Q4 2023 DouYu International Holdings Ltd Earnings Call
Operator: Good morning and good evening, ladies and gentlemen, thank you and welcome to Douyu Intl Hldg. 4th Quarter Full Year 2020. This time all participants are in listen-only mode. We will be hosting a question-and-answer session after management's prepared remarks. I will now turn the call over to the first... Ms. Lingling Kong, IR Director at Douyu, please go ahead. Thank you. Hello
Good morning, and good evening, ladies and gentlemen, thank you and welcome to Delphi, you International Limited's fourth quarter and full year 2020 earnings conference call. At this time all participants are in a listen only mode. We will be hosting a question and answer session after management fee.
Speaker Change: Third the remarks, I will now turn the call over to the.
First speaker today, Ms Lin Ling Tong IR director I know you.
Speaker Change: Please go ahead maam.
Speaker Change: Thank you Hello, everyone will come to a fourth quarter and full year 2023 earnings call joining us today and make them a me too Chief strategy Officer, Mr. Hao, Cao Vice President of finance and missed it.
Lingling Kong: Welcome to our fourth quarter and full year 2023 earnings call. Joining us today are Mr. Mingming Su, Chief Strategy Officer, Mr. Hao Cao, Vice President of Finance, and Mrs. Ziming Ren, Vice President from the Interim Management Committee. You can refer to our fourth quarter and full year 2023 financial results on our IR website at ir.douyu.com. You can also check a replay of this call when it becomes available in a few hours on our IR website.
Speaker Change: Yes, black correcting some of the international maybe.
Hao Cao: You can go to slide 12 fourth quarter and full year 2023 for natural Readouts.
Hao Cao: IR website at IR Dot, though your dot com.
You can also check a replay of this call when it becomes available in a few hours on our IR website.
Operator: Before we start, please note that this column contains forward-looking statements made pursuant to the Safe Harbor Provision for the Private Security Legislation Reform Act of 1995. These forward-looking statements are based on management expectations and observations that involve known and unknown risks, uncertainties, and other factors not under the company's control, which may cause the actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statement, risk factors, and the details of the company's filing with the SEC. The company undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this conference call.
Hao Cao: Before we start pace note that todays call may contain forward looking statements made pursuant to the safe Harbor provision for the private Securities Litigation Reform Act of 1995 forward looking statements are based on management's current expectations and observations that involve known and unknown risks.
Hao Cao: These and other factors not under the company's control, which may cause actual results performance or achievements of the company to be materially different from the base outperformed our expectations implied by these forward looking statements.
Hao Cao: All forward looking statements are expressly qualified in their entirety like the cautionary statements risk factors and if he tells all the company's filings with the SEC. The company undertakes no duty to revise or update any forward looking statements. What's the lag in bunch of circumstances. After the date of this.
Hao Cao: Conference call.
Lingling Kong: I will now speak on behalf of our Interim Management Committee on Business Updates, and the call will be handed to our Vice President of Finance, Mr. Hao Cao, for financial discussion. The year 2023 continues to be filled with challenges. Amid this backdrop, we remain firmly committed to executing our long-term growth strategy of fostering a vibrant, diverse, game-centric content ecosystem while prioritizing content across our paths. We deepened our cooperation with game developers to enhance commercialization while adjusting our revenue and marketing strategies to be more ROI-driven. At the same time, we continuously optimized costs and expenses. At the adjusted net level, we successfully transformed losses into gains, achieving an adjusted net profit of RMB154 million for the full year of 2023.
Speaker Change: I will now speak on behalf of all of that all of our interim management, maybe business updates and the call will be handed to a revised crashed in Oakland that meet your hotel. So it's a national discussion.
Speaker Change: The 2023 continued to be solid waste challenges.
Speaker Change: With this backdrop, we remain firmly committed to executing our long term growth strategy, our forthcoming web wide range that works gaming centric, how can the ecosystem, while prioritizing content across our platform.
Speaker Change: We deepened our cooperation with game developers to enhance commercialization well adjusting our revenue and marketing strategy to be more al I driven.
Speaker Change: At the same time, we're continuously optimizing cost and expenses at suggesting that level, we successfully transformed law fits into again.
Speaker Change: <unk> adjusted net profit of RMB, I'm going 54 million for the full year of 2023.
Lingling Kong: In addition, we continued to place significant emphasis on compliance management and regulatory improvements across the platform. These efforts are dedicated to continue to nurture our platform's ecosystem with enhanced compliance, healthy growth, and sustainability. Navigating the Complex and Involving Macroeconomic Dynamics and Operating Landscapes, we proactively tackled short-term platform challenges in the fourth quarter.
Speaker Change: In addition, we continued to place to stick and if you can emphasize and compliance management and regulatory improvements across the platform.
Speaker Change: This effort are dedicated to continue to Q2 I would pass once ecosystem with enhanced combines healthy growth and sustainability.
Navigating the complex and evolving Mapco mapco.
Speaker Change: The macroeconomic dynamics and operating landscape, we proactively pack house short term platform challenges in the fourth quarter.
Lingling Kong: We further enhanced our compliance efforts to ensure a steady stream of premium content output and effectively maintain the overall stability of our business operation. In the fourth quarter of 2023, our mobile MAUs were 51.7 million, and our quarter paying users were 3.7 million. With 2024 underway, we are zeroing in on harnessing our three core strengths, deep-rooted streamer resources, a rich content ecosystem, and close cooperation with game developers. In doing so, we can ensure operating stability and advance healthy development across our platform.
Speaker Change: With flooding has our compliance efforts to ensure a steady stream of premium content output and effectively maintained the overall stability of our business operations.
In the fourth quarter of 2023 our mobile and they use well $51 7 million in our corner paying users was $3 7 million.
Speaker Change: With 2024 underway, we are they really are harnessing our three close yes.
Speaker Change: Deep annuity stream of resources, our rich content ecosystems, and close cooperation with game developers.
Speaker Change: In doing so.
Speaker Change: Sure I'll, creating stability and at once how CP VI with a bunch of course our platform.
Lingling Kong: First, we are building on our deep-rooted streamer resources by intensifying our cooperation with game developers on the content and operation fronts. There, we are continuously producing premium content and upgrading content operations, cementing and elevating the domain's value as a vibrant game-centric content ecosystem. Additionally, we will heighten our efforts to diversify our revenue stream. We will accomplish this by collaborating with more game developers on commercial endeavors and by bringing promotions and game corp sales to even more gaming segments through diverse business partnership models. During the course of the year, we also streamline our organizational structure, transforming our pivotal content ecosystem business unit into three core divisions, encompassing streamers, content and events, and game developers. With the formation of this primary unit, we believe we can further improve our operating efficiency by integrating and utilizing our key resources.
Speaker Change: First we are building up our deep rooted scheme of resources by intensifying our cooperation with game developers I'm counting on operational Fox.
Speaker Change: We are continuously produced premium content and upgrading content operations.
Speaker Change: And then he and alleyways and building value as a vibrant game centric content ecosystem.
Speaker Change: Additionally, we will heighten our efforts to diversify our revenue stream.
Speaker Change: We will accomplish this by cooperating with more game developers, all commercial endeavors, and by bringing promotions and Gamecocks south to even more gaming segments suite is worst business partnership models.
Speaker Change: At the outside of the U. We also streamline our organizational structure.
Speaker Change: Transforming our pivotal content ecosystem visit this UNH interest three core divisions compassion streamers content in England and game developers.
Speaker Change: With the formation of this prime reunion, we believe we can further improve our operating efficiency by integrating and are utilizing our key resources.
Lingling Kong: Moreover, leveraging our ongoing efforts to enhance compliance standards and execution across the platform, we will further refine our revenue structure to improve the quality of our revenue streams and continuously optimize costs and expenses. This initiative provides us with better agility to navigate the evolving market dynamics and challenges, fortifying our company's foundation for long-term development. With that overview, I'd like to review some details of our business operations during the quarter. In the fourth quarter of 2023, our mobile MAUs were 51.7 million, showing stability on a sequential quarter basis and a decrease of 9.9% year-over-year as we fine-tuned our user acquisition strategy. As you may recall, beginning in early 2023, we began emphasizing user quality and cutting back on low ROI marketing spending, which greatly reduced customer acquisition expense on a year-over-year basis. This led to a lack of user acquisition from promotional channels and a decline in MAUs, quarter over quarter. On the other hand, MU's performance exceeded our expectations, given the high base in the sub-quarter summer peak season.
Speaker Change: Moreover, leveraging our ongoing efforts to enhance compliance standards and execution of course of platform.
Speaker Change: We will further refine our revenue structure to improve the quality of our revenue streams and continuously optimizing costs and expenses.
Speaker Change: This initiative will provide us with better agility to navigate the evolving market dynamics and challenges.
Speaker Change: Fortifying, our company's foundation for long term development.
Speaker Change: With that overview.
