Q2 2024 HUYA Inc Earnings Call

Further information regarding this and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U S Securities and Exchange Commission. The company does not assume any obligation to update any forward looking statements except as required.

Unknown Executive: Security and Exchange Commission. The company does not allow any obligation to update any forward-looking statements except as required on the applicable law. Please also note that HuYA's earnings press release and this conference call includes discussion of audited gap financial information, as well as on audited non-gap financial measures. HuYA's press release contains a reconciliation of the on audited non-gap measures to the on audited most directly comparable gap measures.

Speaker Change: Decouple law.

Speaker Change: Please also note that who have earnings press release and this conference call includes discussion, although it is GAAP financial information as well as an audited non-GAAP financial measures <unk> press release contains a reconciliation of the audited non-GAAP measures to the auditors.

Speaker Change: The most directly comparable GAAP measures.

Unknown Executive: Sponsored ADR Class B Sponsored ADR Class C Please also note that HUYA's earnings press release and this conference call include discussion of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. HUYA's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. With that, I'm pleased to turn the call over to our Co-CEO and SVP, Mr. Huang. Please go ahead.

Junhong Huang: With that, I am pleased to turn the call over to our co-CEO and SVP Mr. Huang. Please go ahead. Okay, hello everyone.

Susquehanna: With that I'm pleased to turn the call over to our co CEO and SVP with Susquehanna. Please go ahead.

Junhong Huang: Okay. Hello, everyone. Thank you for joining our earnings conference today. Against the backdrop of persistent uncertainty in the macro environment and industry landscape, we were pleased to resume quarter-over-quarter growth in total net revenues in the second quarter, up 2.5% from the previous to reach RMB1.54 billion, driven by the rapid revenue growth of our game-related services, advertising, and other businesses. Notably, game-related services, advertising, and other revenues reached a milestone, contributing 20% of our total net revenues for the first time.

Speaker Change: Okay.

Speaker Change: Hello, everyone.

Junhong Huang: Thank you for joining our uneconference today against the backdrop of persistent uncertainty in the macro environment and industry landscape. We were pleased to resume quarter of a quarter growth in total net revenues in the second quarter up 2.5% from the previous quarter to reach RMB 1.5 billion. Driven by the rapid revenue growth of our game-relative services advertising and other businesses. Notably, game-relative services advertising and other revenues reach milestone, contributing 20% of our total net revenues for the first time.

Speaker Change: Q4, joining our conference today against the backdrop of persistent uncertainty in the macro environment and industry landscape, we were pleased to regime quarter over quarter growth in total net revenues.

Speaker Change: The second quarter up two 5% from the previous quarter to reach RMB 1.4.

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Speaker Change: Driven by the rapid revenue growth of our game related services advertising.

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Speaker Change: Notably game related services advertising and other revenues reached a milestone contributing 20% of our total net revenues for the first time.

Junhong Huang: We also sustain our profitability with a non-GAAP net income of approximately RMB97 million. Solid strategic execution across business and commercialization transformation, content and platform ecology upgrade, and technology and product advancement supported this quarter's positive outcomes. Now, let's take a detailed look at our recent operational and strategic progress. First, some user metrics.

Speaker Change: We also assistant our profitability with non-GAAP net income of proxy monthly RMB $97 million.

Junhong Huang: We also sustained our profitability with non-gap net income of proxy monthly RMB 97 million. Solid strategic execution across business and commercialization, transformation, content and platform ecology upgrades and technology and product advancement and support at least quarter's positive outcomes.

Speaker Change: Solid strategic execution across business and commercialized, Jason transformation content platform ecology upgrades and technology and product advancements of bulk at least quarters positive outcomes.

Junhong Huang: For the second quarter of 2024, HUYA Live's average mobile MAUS reached 83.5 million, up from 82.6 million for the previous quarter and 82.9 million for the same period last year. The growth was mainly driven by the success of several self-organized esports events. Various recent new game launches and our continuous user experience improvement have also contributed to enhanced user engagement. As we mentioned on our last call, we are strengthening our cooperation with various platforms and products to enhance our platform ecology and reach a wider range of users.

Speaker Change: Now, let's take a detailed look at our recent operational and strategic progress.

Junhong Huang: Now, let's take a detailed look at our recent operational and strategic progress. First, some user metrics for the second quarter of 2024, who are last average mobile MAUS reached 82.5 million, 83.5 million, up from 82.6 million for the previous quarter, an 82.9 million for the same period last year. The growth was mainly driven by the success of several self-organized eSports events. Various recent new game launches and our continuous user experience improvement also contributed to enhanced user engagement.

