76, a D S.
Class a ordinary shares in open market repurchases.
Totaling approximately 35.5 million U S dollars as Dissemble.
31, 'twenty two 'twenty three.
Moving to our boat I'm moving to our outlook for the first quarter of 'twenty 'twenty four we expect our revenues to be between 72 million U S dollars and 17 9 million U S dollars.
The the outlook is based on.
Current market conditions and reflects the company's management's current and preliminary estimates of market and operating foundations and customer demand, which are all subject to change.
Unknown Executive: In the interest of time, please refer to our earnings price release for future details on our fourth quarter and full year 2023 financial results. This concludes our prepared remarks for today. All preachers, we are ready to take questions. Thank you. To ask a question, please press star then 1 on your telephone keypad. To withdraw your question, please press star then 2.
In the interest of time, please refer to our earnings press release for future.
On our fourth quarter and full year 2023 financial results.
This concludes our prepared remarks for today, operator, we are ready to take questions.
Thank you for asking a question. Please press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Chenghao Li: Today's first question comes from Chenghao Li with CICC. Please go ahead. Hi, management. Thanks for taking my question and congratulations on a solid quarter. I have two questions. First, what have we learned from the operation of the two mid-to-hardcore games?
Today's first question comes from Shanghai.
Please go ahead.
Hi management, Thanks for taking my question and congratulations on another solid quarter and I have two questions first.
Have we learned from the operation of the chimneys hardcore games and how she to reconsider the strategy RPG game business. This year and secondly, how should we see the development trend after two flagship titles shallow and you've Gotta later in this year and are there any changes in the competitive landscape.
Saifi Ismail: And how should we consider the strategy of the game business this year? And secondly, how should we see the development trend of the two flagship titles, Yalla and Yalla Ludo, this year? And are there any changes in the competitive landscape in the MENA region?
Saifi Ismail: Thank you. Hi Chenghao, thanks for your question. I will take your first question and leave the second one to Saif. The two mid-to-hardcore games as our initial offerings have shoulder significant responsibilities. They've allowed us to gain valuable insights into local user preferences and successfully recruit and train a local operations team, paving the way for our further development in this field. However, at this stage, we believe they have completed their main goals, and we realize that these two products are projected to fall short of the company's revenue expectations despite several rounds of optimization. So after careful evaluation going forward, we will shift more of our focus to new products in our development pipeline. Regarding our game strategy, firstly, we're looking to collaborate with more mature gaming studios or those with successful game publishers. We will carefully select game content that is most suitable for the MENA market, leveraging our local expertise.
Thank you.
Yeah.
Hi, Joe Thanks for the question I'll take your first question I'll leave the second one.
To meet to hardcore game as the initial briefs have shuttered.
Significant responsibilities they've allowed us to gain valuable insights into local user preferences.
And successfully recruit and train the local accretions team paving the way.
Our further development in this field.
This stage, we believe they have completed their mangoes and we realized that these two products are projected to fall short of the companys revenue expectations. Despite several rounds of.
Optimization.
So after careful evaluation going forward, we will shift more of our focus to new product development pipeline.
Regarding our game strategy, Firstly, we're looking to collaborate with more mature gaming studios or those we see successful game publishing.
We will carefully select game content that is more suitable for the Mena markets.
Regional localized expertise.
Saifi Ismail: Secondly, we plan to look for opportunities to collaborate with global players who are interested in the MENA market to capitalize on our monetization strategies and our expertise in community engagement. Lastly, we are committed to our in-house development team, continuous enhancement, and professional growth. We expect to introduce a series of new self-development core games this year.
Secondly, we plan to look for opportunities to collaborate with global players who are interested in the Mena market to capitalize on our monetization strategies.
And now the teeth and community engagement.
We're committed to our in house development team continuous enhancement and professional growth.
To introduce a series of new self developed mid core games. This year and we'll keep you updated if we have any.
