Q1 2024 Hello Group Inc Earnings Call
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the first quarter 2024 Hello Group Incorporated Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad.
Ladies and gentlemen, thank you for standing by and welcome to the first quarter 'twenty 'twenty four Hello Group incorporated earnings Conference call.
All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If.
If you wish to ask a question you will need to press the stocky followed by the number one on your telephone keypad.
Operator: Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today, Ms. Ashley Jing. Thank you. Please go ahead, ma'am.
Please note this conference is being recorded today.
Speaker Change: I would now like to hand, the conference over to your first speaker today, Ms actually Jeong.
Speaker Change: Please go ahead ma'am.
Ashley Jing: Thank you, operator. Good morning, good evening, everyone.
Speaker Change: Thank you operator, good morning, and good evening, everyone. Thank you for joining us today for Hello group's first quarter 'twenty 'twenty four earnings conference call. The company's results were released earlier today I know available on the company's IR website on the call today are Mr. Tang Yan do you offer the company Ms Johnson, which one C. All of the company and Miss pulp week.
Ashley Jing: Thank you for joining us today for Hello Group's first quarter 2024 earnings conference call. The company's results were released earlier today and are available on the company's IR website. On the call today are Mr. Tang Yan, CEO of the company, Ms. Zhang Sichuan, CEO of the company, and Ms. Peng Hui, CFO of the company. They will discuss the company's business operations and highlights, as well as its financials and guidance. They will all be available to answer your questions during the Q&A sessions that follow.
Speaker Change: Seattle off the company.
Speaker Change: To discuss the company's business operations and highlights as well as the financials and guidance. They will all be available to answer your questions. During the Q&A session that follows.
Ashley Jing: Before we begin, I would like to remind you that this call may contain forward-looking statements made under the safe harbor provision of the Private Security Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties, and other factors. All of these are difficult to predict, and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the bold-looking statement.
Speaker Change: Before we begin I would like to remind you that this call may contain forward looking statements made under the safe harbour position of the private Securities Litigation Reform Act of 1995, such statements are based on management's current expectations and current market and operating conditions I relate to events that involve known or unknown risks uncertainties and other factors.
All of which are difficult to predict on many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.
Ashley Jing: Further information regarding this and other risks, uncertainties, and factors is included in the company's findings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under law. I will now pass the call over to our COO, Ms. Zhang Sichuan.
Speaker Change: Further information regarding this and other risks uncertainties and factors is included in the company's filings with the U S Securities Exchange Commission. The company does not undertake any obligation to update any forward looking statements as a result of new information future events or otherwise, except as required under law I will now pass the call over to al.
Speaker Change: C O O Mead Johnson from Ms. Jessie.
Sichuan Zhang: Hello everyone. Thank you for joining our call. Since the beginning of the year, we have made steady progress in implementing our strategic priorities across all business models. I will now walk you through the details.
Speaker Change: Hello, everyone. Thank you for joining our call.
Unknown Executive: Since the beginning lets see here you have to make steady progress.
Unknown Executive: Commencing her strategic priorities across all business lines.
Unknown Executive: I will now walk you through the details.
Sichuan Zhang: I will start with a brief overview of our financial performance. For the first quarter of 2024, total group revenue was 2.56 billion RMB, down 9% year-over-year and 17% sequentially, slightly exceeding the high end of our revenue guidance. Adjusted operating income was 550 million RMB, a slight decrease of 0.5% year-over-year and down 22% sequentially. Profit margin was 20.1%, up 1.8% year-over-year but down 2.0% sequentially. The year-over-year margin improvement, despite lower revenue, was primarily due to our continued efforts to improve car efficiency across all business lines, offsetting the revenue declines in. Specifically, we drove continuous efficiency improvements in personnel and cash utilization by reducing inefficient channel investments and optimizing stock allocation. As a result, hogs declined more than 70%, and the CAUSE Optimization Initiative for Margin Improvement. The sequential decline in margin was primarily due to negative operating leverage resulting from seasonal declines in revenues.
Unknown Executive: Oh that was a brief overview of our financial performance.
Unknown Executive: For the first quarter of 'twenty 'twenty, four who loses revenue was one.
Unknown Executive: Five 6 million RMB, nine 9% year over year and 17% sequentially.
Speaker Change: This Lady.
Speaker Change: Exceeding the high end of our revenue guidance.
Speaker Change: Adjusted operating income was 515 million RMB.
Speaker Change: Slight decrease of one.
Speaker Change: One 5% year over year and down 22% sequentially.
Speaker Change: Profit margin was 21, 1%.
Speaker Change: 118 percentage points year over year, but down two percentage points sequentially.
Speaker Change: Year over year margin improvement.
Speaker Change: Despite lower revenue was primarily due to our continued.
Speaker Change: Efforts to improve efficiency across all business lines.
Speaker Change: I think the revenue decline.
Speaker Change: Typically we drove continued efficiency improvements.
Speaker Change: Personnel and cashing sensation by using an efficient channel investment.
Speaker Change: And I think that allocation.
Speaker Change: As a result have declined more than seven.
Speaker Change: And the cost optimization initiatives through margin.
Speaker Change: The sequential decline in margin was primarily due to the negative operating leverage resulting from the season always explain things at home.
Sichuan Zhang: Children's revenue from the Momo app and Tenanonio app, 2.0. 3.2 billion RMB, down 8% year-over-year, mainly due to the declines in revenue from the Momo app, resulting from spending softness amidst the market economy and our proactive product and operational adjustments to maintain a healthy community ecosystem. Stand-alone new apps, especially overseas, continue to grow rapidly year-over-year. Adjusted operating income was 487 million RMB, down 3% year-over-year, with a margin of 21%, up one percentage point from a year ago.
Speaker Change: Total revenue from the mobile app and send them with.
Speaker Change: With two points.
Speaker Change: <unk> billion RMB.
Speaker Change: One 8% year over year.
Speaker Change: Mainly due to the declines in revenue from the mobile App you showed me some spending softness amidst a weak macro economy and also active product and operational adjustments to maintain a healthy community ecosystem.
Our new App.
Speaker Change: Actually oversee.
Speaker Change: Future grow rapidly year over year.
Speaker Change: Adjusted operating income was 487 million RMB.
Speaker Change: And 3% year over year.
Speaker Change: Margin of 21%.
Speaker Change: One percentage point from a year ago.
Sichuan Zhang: For Tantang, total revenue decreased 22% year-over-year to 241 million RMB, mainly due to the reduced number of paying users. Our commercial product team continues to optimize the paying experience to improve our users, which particularly mitigated the revenue pressure. Shenzhen's adjusted operating income was 28 million RMB, up 92% year-over-year, with a margin of 11.6%, up 6.9 percentage points from a year ago.
Four times.
Speaker Change: Total revenues increased 22% year over year to 241 million RMB, mainly due to the reduced number of paying users.
Speaker Change: Our commercial team continued to optimize the pea experiencing who are people.
Speaker Change: Particularly in many cases, even fresher.
Speaker Change: Sometimes adjusted operating income was 28 million RMB.
Speaker Change: 92% year over year with a margin of 11, 6%.
Speaker Change: Okay.
Speaker Change: One nine percentage points.
Speaker Change: Okay.
Sichuan Zhang: Now I will read through the progress we have made against our strategic priorities for Momo, Tangtang, and new endeavors since the beginning of the year. As I outlined on the Q4 2023 Earnings Call in March. The main goal for Momo this year is to maintain the productivity of the cash cow business with a healthy ecosystem. Tandem's goal is to continue to improve the core dating experience and build an efficient business model that drives profitable growth.
Speaker Change: No I won't use through the progress made against those who choose your priority for mobile content and new endeavors.
Speaker Change: Oh yeah.
Speaker Change: Is that all ages on the Q4 2023 earnings call in March.
Speaker Change: The main goals were to normal at this year is to maintain the productivity of it.
Speaker Change: Our business with a healthy ecosystem.
Speaker Change: The tender is going to continue to improve the courts eating rewritten and human nutrition business model that drives profitable growth.
Sichuan Zhang: As for our new endeavor, our plan is to enrich the grant portfolio further, push the business boundaries beyond Momo and Tomahawk, and View a Long-Term Growth Engine. I will now walk you through the details of our application.
Speaker Change: As for our new endeavor.
Speaker Change: One in which the friend for flu Burger.
First the business Burndy Yamal and hunger.
Zero long term growth engine.
Speaker Change: I will now walk you through the details of our execution.
Sichuan Zhang: First, on the product and operational front of the Momo app. Since the beginning of the year, our product team has been focused on continuously enriching use cases and gamified features, as well as strengthening Momo's social contribution. To help users improve their interactive experience, we applied AI technology to assist with chatting and image generation features. For example... AI Greeting provides chatting assistance and service for users who want to make new friends from the nearby people list.
Speaker Change: First on the startup and operation of one of the normal.
Speaker Change: Since the beginning of the year our product team has been focused on continuously in Gucci use cases and gave me five features.
Speaker Change: As far as certain evening.
Speaker Change: Sure Shilton sugar.
Speaker Change: You have users who sat in churches.
Speaker Change: Irene.
Speaker Change: We applied AI technology to do with chatting and image generation featured.
Speaker Change: For example.
Speaker Change: I agree to cause I tried any assistance.
So there's four user who wants to make new friends for the nearby people list.
Sichuan Zhang: In another word, AI can suggest eye-catching topics to users by analyzing the image and text information on the potential candidate's profile page. Data from the test group shows that this creature plays a positive role in increasing the green ginkgo's response rate. Another example is AI Magic Mirror or AI Molding, image generation tools that allow users to synthesize photos with other users or landmarks.
Speaker Change: And then the other war yeah I can suggest is routine coffee.
Speaker Change: He uses by N and I think the image and text information Anja.