Speaker Change: I'd like to review some details of our business operations during the quarter.
Speaker Change: In the fourth quarter of.
Speaker Change: 2023 our mobile I may use well $51 7 million showing stability on a sequential quarter basis, and a decrease of nine 9% year over year as we fine tune our user acquisition strategy.
Speaker Change: As you May recall beginning in early 2023, we began emphasizing user quality and cutting back on low all I'm marketing spending.
Speaker Change: Which greatly reduced our customer acquisition expenses.
Speaker Change: The year over year basis. This led to a lack of user acquisition some promotional channels and at the high end may use.
Speaker Change: Although quoted on the other hand, I mean, your performance exceeded our expectations.
Speaker Change: The high base in the third quarter Summer peak season.
Lingling Kong: Our effective content-driven growth strategy continues to attract and retain high-quality users, supporting MAU stability Quarter Over Quarter. Specifically, we were able to attract new users and boost user retention through the continued development of our platform's diversified commercial initiatives, promotions of game version updates and new game themes, and operational activities featuring high-quality streamers. Second, we rolled out an array of exclusive features and content offerings during official gaming events broadcast, which elevated user engagement. This quarter, we broadcasted over 30 large-scale official esports tournaments, including the F-13 League of Legends World Championship, Dota 2 TI12 International Championship, King Pro League Challenger Cup and Championship, Quad Five Stars 2023 China Regionals and World Championship, as well as the exclusive World Run Championships Tour 2023.
Speaker Change: Are you factoring partner driven growth strategy continue to attract anybody can't high quality users supporting Emmy, you'll stability quarter over quarter.
Speaker Change: That's typically where we're able to attract new users and boost you do get retention through the continued development of our platform's diversified commercial initiatives.
Speaker Change: Motion of Gameboard, and updates and new game team and operational activities featuring high quality streamers set.
Speaker Change: And we go out every of exclusive features and content offerings doing official gaming when scorecard.
Speaker Change: Which any weighted user engagement.
Speaker Change: This quarters with forecasted over 30 large scale official esports tournaments, including the Aster team League of Legends World Championship.
Daughter, Chew T I child International Championship, King poorly challenger hubs and Italian ship.
<unk> 20th of NIS, three China, Regionals and work from Asia as well as the exclusive waterfront championships towards 2023.
Lingling Kong: In terms of tournament content operations, in addition to our derivative commentary and review programs, we upgraded real-time interactive features to further boost user engagement. For example, during the League of Legends World Championship, we introduced a professional data scoreboard during our live streaming sessions, allowing hardcore gamers to quickly access the strengths of players and teams. Moreover, we have intensified our investment in interactive features. Alongside the MVP fall list, a best and worst player voting feature initiated during the LPL summer split, we added a player rating section, enabling users to rate and comment on players after each game, fulfilling the user's desire for frequent interaction.
Speaker Change: In terms of term and content operations. In addition to our do it with your commentary and the reveal programs.
Speaker Change: Upgrade real time interactive features to further boost user engagement.
Speaker Change: For example, do you is the league of Legends World Championship, we introduced a professional data scoreboard yeah overlaps during these sessions, allowing hardcore gamers to quickly access the strength of players and teams.
Speaker Change: Moreover, we have intensified our investment interactive features.
Speaker Change: Alongside the M way P fault list.
And what's the player voting feature initiated during the L. P. L Summer Blake, we added a player ratings section.
Speaker Change: They've only users to rate and comment on payers after each game fulfilling users' desire for frequent interactions.
Lingling Kong: In addition, during the official gaming event's co-streamed live commentary, the player rating feature gathered highly positive feedback from streamers, enabling streamers to rate players, enhance user immersion and enjoyment during the viewing experience, fostering lively discussions and heightened engagement. Moreover, we have preactively expanded our presence in new official eSports tournaments. For instance, with Valorant, a new game known for its competitive appeal and captivating gameplay, thanks to our attentive operations during the game's initial launch and our hardcore user base, in addition to regular tournaments like Valorant CN Evolution Series, we secured the exclusive live streaming rights to and Warren Global Invitational, featuring top-tier stream teams and enriched user experience with a wide array of premium esports content. Upon comprehensive evaluation of our Throughout the fourth quarter, we produced over 60 gaming events, including the KPL Academy Tournament 2023, aligned with KPL's official event, the S10 Teamfight Tactics Grace Tournament, highlighting female streamers, and the EBITS BP Tournament of the Jingxin Impact Continuous Series, alongside other high-caliber self-producing events.
Speaker Change: In addition, during the official gaming events co streamed live commentary the player rating feature gathered the highly positive feedback from streamers.
Speaker Change: Enabling streamers to ratepayers enhance user emotion and enjoyment teams are viewing experience.
Speaker Change: Fostering a lively discussions and heighten engagement.
Speaker Change: Moreover, we have actively expanded our presence in new official esports tournaments for.
Speaker Change: For instance, waste via a range of new game known for is competitive appeal and kept you waiting gameplay.
Speaker Change: Two hour attentive operation students of games in usual lung and Aloha core user base.
Speaker Change: In addition to regular tournaments like water and see any evolution theories, we secured the exclusive of live streaming rights to <unk>.
E M Waller and global invitation Yelp, featuring top tier shrimp teams and enrich the user experience with a wide area of premium esports content.
Speaker Change: Upon comprehensive evaluation of our esports content offerings across our platform. We promote adjusted the balance between copyrighted tournaments and self produced content.
Speaker Change: Achieving Senate, saying, Oh, just chip integration of our premium content offerings, well if that people they balancing or all carbon copy.
Throughout the fourth quarter, we produced over six take gaming events, including Z K P. L. Danny tournaments.
Speaker Change: 23 align waves K P L social events. The S 10 team fired tactic waste Herman highlighting female streamers.
Speaker Change: And the EBIT be Pete Herman of changing impact continuous series alongside other high caliber sell producing beds.
Lingling Kong: Beyond bridging content gaps during official events, off-seasons, our self-produced events serve as pivotal platforms for talent discovery, streamer cultivation, and enhancing user engagement and interaction. In terms of premium content promotions, we reinforced the synergy between platforms, online content, and offline initiatives. During the quarter, we organized offline activities at 13 offline watchings for the League of Legends World Championship and Peaceful Adventure for the Peacekeeper Sector, leveraging the momentum of high-traffic events of League of Legends in 2023. We created an area of offline game watching and gathering featuring top tier gaming streamers and entertainment streamers. This innovative model integrated pre-game variety show live-streaming, offline esports fun challenges, and immersive offline game viewing, presenting gamers with a fully immersive, all-inclusive esports content journey.
Speaker Change: Beyond the bridging content gaps you all facial England off seasons, our self to produce event.
Speaker Change: As pivotal platforms for talent discovery, streamer cultivation, and enhancing user engagement and interaction.
Speaker Change: In terms of premium content promotions, we've reinforced that the synergy between platforms I'm content and offline initiatives.
Speaker Change: During the quarter, we organized offline activities at certain often I'm watching for the league of Legends World Championship and peaceful adventure for the peace cable segment.
Speaker Change: Leveraging the momentum of high traffic, England of league of legends in 2020 three.
Speaker Change: We created a area of offline games watching gatherings, featuring top cute gaming streamers and entertainment streamers.
Speaker Change: This innovative model integrated pregame, but why do you show live streaming offline E Sports fund challenges and immersive offline game Wheeling, presenting gamers with a fully immersive all inclusive esports content journey.
Lingling Kong: Furthermore, it catalyzed the convergence of gaming and pie entertainment fan select. We also capitalized on in-person engagements for the Peacekeeper gaming segment to enhance promotion. By introducing new Redemption in-game items for gaming members, streamers competing offline tasks gained the ability to unlock limited offerings on in-game items. Through those targeted content offerings and interactive user experience, we advanced the promotion of our game-specific membership service. Now, let's turn to our monetization. The total number of paying users in the fourth quarter was 3.7 million, with a quarterly output of RMB 278. The decrease in the number of paying users seems to have come from our strategic shift at the start of 2023 to deliberately reduce revenue-generating activities and low-margin sales promotion. Instead, we began focusing on enhancing the operating efficiency of revenue streams while fostering a healthy and sustainable game-centric community ecosystem.
Speaker Change: Furthermore, it catalyzed the convergence of gaming and pine infotainment sensor lack.
Speaker Change: We also capitalized on in person engagement for the peace cable gaming segment to enhance promotions.
Speaker Change: By introducing new redemption in game items smoking members Dreamers competing offers on task and the ability to analog limited offerings and in game items.
Speaker Change: Sue those targeted content offerings and interactive user experience, we advanced the promotion of our games specific membership service.
Speaker Change: Let's turn to our monetization of total number of paying users in the fourth quarter was $3 7 million with a corner the awful up RMB 278.