Saifi Ismail: I will keep you updated if we have any further progress. Thank you. I, Xing Ho, will take your second question. The performances of Yalla and Yalla Ludo currently remain very stable.
Thank you.
I think I'll I will take the second question.
The bed four months as of yet.
And yellow Ludo currently remains very stable.
Saifi Ismail: We have cultivated a vibrant, highly engaged community with a loyal user base, and both products are exhibiting long life cycles. We are confident that both products will continue to develop well and maintain their momentum. We are also actively working on improvement as well as making some bold experiments, hopeful of even better performances from these two products. In terms of competition, every quarter, we address questions about competition, reflecting the fact that competition in the MENA region is always present and constantly evolving. During the past quarter, no significant new competitors entered the market.
We have cultivated a vibrant highly engaged community with our loyal user base.
Both products are exhibiting long lifecycle.
We are confident that both products will continue to develop well.
Maintained their momentum.
We're also actively working on improvement as well as making some ball bitterman hopeful of even better performance from these two products.
In terms of competition every quarter, we address the question about the competition.
Afflicting, the fact that competition in the Mena region is always bridging and constantly evolving during the bus squashed up no significant new competitors have entered the market of course, we are aware of an increasing number of companies exploring overseas expansion.
Xueqing Zhang: Of course, we are aware of an increasing number of companies exploring overseas expansion, with the Middle East emerging as a popular destination. This trend may introduce multiple new variables. However, at present, we see that the competitive landscape seems stable, even with big names like TikTok, which have been in the Middle East market for a while. Nevertheless, our team has been monitoring the trend closely for emerging opportunities, and we will share with you new observations if any. Thank you. Thank you. And our next question today comes from Xueqing Zhang with CICC. Please go ahead.
With the middle East emerging as the mobile App. The nation. This trend may introduce multiple new body. Then however, I presume, we see that the competitive landscape seems stable, even with big names like big stores, which have been in the middle East market, Florida, while never.
Our team I have been monitoring that closely but imagine the opportunity and we will share with you observed version if any thank you.
Thank you and our next question today comes from <unk>, Zhang with <unk>.
<unk>. Please go ahead.
Xueqing Zhang: Hi Management. Thanks for taking my question and congratulations on the story content. My first question is about the financial outlook. What should we think about revenue growth and margin change this year? And my second question is about shareholder returns.
Hi management, Thanks for taking my question and congratulations on a solid quarter. My first question is a pause financial outlook.
How should we think about revenue growth and margin changes yeah and my second question is about shareholder return and can management share some details on the share buyback and the dividend client in the future. Thank you.
Yang Hu: And can management share some details on the share buyback and the dividend plan in the future? Thank you. Hi Xueqing, glad to have you here.
Hi, shrinking glad to have you here thanks for your questions.
Yang Hu: Thanks for your questions. For 2024, regarding our current product portfolio, we are so confident that we can at least maintain our top line at the current stable level. At the same time, we are looking forward to revenue contributors from new products and business collaborations in the coming year. We expect our margin to be around 40% for the year, excluding potential investments in new products. In factoring in new products, our margin may fluctuate around 35%. For your second question about the share repurchase and dividend, Yalla is dedicated to returning value to shareholders through our share repurchase program. As of December 31, 2023, we have repurchased a total of $35.5 million.
For 2024 regarding our current product portfolio. We are so confident that we can at least maintain our topline at current stable level at the same time, we're looking forward to revenue contributors from new products and the business collaborations in the coming year, we expect our margin to be around 40%.
For the year are excluded.
Excluding potential investments in new products.
Factoring in new products, our margin may fluctuate around 35%.
For your second question about the share repurchase and dividend Yeah. All eyes are dedicated to return value to shareholders through our share repurchase program.
As of December 31, 2023, we have repurchased a total of $35 5 million U S dollars.