Speaker Change: Sure candidates who've got a page.
Speaker Change: Data from the test strip shows that.
Speaker Change: This feature plays a positive move in increasing the freezing response rate.
Speaker Change: Another example is a magic mirror or AI more thing.
Speaker Change: And image generation choose that allow users to synthesize photos with other uses or landmark Inc.
Sichuan Zhang: Increasing users' social capital to provide new ways to interact. In addition, Last year, we piloted a Finding Partners, or Zhaogazi, program for our online-to-offline interest groups in several major cities, which was well-received by young users. The number of Pine Outdoor Activity Groups, represented by CityWalk, grew quite strongly in the first quarter.
Speaker Change: Increasing use of social capital supervised new ways to interact.
Speaker Change: In addition.
Speaker Change: Yeah, we piloted a finding partners or satisfaction program for our online to offline interest in.
Speaker Change: In several major city.
Speaker Change: Rich with wildly satisfy young users.
Speaker Change: The number hi.
Speaker Change: I'll draw activity.
Speaker Change: Represented five did you walk.
Speaker Change: Quite strongly in the first quarter.
Sichuan Zhang: Our innovation and our ability to keep pace with the time in technology have enabled Momo, a mature social brand with a 30-year history, to play an essential role in helping users discover new relationships and build meaningful interactions. This has laid a solid foundation for Momo's app to maintain user and revenue scale over the long term. [inaudible] About a year ago, we shifted our focus from general user growth to ROI-oriented, profitable user growth. This model is more pragmatic and better suited to Momo's current stage of development as well as the overall economic environment.
Speaker Change: But our innovation and our ability to keep pace with the time in technology has able normal mature social brands with a 30 year history.
Speaker Change: To play a central role in helping users discover new relationships and see meaningful interaction.
Speaker Change: This has laid a solid foundation for a more apps you maintain user and revenue scale over the long term.
Speaker Change: On the China front.
Speaker Change: About a year ago, you shifted our focus from general user growth to our I O into profitable user growth.
Speaker Change: Motto is small.
Speaker Change: Patrick and better suited Shimon most parents stage of development as well as the overall economy.
Speaker Change: It equal.
Speaker Change: Women.
Sichuan Zhang: Our adjusted budget allocation for various channels according to the traffic at the beginning of the year, optimize potential channels, cut spending in channels and act with poor ROI, and explore new ways to bring incremental traffic while further reducing user acquisition costs through collaboration with KOL. We also focus on improving pay-in conversion. Acquiring more high-paying users and improving our ability to better accommodate this group of people with more suitable features on our mobile apps. In the first quarter, the Momo app had 7.1 million paying users, a decrease of 300k from the previous quarter. I may need you to achieve these goals.
Speaker Change: Our adjusted searches allocation for various channels. According to the traffic at the beginning of the year.
Speaker Change: Tonight.
Speaker Change: So we're trying to cut spending in China and as with all our lives.
And explore new ways to bring incremental traffic.
Speaker Change: Well further reducing user acquisition cost.
Speaker Change: Collaboration with Kols.
We also focus on improving conversion.
Speaker Change: Acquiring more high paying users and improving our ability to better accommodate it.
Speaker Change: People with most digital features on our mobile App.
Speaker Change: In the first quarter, the more has seven 1 million paying users.
A decrease or 300, K the poorest quarter.
Speaker Change: Mainly Jude should choosy.
Sichuan Zhang: First, our product and operational adjustment should reduce competition events resulting in declined paying users. Second, in order to improve profitability and pursue profitable growth, our channel team reduced investments in acquiring low-paying users with negative channel ROI, resulting in a decrease in long-term pain users. Now, let's talk about the productivity of our Momo cash cow business.
Speaker Change: First our product and operational adjustments to reduce competition event with Turkey in the claim paying users.
Speaker Change: Second in order to improve profitability and profit.
Speaker Change: Profitable growth.
Speaker Change: Our China team and reduce investments in acquiring no low paying users with negative channel how are.
Speaker Change: Resulting in a decrease in long how pay users.
Speaker Change: Now, let's talk about the productivity of our normal catch how business.
Sichuan Zhang: In the first quarter, Momo's live streaming revenue was 1.15 billion RMB, down 11% year-over-year and 90% sequentially. The year-over-year decrease was mainly due to our strategy and proactively-reduced revenue-oriented, large-scale competition events in order to maintain a good social ecosystem and limit unhealthy monetization approaches adopted by broadcasters and agencies to obtain competition event related bonuses. Funding softness amidst the weak macroeconomy was another reason for the year-over-year decrease in revenue.
Speaker Change: In the first quarter.
Speaker Change: Mahmoud live streaming revenue was 1.15 billion RMB down 11% year over year and 19% sequentially.
Speaker Change: Yeah, we use increase was mainly due to our strategy and we're actively reduce revenue oriented large god competition events in order to maintain the good shows Zoe who system.
Speaker Change: Michigan had a fever pitch.
Speaker Change: And approaches.
Speaker Change: Wi Fi Forecaster, and then you can see.
Speaker Change: Pain.
Speaker Change: Competition events related bonuses.
Spending softness amidst a weak macro economy with a lot of reasons for their year over year decrease.
Sichuan Zhang: The crucial revenue decrease was due to the Chinese New Year seasonality. On the product operation side, we fully leverage Momo's social contribution to achieve the transition from revenue-oriented competition events to user-oriented content-focused operational activities. We managed to drive non-event-related, in another word, organic revenue growth by strengthening support for high-quality content and adding new Gamify features. However, total savings from reducing operational activities during Chinese New Year resulted in a slight sequential decrease in the revenue sharing ratio.
Speaker Change: This is a crucial revenue decrease was due to the Chinese new year seasonality.
Speaker Change: On the product operation side, we fully leverage more moisture social contributed sheets to transition from a revenue oriented competition events.
Speaker Change: She use oh weird to condensate cause operational activity.
Speaker Change: We manage to drive non event related.
Speaker Change: In another word organic revenue growth by surgeon support for high quality content and adding new gave me five features.
Speaker Change: Cost savings from reduction in operational activities.
Speaker Change: And Chinese new year, the assumption in this light.
Speaker Change: The decrease in the revenue sharing ratio.
Sichuan Zhang: Revenue from value-added services, excluding content, totaled 1.15 billion RMB for the first quarter, down 4% year-over-year and 9% sequentially. Gross revenue from the Momo app was 806 million RMB, down 17% year-over-year and 14% sequentially. Revenue from the standalone app was 343 million RMB, up 52% year-over-year and 6% sequentially. The year-over-year decline in rice revenue from the Momo Act was mainly due to our proactive product and operational adjustments to mitigate the regulatory risks, as well as suspending softness amid the remarkable economy. But the crucial decline was due to Chinese New Year's Eve in 1988.
Speaker Change: Revenue from.
Speaker Change: Well I just services, excluding times chosen 1.15 daily on R&D for the first quarter down 4% year over year and 9% sequentially.
Speaker Change: One seven years, when demand was 806 million RMB down 17% year over year and 14% sequentially.
Speaker Change: Revenue from the Central App was 343 million RMB.
52% year over year and six.
Speaker Change: And sequentially.
Speaker Change: Year over year decline in lost revenue for them are mainly due to our proactive product and operational adjustments to mimic age of ROIC or carry risk as far as the spending softness.
Speaker Change: Mr Mark Mccollum.
Speaker Change: The sequential decline was due to Chinese new year seasonality.
Sichuan Zhang: On the product front, the user scale of the audio and video-based live experience gradually recovered after the Chinese New Year, thanks to our efforts to drive the penetration rate. Our team made a smooth transition from competition-event driven to non-event-focused operations by enriching interaction features and upgrading core gamified play. The study increased inorganic revenue, partially offset by the reduction in competition events. The group's revenue for the quarter was slightly better than expected, mainly due to the small transition of the Momo app plus business, which has a strong social contribution. The overall revenue sharing ratio decreased slightly compared to the previous quarter due to additional cost savings. Now, moving to Cancan.
Speaker Change: On the product for us.
Speaker Change: They use the scope of the audio and you do phase one experience gradually recover after the Chinese new year.
Speaker Change: Through our efforts to drive the penetration rate.
Our teams make a smooth transition from competition adventure huh.
Speaker Change: Non comp events, though cause.
Speaker Change: Operations by enriching interactions he should and upgrading CT scan your sites right.
The study increase in organic revenue potentially that's a reception and competition events.
Speaker Change: The group's revenue for the quarter was slightly better than expected.
Speaker Change: Mainly due to the smooth transition of the more glass business.
Speaker Change: Which has strong social contribute.
Speaker Change: The overall revenue sharing ratio decreased slightly compared to the previous quarter due to additional cost savings.
Speaker Change: Now moving to Midtown Manhattan.
Sichuan Zhang: First, regarding user trends and financial performance, as the cold wave at the beginning of the year and the Chinese New Year holidays reduced content user demand, our team reduced channel investment, and our user base fell to a low point in March, with the gradual easing of external unfavorable factors and the improvement in user experience brought about by continuously Ecosystem Improvement and Recommendation Strategy Optimization. Our user base and retention started to recover gradually. Tenants' MAU was $13.7 million in the month.
Speaker Change: First we're going to use their turns and financial performance.
Speaker Change: Oh wait as the beginning of the year and Chinese new year holiday.
Speaker Change: User demand.
Speaker Change: Our team reduced China investing in our user base voucher, a low point.
Speaker Change: In March with a gradual easing of ex China pharmaceutical sector.
Speaker Change: And the improvement in using you in Florida.
Speaker Change: About by continued see.
Ecosystem improvement and recommendation strategy of my session how.
Speaker Change: Our user base and retention started to recover gradually.
Speaker Change: And that's M. A U was $13 7 million in March.