Speaker Change: The decrease in the number paying users themes from our strategic shift at the start of 2023 to deliberately reduce rent revenue generating activities and the low margin sales promotions.
Speaker Change: Instead, we began focusing on enhancing the operating efficiency of revenue streams.
Speaker Change: Fostering a healthy and sustainable game centric community ecosystem.
Lingling Kong: This transition resulted in a year-over-year decline in our paying user base. Furthermore, with macro-level consumer sentiment gradually waning in the latter half of 2023, we strategically scaled back on platform-wide promotion activities in the fourth quarter. This adjustment also impacted the scale of paying users for the period. While we continue to maintain our co-paying user base, given the current consumer sentiment, we offered some modestly priced revenue-generating products to accommodate the spending habits of mid- and long-tail users. Therefore, our quarterly output marginally declined year-over-year and quarter-over-quarter.
Speaker Change: This transition resulted in a year over year decline, our paying user base.
Speaker Change: Furthermore, with the macro level consumer sentiment gradually waning in the latter half of 2023 we strategically scaled back on track.
Speaker Change: Platform wide promotional activities in the fourth quarter.
Speaker Change: Adjustments also impacted the scale of paying users for the period.
Speaker Change: Well, we continue to maintain our co paying user base given the current consumer sentiment, we offered some modest delay price to revenue generating products to accommodate the spending habits of meat and long tail users.
Speaker Change: Therefore, our quarterly alcohol market, while it declined year over a year and a quarter over quarter.
Lingling Kong: Over the past few years, we have been exploring ways to diversify our revenue stream. Thanks to our innovative commercialization initiatives, the contribution from other revenues in 2023 significantly increased year-over-year. In 2024, revenue diversification remains one of our focus, and we will prioritize collaborative commercialization ventures with game developers. First, most Douyu users are hardcore gamers with a great appetite for game porn.
Speaker Change: Over the past few years, we have been exploring ways to diversify our revenue stream.
Thanks to our innovative commercialization initiatives the contribution from other revenues in 2023 significantly increased year over year.
Speaker Change: In 2020 for revenue diversification remains one of our focuses.
Speaker Change: We will plan are at highest collaborative commercial realization lunches with game developers.
Speaker Change: First most adult you users a hardcore gamers with good appetite for games Pos.
Lingling Kong: Second, previous sales campaigns for GameForbes not only diversified our revenue streams but also boosted traffic on our platform. This suggests strong user interest and engagement in this activity, highlighting the robust alignment between user demand and South for in-game IT.
Speaker Change: Second prepare shelf campaigns for game works not only that works you find our revenue streams, but also boosted traffic our path forward.
Speaker Change: This suggests strong user interest and engagement in this activities.
Speaker Change: Highlighting the jewel box alignment between user demand.
Speaker Change: In South Florida in game items.
Lingling Kong: Given these insights, we intend to deepen our partnerships with more game developers, determining and promoting various approaches to commercialization for game ports tailored to diverse game genres. Moving on to our technology R&D, we introduced a major version update to the Douyu app in November, 2023. The update strengthens interactive functionalities between streamers and users within our game-centric content ecosystem, further enhancing overall engagement. We introduced a new tab called Buzz on the main interface, providing users with real-time updates on streamers they follow, such as live streaming status and access links, as well as non-live streaming updates on streamers and Yuba posts. This feature allows users to engage with streamers and leave comments in and outside of live streaming sessions.
Speaker Change: Given this insight we intend to deepen our partnerships with more game developers.
Speaker Change: Terming and promoting beverage approaches to commercialization for gamecocks tailored to diverse game genres.
Speaker Change: Moving onto our technology R&D, we introduced a major Washington update choosy App in November.
Speaker Change: In 2023, the updates strengthened interactive functionalities between streamers and users waste in our game centric content ecosystem.
Speaker Change: Further enhancing overall engagement, we introduced a new path for the bus on the main interface, providing users with real time updates Austria. They follow such as live streaming stated and excess links as well as none that drew me update sounds dreamers and.
Speaker Change: Bob Hope.
Speaker Change: This feature allows the user to engage with streamers and Lees comments, even outside of live streaming sessions.
Lingling Kong: Additionally, it fosters interaction among users who follow the same streamer within that streamer's Yuba community. Furthermore, we have continued to strengthen our compliance self-assessment procedures and further standardize compliance management across the platform. This ongoing effort includes enhancing compliance standards for various areas, such as products, operations, and content moderation. We have been implementing strict compliance.
Speaker Change: Additionally, if what it fosters interactions among users who follow the same streamer ways in that stream weightings that you bought community.
Speaker Change: Furthermore, we have continued to strengthen our compliance self assess them in procedures, and Florida standardized Hawkeye management across our platform.
Speaker Change: This ongoing effort includes enhancing compliance standards on that response.
Speaker Change: <unk> has products operations and content moderation.
Speaker Change: We have been implementing strict compliance effort in particular, starting this year, we have intensified efforts to combat behaviors, while awaiting our platform's rules and policies.
Lingling Kong: In particular, starting this year, we have intensified efforts to combat behaviors violating our platform rules and policies. This remedial measure showed very good results with regular public announcements on our website. In the meantime, we will continue to comprehensively implement project risk provision and control mechanisms while establishing product tracing procedures.
Speaker Change: This is a major measures showed very good results with regular public announcements on our website.
Speaker Change: In the meantime, we will continue to comprehensively implements project forget risk provision and control mechanisms well establishing product tracing procedures.
Lingling Kong: Additionally, we have enhanced our interactive anti-addiction systems, prioritized the distribution of compliant resolution, conducted regular reviews of breach risks across the path, and Ratified Irregular Behaviors, Reinforcing Risk Awareness Among All Relevant Stocks. In summary, throughout 2023, we fine-tuned our operating strategies to align with the evolving market dynamics and effectively maintained the overall stability of our business operations while improving profitability. We believe that by sharpening our focus and capitalizing on the platform's co-competitive edge, we can effectively foster a vibrant, healthy, diverse, game-centric content ecosystem while continuing to uphold regulatory compliance. We remain unwavering in our commitment to the company's long-term sustainable growth. With that, I will now turn the call over to our Vice President of Finance, Mr. Hao Cao, to go through the details of our financial performance in the quarter. Thank you, Lingling. Hello everyone.
Speaker Change: Additionally, we have enhanced our interactive anti addiction systems prioritize did distribute compiled resolution conducted regular reviews of bleach risks of course, the path one and.
Speaker Change: And ratified in rack with it behaviors.
Speaker Change: Enforcing risk awareness among all relevant stuff.
Speaker Change: In summary throughout 2023, we fine tune, our operating strategies to align with the evolving market dynamics and in fact, even maintained the stability of our business operations, while improving profitability.
Speaker Change: We believe that by sharpening our focus and capitalizing on good platforms co competitive edge.
Speaker Change: We can't effectively foster a vibrant how see that worse gang century content ecosystem, well continue to uphold the regulatory time line.
Speaker Change: Wave of men.
Speaker Change: In our commitment to the company's long term sustainable growth.
Speaker Change: Yeah.
Speaker Change: With that I will now turn the call over to our Vice President of Finance, Mr. Hao Cao to go through the details of our financial performance in the quarter.
Speaker Change: Yes.
Hao Cao: Thank you Lindy Hello, everyone.
Hao Cao: Looking back on 2023, despite ongoing macro-heaviness, we diversified our revenue streams with advertising and other revenues contributing 13.2% of our total revenue. Meanwhile, we successfully executed our cost-effective strategy, adjusting our live streaming business to prioritize healthy margins, and prudently managing our costs and expenses to enhance our earnings. For the full year of 2023, we achieved an adjusted net income of RMB 154 million.
Hao Cao: Looking back on the pantry punditry, despite ongoing macro headwinds, we've diversified our revenue streams with advertising and other revenues contributing 13.2%.
Hao Cao: Yes.
Hao Cao: Meanwhile, we successfully executed our cost effective strategy.
Hao Cao: Adjusting our live streaming business.
Hao Cao: Archives healthy margins and are prudently managing our costs unexpected for us.
Hao Cao: Our earnings.
Hao Cao: For the for you I'll put it on the Street, we achieved adjusted net income of RMB.
Hao Cao: On a 54 million.
Hao Cao: Let's now look at our financial performance for the fourth quarter in more detail. Total net revenues in the fourth quarter of 2023 decreased by 22.9% year-over-year to RMB 1.3 billion; live streaming revenues were RMB 1.02 billion, a decrease of 36.1% from RMB 1.6 billion in the same period of 2022. The decrease was primarily due to soft macroeconomic conditions and a deliberate reduction in revenue-generating promotions during the quarter.
Hao Cao: Let's now look at our financial performance for the fourth quarter in more detail.
Yes.
Hao Cao: Total net revenues in the fourth quarter of industry decreased by.
22.9% every year to RMB, one 3 billion.
Hao Cao: Live streaming revenues were RMB, one point or 2 billion.