Speaker Change: First some user metrics for the second quarter of 2020 for full year last average mobile <unk> reached 82 5 million registry five.

<unk> up from $82 6 million for the previous quarter and 82 9 million for the same period last year. The growth was mainly driven by the success of several self organized esports events.

Speaker Change: Recent new game launches and our continuous user.

Speaker Change: <unk> improvement also contributed to enhanced user engagement.

Junhong Huang: As we mentioned on our last call, we are strengthening our cooperation with various platforms and products to enhance our platform ecology and reach a wider range of users. This includes professionally generated content called production, broadcaster-class platform streaming and joint promotion in initiatives. As a barrier-breaking industry pioneer, we believe we can further increase our platform's influence within this more open content ecosystem. We have already started to selectively bring our live streaming and video content to other content platforms as well as various product lines within the Tencent ecosystem. In June, we are content reached a total of approximately 120 million mobile users. We are confident this broadened reach will first participate in the creation of more commercialization opportunities.

As we mentioned on our last call we are strengthening our cooperation with various platforms and products to enhance our platform ecology and reached a wireless wider range of users.

Junhong Huang: This includes professionally generated content co-production, broadcaster-across-platform streaming, and joint promotion initiatives. As a barrier-breaking industry pioneer, we believe we can further increase the HUYA platform's influence within this more open content ecosystem. We have already started to selectively bring our live streaming and video content to other content platforms, as well as various product lines within the Tencent ecosystem. In June, HUYA content reached a total of approximately 120 million mobile

Speaker Change: In close professionally generated content coal products.

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Speaker Change: Promotion in niche initiatives.

As a barrier breaking industry pioneer we believe we can further increase took ria platforms influenced we're seeing less more open content ecosystem. We have already started to selectively bring our live streaming and video content too.

Speaker Change: Other content platform as well as various product line within the Tencent ecosystem.

Speaker Change: In June we are content reached a total of approximately 120 million mobile users.

Junhong Huang: We are confident this broadened reach will facilitate the creation of more commercialization opportunities. Moving on to our strategic transformation, our game-related services continue to expand rapidly as we collaborate with more game titles, leverage our live streaming content and PGC programs, and employ innovative operational approaches to drive business development. In the second quarter, revenues from our game-related services, advertising, and other segments increased by 152.7% year-over-year and 26.6% quarter-over-quarter to RMB308.5 million. In terms of game distribution, we continue to expand Evergreen Games' coverage and drive improvement in their user return rate. We also participated in the promotion and distribution of the newly launched DNF Mobile in the second quarter. Specifically, we set up a special pre-download area for this game in the Game Center section of HUYA Live.

Speaker Change: We are confident least broadened reach will facilitate the creation of more commercial commercialization opportunities.

Junhong Huang: Moving on to our strategic transformation, our game-relative services continue to expand rapidly as we collaborated with more game titles, leverage our live streaming content and PGG programs, and employ innovative operational approaches to drive business development. In the second quarter, revenues from our game-relative services, advertising and other segments, increased by 152.7% year-over-year, and 26.6% quarter-over-quarter, 2RMB, 3308.5 million. In terms of game distribution, we continue to expand ever-growing games coverage and drive improvement in their usual return rate.

Speaker Change: Moving on to our strategic transformation, our game related services continued to expand rapidly.

Speaker Change: The current elaborated with more game titles leverage our live streaming content and PTC programs and employed innovative operational approaches to drive business development in the second quarter revenues from our game related services advertising.

Speaker Change: Other segment increased by 152.

Speaker Change: 7% at year over year, and 26, 6% quarter over quarter to RMB three three.

Speaker Change: 308 5 million.

Speaker Change: In terms of game distribution, we continue to expand evergreen games coverage and drive improvement in the Euro return rate. We also participated in the promotion and distribution of newly launched.

Junhong Huang: We also participated in the promotion and distribution of newly launched DNF mobile in the second quarter. Specifically, we set up a special pre-downal area for this game being the game center section of Huya Live app, promoted the game with special three design programs and inclusive props and gifts and recruited broadcasters for the game's live streaming, all of which help to increase the game's each project and popularity on our platform. DNF mobile not only ranked top among these years new games in live streaming views should indicate us, but also achieved better than expected result in game distribution.

Speaker Change: Mobile in the second quarter, specifically, we setup a special free area for Lithia and being the game Center section of F.