Speaker Change: Like sequentially.
Sichuan Zhang: [inaudible] As of the end of the first quarter, Canton had 1.1 million paying users, down 100,000 sequentially, primarily due to the redesign of the auto-renewal page, which was required by the regulatory body. Our commercial product team has improved users' propensity to pay by optimizing guidance on the payment experience and highlighting the differentiated member experience. Therefore mitigating the negative impact on paying users on the renewal page redesign. Turning to Tantan Financial, Total revenue for the first quarter was 241 million RMB, down 22% year-over-year and 11% sequentially.
Speaker Change: As of the end of the first quarter, sometimes $1 1 million paying users.
Speaker Change: 100000 sequentially, primarily due to the redesign of the auto renewal page.
Speaker Change: As required by the regulators.
Speaker Change: Our commercial products team has.
Speaker Change: Use it.
Speaker Change: So propensity to pay by optimizing diamond on the paying experience and highlighting.
Speaker Change: She's a member experience.
Speaker Change: Thereby.
Mitigating the negative impact on paying users for the renewal page redesign.
Turning to turn her financial.
Total revenue for the first quarter was 241 million RMB down 22% year over year and 11% sequentially.
Sichuan Zhang: The year-over-year decrease was mainly due to a reduced number of paying users, but an increase in the revenue contributions of relatively high-end black gold and SVIP membership products drove overall active growth, particularly alleviating the revenue pressure caused by a reduction in paying users. The sequential revenue decline was mainly due to the change in auto-renewal policy, as well as business allocation, which put pressure on paying users and app people. In terms of business line, West Avenue was 145 million RMB, down from 40% year-over-year and 10% sequentially, while last streaming revenue was $87.7 billion, 145 million RMB down 37% year over year and 12% differentially.
The year over year decrease was mainly due to reduced number of paying users.
Speaker Change: The increase in.
Speaker Change: The revenue contribution.
Speaker Change: Relatively high and black gold and S. VIP membership program.
Speaker Change: Overall our people.
Speaker Change: Additionally, mitigated the revenue pressure caused by reception and paying users.
Speaker Change: It's a crucial decline was mainly due to the change and also the new policy as well as seasonality.
Speaker Change: Which put pressure on paying users and our people.
Speaker Change: In terms of business line, whilst revenue was 145 million RMB down.
Speaker Change: 40% year over year and 10% sequentially.
Speaker Change: Well lots roaming revenue was 87 seven.
Speaker Change: Million RMB.
Speaker Change: 37% year over year and 12% sequentially.
Sichuan Zhang: The significant year-over-year decrease was mainly due to the ongoing operational strategy to de-emphasize live streaming. Tang Tang's adjusted operating income for the first quarter was 28 million RMB, nearly doubling year-over-year despite lower revenue and slightly up 4% sequentially.
Speaker Change: The significant year over year decrease was mainly due to the ongoing operational strategy to de emphasize live streaming.
Speaker Change: Adjusted operating income for the first quarter was 28 million RMB.
Speaker Change: <unk> definitely year over year, despite lower revenue and slightly up 4% sequentially.
Sichuan Zhang: Profit growth was mainly driven by continued improvements in channel efficiency and personnel cost optimization. Now I would like to walk you through the details of Tom Han's progress on channel and product plans, first on channel for the past two years.
Speaker Change: Profit growth was mainly driven by continued improvements in China really efficiency and personnel costs.
Speaker Change: Meditation.
Speaker Change: Now I'd like to walk you through that these houses townhouses.
Speaker Change: On channel and product for.
Speaker Change: First on China for over the past few years how.
Sichuan Zhang: Our user acquisition team has continuously invested in efficient channel and marketing approaches and further reduced marketing investments in negative outliers, laying a solid foundation for Tantan to achieve profitability despite revenue pressure. In the first quarter, thanks to the effective control of spamming activities and continuous improvements in Apple over the past year, new user ROI meaningfully improved over the previous year. While our China strategy optimization has yielded promising results over the past two years, the space for continuous optimization of unit acquisition costs is relatively limited.
Speaker Change: Our user acquisition team has continuously cup.
Speaker Change: And fishing channel and marketing approaches.
Speaker Change: And further we see with marketing investments and negative all right.
Speaker Change: They will find a solid foundation for time to time to achieve profitable despite revenue pressures.
Speaker Change: In the first quarter.
Speaker Change: Thanks to the effective control of spending a T V.
Speaker Change: Can you.
Speaker Change: Improvements in absolute over the past year.
Speaker Change: New use of eye meaningfully improved over the previous year.
Speaker Change: While our China strategy optimization.
Speaker Change: The promising results over the past two years.
Speaker Change: The faithful continuous optimization of unit opposition cost is relatively limited.
Sichuan Zhang: Meanwhile, a major problem facing Cancan's user growth model is relying too much on user acquisition through paid channels and too little on adding users organically through brand recognition. As a result, although the overall user acquisition cost has continued to decline over the past year or so, the reduction in the overall average cost of new users has been quite limited due to the continuous decline in the number of new organic users.
Speaker Change: Meanwhile, our major problems facing compound user growth model.
Speaker Change: Is it like too much on user acquisition.
Speaker Change: Pay channels and too little on.
Speaker Change: Adding users organically through brand recognition.
Speaker Change: As a result, although the overall user acquisition cost has continued to fly over the past year.
Speaker Change: The reduction in overall average cost of new uses was quite limited due to the continuing declines in number of new organic uses.
Sichuan Zhang: To explore new growth models, and more importantly, to increase the portion of new users acquired outside pay channels. Our user acquisition team plans to wrap up spending on KOL advertising. Wishes both our eye focus and friends a successful landing.
Speaker Change: To explore new growth model and more importantly to increase the proportion of new users acquired outside pay channels.
Speaker Change: I wouldn't use that decision team plans to wrap up spending on advertising.
Speaker Change: Richard.
Speaker Change: I feel good and rents oriented.
Sichuan Zhang: Early data in March shows that the popularity of new users acquired through offline branding activities is higher than the overall average. We believe that improving the brand image will contribute to sustainable, sustainable and stable organic user growth over the long term, thereby effectively reducing the overall user acquisition cost in the long run and helping to achieve a positive business cycle. We are now moving to content progress on the product and operational side to achieve our strategic goals of improving the coordinating experience and building an efficient business model. Our user product team focused on choosing in the first quarter.
Speaker Change: And then memory data in March shows that.
Speaker Change: The popularity of new user acquired through offline branding activity.
Speaker Change: Oh was higher than the overall average.
Speaker Change: We believe that improving brand image real crime will contribute to sustainable.
Speaker Change: And.
Speaker Change: Favorable.
Speaker Change: And stable organic user growth over the long term.
Speaker Change: Thereby effectively using the overall user acquisition cost is the long run and helping to achieve a positive business cycle.
Speaker Change: Now moving to sometimes progress on product and operational side.
Speaker Change: To achieve our strategic goals of improving the core dating experience and building our efficient business model.
Speaker Change: How do we use this product he can focus on two things in the first quarter.
Sichuan Zhang: First, we continue our MT-SPAN campaign with an updated strategy to enhance MT-SPAN's capabilities to improve the user experience. Second, we are working on an upgraded version to improve the dating experience. Our new version focuses on guiding users to enrich their personalities by adding more information to their profile page, thereby increasing their reach and matching performance and improving the efficiency of matching and deep interaction with their actors. Meanwhile, in terms of UI design, we have decided to emphasize the white smoke and encourage users to scroll down and check out the details of each candidate. We started testing the new version at the end of April. We are currently based on the version based on our user feedback and gradually expanding the texting scale.
Speaker Change: First we continue our N cheek fun campaign is the updated strategy.
Speaker Change: M E C K.
Speaker Change: Capabilities to improve user experience.
Speaker Change: Second we are working on an upgraded version to improve the dating experience.
Speaker Change: A new version so because there's guy didn't use it to enrich that person that was used by adding more information to that profile page.
Speaker Change: Yeah, right, increasing their reach and matching performance and.
Speaker Change: And improving the efficiency of matching and if interaction thereafter.
Speaker Change: Meanwhile, in terms of your design, we have decided that emphasize the.
Speaker Change: Well and you can cover shoes, such as food out and check out the details of each Kennedy.
Speaker Change: We started testing a new version at the end of April.
Speaker Change: We are currently.
Speaker Change: It's.
Speaker Change: Tracy and emphasizing the.
Speaker Change: The version based on our user feedback and gradually extensive testing yeah.
Sichuan Zhang: In terms of monetization, we're adding a short-term WASP membership package to lower the threshold for viewing for new paying users. In addition, we have built a pay-in model in a corpse-like and match mechanism specifically for users without qualified photos to improve long-term retention and pay-in conversion of this group of users. We firmly believe that our efforts to continue to focus on product innovation and improving the payment experience to drive upward growth is the only effective way for Tantan to achieve the strategic goals of profitable growth in the long term.
Speaker Change: In terms of monetization.
Speaker Change: A sharp turn why membership packages shoot lowered the threshold for nearing.
For new paying users.
Speaker Change: In addition, we have few a paying model in courts, right and match Mccann Newsome consistently for users without cordis I photos to improve long term retention and paying conversion of this group of users.
Speaker Change: We firmly believe that our efforts to continue to focus on product innovation and improving paying experience to drive absolute growth.
Speaker Change: Amit.
Speaker Change: Effective way for time to achieve the strategic growth profitable growth in the long term.
Sichuan Zhang: Lastly, in terms of new endeavors, in the first quarter, the total revenue of the new act included social and game products, 344 million RMB, up 51% year-over-year and 5% sequentially. The year-over-year increase was mainly driven by the rapid growth in our overseas business. However, consumer sentiment in Arabic-speaking regions experienced a seasonal decline due to the impact of Ramadan.