Hao Cao: Decrease of 36, 1% from RMB, one 6 billion in the same period of pulp a patent on it too.
Hao Cao: The decrease was primarily due to soft macroeconomic conditions.
Hao Cao: Deliberate reduction in revenue generating promotions during the quarter.
Hao Cao: These factors affected the spending awareness of some new and price-sensitive paying users. Additionally, our strategic decrease in marketing spending led to a smaller user base, resulting in a year-over-year decrease in total paying users. In response to the soft consumer sentiment, we continue to offer lower-priced revenue products to maintain the spending habits of our mid- to long-tail pan users, leading to a decrease in quarterly growth. Our quarterly growth was RMB 278, down 4.9% from RMB293 in the same period last year. Advertising and other revenues were RMB 275.2 million, a significant increase of 226.5 percent from RMB 84.3 million in the same period of 2022. The year-over-year increase was primarily driven by other revenues generated through our new, innovative businesses, such as a game-specific membership service and a voice-based social networking service. The cost of revenues in the fourth quarter of 2023 was RMB 1.17 billion, a decrease of 21.8 percent compared with RMB 1.5 billion in the same period of 2022. Revenue share fees and content costs decreased by 30.3% to RMB 0.89 billion from RMB 1.27 billion in the same period of 2022. The decrease was primarily driven by two factors.
Hao Cao: These factors affected the spending awareness of starting a new process to paying users.
Hao Cao: Additionally, our strategic decrease.
Hao Cao: Marketing spending led to a smaller user base.
Hao Cao: You know year over year decrease in total paying users.
Hao Cao: In response to the softer consumer sentiment, we continue to offer lower priced rubbing your products to maintain our spending habits of our mid to long tail pay users leading to a decrease in quarterly up.
Hao Cao: Our quarterly up was RMB 278.
Hao Cao: 4.9% from RMB 293 in the same period last year.
Hao Cao: Advertising and other revenues were RMB 275 2 million.
Hao Cao: A significant increase of 226, 5% from RMB 84, 3 million in the same period of 10 of them too.
Hao Cao: The year over year increase was primarily driven by other revenues generated through our new innovative businesses such as our game specific membership service and a voice based voice based social networking surface.
Hao Cao: Yeah.
Hao Cao: Cost of revenues in the fourth quarter of kind of industry.
Hao Cao: Be 1.17 billion, a decrease of 21.8% comparatively RMB 1.5.
Hao Cao: That period of time trying to.
Hao Cao: Revenue sharing fees on the carton cost decreased by 30.3% to RMB 0.8, 9 billion from RMB 1.27 billion in the same period of the kind of attitude.
Hao Cao: The decrease was primarily driven by two factors first the decrease in revenue sharing fees, which was largely in line with decreased live streaming revenues.
Hao Cao: First, the decrease in revenue sharing fees, which was largely in line with decreased live-streaming revenues. Second, the decrease in content costs, which was primarily attributable to improved cost management in our self-produced content and streamer payments. However, this decrease was partially offset by higher copyright costs related to the LOL World Championship Tournament. Bandwidth cost in the fourth quarter of 2023 decreased by 27.4% to RMB 105.5 million from RMB 138.4 million in the same period of 2022. The decline was primarily due to a year-over-year decrease in peak bandwidth usage.
Hao Cao: Second the decrease in colon costs, which was primarily attributable to improved cost management.
Hao Cao: Self produced content and a stream of payments.
Hao Cao: This decrease was partially offset by higher copyright costs related to the L. O L World Championship tournament.
Hao Cao: [noise] bandwidth costs in the fourth quarter, all the time the tonnage decreased by 27 point of 4% to RMB 105.5 million from RMB 138.4 million in the same period of time dependent too.
Hao Cao: But decline was primarily due to a year over year decrease in peak bandwidth usage.
Hao Cao: Gross profit in the fourth quarter of 2023 was RMB126.2 million, compared with RMB186.1 million in the same period of 2022. The decline in gross profit was primarily attributable to decreased live streaming revenues. Gross margin in the fourth quarter of 2023 was 9.7%, compared with 11.1% in the same period of 2022. The decrease in gross margin was mainly attributable to the increase in other costs and copyright costs as a percentage of revenues, which was partially offset by the decreased percentage of revenues attributed to revenue-sharing fees.
Hao Cao: Gross profit in the fourth quarter of ton Pentre Street was on beef.
Hao Cao: And kind of 6.2 million compared with RMB $186 1 million in the same period of time that I need to.
Hao Cao: But the clock gross profit was primarily attributable to a decrease live streaming revenues.
Hao Cao: Gross margin in the fourth quarter of talent on the Street was 9.7% comparatively 11.1 person in the same period of time too.
Hao Cao: The decrease in gross margin was mainly attributable to the Ingrid and other costs and copyright Cogs as a percentage of revenues, which was partially offset by the decrease the percentage of our revenues.
Hao Cao: Pivoted to revenue sharing fees.
Hao Cao: Sales and marketing expenses in the fourth quarter of 2023 were RMB84 million, a significant decrease of 32.2% from RMB123.9 million in the same period of 2022. This was mainly attributable to a decrease in marketing expenses for user acquisition, as well as a decline in staff-related expenses. Research and Development Expenses in the 4th Quarter of 2023 were RMB 59.1 million, representing a 26.7% decrease from RMB 80.6 million in the same period of 2022. This decrease was primarily due to a decrease in staff-related expenses.
Hao Cao: Sales and marketing expenses in the fourth quarter on a ton of suites were RMB 84 million a significant decrease of 32.2% from RMB 110 to three 9 million in the same period of 10 attended to.
Hao Cao: This was mainly attributable to a decrease in marketing expenses for user acquisition.
Hao Cao: Well as a decline in staff related expenses.
Hao Cao: Research and development expenses in the fourth quarter of a tenant on the street were RMB $59 1 million.
Hao Cao: Representing a 26, 7% decrease from RMB 80 point of 6 million in the same period of kind of hinted to.
Hao Cao: This decrease was primarily due to a decrease in staff related expenses.
Hao Cao: General and administrative expenses in the fourth quarter of 2023 were RMB80 million, an increase of 45% from RMB55.2 million in the same period of 2022. The increase was due to higher salary expenses associated with management position adjustments, increased expenses related to our organizational streamlining initiatives, as well as an increase in the provisions for assets. Loss from operations was RMB 120.4 million in the fourth quarter of 2023, compared with RMB 56 million in the same period of 2022. Adjusted Operating Loss, which measures the impairment loss of goodwill and intangible assets, was RMB 86.4 million in the fourth quarter of 2023. Compared with RMB 56 million in the same period of 2022, net loss in the fourth quarter of 2023 was RMB 62.2 million, compared with net income of RMB 41.8 million in the same period of 2022. Adjusted Net Loss, which excludes share-based compensation expenses because the share of income is lost in an equity method investment.
General and administrative expenses in the fourth quarter of three well on the $80 million.
Increase of 45% from RMB 55.2 minutes, you know Sam Barrett uptime on it too but.
Hao Cao: The increase was due to higher salary expenses.
Hao Cao: At waste management position adjustments increased expenses related to organizational streamlining initiatives.
The increase in the prohibitions assets.
Hao Cao: Loss from operations was RMB 124 million in the fourth quarter of kind of street comparatively RMB 56 million in the same period of kind of attitude.
Hao Cao: Adjusted operating loss.
Hao Cao: S back impairment loss on goodwill and intangible assets was RMB 86, 4 million in the fourth quarter public kind of penetrate.
Hao Cao: Compared with RMB 56 million the same period of time, if I need to.
Hao Cao: Net loss in the fourth quarter of talent on the Street was RMB 62 2 million.
Comparator with net income of RMB 41, 8 million in the same period of time to talk to.
Hao Cao: Adjusted net loss, which excludes share based compensation expenses the.
Hao Cao: The shelf of income or loss.
Hao Cao: Mercer investments.
Operator: Gain and Disposal of Investment, Impairment Loss of Investments, and Impairment Loss of Goodwill and Intangible Assets were RMB 5 million in the fourth quarter of 2023, compared with RMB 4.3 million in the same period of 2022. For the fourth quarter of 2023, basic and diluted net loss per ADS were both RMB0.19, while adjusted basic and diluted net loss per ADS were both RMB As of December 31, 2023, the company had cash and cash prevalence, with traded cash, restricted cash in other non-current assets, and short-term and long-term bank deposits of RMB 6.86 billion compared with RMB 6.81 billion as of December 31, 2022. Moving forward, we are committed to enhancing revenue diversification, optimizing operating efficiencies, and prudently managing costs and expenses.
Hao Cao: Gain on disposal of investment impairment loss of investments and impairment loss of goodwill and intangible assets was RMB 5 million in the fourth quarter of punditry.
Hao Cao: Comparatively is RMB four 3 million in the same period of time.