Junhong Huang: Promoted the game with specially designed programs and inclusive props and gifts, and recruited broadcasters for the game's live streaming, all of which helped to increase the game's exposure and popularity on our platform. DNF Mobile not only ranked top among this year's new games in live streaming view shift indicators but also achieved better than expected results in game distribution. In particular, early data shows that in game spend per user, Distribution, highlighting our platform's deeply engaged base of high-value gamer users.

Speaker Change: Promoted the game with space.

Speaker Change: So re designed programs and across the props and gifts and recruited broadcasters for the games live streaming all of which helped to increase the games each project popularity on our platform.

Speaker Change: TNF mobile not only ranked top amount last year new games in live streaming video ship indicators now.

Speaker Change: Also achieved better than expected result in game distribution in particular early data shows that debt in <unk> spend per user.

Junhong Huang: In particular, early data shows that that in-game spend per user distribution highlighting our platforms deeply engaged base of high-value gamer users. We also commenced in-game item sales for League of Legends, LOL, Wild Rift, and Verrorant in the second quarter, innovatively combining game prop sales with corresponding tournaments to fully leverage this game's rich e-sports content. For example, we sold LOL champion skin through our LOL Legend Cup live streaming channel, which generated great purchase interest in terms of game advertising, in addition to gearing up for the promotion of the summer's upcoming games.

Speaker Change: Distributions.

Highlighting our platforms deeply engaged base of high variable gemmer users.

Junhong Huang: We also commenced in-game item sales for League of Legends, LOL, Wild Rift, and VALORANT in the second quarter, innovatively combining game prop sales with corresponding tournaments to fully leverage this game's rich esports content. For example, we sold L.O.L.

Speaker Change: We also commenced in game item sales floor League of legend.

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Junhong Huang: champion skins through our LOL Legend Cup live streaming channel, which generated great purchase interest in terms of game advertising, in addition to gearing up for the promotion of this summer's upcoming games. We recently produced Yijing Daodi, or Competing to the End, an interactive game play variety show that integrates game promotion and entertainment content under a different game theme in each episode. The program successfully engaged users on our platform and proved effective in driving active players to corresponding games.

Speaker Change: We sold <unk> champion scheme.

Through our <unk> copper large streaming channel, which generated great purchase interest.

Speaker Change: In terms of game advertising in addition to gearing up for the promotion of the summers upcoming games. We recently produced Egypt, Saudi are compelling to the end.

Junhong Huang: We recently produced Yijing Daudi, or competing to the end, an interactive gameplay variety show that integrates game promotion and entertainment content under a different game theme in each episode. The program successfully engaged users on our platform and proved effective in driving active e-preyers to corresponding games. It is worth mentioning that our game relative services have also opened up in new income resources for our content creators, gradually improving their income levels. In the first half of this year, several thousands of our broadcasters received revenue sharing and commissions from game distribution and proper sales.

Speaker Change: Interactive game play variety show at that integrate game promotion and entertainment content under different games team in each that is sought.

Speaker Change: The program successfully engaged users on our platform.

Speaker Change: So effective in driving active you pay us to corresponding yes.

Junhong Huang: It is worth mentioning that our game-related services have also opened up new income resources for our content creators, gradually improving their income levels. In the first half of this year, several thousand of our broadcasters received revenue sharing and commissions from game distribution and prop sales, as eSports content represents one of our core offerings. We continuously improve.

Speaker Change: It is worth mentioning that our gamma relative services have also opened up in new income resource sources for our content per <unk> gradually improving their income levels.

Speaker Change: In the first half of last year.

Speaker Change: Several solid and of our broadcasters receive revenue sharing and commissions from gas distribution.

Speaker Change: Profit sales.

Junhong Huang: As eSports content represent of one of our core offerings, we continuously refine our self-organized eSports content events. Our Legend Cup held in the second quarter is a perfect example of our progress in upgrading tournaments, products, and operation no strategies. Legend Cup is our premium self-organized tournament in cooperation with League of Legend Games. This event brought together outstanding retired and active professional players and introduced bold innovations in the competition for math and schedule.

Speaker Change: As his past content represent of one of our core offerings, we continuously refine we our sales organized esports events.

Junhong Huang: We are self-organized eSports events. Our Legend Cup, held in the second quarter, is a perfect example of our progress in upgrading tournaments, products, and operational strategies. Legend Cup is our premium self-organized tournament in cooperation with League of Legends Games.

Speaker Change: Our legend Cup held in the second quarter is a perfect example of our progress in upgrading tunable products.

Speaker Change: Operation No strategies legend copper is our premium sales authorized tournament in cooperation with league of resin game.