Speaker Change: Lastly in terms of new endeavor.
Speaker Change: First quarter.
Speaker Change: Total revenue of the new App.
Speaker Change: Who does show show insane, Florida.
Speaker Change: 344 million RMB.
Speaker Change: It's two 1% year over year and 5% sequentially.
The year over year increase was mainly driven by the rapid growth in our overseas business.
Speaker Change: On a sequential basis.
Speaker Change: Consumer sentiment in Arab seeking vision experience, a seasonal decline due to the impact of Ramadan.
Sichuan Zhang: At the beginning of the year, our user acquisition team increased investment in overseas channels and enhanced collaboration with local KOLs, resulting in a significant year-over-year exponential increase in the number of users and paying users. Launching new gifting features and rabbit gold in Turkish speaking markets led to a slight sequential increase in overseas revenue during the off-season, while contributing in portioned incremental revenue for the San Ong Liu Act. At present, we are accelerating the localization process of our overseas business on the product side.
Speaker Change: At the beginning of the year, our user acquisition to increase investment in overseas channels.
Speaker Change: Hence collaboration with local care out there.
Speaker Change: Sucking in this significant year over year.
Speaker Change: Increasing numbers of users and paying users.
Launching new E gifting features and radicals in Turkish became market naturalists slice it a crucial increase in overseas revenue during the off season.
Speaker Change: And she really in portion of incremental revenue for the spend on our new App.
Speaker Change: That person yeah.
Speaker Change: Accelerating the localization process of I oversee the.
On the product side.
Sichuan Zhang: We are introducing more interactive gamified features in line with local user preferences and stepping up to the testing of live streaming. On the operational side, we are improving the customer experience and the product experience specifically for high-paying users. At the same time, we are strengthening collaboration with local agencies and forecasters to improve content quality and Zhaogu Li. Making rapid progress in multiple regions in the Middle East means we will face more uncertainty and challenges due to geo-diversification. For example, the sharp depreciation of the Egyptian pounds in March caused significant foreign exchange losses.
Speaker Change: We are introducing more interactive gaming features in line with local user preferences and stepping up to testing of live streaming.
Speaker Change: On the operational side.
Speaker Change: We are improving customer experience.
Speaker Change: <unk> heard of experience specifically for high paying users.
Speaker Change: At the same time, we are certainly in collaboration with local agencies and forecasted to improve content quality.
10000.
Speaker Change: Making rapid progress in multiple regions in the misery main we will face more uncertainty and challenges huge here that you see.
Speaker Change: So where's the vacation.
Speaker Change: For example, the sharp depreciation of Egyptian passing March caused significant foreign exchange losses.
Sichuan Zhang: In addition, as we gradually refurbish our local operational team and start entering new markets, you could put more pressure on the process of our Overseas Business Initiative. However, these upfront investments have laid a necessary foundation for future revenue and profit growth. This concludes my remarks. Now, let me pass the call to Kathy for the financial review.
Speaker Change: In addition has to be gradually you broke out a little co operational team and start entering new market.
Speaker Change: Because.
Speaker Change: Our patches on the profit.
Speaker Change: Of our overseas business English option.
Speaker Change: However, our firm investments.
Lay the necessary foundation for future revenue and profit schools.
Speaker Change: This concludes my remarks.
Kathy: Hello, everyone. Thank you for joining our conference call today. Now, let me briefly take you through the financial review. Total revenue for the first quarter of 2024 was 2.56 billion RMB, down 9% year-on-year and 15% quarter-on-quarter. Non-GAAP net income attributable to the company was 59.9 RMB compared to 471.9 million RMB for the same period of 2023. In the first quarter, we accrued a withholding income tax of RMB 448.6 million associated with our historical undistributed earnings generated by our roll fee. I will elaborate a bit later on such accounting treatment.
Cathy: Now, let me pass the call to Cathy for the financial review.
Speaker Change: Kathy suite.
Speaker Change: [noise]. Thank you are sick.
Speaker Change: Hello, everyone.
Speaker Change: So joy joining our conference call today.
Kathy: This tax expense item is on an accrual basis, meaning that it did not result in an actual cash outflow in that amount during the current quarter. In addition, it was one-off in nature and did not reflect the fundamental performance of the current quarter, nor is it indicative of future profit prospects. Excluding this special item, non-GAAP net income for the quarter would have been 508.5 million RMB, up 8% from the same quarter last year but slightly down 1% sequentially.
Speaker Change: Now let me briefly take you through the financial review.
Speaker Change: Total revenues for the first quarter 2024 was 2.56 billion and then be down 9% year on year and 15% quarter on quarter.
Speaker Change: non-GAAP net income attributable to the company was 59.9 can be compared to 471 9 million and then b for the same period of 2023.
Speaker Change: In the first quarter, we accrued a withholding income taxes will then be 400, and $448 6 million associated with our historical undistributed earnings generated by our Woolsey I will elaborate.
Speaker Change: The later, all such accounting treatment there.
Speaker Change: This tax expense item is on accrual basis, meaning that it did not result in an actual cash outflow in that amount during the current quarter. In addition, it was one off in nature and do not reflect the fundamental performance of the current quarter nor is it indicative of.
Speaker Change: Sure profit prospect.
Speaker Change: Excluding this special item non-GAAP net income for the quarter would've been 500, an 8.5, new era and be up 8% from the same period from the same quarter last year, but slightly down 1% sequentially.
Kathy: I'm glad to see that net income continued to grow on a year-over-year basis despite lower revenue. This was mainly attributable to our effective cost optimization and efficiency improvement initiatives. Now, let me walk you through the details.
Speaker Change: I'm glad to see that net income attributed.
Speaker Change: Net income continued to grow on a year over year basis. Despite lower revenue. This was mainly attributable to our effective cost optimization.
Speaker Change: And efficiency improvement initiatives.
Speaker Change: Now, let me walk you through the details.
Kathy: Looking into the key revenue items for the quarter, firstly, live broadcasting. Total revenue from the live broadcasting business for the first quarter of 2024 is $1.24 billion RMB, down 13% year-over-year and 19% quarter-over-quarter. The year-over-year decrease was mainly due to three factors. Number one, our proactive product and operational adjustments to de-emphasize revenue-oriented competition events for the sake of maintaining a healthy ecosystem. 2.
Speaker Change: Looking into the key revenue items for the quarter, Firstly, our live broadcasting.
Speaker Change: Total revenue from LIBOR casting business for the first quarter of 'twenty 'twenty, four 1.24 billion of them and be down 13% year over year, and 919% quarter over quarter. The year over year decrease was mainly due to three factors number one our proactive crowd.
Speaker Change: And operational adjustments to deemphasize revenue oriented competition events for the sake of maintaining a healthy ecosystem.
Kathy: Soft Consumer Sentiment Amid the Weak Macroeconomy, Number three, Tantan strategically pivoting away from the less dating-centric live streaming service. The sequential decrease was due to CNY negative seasonality. Momo's app live broadcasting revenue totaled 1.15 billion RMB for the quarter, down 11% year-over-year and 19% quarter-over-quarter. Panpan's live broadcasting revenue amounted to 87.7 million RMB, down 37% year-over-year and 12% quarter-on-quarter. Revenue from value-added services for the first quarter of 2024 was 1.29 billion RMB, down 5% from Q1 last year and 9% sequentially.
Speaker Change: Number two soft consumer sentiment amid the weak macro economy.
Speaker Change: Number three compounds strategically pivoting away from the less data centric live streaming service.
Speaker Change: The sequential decrease was due to C O y negative a negative seasonality.
Speaker Change: Well my off LIBOR casting revenue totaled 1.15 billion in India for the quarter down, 11% year over year, and 19% quarter over quarter.
Sometimes library hosting revenue amounted to 87.7 million them and be down 37% year over year and 12% quarter on quarter.
Speaker Change: Yeah.
Speaker Change: Revenue from value added services for the first quarter of 'twenty 'twenty four was 1.29 billion of them and be down 5% from Q1 last year and 9% sequentially revenue from value added service on an ex tom-tom basis was 1.15 billion of them and be in the first quarter of 2024 down.
Kathy: Revenue from value-added services on an ex-tantan basis was 1.15 billion RMB in the first quarter of 2024, down 4% from Q1 last year and 9% from the previous quarter. This was due to our proactive product adjustments to manage regulatory risks, as well as a weak spending sentiment, coupled with negative seasonality. On the other hand, revenue from standalone new apps continues to grow steadily, partially offsetting the revenue pressure from Momo's Value Added Service.
Speaker Change: 4% from Q1 last year and 9% from the previous quarter.
Speaker Change: Mobile App Vas revenue decreased both on a year over year and quarter over quarter basis.
Speaker Change: This was due to our proactive product adjustments to manage reservoir through it as well as a weak spending sentiment coupled with negative seasonality on the other hand revenue from the Standalone new apps continued to grow steadily partially offsetting the revenue pressure pressure from a more value added service.
Kathy: Time Times Value Added Service Revenue amounted to RMB145,000 or 1.1 million, down 14% year-over-year and 10% sequentially. The worldwide decrease was due to a decline in paying users, which was in turn due to a reduction in channel investment, the Anti-Spam Campaign, and the Adjustment to Subscription Renewal Policy. The sequential decrease was due to CMY seasonality, which had a negative impact on both pain users and R2.
Speaker Change: Compounds that are out of service revenue amounted to renminbi 145.
Speaker Change: <unk> 1 million down 14% year over year and 10% of your question.
Speaker Change: Y O Y decrease was due to a decline in paying users, which was in turn due to a reduction in channel investment.
Speaker Change: Anti spam campaign M.
Speaker Change: And the adjustments to subscription renewal policy.