For the fourth quarter of 10, three basic and diluted net loss per ads were both RMB <unk> one.
One nine.
Hao Cao: While adjusted basic and diluted net loss per ads were both RMB 0.02.
Hao Cao: Okay.
Hao Cao: As of December 31st and they penetrate the company had cash and cash equivalents.
Hao Cao: Restricted cash.
Hao Cao: <unk> cash in other non current assets and the short term and long term bank deposits of RMB 6.86 billion compared with RMB 6.81 billion as of December 31st plenty of 'twenty two.
Hao Cao: Moving forward, we are committed in housing revenue diversification, optimizing operating efficiencies and prudently managing costs and expenses.
Operator: By remaining agile in our responses to market dynamics and diligently executing a core growth strategy, we are confident we can overcome the short-term challenges and foster the long-term healthy development of our platform while also delivering value to our shareholders. This concludes our prepared remarks for today. Operator, we are now ready to take questions. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the key.
Hao Cao: By remaining agile in our responses to market dynamics and diligently executing our corporate strategy. We are confident we can overcome the short term challenges and to foster the long term housing at the bottom end of our platform, while also delivering body pass shareholders.
Speaker Change: This concludes our prepared remarks for today operator, we are now ready to take questions.
Hao Cao: Yes.
Speaker Change: We will now begin the question and answer session to ask a question who May Press Star then one on your phone.
Speaker Change: Sure.
Speaker Change: Take your phone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two at this time, we will pause momentarily to assemble our real stuff.
Speaker Change:
Operator: Withdraw your question; please press star then. At this time, we will pause momentarily to assemble our room. www.youtube.com.uk The first question comes from... Brian Gong with C-P-L-E-N-S-E-N-S-E-N-S-E-N-S-E-N-S-E-N-S-E-N-S-E-N-S-E I would like to ask a question about the stability of the broadcaster. With more games live on Douyin, how can we assess the future trend of the broadcaster's stability? Thank you for your question.
Speaker Change: Uh huh.
Speaker Change: The first question comes from the line of Brian Gong would you say the group. Please go ahead.
Brian Gong: Hum shifting.
Brian Gong: Michelle will you charge.
Brian Gong: The leaching communism.
Brian Gong: Sure.
Speaker Change: It should be.
Speaker Change: Chiquita Canyon Mackay for women go to global Beach.
Speaker Change: Jimmy Choo.
Speaker Change: Sure.
Speaker Change: Oh no questions myself, Vince mentioned before taking my question, it's mortgage snow can be.
Speaker Change: They use possible hopefully we see the stability of our streamers and then hopefully we see the future trend. Thank you.
Speaker Change: Thank you for your question. So overall, our extranet has remained relatively stable.
Lingling Kong: So overall, our streamers remain relatively stable. We have exclusive cooperation agreements with our platform's top tier streamers, securing stability throughout relevant contract terms. For core streamers whose agreements are about to expire, with prevailing market conditions in mind, we actively engage in renewal discussions with them in advance. We comprehensively assess contract costs and operating efficiencies and selectively negotiate and renew contracts.
Speaker Change: We have exclusive cooperation agreements with our platform's top tier extremists securing stability throughout relevant contractions for clustering, most whose agreements at about your expired with the valley market conditioning mind, we actively engage in renewal discussions with them in advance.
Speaker Change: We comprehensively SaaS contract costs, and operating efficiencies and selectively and negotiate and win new contracts.
Lingling Kong: Over the years, Douyu's game-centric content ecosystem has fostered a wild array of influential streamers. What I need to highlight here is that some of those have emerged as break-up streamers, begun their live streaming journey as gaming streamers on Douyu. Their achievements underscore Douyu's prowess in nurturing and supporting streamers.
Speaker Change: Over the years donors game centric content ecosystem has fostered a wider array of influential stream us what I need to highlight to here as for some of those have emerges breakup Cmos begun third live streaming journey as gaming streamers on Dolby.
There are no treatments on the school don't use prowess in neutering and supporting streamers bidding.
Lingling Kong: Building upon our years of experience in gaming content operations, we have developed a sophisticated and effective mechanism for identifying and cultivating gaming streamers. Firstly, our platform offers streamers a multitude of content production options based on our commitment to content innovation and diversity. Secondly, our data analysis tools empower streamers with better insights into user needs and market dynamics, enabling them to fine-tune their live streaming strategies, enhance quality, and boost efficiency. Unlike short video platforms, we provide our streamers not merely algorithm-based data insights but also with customized resources and content support based on each streamer's unique characteristics. This approach grants streamers ample time for development while empowering them to grow.
Speaker Change: Building upon our years of experience in gaming content operations, we have developed a sophisticated and effective mechanism for identifying and cultivating gaming streamers.
Speaker Change: And firstly our platform offers dramas.
Speaker Change: The content production options based on our commitment to constant innovation and diversity secondly, our data analyze it towards empower those three medicines.
Speaker Change: Ice into user needs and market dynamics, enabling them to fine tune their life streaming strategy enhance quality and boost efficiency.
Speaker Change: Oh like short video platforms, we provide upstream is not merely algorithm based data insights, but also with customized resources and content support based on each stream of unique characteristics. This approach Grand stream is ample time for development well empowering them to grow.
Lingling Kong: We are intensifying our focus on refined operations, customizing our services and support to streamers across different tiers. To build on the existing influence of top-tier streamers, we continue to reinforce their brand presence and impact by enhancing streamer IP through high-quality content and strategic operations, channeling and driving traffic both within and beyond our platform. With mid-tier streamers, we mainly focus on increasing their visibility by inviting them to participate in our self-produced events and programs. Additionally, some of our original esports player streamers have gained significant recognition and user acclaim through our co-streamed live commentary programs during the broadcast of official tournaments.
Speaker Change: And we are intensifying our focus on refining operations.
On customizing, our services and support to FEMA is across different tiers debuted on the existing influenced I'll talk history mess, we continue to reinforce their brand presents an impact by enhancing stream of IP through high quality content and strategic operations generally and driving traffic.
Speaker Change: Within and beyond our platform.
Speaker Change: With meat history knows we mainly focus on increasing their visibility by inviting them to participate in our self produced events and programs.
Speaker Change: Additionally, some of our original esports player stream must have gained significant recognition and user claims through our core streamed live commentary programs. During the boat cost of official tolerance, we use our platform support many has rapidly S eat it to the top tier.
Lingling Kong: With our platform support, Many has rapidly ascended to the top tier. For Me Too long-tail streamers, our priority is to provide them with solid fundamentals that support their continued presence and space for growth. Over the past year, we have initiated incentive programs in various gaming segments, encouraging up-and-coming streamers to go live and actively engage with the audience, so that they can secure relatively stable incomes.
For me to long tail streamers Adria Artie is to provide them with stonegate fundamental that support their continued presents and space for growth.
Speaker Change: The Pos T O. We have initiated incentive programs in virus games gaming segment encouraging I think common stream is to go live and actively engage with the audience. So that they can secure relatively stable incomes joined all the insights from the data analyze it. We also enabled me to long tail streamers.
Speaker Change: With more timely and customized content support.
Lingling Kong: In addition to our insights from the ongoing data analysis, we will also enable mid- to long-tail streamers with more timely and customized content support. Apart from refined content operations, we will also offer more commercialization avenues for streamers through deeper cooperation with game developers. These will include game promotion and game sales. Among other revenue-generating opportunities across various game genres, our endeavors will increase streamer income, sentiment, and elevate Douyu's value as a vibrant, game-centric content ecosystem. Top-tier streamers represent invaluable assets within the industry. As the live-streaming sector matures, there is always competition over streamers' resources within legal compliance.
Speaker Change: Apart from refined content operations, we will also offer more of a commercialization avenues for success through deeper cooperation with game developers. These will include game promotion.
Speaker Change: Among other revenue generating opportunities across virus game Jones, our endo and augurs, well increase stream of income sentiments in and elevating to always value a vibrant game centric content ecosystem.
Speaker Change: Top kitchen, misrepresent invaluable assets within the industry.
Speaker Change: After live streaming.
And the choice there is always competition oversee most resources within legal compliance.
Speaker Change: Through this decade long journey, we have continuously navigated these competitive landscape for high quality streamers.
Speaker Change: Like I said, our advantages such as exclusive contracts and streamer neutering programs are the cornerstone of our ongoing success within the competitive streamer market.
Speaker Change: Thank you.
Speaker Change: Question piece.
Speaker Change: Yeah.
Speaker Change: Excuse me for the benefit of all participants on today's call. If you wish to ask you a question to management in Chinese place immediately repeat your question in English. The next question comes from the line of Zhang with Bank of America Merrill Lynch. Please go ahead.
Lingling Kong: Through Douyu's decade-long journey, we have continuously navigated this competitive landscape for high-quality streamers. As I said, our advantages, such as exclusive contracts and streamer-neutering programs, are the cornerstone of our ongoing success within the competitive streamer market. Thank you. Next question, please. Excuse me, for the benefit of all...