Yang Hu: Given our solid fundamentals, we will continue to conduct our share repurchase program while considering cash dividend payments in the dual case. We will keep you posted if there are any updates. In short, we are confident in Yalla's long-term prospects and committed to creating value for all stakeholders. I hope that answers your question.
Given our solid fundamentals, we will continue to contract our share repurchase program, well considering cash dividend payments into our case.
Oh, we will keep you posted if you if there are any.
Updates in short we are confident as long term prospects and are committed to creating value for all stakeholders I hope that answers your question Vasily.
Kaifang Jia: Thank you. And our next question comes from Kaifang Jia with CIPIC. Please go ahead.
Thank you and our next question comes from Cai von <unk>.
<unk>. Please go ahead.
Tao Yang: Hi, management. Thanks for taking my question. And I have a question about your strategy in 2024. Can management share what the company's key focus will be in 2024? Hi, Kaifang. This is Tao.
Hi management. Thanks for taking my question and I have a question about your strategy in terms of heads for a kind of management of share which is a company is clean for curse and turned into Nashville.
Hi, Paul this is Don.
Tao Yang: Thanks for your question. As a first mover in this market, we focus our attention on the stability and growth of our flagship application to maintain our leading position in the market. We will enhance the two products and drive growth this year by adopting a more innovative approach and undertaking further experimentation. We do not start YALA and YALA-Ludu competitively and the long-tail growth momentum in the Middle East.
Thanks for the question and the first mover in this market, we focus our attention all the stability in crude.
Actually its applications to maintaining our leading position in the market.
We have the two products and the drive through.
And job growth in this year by adopting a more innovative approach and undertaking further.
Experimentation, we do not start.
And again I lose competitiveness.
And the long tail growth momentum in the middle East market. Meanwhile, we also assume more responsibility for new product development.
Tao Yang: Meanwhile, we also assume more responsibility for new product development, and we will allocate our important resources to the planning and implementation of our revenue growth projects. Thank you. Thank you. And our next question today comes from Xiaoyue Hu with Haitian International. Please go ahead. Hello management.
We will allocate our important resources to the planning and implementation.
With revenue growth.
Thank you.
Okay.
Yes.
Thank you and our next.
Question Today comes from show you, who was telling international. Please go ahead.
Hello management. Thank you for taking my question. So my question is that since I'm. The middle East has become a go to market for a lot of your investors in the past year. So.
Xiaoyue Hu: Thank you for taking my question. So my question is, since the Middle East has become a go-to market for a lot of investors in the past year, so what, Sarah. Thank you for the question. As NINA's role on the global stage has grown, we have seen growing opportunities with increasing attention and resources from around the world to participate in this surging development. As a company rooted in MENA, we believe its vibrant market will drive our further development. The media market has its own characteristics, which can be very different from other markets.
Good morning. Thank.
Thank you for the question.
You have to do all the global stage has grown we have seen growing opportunities with increasing attention and resources from around the world participating in the <unk> development.
Another copy Bluetooth Humana, we believe it will bring to market we drive our further development.
So neither market has its own characteristics.
It can be very different from other markets. We are continuously navigating the market dynamics well be exploring opportunities and potential collaborations we will keep you posted.
Tao Yang: We are continuously navigating the market dynamics while actively exploring opportunities and potential collaboration. We will keep you posted on the progress. Thank you. Thank you. And our next question today comes from Lincoln Kong with Goldman Sachs. Please go ahead. Thank you, management, for taking my question. My first question is about the gaming business.
The progress thank you.
Okay.
Thank you.
And our next question today comes from Lincoln.
Goldman Sachs. Please go ahead.
Thank you management for taking my question. My first question is on the can business. So can management give us some updates in terms of that game publishing strategy and also the game popcorn right next to it.
Lincoln Kong: So can management give us some updates in terms of the game publishing strategy and also the game pipeline for the next few years? And the second question is in terms of what are the growth drivers for 2024 when we're thinking about overall business growth? Thank you. Thanks, Lincoln.
Yes.
And the second question is in terms of what are the gross driver.