Speaker Change: The sequential decrease was due to the C O Y seasonality, which had a negative impact on both paying users and <unk>.
Kathy: Now turning to costs and expenses, non-GAAP cost of revenue for the first quarter of 2024 was $1.50 billion RMB compared to $1.66 billion for the same period last year. Non-GAAP gross margin for the quarter was 41.4%, up 0.4 percentage points from the year-ago period and 0.3 percentage points from the previous quarter. The increase was due to an improvement in Tata's margin that resulted from a shift in its revenue mix. Non-GAAP R&D expenses for the first quarter were 183.4 million RMB, compared to 214.4 million RMB for the same period last year, or a 14% decrease year-over-year.
Speaker Change: Now turning to costs and expenses non-GAAP cost of revenue for the first quarter of 2024 was 1.50 billion renminbi compared to $1 66 billion for the same period last year.
Speaker Change: non-GAAP gross margin for the quarter was 41, 4% up 0.4 percentage points from the year ago period, and 0.3 percentage points from last quarter.
Speaker Change: The increase was due to an improvement in top half margin.
Speaker Change: That resulted from a shift in its revenue mix.
Speaker Change: non-GAAP R&D expenses for the first quarter was 183 point formulating them and be compared to $214 4 million or maybe for the same period last year or a 14% decrease.
Speaker Change: Year over year.
Kathy: The decrease was due to the continuous optimization in personnel and infrastructure costs. Knockout R&D expenses as a percentage of revenue were 7% compared with 8% from the year-ago period. We ended the quarter with 1,375 employees, of which 294 are from Tantan, compared to 1,533 total employees, of which 374 from Tantan a year ago.
Speaker Change: The decrease was due to the continuous optimization in personnel and infrastructure costs.
Speaker Change: R&D expenses as a percentage of revenue was 7% compared with 8% from the year ago period.
Speaker Change: We ended the quarter with 1375 employees of which 294 are from Tata Comparator 1533, total employees of which 374 from Tata a year ago.
Kathy: The R&D personnel as a percentage of total employee for the group was 62% compared with 63% in Q1 last year. Non-gap sales and marketing expenses for the first quarter were $287.3 million RMB, or 11% of total revenue, compared to $372.0 million RMB, or 13% of total revenue, for the same period last year. The Significant Year-over-Year Decrease, both in terms of the absolute renminbi amount and as a percentage of revenue, was primarily attributable to two reasons.
Speaker Change: The R&D personnel as a percentage of total employees for the group was 62% compared with 63% Q1 last year.
Speaker Change: non-GAAP sales and marketing expenses for the first quarter was $287 3 million, a and B were 11% of total revenue compared to 372.0 million renminbi or 13% of total revenue for the same period last year the.
Speaker Change: The significant year over year decrease.
Speaker Change: Both in terms of absolute renminbi amount and as a percentage of revenue was primarily attributable to two reasons.
Kathy: One, in Q1 last year, we hosted an offline year-end gala for Momo live-streaming. Number two, our strategy to trim inefficient channel marketing spend and focus on channel ROI. It's worth calling out that the offline annual gala for Momo live-streaming is scheduled to happen in June 2024.
Speaker Change: One eight Q1 last year, we hosted an offline.
Speaker Change: Your end gala, where mobile live streaming number two our strategy to train inefficient channel marketing spend and focus all channel or why it's worth calling out that the offline annual gala for Momo live streaming is scheduled to happen in June 2024, Therefore, we expect the marketing cost in the second.
Kathy: Therefore, we expect the marketing costs in the second quarter this year to see a spike due to that event. Non-GAAP G&A expenses were 93.5 million RMB for the first quarter of 2024, compared to 88.4 million RMB for the same quarter last year, representing 4% and 3% of total revenue, respectively. Non-GAAP operating income was 515.0 million RMB, a slight decrease of 0.6% from Q1 2023, down 22% from the previous quarter. Non-GAAP operating margin for the quarter was 20.1%, up 1.7% from the same period last year, but down 2.0% from the previous quarter.
Quarter this year to see a spike due to that event.
Speaker Change: non-GAAP G&A expenses was $93 5 million room and be for the first quarter 2024, compared to $88 4 million and it would be for the same quarter last year reps.
Speaker Change: Representing a 4% or 3% of total revenue respectively.
Speaker Change: non-GAAP operating income was 515.0 million rather than be a slight decrease of euro 6% from Q1 2023.
Speaker Change: Down 22% from the previous quarter.
Speaker Change: non-GAAP operating margin for the quarter was 21% up one seven percentage points from the same period last year, but down 2.0 percentage points from the previous quarter non-GAAP Opex as a percentage of total revenue was 22% a decrease from 24% from Q.
Kathy: Non-GAAP OPAC as a percentage of total revenue was 22%, a decrease from 24% from Q1 2023 but up from 20% in Q4 last year. Non-GAAP operating expenses on a year-on-year basis decreased 16%. The decrease in both the absolute renminbi amount and as a percentage of revenue for OPEX was mainly due to a reduction in social marketing expenses and, to a lesser degree, optimization in personnel costs. Non-GAAP operating expenses decreased 6% sequentially. This was attributable to a decrease in year-end bonuses as well as double pay.
Speaker Change: <unk> 2023, but up from 20% in Q4 last year.
Speaker Change: non-GAAP operating expenses on a year on year basis decreased 16%.
Speaker Change: The decrease in both absolute renminbi amount and as a percentage of revenue for Opex was mainly due to a reduction in sales and marketing expenses and to a lesser degree optimization in personnel costs.
Speaker Change: non-GAAP operating expenses decreased 6% sequentially. This was attributable to a decrease in year end bonus.
Speaker Change: As well as double pay.
Kathy: Now, briefly, on income tax expenses. The total income tax expense was 557.6 million renminbi for the quarter. In Q1, the company repatriated 2.0 billion renminbi from a world fee in China to our offshore entity in order to replenish our U.S. dollar funding. As such, repatriation already partly involved our historical undistributed earnings for prior years, and since we might continue to distribute the world fees retained earnings to fund overseas business operations, shareholder return, and potential investments, based on the principle of conservatism, in Q1, we accrued a withholding tax of 448.6 million RMB, which is 5% of the historical undistributed earnings of our world fees.
Speaker Change: Now I'll briefly on income tax expenses total income tax expense was 500 to $557 6 million in them and be for the quarter in Q1, the company repatriated 2.0 billion renminbi from Wolfie in China.
Speaker Change: Offshore entity in order to replenish our U S dollar funding.
Speaker Change: Such repatriation already partly involved our historical on distributed earnings for prior years and since we might continue to distribute the Wolfish retained earnings to fund overseas business operation shareholder return and potential investments based on the.
Speaker Change: The principle of conservatism in Q1, we accrued withholding tax of $448 6 million Renminbi, which is 5% of the historical undistributed earnings of a rosy.
Kathy: As I said at the beginning of my remarks, this tax expense item is on an accrual basis, meaning that it did not result in an actual cash outflow of that amount during the quarter. In addition, it was one-off in nature and did not reflect the fundamental performance of the current quarter, nor was it indicative of future profit prospects. Without withholding tax, our estimated non-gap effective tax rate was around 15% in the first quarter.
Speaker Change: As said at the beginning of my remarks. This tax expense item is on accrual basis, meaning that it did not result in an actual cash outflow in that amount during the quarter.
In addition, it was one off in nature and do not reflect the fundamental performance of the current quarter, nor is it indicative of future profit prospects.
Speaker Change: Without a withholding tax our estimated non-GAAP effective tax rate was around 15% in the first quarter.
Kathy: Now turning to the balance sheet and cash flow item. As of March 31st, 2024, Hello Group's cash equivalents, short-term deposits, long-term deposits, short-term investments, and restricted cash totaled 15.12 billion RMB compared to 13.48 billion RMB as of December 31st, 2023. Lastly, on business outlook, we estimated our first quarter revenue to come in the range of 2.65 billion RMB to 2.75 billion RMB, representing a decrease of 15.5% to 12.4% year-on-year or an increase of 3.5% to 7.4% quarter-on-quarter.
Speaker Change: Now turning to balance sheet and cash slide them.
Speaker Change: As of March 31, 2024, Hello group's cash cash equivalents short term deposits long term deposits short term investments and restricted cash totaled 15 points 12 billion renminbi compared to 13.48 billion renminbi as of December 31, 2023.
Speaker Change: Net cash provided by operating activities in the first quarter of 'twenty 'twenty four was 400.2 million b.
Speaker Change: Lastly on business outlook, we estimate at all first quarter revenues to come in the range from 2.65 billion or 92 2.75 billion renminbi, representing a decrease of 15.5.
Speaker Change: Percent to 12, 4% year on year or an increase of three 5% to seven 4% quarter on quarter.
Kathy: At segment level, for Q1 2024, on a sequential basis, we expect Momo revenue to increase around 8 single digits. On the compound side, we expect revenue to decrease mid-single digit. Please be mindful that this forecast represents the company's current and preliminary views on the market and operational conditions, which are subject to change.
Speaker Change: Segment level for Q1 2024 on a sequential basis, we expect more revenue to increase around mid single digit.
Speaker Change: On the compound side, we expect revenue to decrease mid single digits.
Speaker Change: Please be mindful that this forecast represents the company's current our current and preliminary views on the market and operational conditions, which are subject to changes.
Ashley Jing: That concludes our prepared portion of today's discussion. With that, let me turn the call back to Ashley to start Q&A. Ashley, please.
Speaker Change: That concluded our port.
Ashley: Prepared portion of today's discussion with that let me turn the call back to Ashley to start Q&A.
Ashley: Thank you.
Ashley Jing: And just a quick reminder before we take any questions...
Speaker Change: Just a quick reminder, the holes you got any questions for those who can become please ask your questions in Chinese first followed by all translation by yourself and I'll Preto. Please we're ready for questions. Thank you.