Speaker Change: Okay.
Hi, Alexander.
Because as you told US you want all of the ones, who blogs through Oh Glenn.
Zhang: Yeah dog that one Oh geez since that dogs is looking to be blunt when that backlog is being paid a woman who is our senior adult junky box.
Operator: Please call if you wish to make a reservation. Please immediately repeat your question in English. The next question comes from the line of Lei Zhang from Bank of America, Maryland. Hi, good evening.
Zhang: Well, that's all being done at home.
Zhang: So go up it makes it that long.
Speaker Change: Oh, Thank you management for taking my question. My question Me Wade Boggs all alternative 20th Sports also hope that you get a lot more color on your strategy, yeah, that'd be snake that always has been for it. Thank you.
Operator: Thank you for accepting my question. My question is mainly about the outlook for 2024. Based on the current economic and regulatory environment, can you help us sort out the overall focus of business in 2024 and the outlook for the whole business?
Thank you for your question as.
As we mentioned in our prepared remarks, our 10 day 24 plants and folks that will revolve around the cutting the three cold shrimp three more content on the cooperation with game developers.
Speaker Change: Let me walk you through these brands with one by one.
Lingling Kong: Thank you for taking my question. My question is about 2024. Thank you for your questions. As we mentioned in our prepared remarks, our 2024 plans and focus will revolve around the company's three core strengths, streamer, content, and cooperation with game developers. Let me walk you through these plants one by one.
Speaker Change: In terms of all the screen more to sources, our approach in closer and closer.
Speaker Change: Three key initiative, it's Fortunately, we will concentrate our call three months results. It's a by enhancing three more I T and fortifying IP operation.
Speaker Change: Monitoring and promoting three more comps both across I'm beyond our platform. We M O M to bolster three more appeal and drive increase their traffic a bit in our platform.
Lingling Kong: In terms of streamer resources, our approach includes three key initiatives. Firstly, we will concentrate on our core streamer resources by enhancing streamer IP and fortifying IP operations. By managing and promoting streamer accounts both across and beyond our platform, we aim to bolster streamer appeal and drive increased traffic within our platform.
Speaker Change: Secondly, we will prioritize for certain gaming streamers, and the recruiting more east coast perfect in the players.
Speaker Change: Further we will diversify our scream orsa monetization avenues through cooperation with game developers.
Speaker Change: In terms of all of our content ecosystem I'll go it's too.
Speaker Change: Edit content to our eye, while upholding premium quality, we strive to balance of all content closer to by optimizing the number of the show is focused on the mass and the self produced any event.
Lingling Kong: Secondly, we will prioritize fostering gaming streamers and recruiting more esports professional players. Thirdly, we will diversify our streamers' monetization avenues through cooperation with game developers. In terms of our content ecosystem, our goal is to elevate content IOI while upholding premium quality. We strive to balance overall content costs by optimizing the number of official esports tournaments and self-produced gaming events.
Speaker Change: Additionally.
Speaker Change: We darrin into direct to a commercialization prospects for gaming event content, such as they started sharing and the game itself to empower with all of our gaming contender.
Speaker Change: Our olive occupants being both scream or on the content are closely tied to our cooperation with game developers.
Speaker Change: We have now centralized our resources and pay any airport shifting away from our past approach we are each bidder.
Speaker Change: Independently provided a collaborate collaborate.
Lingling Kong: Additionally, we are delving into direct commercialization prospects for gaming event content, such as resource sharing and game property sales to improve the ROI of our gaming content. Our advancements in both streamer technology and content are closely tied to our cooperation with game developers. We have now centralized our resources and planning efforts, shifting away from our past approach where each business unit independently provides collaborative proposals.
Speaker Change: Proposals by fully understanding our users content and the gaming needs, where you can pursue more in depth collaborations with game goodbye ever.
Speaker Change: Additionally.
Speaker Change: We are tailoring gam promotions operations and commercialization surround the baseball game developer based on each games, especially fake or development stage.
Speaker Change: To facilitate more if that's people exactly wishing all of our plans and amplify the scenery of our coal strength.
Speaker Change: We began I would I just didn't know restructuring as is I would say end of 'twenty 'twenty four.
Lingling Kong: By fully understanding our users' content and gaming needs, we can pursue more in-depth collaborations with game developers. Additionally, we are tailoring game promotions, operations, and commercialization strategies for game developers based on each game's specific development stage to facilitate more effective execution of our plans and amplify the scene of our co-strength. We began an organizational restructuring at the outset of 2024, particularly within business units related to our content ecosystem. We used to structure our content ecosystem-based units around individual gaming projects, with distinct teams under each business unit, managing streamer operations, events and activities, and game developer cooperation.
Speaker Change: Particularly within business units related to our content ecosystem.
Speaker Change: Were you able to structure our content that you could see some business units around the individual gaming projects.
Speaker Change: With 15.
Speaker Change: Our team is on the each business, you'll need to mandatory streamer operations event on the activities and the game developer cooperation.
Speaker Change: Our restructuring has enabled us to shift away from game based.
Speaker Change: Operations, and consolidate fragmented, resulting associated with gaming segments.
Speaker Change: Our internal communication communication channels now.
Speaker Change: No more streamer, either allowing us to amplify our platform as a collective strength.
In short our goal this year.
Speaker Change: To enhance compliance why imploring contend to quality and the user experience. We are committed to diversifying revenue was screaming.
Lingling Kong: Our restructuring has enabled us to shift away from game-based operations and calculate the fragmented resources associated with gaming segments. Our internal communication channels are now more streamlined, allowing us to amplify our platform's collective strength. In short, our goal this year is to enhance compliance while improving content quality and user experience. We are committed to diversifying revenue streams and continuously optimizing costs and expenses. In doing so, we can stabilize and promote long-term healthy platform growth amidst the pandemic, continually involving market dynamics. Thank you. Excuse me, Mei Zhang. Are you done with your questions? Yes, next question, please. The next question comes from Lionel Raphael Chen with BOCI Research. Please go ahead.
Speaker Change: And continuously optimizing cost and expense in doing so we have stabilized and the pro Bowl long term healthy platform growth amidst the.
Speaker Change: Can you give me already involving marquee dianetics dynamic maybe cause thank you.
Speaker Change: Yeah.
Speaker Change: Excuse me Ms. Shang you done with your question.
Ms. Shang: Yes, no that's great.
Ms. Shang: Yeah.
Ms. Shang: The next question comes from the line of Rockwell Chen with Boc Eye Research. Please go ahead.
Ms. Shang: Yeah.
Shaojie Chen: She's air quality sensors or that you will enjoy yourself, while you're trying to kind of walk through.
Shaojie Chen: She vegetable Frank like I don't think they're going to Jean Guy.
Shaojie Chen: Michelle.
Shaojie Chen: Thank you management for taking my question I'm, just wondering how does the bank guarantee evaluate impact also on top tier type of games, such as honour of Kings and league of legends and graduate to Scream out doing platform. Thank you.
Operator: Thank you, Manager Chen, for accepting my question. I would like to ask you how he sees the impact of WangZheRongYao and League of Legends games on Douyin. Thank you, Raphael.
Shaojie Chen: Yeah.
Shaojie Chen: Oh.
Speaker Change: Thank you Rockville, so the user base of China's Internet and gaming sector is near situation in response, starting last year Internet platforms started promoting away from traditional traffic acquisition muscle and fat and they have been prioritizing core business operations and competitive strengths.
Lingling Kong: In response, starting last year, internet platforms started pivoting away from traditional traffic acquisition methods. Instead, they have been prioritizing core business operations and competitive strengths, improving operating efficiencies, and fostering cross-platform collaborations. Therefore, cross-platform content sharing is emerging as a strategic trend. We have actively embraced the trend of open content.
Improving operating efficiencies and folks to cross platform collaborations. So cross platform content sharing is emerging as a strategic trend.
Speaker Change: We have actively embraced the trained of open content, we have a focus on our core strengths to 45 business fundamentals.
Lingling Kong: We have focused on our core strengths to fortify business fundamentals and have also diversified our business scope and models. Being mindful of competition risks while seizing diverse opportunities, we have been actively innovating our content offerings and fostering cross-platform collaborations. In addition to producing differentiated and compelling content integrating our streamers' unique characteristics, we have also explored cooperation avenues with other platforms to expand our content ecosystem, launching joint promotions and collaborative initiatives powered by the premium content features on our platform. For example, we have been progressively highlighting partnerships with other platforms based on each party's top-tier exclusive streamer resources. We've been working on great complementary content synergies, offering esport live streaming users more premium content and more convenient viewing options. Additionally, in the second half of 2023, we started piloting content promotions on WeChat channels with selected streamers. These enable streamers to promote their live-streaming content on WeChat channels to improve their content's visibility.