For 2024, when you're thinking about the overall business grows.
Thanks Lincoln. Thanks for your question I'll take your first one.
Unknown Executive: We are actually proactively speaking with global top-tier gaming studios to explore potential cooperation. We now have a clear roadmap and some potential options. In the process of exploring the sector, we are gaining experience, which empowers us to better move forward and achieve positive outcomes. We also have some new self-developed mid-core games in our pipeline.
We are actually proactively speaking with global top tier game studios to explore potential cooperation that we now have a clearer roadmap and some potential options in the process of exploring the sector, we are gaining experience, which empowers us to prepare to move forward on the two positive outcomes. We also have some new self developed medical.
Games in our pipeline, we will share more details when we have made further meaningful progress. Thank you.
Unknown Executive: We will share more details when we have made further meaningful progress. Thank you. Good morning, Lincoln. This is Tao. I will take the second question.
Good morning, Nathan This is Tom I will take the second question.
Tao Yang: For the year 2024, we will still be dedicated to enhancing and developing our flagship product. We are proud of Yalla, and Yalla provides good service and good performance. And we do expect the two products to unlock more growth potential; we see the potential to further penetrate the market. Also, as we earlier introduced, we anticipate the launch of new mid-core and hard-core games as an important potential growth driver. Thank you, Lincoln.
Full year 2024, we will still be dedicated to housing and developing our actually slowdown.
We are proud of yellow.
Those early signs and good performance.
And we do expect the two products to unlock more growth potential this year we.
We see the potential to further penetrate the market.
Actually earlier introduced.
We anticipate the launch of new mid Corps and hardcore game at the important potential growth driver.
Thank you Lincoln.
Tao Yang: Thank you. And our next question comes from Rachel Guo with Nomura. Please go ahead.
Thank you and our next question comes from Richard <unk> with Nomura. Please go ahead.
Rachel Guo: Hi management, thanks for taking my question. My question is about your business expansion. Would your company consider expanding your business to more regions globally besides your Middle East?
Hi management. Thanks for taking my question My question on Egypt Voucher business expansion would your company consider expanding your business to more regions globally, Besides Jamaica East sex.
Tao Yang: Thank you. Hi Rachel. Thank you for your question. This is Tao. First of all, we will remain dedicated to the Middle East market while also keeping an eye on opportunities in other markets, especially for some of our new products in our portfolio if we see their potential to be distributed, not only in the MENA market but also in other markets. We may consider conducting global promotions. Our main focus is undoubtedly the Middle East market where we have unique advantages, and we will continue to leverage our core capabilities to unlock our growth potential.
Hi, Richard Thank you for your question.
So first of all we remain dedicated to the middle East market, while also keeping an eye on opportunities in other markets.
Especially for some of our new products.
And hopefully if we see there a potential to be distributed not only in a minute.
In other markets.
We may consider conducting global promotion our main focus is.
And Duffy on the Middle East market, where we have unique advantages and we will continue to leverage our core capabilities to allow a couple of growth potential.
Unknown Executive: Thank you. Thank you. As there are no further questions now, I'd like to turn the call back over to management for closing remarks. Thank you once again for joining us today. We look forward to speaking with you next quarter. If you have further questions, please feel free to contact Yalla's Investor Relations or Piacente Financial Company. Both parties' contact information is available in today's press release, as well as on our company website.
Thank you Richard.
Yeah.
Thank you.
Further questions now I'd like to turn the call back over to management for closing remarks.
Thank you once again for joining US today, we look forward to speaking with you in next quarter. If you have further questions. Please feel free to contact Investor Relations <unk> financial Communications. Both parties contact information is available in today's press release as well as all of our company website. Thank you.
Unknown Executive: Thank you. Thank you. This concludes the conference call. You may now disconnect your line, and thank you. All right. Thank you. Thank you.
Thank you. This concludes the conference call.
Good luck tomorrow and thank you.
Okay.
[music].