Operator: any questions. For those who can't speak Chinese, please ask your questions in Chinese first and followed by our translation by yourself. Operator, please. We're ready for questions. Thank you.
Operator: If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Xueqing Zhang at CICC. Please go ahead.
Speaker Change: If you wish to ask a question. Please press star one on your telephone and Whitefield name to be announced.
Speaker Change: If you wish to cancel your request. Please press star two if you will.
Speaker Change: Our speakers signed up please pick up the handset to ask your question.
Speaker Change: Your first question comes from do Kim Dang, what C. I Stacy. Please go ahead.
Xueqing Zhang: Thank you for accepting my question. My question is about Momo Inc. Considering that there are further adjustments due to the macro policy, what is the future strategy of WAAS? In your speech, you also mentioned reducing competition activities.
Speaker Change: And since we have only transitional of T Rowe with Devon piece, you're going to need more much agenda coffee thoughtful in London with the interest in gene would couch. It in all of my Boston Whaler Champaign, Kurdish among a whole glad he turns I enjoy it to Joe to ensure a sideshow adult not just triple Uhm bunch.
Xueqing Zhang: Does this mean that there will be room for improvement in the proportion of live streaming and WAAS? Finally, I would like to ask the company about Momo Inc.'s revenue and profit expectations for this year. Thank you.
Speaker Change: Both of us with Ghansham, but equally or action the concept and.
Speaker Change: And let's say Oh, yes, I'll cheat Goldsmith Chatline charging you more substantial.
Xueqing Zhang: Thank you management for taking my question. My question is about Momo Inc. Considering adjustments due to micro environment regulation and other reasons, what is your strategy for WAAS in the future? Also, you mentioned in the prepared remarks that Momo will reduce competition events. Does that improve the revenue sharing ratio of live streaming and WAAS? Lastly, how do you view the revenue and profit of Momo Inc. in 2024? Thank you.
Speaker Change: And she said.
Speaker Change: Thanks management for taking my question My question about mobile and considering adjustments due to micro environment congratulation on Agua Rica.
Speaker Change: What's your strategy for boss in the future.
Speaker Change: Also you mentioned in the prepared remarks, mark against the competition.
Speaker Change: Does it improve the revenue sharing ratio off like Jamie on the box.
Speaker Change: On the varsity how to how to deal with the revenue and profit to after the call my button for us. Thank you.
Unknown Executive: Let me answer the question At the end of last year, there were many uncertainties in terms of the macro level. [inaudible] In the past two quarters, revenue has changed dramatically, which reflects the operation... Arrangement changes have had an impact on Momo's main battlefield. Furthermore, since the beginning of the year, the team has introduced new interactive gameplay. Thanks to Momo's strong social attributes, we have boosted the growth of natural running water and partially compensated for the lack of running water in the race.
Speaker Change: Oh, well, that's where it is.
Speaker Change: Yeah morning, once again I'm sorry, the issue.
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Unknown Executive: My team is able to respond flexibly to external environmental changes. Moreover, I am very satisfied with the smooth transition to the daily play method. This year, we will follow this idea and fully implement the Momo product style to build more immersive interactive play methods in the audio-video scene and explore the opportunity to increase revenue.
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Unknown Executive: Given the uncertainties in the macro environment at the end of last year, our team proactively reduced the revenue-oriented competition events in the live streaming and audio and video-based VARF experiences in order to protect user experience and limit the unhealthy monetization approaches adopted by broadcasters and agencies to obtain more revenue from competition events. The year-over-year revenue changes in the past two quarters reflected the impact of these operational adjustments on Momo app revenue.
Speaker Change: Okay.
Speaker Change: Given the uncertainties in the macro environment.
Speaker Change: The end of last year, our team proactively reduce the revenue all reality competition event in the live streaming and audio and video based Alafi fears is in order to protect usually.
Speaker Change: And limit the unhealthy pneumonia season approaches adopted by broadcasters on agencies to obtain more revenue from our competition events.
The year over year revenue changes in the past two quarters reflected the impact of these operational adjustments on the mobile App revenue.
Unknown Executive: And since the beginning of the year, our team has introduced new interactive gamification features and fostered the supply of high-quality content and leveraged Momo's strong social attribute to drive organic revenue growth, partially offsetting the decrease in competition events-related revenue. I'm very pleased with the team's ability to flexibly respond to changes in the external environment and make a smooth transition from competition events-driven to non-event-focused operations. This year, we plan to further pursue this strategy of fully leveraging Momo's core value proposition, develop more immersive interactive unified features in the audio and video based experiences, and explore incremental revenue opportunities.
Speaker Change: Since the beginning of the year our team has they introduced a new interactive give me if I'd be just a boasted a the supply of high quality content I leave reached more and more saw strong social attribute to drive organic revenue growth, partially offsetting the decrease in competition events related revenue.
Speaker Change: I'm very pleased with the team's ability to flexibly respond to changes in the external environment and make a smooth transition from competition events driven two now you've unfocused operations. This year, we plan to further pursue this strategy of fully live reaching almost <unk>.
Speaker Change: Our value proposition and develop more immersive interactive features in the audio and video based experiences and explore improve onto our revenue opportunities.
Unknown Executive: In the past few years, our basic division policy has been to maintain stability. In the past six months, due to the decrease in competition activities, we have generated some savings in terms of bonus costs. [inaudible] ??, In short, the overall distribution ratio will remain stable compared to the previous period. I think Cassie can talk about specific financial and profit expectations.
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Unknown Executive: In terms of revenue sharing, our basic revenue sharing policy has remained stable over the past few years. Due to the reduction in competition events in the past six months, we have saved some bonus costs. However, the decrease in revenue caused by these operational adjustments has resulted in lower income for broadcasters and lower profits for agencies. As a result, we believe that it makes strategic sense to use a portion of the saved bonuses to increase revenue sharing for non-event operations and to enhance agency engagement and motivation through moderate profit concessions. Consequently, our overall revenue sharing ratio will remain basically stable compared to the previous period. And as for revenue and profit guidance, I will leave it to Ken.
Speaker Change: In terms of revenue sharing all basic revenue sharing policy has remained stable over the past few years.
Speaker Change: Due to the reduction in competition events in the past six months, we have saved some bonus costs. However, the decrease in revenue caused by our these operational adjustments has resulted in lower income for broadcasters on lower profits for agencies. As a result, we believe that it makes strategic.
Speaker Change: He plans to use a portion of the saved of bonuses to increase the revenue sharing for now move on to operations and our two new House agency engagement and motivation through moderates a pocket concession and consequently, our overall revenue sharing ratio will remain basically stable compared to the previous period.
Speaker Change: And as for our revenue and profit guidance I will leave it to Cathy.
Speaker Change: Okay.
Unknown Executive: Before talking about the revenue outlook, I would like to remind the analysts and investors that the Momo segment revenue actually includes both the revenues from the core Momo application and the revenues from the new applications, including Socio, Hertz, and Duidui, etc. That's something you may want to bear in mind when taking our comments into your modeling.
Before before talking about the revenue outlook.
Cathy: I I would like to remind analysts and investors that the more segment revenue actually includes both the revenues from the core Momo application and the revenues from the new applications, including social hurts and in a good way et cetera.
Cathy: That's something you might want a very mind when taking our our comments into our modeling now on the core Momo application as in the past few quarters future revenue trajectory.
Unknown Executive: Now on the core MoMA application, as in the past few quarters, future revenue trajectory will continue to hinge upon the development on two major fronts. One is macro, and the other one is the regulatory environment. For macro, which in turn dictates consumer sentiment, we're seeing some positive policy changes at the top. However, how effectively and quickly those policy changes will get filtered down into consumer behavior in general and more specifically into user spending on our platform, I think it's still too early to tell. We'll see as the year progresses. So that's for macro.
Cathy: Well continue to hinge upon the development on <unk>.
Cathy: Two major front, one is macro and the other one is regulatory environment.
For macro.
Cathy: Which in turn dictates the consumer sentiment were seeing some positive policy changes at the top however, how effectively and quickly those policy changes will get filtered down into the consumer behavior in general and more specific more specifically to use your spending on our platform.
Cathy: That at this point.
Cathy: It's I think it's still too early to tell but we'll see as the year progresses.
Cathy: So that's for macro on the regulatory front as investors can see our we have always been very disciplined and prudent in terms of managing.
Unknown Executive: On the regulatory front, as investors can see, we have always been very disciplined and prudent in terms of managing risks and making sure our ecosystem is healthy and safe in the regulatory regard. In Q1, we undertook very important adjustments to the operational policy, as described by Sik and Tang Zong in their remarks. The impact on the ecosystem is positive, and the financial impact so far is pretty in line with our earlier expectation, as communicated in last quarter's call. So that's the core business.
Speaker Change: Risks and making sure our ecosystem is healthy and safe in the regulatory regard in Q1, we undertook very important adjustments to the operational policy as described by chicken Townsville in their remarks, the impact on the ecosystem is positive and.
Speaker Change: The financial impact so far are pretty.
Speaker Change: Pretty in line with our earlier expectations.
Speaker Change: As communicated in last our last quarter's call. So that's the core business. The oversea peas are well, obviously continue to grow pretty robustly and that's helped mitigate the decreased from from the core overall, if you look at our Q2 guidance at mid point I think we are.
Unknown Executive: The over CPs will obviously continue to grow pretty robustly and thus help mitigate the decrease from the core. Overall, if you look at our Q2 guidance, at midpoint, I think we are seeing a 13% decrease on a year-over-year basis in the Momo segment. That YY decrease is higher than what we saw in Q1, mainly because Q2 2023, if you remember, that was the best quarter of that year, forming a higher base for the YY comparison.