Speaker Change: So diversified our business scope and models being mindful of competition risks well serving diverse opportunities we have been actively innovating our content offerings and fostering cross platform collaborations.
Speaker Change: Listen to producing differentiated and upholding content integrating our stream its unique characteristics. We also explored cooperation avenues with other platforms to expand our content ecosystem lunching joint promotions and collaborative initiated powered by the premium content features on our platform.
Speaker Change: For example, we have been progressively highlighting our partnerships with other platforms based on each parties' top tier exclusive streamer resources. We've been working on are quite complementary content synergies offering esport livestream. He uses more premium content and more convenient viewing.
Speaker Change: <unk>.
Speaker Change: Additionally, in the second half of 2023, we started piloting content promotions on we touched on it with select extremists. These enable streamers to syndicate their live streaming content on wechat channels to improve their content with ability.
Lingling Kong: Given the vast user base of short video platforms, we might encounter certain challenges in the short term, particularly potential downward pressure on MAUs this year. We have proactively addressed these risks by leveraging our strengths. As part of our primitive measures, we deepened our operations around the gaming needs of our core users, including consistently rolling out high-quality content and operational activities, and updating product features to fulfill diverse user needs. According to our data analysis so far, despite MAU declines, our platform's core user behavior matrix remains relatively stable.
Speaker Change: Given the vast video a user base of short video platform, we might in content search and challenging in the short term potential, particularly potential downward pressure in and they used this year, we have proactively address these risks by leveraging our strength.
Speaker Change: As part of a premature smashes, we deepened our operation around the game the gaming needs of our core users, including consistently rolling out high quality content and operational activities and updating them.
Speaker Change: Product features to fulfill a diverse user needs.
Speaker Change: According to our data analyzer, so far despite declines our platform's core user behavior metrics remain relatively stable.
Lingling Kong: Moreover, leveraging insight from our prior commercial collaborations, marketing campaigns centered around game props, including limited time cells during live streaming sessions and regular game membership services, that not only contribute to revenue diversification but also serve to new user acquisition while deepening existing user engagement. Moving forward, we will continuously explore more operational models to solidify our core user base and pursue opportunities to propel growth across our platform. Thank you.
Speaker Change: Moreover, our leveraging insight from our prior commercial collaborations.
Speaker Change: Marketing campaign centered around Gamecocks, including limited time sauce during live streaming sessions and regular gained membership services.
Speaker Change: That's not only contribute to revenue diversification, but also sourced a new user acquisition well deepening existing user engagement.
Moving forward, we will continuously explore mall operational models to solidified our core user base and to pursue opportunities to propel growth across our platform. Thank you.
Speaker Change: Operator next question please.
Speaker Change: The next question comes from the line of David <unk> with Morgan Stanley. Please go ahead.
Operator: Operator, next question please. The next question comes from the line of Derek Tse with Morgan Stanley. Thank you, Guanli Chen, for accepting my question. We can see that the company has made good progress in non-live-streaming income in 2023. One of the priorities of 2024 is the diversification of income. Can you share with us your specific plans and goals? Please share more details about the plans and goals for the upcoming year. Thank you, Derek.
Gotcha, and just hold that you would.
Speaker Change: Condor.
David: So that you go featured a bushel I mean should go up with working down the consolidated I'll draw a father Ollie Oddsson yeah. That's controlling century I'll shoot you guys showed the real hot among Cripple Creek Central and South Korea.
David: Mobile.
Speaker Change: Thank you management, we noticed that the company has made significant progress in the no no like streaming revenue and importantly, free and you just mentioned earlier that diversifying in Brooklyn is one of the key focus for 'twenty 'twenty four.
Speaker Change: Please share more details about.
Speaker Change: About the plans and it goes for the upcoming year.
Speaker Change: Thank you Derek.
Lingling Kong: In 2023, advertising and other revenues surged by 135% year-over-year, with its revenue contribution increasing from 4.4% in 2022 to 13.2%. This remarkable growth was driven by revenues from our new revenue-generating models. Capitalizing on strengths in gaming content operations since 2022, we have been exploring diverse avenues for commercialization beyond the traditional virtual gifting model. The robust growth of the gaming membership business and certain smaller innovative initiatives, such as our voice-based social networking service, both contributed to other revenues in 2023. In 2024, we plan to dive deeper into commercialization directly related to games. Given that the majority of our platform's core users are gamers, there is a clear demand for game prompts and new games, which closely align with our platform's gaming content.
Speaker Change: In Panic Ministry.
Speaker Change: And other revenues surged by 100, and so two 5% year over year, which is revenue contribution and crazy from four 4% in kind of I need 2% to 13.2%.
Speaker Change: This remarkable growth was driven by revenues from our new stuff the new generating models.
Speaker Change: After logging on stress and gaming content operations, it's dependent on it too we haven't been exploring diverse avenues for commercialization beyond the traditional virtual gifting model.
Our robust gross gaming membership business.
Speaker Change: It is smaller.
Speaker Change: Initiatives, such as our voice based social social networking service flows contributed to other revenues and trying to penetrate.
Speaker Change: Yes.
Speaker Change: In 2024, we plan to dive deeper into commercialization directly related to games given that the majority of our platform's core users gamers theres, a clear demand for game prompts and of new games.
Speaker Change: Which closely aligns with our platforms gaming content.
Lingling Kong: Firstly, we will bolster and broaden the scope of the gaming membership business, aiming to expand this service to more game genres. We plan to unveil new revenue-generating products and marketing strategies tailored to distinctive characteristics and player needs. Secondly, we will ramp up our focus on performance-based game promotions. We intend to pivot away from streamer-sponsored product placements and gradually transition to performance-based promotions, such as the cost-per-sale model. Streamers will have the flexibility to select new games for promotion based on their expertise and audience preferences.
Speaker Change: Firstly, we will bolster and broaden the scope of gaming membership business.
Speaker Change: Spanish based therapies to Mark M Gyros.
Speaker Change: We plan to unveil new revenue generating products and marketing strategies tailored to distinctive characteristics and a pair knees.
Secondly, we will ramp up our focus on performance based game promotions, we intend to pay a pivot away from <unk>.
Speaker Change: Streamers sponsored product placements and are gradually transition to performance based promotions such as cost per sale model.
Speaker Change: Streamers will have the flexibility to select suite to select new games for promotion based on their expertise and audience preferences.
Lingling Kong: The ACPS model has been operational for some time now, yielding promising results, with the conversion rate surpassing the market average. [inaudible] Our other smaller innovative businesses have shown promising momentum and are now making revenue contributions. While these ventures currently operate on a multi-scale, we will keep you informed of their progress and expansion. Overall, we anticipate advertising and other revenues will grow year-over-year in 2024, with their overall revenue share exceeding 20%, given the impact of macroeconomic factors and internal operational adjustments on traditional live streaming businesses. We expect live-streaming revenue to experience downward pressure in 2024.
Speaker Change: S. S model has been operational for some time now the early promising results with conversion rates of pausing market average.
Furthermore.
Speaker Change: Oh onto smaller innovative businesses have shown promising momentum.
Speaker Change: Now, making revenue contributions while this winters currently operate a motor scale, we will keep you informed of their progress and expand.
Speaker Change: Overall, we anticipate advertising and auto revenues will grow year over year in China 24, with the overall revenue share exceeding 20%.
Speaker Change: Given the impact of macroeconomic factors.
Speaker Change: Factors and internal operational adjustments, our traditional live streaming business, we expect life streaming revenue to experience downward pressure in Pentagon for as to overall revenue share from live streaming rep lapsed dreaming it remains significant.
Lingling Kong: As the overall revenue share from live-streaming remains significant, the rapid growth of our innovative businesses may have a comparatively limited effect on the company's overall revenue scale. Despite potential short-term growth pressure, as we fine-tune our core business, the company's financial remains solid, and we continue to pursue breakthroughs in our innovative businesses. For example, in October 2023, we joined hands with Taobao and game developers to launch the game Shopping Bonanza on Douyu's official live-streaming channels on the Taobao platform, as well as live-streaming sessions on Douyu Gamers showed considerable demand for those offerings.
Speaker Change: Gross.
Speaker Change: You know better businesses may have a comparatively limited effort.
Speaker Change: The effect of the company's overall revenue scale.
Speaker Change: Despite potential short term gross pressure as we fine tune our car business the company's financial remains solid and we continue to pursue breakthroughs.
Speaker Change: Innovative businesses.
Speaker Change: Examples in October tenant industry, we joined hands with topple and game developers to launch the game shopping Bonanza abilities official live streaming channels on the top of our platform as well as lab streaming sessions on those platform savings came prompts and.
Speaker Change: Jamie merchandize from popular mobile games like pension impact.
Speaker Change: League of legends Bahar, two and of course file.
Or is it showed cost theater brought the amount of what those offerings. The result of this campaign proved that streamers have a substantial inflows are gaming commercialization on welding, whilst the potential opportunities.