Speaker Change: Seeing a 13% decrease on a year over year basis.
Speaker Change: One more segment that Y O Y decrease is higher than what we saw in Q1, mainly because Q2 'twenty 'twenty. Three if you remember that was the best quarter of that year of forming a higher base for Y O Y comparison, as we head into the second half the wawa comparisons should get a little bit easier.
Unknown Executive: As we head into the second half, the YY comparison should get a little bit easier. But overall, because the biggest impact factor, which is the operational adjustment, that adjustment was fully in the system by Q1. And the other two elements, the macro and regulatory risk, currently seem to be pretty stable. So if you put all these together, I would say the first half is a pretty good basis for us to think about the back half.
Speaker Change: But overall because the biggest impact factor, which is the operational adjustments.
Speaker Change: That adjustment was fully in the system by Q1.
Speaker Change: And.
Speaker Change: The other two elements the macro and regulatory.
Speaker Change: Risk currently seem to be pretty stable.
Speaker Change: So if you put all these together I would say first half is a pretty good basis for us to think about the back half.
Unknown Executive: With regard to profit, while we continue to try to optimize the cost structure for the core Momo business, we're also going to put a very significant portion of the savings from the core into building the new applications. Thus, we won't have as much room to cut on operating expenses in 2024 as we have in the past couple of years. This means we're probably going to get some negative leverage from the decrease in the top line.
With regards to our profit.
Speaker Change: While we continue to try to optimize the cost structure for the core Momo business. We're also going to put a very significant portion of the savings from the core into building the new applications and those we won't have as much room to cut operating expenses in 2024 as in there.
Speaker Change: Past couple of years this means.
Speaker Change: We're probably going to get some negative leverage from the decrease on topline overall for more segment will try to hit our range.
Unknown Executive: Overall, for Momo, we'll try to hit a range in the high teens for the adjusted operating margin, but we won't pin ourselves down to that range. I guess that's several points to address the question on top line and bottom line outlook. Back to Ashley for the next question.
Speaker Change: But you know between hit a range in the high teens for the adjusted operating margin, but we wont pin ourselves down to that range.
Speaker Change: I guess that that's a that's a several points to address your question on topline and bottom line outlook.
Speaker Change: Back to Ashley for next question.
Operator: Thank you. Your next question comes from Raphael Chen with BOCI Research. Please go ahead.
Next question please.
Speaker Change: Thank you. Your next question comes from Rafael Chen with B or C. I research. Please go ahead.
Yiqun Chen: My question is about overseas business. Can you share the latest development strategies and ideas for overseas business, as well as the latest updates on the process of localization and business data? Lastly, can you share the overall revenue and profit expectations for overseas business this year? Thank you. I will translate myself. Thank you for accepting my question.
Speaker Change: It's usually about eight months or so that you all were the ones who should tell you how about a month old Ching Kwan for yourself, how are you seem very fragile.
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Speaker Change: I will translate myself. Thank you for taking my question.
Speaker Change: I'll just follow up all overseas business could the management share the wages.
Speaker Change: Any updates on the operational metrics or the localization Cobra.
Yiqun Chen: I want to follow up on our overseas business. Could the management share the latest strategy, any updates on operational metrics or the localization progress? And lastly, could we have any quantitative outlook regarding the total revenue and profit of our overseas business this year? Thank you.
Speaker Change: Last week, we have any quantitative outlook regarding the total around what I'll call critical power overseas just used to hear thank you.
Speaker Change: Oh gosh.
Speaker Change: There's always.
Jonathan.
Unknown Executive: Sig In the beginning of the year, business in the Middle East gradually slowed down due to the impact of the disaster, but at the same time, the trend is still fast-growing. This is mainly due to the strategic importance of the group's overseas business in recent years. In the past year, the group has given a lot of support to the overseas team in terms of talent accumulation and funding of product technology. At the last phone conference, I mentioned the three directions of overseas business growth: localization, new scenarios, and new areas.
Speaker Change: Natural neutral don't be too sure. So I can tell you that.
Speaker Change: And Joe one reasons, Amit your address you Farquhar.
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Speaker Change: All right.
Speaker Change #100: Where are you with Golden Ocean.
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Speaker Change #102: From your.
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Unknown Executive: I think Sich has covered this topic quite comprehensively in her prepared remarks earlier. At the beginning of the year, our business in the Middle East temporarily slowed down sequentially due to the restrictions on entertainment activities during Ramadan. But year-over-year, it remained a rapid growth momentum. This was mainly because we have attached great strategic importance to the overseas business in recent years. And we have provided strong support to our overseas teams in terms of talent and capital allocation over the past years. On the last earnings call, I outlined three directions for overseas business growth: localization, new features, and new regions.
Speaker Change #105: I think she has covered this topic quite comprehensive in her prepared remarks.
Speaker Change #106: And at the beginning of the year our business in the middle East have temporarily slowed down sequentially due to the strict restrictions on entertainment activities. During Ramadan on budget Yo Yeah. You remained a rapid growth momentum. This was mainly because we have attached to them.
Speaker Change #106: Great strategic importance to the overseas business reason, yes and.
Speaker Change #106: We have provided strong support to our overseas schemes in terms of talent and our capital allocation over the past years.
Speaker Change #106: On the last earnings call I outlined our three directions for overseas business growth localization, new features and new readers.
Speaker Change #106: Yeah.
Unknown Executive: In terms of localization, we have already set up an office in the Middle East region. This will help us connect local supply and marketing resources more efficiently, select excellent partners, and reduce communication management challenges. In terms of products, we interviewed high-paying users with different languages and cultural backgrounds. We adjusted the operating system according to feedback requirements and optimized product design to enhance the user experience and drive overall consumer enthusiasm. , , I expect that this year, our products and operations in the central region will be better than last year, to build a good foundation for the continued growth of this region. As for income and expectations, I'll leave it to Cassie. In terms of
Speaker Change #106: Up a department with.
Speaker Change #107: With genzyme wont be changing solely the financials.
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Speaker Change #119: Ravi Chris at every level.
Unknown Executive: In terms of localization, we have set up an office in the Middle East, and this enables us to connect with and select local high-quality partners in a more efficient manner, therefore reducing communication and management costs. And in terms of products, we have engaged with high-paying users from different language and cultural backgrounds and optimized the product design and adjusted our practice based on users' feedback, thereby improving the user experience and boosting overall consumer sentiment.
Speaker Change #120: And in terms of localization will have set up an office in the middle East and this enables us to connect and connect with and select local high quality partners in a more efficient manner, therefore, reducing communication and management cost and in terms of products, we have engaged with.
Speaker Change #120: High paying users from different language and cultural backgrounds, and optimize the product design and adjusted all practice based on user feedback and thereby improving user experience and boosting overall consumer sentiment.
Unknown Executive: In addition to upgrading the existing voice-based gamified play, we also ramped up the testing of live streaming by increasing its penetration. In terms of new market expansion, we have begun to gradually increase investment in richer countries in the Gulf region. We expect our products and operations in the Middle East to improve significantly this year compared to last year, laying a solid foundation for continued growth in this region. As for financial-related matters, I will leave that to Cassie.
Speaker Change #120: In addition to upgrading the existing voice based up enough I play, we also ramped up our testing all life streaming by increasing its penetration.
Speaker Change #120: In terms of new market expansion.
Speaker Change #120: We have begun to gradually increase the last months in which countries in the Gulf region.
Speaker Change #120: We expect our corridor and accretions in the middle East to improve significantly this year compared to last year are laying a solid foundation for continued growth in this region.
Speaker Change #121: As full financial related matters, I will leave it to Cathy.
Speaker Change #120: Yeah.
Unknown Executive: Okay, for revenue outlook for the Overseas Teas and Q1SoChill group, I think over 60% year-over-year.
Speaker Change #120: Okay.
Speaker Change #122: Core revenue outlook for the overseas.
Speaker Change #123: In Q1, so chill.
Speaker Change #123:
Speaker Change #123: Thank over 60% year over year.
Unknown Executive: Moving deeper into the year, worldwide growth may slow down a little bit due to the higher level of calm last year. However, if we can move faster in implementing our product and operational strategies, the slowdown could be mitigated to a large extent. If some of the growth initiatives take time to bear fruit, then the slowdown could be more evident. We'll get more clarity as we head into the second half. Profit-wise, there is still going to be pretty impressive worldwide growth, but as we are still seeing many growth opportunities in the region, we'll try to strike a balance between profit growth and investment for the future.
Speaker Change #123: Moving deeper into the year the Y O Y growth may slow down a little bit due to the higher com last year.
Speaker Change #123: If we can move faster in implementing our product and operational strategies, the slowdown could be mitigated to a large extent.
Speaker Change #123: Yeah.
Speaker Change #123: If some of the growth initiatives. It takes time to bear fruit than just go down it could be more evident.
Speaker Change #123: We'll get more clarity as we head into the second half.
Speaker Change #123: Profit wise, there is still going to be pretty impressive y O y growth, but as we are still seeing many growth opportunities in the region will try to strike a balance between profit growth and investment in the future our investment for the future.
Speaker Change #124: Back actually on all three inches of time, let's take all one off question.
Operator: Operator, in the interest of time, let's take one last question. Thank you. Thank you. Your last question is from Henry Sun.
Speaker Change #125: Thank you. Thank you. Your last question is from Henry <unk> with J P. Morgan. Please go ahead.
Operator: Thank you. Thank you. Your last question is from Henry Sun with J.P. Morgan. Please go ahead. Your line is now live. Please proceed with your question.
Speaker Change #126: And my son your line is now live. Please proceed with your question.
Speaker Change #126: Great.
Henry Sun: Can you hear me?
Speaker Change #127: Okay do you know what the Windsor Ma.
Operator: Hello Henry. Yes, we can hear you. Yeah.
Henry: Hello, Henry Yes, we can hear you.
Henry Sun: Thank you, Guan Li, for accepting my question. I have a few questions about exploration. Guan Li mentioned in his speech that the efficiency of exploration has significantly improved.
Speaker Change #127: <unk>.
Speaker Change #127: Yes.
Speaker Change #129: Thank you to all of the tier one or two quick ones, you're talking kind of Vinci, ladies on site financial and see it all the time powerful consolidations, which you shouldn't just before you're ready to host Chad how telephony.
Henry Sun: Does this mean that the investment will be increased in the future? How much is the corresponding investment to start brand marketing? Does the change in the market strategy mean that the size of the users has already reached the bottom? My last question is about the financial indicators, such as income and profit, and the trend of users this year. I'll translate myself.
Speaker Change #130: So you don't keep paying yourself, bringing the total cholesterol.
Speaker Change #129: Sure.
Sure sure.
Speaker Change #131: Good morning, John.
Speaker Change #132: What's the whole gland usual guangxi.
Speaker Change #133: So what are you and how would you be also a women's and young people young which usually they're traveling oh translate myself. Thanks management for taking my question I have a few questions about 10 times management mentioned that unit property market improvement in content acquisition efficiency does it mean, we should expect on the increased marketing spend moving forward.
Henry Sun: Thanks, management, for taking my question. I have a few questions about TenTime. Management mentioned in a prepared remark an improvement in TenTime's acquisition efficiency. Does that mean we should expect an increase in marketing spend moving forward? And how much are we planning to invest in a brand marketing initiative? Thus, the changing strategy suggests that user numbers have bottomed out. And lastly, could management share your perspective on the user trend, as well as the revenue and profit outlook this year? Thanks.
Speaker Change #133: And how much are we planning to invest in our brand marketing initiative.
Speaker Change #134: The changing as far as you suggest the user numbers have bottomed out in Las Vegas could management share your perspective on the user trend as well as the revenue and cost control this year. Thanks.
Unknown Executive: In the past two years, the continued strategy of reducing the cost-effectiveness has effectively promoted the stability and profitability of exploration. However, the continuous reduction has also caused significant pressure on the user scale of exploration. We can see that the users and income of Tantan has not reached a stable level. Considering last year, ????Rpool???????,???????RI?????,????Rpool???????,???????RI?????, ???????????????????????,?????????,???????????????????????????????,?????????,???????? In addition, since 2019, our brand promotion to Tantan has not been stopped. [inaudible]
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Speaker Change #143: You said outside Shanghai, which I'll Hudson's Nelson.
Unknown Executive: Our continuous cost reduction and efficiency improvement strategies over the past two years have effectively brought Tantan to stable profitability. However, the continued reduction in Chinese investment has also put significant pressure on Tantan's user base. We see that tenancy users and revenue have not stabilized. Given that new user output has improved significantly over the past year, leading to an improvement in new user ROI, we plan to moderately increase channel investment in the second quarter while maintaining the current ROI in order to stabilize the user base.
Speaker Change #143: Our continuous cost reduction and efficiency improvement and strategies over the past two years has effectively brought to time time to stable profitability.
Speaker Change #143: However, the continued reduction in China in the last month has also put significant pressure on 10 times the user base and we see that 10000 users and revenue has not stabilized and given the new use all pool has improved significantly over the past year, leading to an improvement E.
Speaker Change #143: US all why we plan to moderately increase our China last month in the second quarter, while maintaining the current all I in order to stabilize the user base.
Unknown Executive: In addition, we haven't invested in Tantan's brand marketing since 2019, which is one of the key reasons for the continuous decline in organic new users in recent years. Therefore, based on our successful task in March, we plan to adopt more offline marketing strategies to raise brand awareness, improve brand image, and user trust, to drive download conversions and organic user growth.
Speaker Change #143: In addition, we have invested in content spend our marketing since 2019, which is one of the key reasons full all the continuous decline in our organic on new users and the reason, yes. Therefore based on our successful test in March we plan to adopt a more offline marketing.
Speaker Change #143: Tragedies to raise brand awareness improve brand image and use our cost to drive download conversions and organic user growth.
Unknown Executive: As for commercialization, as Isaac just mentioned, we are working on a new version of Tantan. The new UI design will guide users to enrich their personal data and encourage users to spend more time understanding each other's basic situations before making a decision to swipe a card. We've had a lot of in-depth discussions on this design because it involves changing the user's habit of using it for a long time. And we have a lot of high-level membership and user-friendly features built into these...??,. However, our final conclusion is that this pair of... For a long-term user experience improvement, this is the right approach. It is worth making some concessions in terms of short-term commercialization. , [inaudible] We will leave the financial questions to Cassie.
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Speaker Change #147: Thanks, you guys.
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Speaker Change #149: I wish I Wonder if you had a Java cases.
Unknown Executive: In terms of monetization, Sich just mentioned that we are working on an upgraded version of Tantan. The new UI design will guide users to enrich their personal information and encourage users to spend more time learning about a candidate before deciding to swipe left or right. We had much debate internally about this design change because it involves changing a long-standing user behavior based on which many of our premium features are built. Thus, such a change in UI will likely have a negative impact on monetization.
Speaker Change #150: In terms of monetization and seek just mentioned that we are working on the upgraded version I was kind of a hot.
Speaker Change #151: I'm, the new UI design will guide us as to enrich the personal information on it.
Speaker Change #151: College users to spend more time learning about our candidates before the fighting to swipe left or right.
Speaker Change #151: We have much debate internally about this saw a design change because it involves changing our long standing use of behavior based on which many of our premium features are built.
Speaker Change #151: Thus such change in U I would likely to have a negative impact on monetization. However, we eventually concluded that this is the right course of action for a long time of improvement and use eats yes.
Unknown Executive: However, we eventually concluded that this is the right course of action for long-term improvement in user experience and worth the sacrifice in short-term monetization. Of course, our commercial product team will continue to optimize the paying experience to improve the new user pool to partially offset the negative impact of regulatory changes on membership renewal policy and product upgrade. And as for the financial part, I will leave that to Cathy.
Speaker Change #151: And what's the sacrificing short term monetization of course, all of our commercial product team will continue to optimize P. U N. Two improved new user op, who to partially offset the negative impact of.
Speaker Change #152: Regular regulatory changes on our membership renewal policy on product operate and as for the financial part out each batch to Cathy please.
Speaker Change #151: Yeah.
Unknown Executive: Uh, sure.
Speaker Change #151: Sure.
Unknown Executive: I think there are several questions here on marketing spend. Although the R2 of Tata has significantly improved during the past year, we have not reached the tipping point where the return on investment is high enough to drive a positive business cycle yet. That means if we pull the marketing spend too high, we could slip back into a loss. So the plan for the coming couple of quarters is to moderately increase the marketing spend. By moderately, I mean ballpark, probably between 10 to 20 million renminbi incrementally per quarter.
Speaker Change #154: I think there are some.
Speaker Change #153: Several questions here on the marketing spend.
Speaker Change #153: Although the or two of Tata has significantly improved during the past year.
Speaker Change #153: We have not reached the tipping point.
Speaker Change #153: We are the return on investment is high enough to drive a positive business cycle yet.
Speaker Change #153: That means if we pull the marketing spend too high we could strip back to us.
Speaker Change #153: So the plan for the coming couple of quarters is to moderately increase the marketing spend by moderately I mean ballpark probably between 10 to 20 million reminbi incrementally per quarter in.
Speaker Change #153: And most of that incremental spending.
Speaker Change #153: Standing.
Speaker Change #153: Well go into K O L marketing at the same time, we will carefully monitor all ROI to make sure we get good return for our the.
Speaker Change #153: The marketing investment.
Unknown Executive: And most of that incremental spending will go into KOL marketing. At the same time, we will carefully monitor the ROI to make sure we get a good return for the marketing investment. The goal for the Tantan team this year, Here I'm answering the question about the user plan. The goal for Tantan this year is to keep the user base stable through effective marketing campaigns, as well as product innovations to deliver better dating experiences.
Speaker Change #155: The golfer the Tata and team this year.
Speaker Change #155: Here I'm answering the question about the user trial, the Gulf of Kantar and team. This year is to keep the user base stable through effective marketing campaigns as well as our product innovations to deliver a better abating experiences, whether we will be able to reach that target.
Unknown Executive: Whether we will be able to reach that target will depend on how efficient our product and marketing teams are. However, revenue-wise, we are likely still going to see a downtick as live streaming continues to shrink. But there is quite a limited impact on profit because the gross margin for live streaming is very, very low for Tantan's live broadcasting business. However, as we are investing part of the profit back to brand marketing, the bottom line this year will likely decrease from last year's level. So hopefully, that addresses your question. [inaudible] and I think that's it for today.
Speaker Change #155: Penn on how efficient our product and marketing teams are revenue wise, we're likely still going to see a downtick as live streaming continue to shrink, but there is quite limited impact on profit because our gross margin for life. Xiaomi is very very low for compounds are a library casting business.
Speaker Change #155: However, as.
Speaker Change #155: As we are investing part of the profit back to brand marketing the Bottomline will.
Speaker Change #155: Bottom line this year will likely decrease from last year's level.
So hopefully that addresses your question.
Speaker Change #156: Oh actually fantastic.
Operator: Thank you. I think that's it for today. Thank you for participating, and we'll see you guys next quarter. Thank you, operator. We're ready to close. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.
Speaker Change #157: Please proceed.
Speaker Change #157: That's it for today and thank you for participating and I'll see you guys next quarter.
Speaker Change #158: Thank you operator, we're ready to close.
Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. [inaudible] Resilience Resilience Resilience.
Speaker Change #159: Thank you that does conclude our conference for today. Thank you for participating you may now disconnect.
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