Lingling Kong: The result of this campaign proved that streamers have a substantial influence on gaming commercialization, unveiling vast potential opportunities. Moving forward, we will delve deeper into additional revenue-generating avenues within the gaming content value chain. Thank you. Next question, please. The next question comes from the line of Thomas Chong with Jeffreys. Please go ahead.
Speaker Change: Looking forward, we will delve deeper into additional revenue generating avenues within the gaming content better changed.
Speaker Change: Thank you next question please.
Speaker Change: Yes.
Speaker Change: The next question comes from the line of so much.
Speaker Change: Chong from Jefferies. Please go ahead.
Speaker Change: Well, thank you ladies and gentlemen.
Chong: But what's it doing all that but once you go on to hit him up and he said when he say on Columbia Wendy.
Speaker Change: Uh huh.
Speaker Change: It seems obvious that these mega hubs.
Speaker Change: Uh huh.
Speaker Change: Well any time, you look up people when I asked me yesterday that she should be shaping.
Operator: Thank you for taking my question. I have two questions. The first question is, I see that the management cost of this quarter has increased significantly compared to the previous year. Can you explain the basic reasons and how the management team assesses the trend and profitability of our business costs in 2024? My second question is about the stock buyback. The company announced a stock buyback plan at the end of the year. Can you share the strategy of the stock buyback and whether you are going to expand the stock buyback scale? So I'm transferring myself.
Speaker Change: Oh, Yeah. The ones you said why you could calculate Oh wow called.
Speaker Change: Well Julien simple local council of course, Dupont cobalt franchise Alcatel.
Speaker Change: Did you ship all get caught up.
Speaker Change: It goes up way more once I chuckle myself that's.
Speaker Change: So I have two questions. My first question is so we saw the year over year and quarter over quarter increase of Mccann expenses, because we share the reason behind and how the management team and all operating.
Spencers and the profitability in 2024 and my second question is about share buyback program. So we're announcing a share repurchase program and wish you all a strategy on share buybacks.
Speaker Change: Do we continue to increase in Belgium.
Speaker Change: Thanks.
Speaker Change: Okay I will ask the first question.
Hao Cao: So I have two questions. My first question is, so we saw a year-over-year and quarter-over-quarter increase in general expenses. So could we share the reason behind and how the management sees the trend of operating expenses and profitability in 2024? And my second question is about the share buyback program. So we announced the share repurchase program, and could we share our strategy for share buyback? And do we consider an increased amount of buyback? Thank you. Thank you. I will answer the first question.
There are two reasons for the year over year and sequential increase in operating expenses in the fourth quarter first at onset of 904.
Speaker Change: <unk> organizational restructuring that will allow us to better respond to market dynamics and continually optimize the company's operating efficiency.
Speaker Change: As part of our staff.
Speaker Change: We're aligned to material functions Apache a portion of their salaries was allocated to the initiative expenses in the fourth quarter without an increase in employee salaries under the major administrative expenses. We also incurred some one time per person.
Hao Cao: There are two reasons for the year-over-year and sequential increase in operating expenses in the fourth quarter. First, at the beginning of 2024, we announced an organizational restructuring that will allow us to better respond to market dynamics and continually optimize the company's operating efficiency, as part of our staff, are aligned to managerial functions. A portion of their salaries was allocated to administrative expenses in the fourth quarter, resulting in an increase in employee salaries and administrative expenses.
Speaker Change: Now of course as part of our ongoing workforce optimization efforts.
Speaker Change: These these for a part of our preliminary organizational structure adjustments and we anticipate first of workforce adjustments in the first quarter of a tenant default.
Speaker Change: Second we made provisions for bad debts of doubtful accounts receivables. The combination of these one time expenses caused part of the increase in operating expenses for the fourth quarter.
Speaker Change: And our goal of long term sustainable growth throughout 'twenty penetrate.
Speaker Change: Lastly, our revenue and our marketing strategies, while continuing to make high driven decisions and cost consistently optimizing our cost structure.
Hao Cao: We also incurred some one-time personnel costs as part of our ongoing workforce optimization efforts. These were part of our preliminary organizational structure adjustments, and we anticipate further workforce adjustments in the first quarter of 2024. Second, we made provisions for bad debts of doubtful account receivables.
Speaker Change: This coordinated efforts resulted in a 28, 7% year over year decrease in operating expenses for the four year plan to penetrate.
Speaker Change: Fortunately, we have successfully transformed losses into games at the adjusted net profit level.
Hao Cao: The combination of these one-time expenses caused part of the increase in operating expenses for the fourth quarter and a goal of long-term sustainable growth throughout 2023. We adjusted our revenue and marketing strategies while continuing to make ROI-driven decisions and consistently optimizing our cost structure. These coordinated efforts resulted in a 28.7% year-over-year decrease in operating expenses for the fall of 2023.
Speaker Change: Heading into 'twenty 'twenty four.
Speaker Change: Our focus remains on your housing diversified commercialization capabilities across the platform, while I'm out painting stringent control of operating expenses, we are that Katy.
Speaker Change: The company's financial stability in order to navigate complex and evolving macroeconomic dynamics.
Speaker Change: Yeah.
Speaker Change: Let me answer your second question about the buyback.
We haven't been overcoming challenges arising from our planned although macroeconomic conditions and the operational aspects.
Speaker Change: The company's board of directors and the interim management Committee.
Hao Cao: Importantly, we successfully transformed losses into gains at the adjusting net profit level. Heading into 2024, our focus remains on enhancing our diversified commercialization capabilities across the platform while maintaining stringent control of our operating expenses. We are dedicated to upholding the company's financial stability in order to navigate complex and evolving macroeconomic dynamics. Let me answer your second question about the buyback. We have been overcoming challenges arising from a blend of macroeconomic conditions and operational aspects.
Speaker Change: Fully committed to addressing these challenges head on.
Speaker Change: As part of our threat. They do good initial gave us.
Speaker Change: Our share repurchase program on December time to add to 'twenty to 'twenty three on the reach we plan to repurchase up to 20 meeting just dollars outdoor covenants ordinary shares through a b S.
Speaker Change: Protests and protests.
Speaker Change: This initiative highlights I will convey their screens or value of the company as well as our commitment to enhancing shareholder returns.
Speaker Change: We are currently in the initial phase, although implementing our share.
Protests program future adjustments to the program may be made based on the company into a threat to take up prioritize and ongoing reveal is our market.
Hao Cao: The company's Board of Directors and the Interim Management Committee are fully committed to addressing this challenge head-on. As part of our strategic initiatives, we announced a share repurchase program on December 28, 2023, under which we plan to repurchase up to $20 million of the company's ordinary shares through ADS purchases. This initiative highlights our confidence in the value of the company as well as our commitment to enhancing shareholder returns. We are currently in the initial phase of implementing our share repurchase program. Future adjustments to the program may be made based on the company's strategic priorities and ongoing reviews of market conditions. However, beyond returns, the foundation of enhancing shareholder value lies in the company's fundamental business operations. We have proven our business model is a resilient one and strongly believe in the company's long-term growth potential. Management's primary focus remains on executing our business strategies, identifying opportunities, administering channels, and propelling the company toward long-term sustainable growth.
Speaker Change: Conditions.
Speaker Change: Be on the returns as a foundation of enhancing shareholder value lies in the comprehensive fundamental spinster operation.
We have proven our business model is.
Speaker Change: If zetland Tobias and strongly believing our company's long term growth potential.
Speaker Change: <unk> remains the primary focus remains on because that coaching our business strategies.
Speaker Change: Identifying opportunities amidst the tenants and promoting the company provided long term sustainable growth.
Speaker Change: So Robert Sterling.
Speaker Change: We will continue to show up our fundamentals, providing regular updates on our business operations and the share repurchase program. Thank you operator please.
Speaker Change: Thank you that's all the time, we have questions I will now turn the call back over to management for closing remarks.
[noise] I don't see half of our interim management amazing we thank you for joining our call. We look forward to speaking with everyone next quarter.
Operator: Throughout this journey, we will continue to show our fundamentals, providing regular updates on our business operations and share repurchase program. Thank you. Operator, please. Thank you. That's all the time we have for questions.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: I will now turn the call back over to management for closing remarks. On behalf of our interim management committee, we thank you for joining our call. We look forward to speaking with everyone next quarter. Lingling Kong, Shaojie Chen, Mingming Sun, Hao Cao, Lingling Kong, Shaojie Chen, Mingming Sun, Douyu Intl Hldg. The conference has now concluded. Thank you for attending today's presentation. You may now go. [inaudible] BF-WATCH TV 2021, Thomas Chong, Yiqun Chen, Lingling Kong, Shaojie Chen, Mingming Su, Raphael Chen, Hongrui Sun, Derek Tse, Douyu Intl Hldg
Speaker Change: [music].