Junhong Huang: This event brought together outstanding retired and active professional players and introduced bold innovations in the competition format and schedule. We live-streamed the entire event, beginning with player selection and team formation, and distributed highlight videos across multiple platforms. This enhancement helps attract widespread interest from League of Legends gamers and esports viewers, both within and outside HUYA's platform. We also introduced a number of special features for the Legend Cup on our HUYA live app.

Speaker Change: This event brought together outstanding retired an active progression no prayers and introduce bold innovations in the competition format and schedule with livestream the entire event, beginning with prayers election, and Tim formation and distribute distributed hi.

Junhong Huang: For example, we set up designated event discussion areas to aggregate event hot topics, player news, short videos, and official tournament information. In addition, a new rating card function allowed viewers to comment on multiple aspects of players' performance, showcasing players' diverse characteristics, and increasing users' interaction and enjoyment. In terms of event presentation, we created a voice capture live broadcast room for this tournament. Powered by cutting-edge automatic speech recognization technology and an eSports professional vocabulary library, this feature instantly converts oral communication between players into text, immersing the audience in the player's game experience.

Junhong Huang: We live streamed the entire event beginning with player selection and team formation and distributed highlight videos across multiple platforms. This enhancement helped attract widespread interest from League of Legend Games gamers and eSports viewers both within and outside HuYA's platform. We also introduced a number of special features for the Legend Cup on our HuYA live app. For example, we set up a designated event-discussing area to irrigate event hard topics, prayer news, short videos and official tournament information.

Speaker Change: Videos across multiple cloud platforms.

Speaker Change: This enhancement help attract widespread interest from league of legend game cameras and esports viewers.

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Speaker Change: We also introduced a number of special features for the resin cost on our <unk>. For example, we setup designated events to discuss an area to aggregate event hot topics prey on deals soft videos and <unk> tournament information.

Junhong Huang: In addition, a new rating card function allowed viewers to comment on multiple aspects of players' performance, stocaching players' diverse characteristics and increasing users' interaction and enjoyment. In terms of event presentation we created a voice capture live broadcast room for Lee's tournament, powered by cutting-edge automatic speech recognizing technology and an eSports professional vocabulary library. Lee's feature instantly converts RO communication between players into text, immersing the audience in the player's game experience. Furthermore, our Legend Cup was seamlessly integrated into LOLs, professional League schedules to complement and enrich the LOL eSports content ecosystem.

Speaker Change: In Edison New rating card function allows viewers to commence on multiple aspects of prayers performance still occasion prayers divers characteristics and increasing user interaction and enjoyment.

Speaker Change: In terms of event event the presentation with eight a voice capture live broadcast room for at least tournament.

Speaker Change: Powered by cutting edge automatic speech recognize Jason technology and on his boss professional <unk> Library. This feature instantly convert RF communication between prayers into tax immersing the audience in the prayers game experience.

Junhong Huang: Furthermore, our Legend Cup was seamlessly integrated into LOL's professional league schedules to complement and enrich the LOL esports content ecosystem. It also provided opportunities for retired professional players to return to the top arena and quickly attract attention.

Speaker Change: Furthermore, our Asia comp was seamlessly integrated into <unk> professional lakes schedules to complement and enrich the ol esports content ecosystem.

Junhong Huang: Legend Cup also provided opportunities for retired professional players to return to the top arena and quickly attract attention, while its entertaining elements drew a diverse crowd of fresh viewers, expanding the eSports and the audience. We were pleased to see Lee's event's view ship, set a new record for HuYA's in-house produce content. Its popularity in depth on our platform was also comparable to that of top tier licensed professional events. More importantly, through events like Lee's one, we hope to enhance the influence and monetization of eSports event IPs and promote the eSports industry's sustainable development.

Speaker Change: <unk> Com also provided opportunities for retire professional players to return to the top arena and quickly attract attention while is entertaining element do a diverse crowd of fresh viewers expanding the east bask in the audience.

Junhong Huang: While its entertaining elements drew a diverse crowd of fresh viewers, expanding the esports audience, we were pleased to see this event's view shift, set a new record for HUYA's in-house produced content. Its popularity index on our platform was also comparable to that of top-tier licensed professional events.

Speaker Change: We were pleased to see lease event viewer ship ship set a new record for who we are in house produced content is.

Speaker Change: His popularity index on our platform was also comparable to that of top tier licensed professional events.

Junhong Huang: More importantly, through events like this one, we hope to enhance the influence and monetization of esports event IPs and promote the esports industry's sustainable development. Our successful sale of the League of Legends Champion Skin at the Legends Cup demonstrated HUYA's prowess in esports event monetization. Legends Cup's high popularity across platforms and showdown offline finals also underscore our self-organized event's commercial value. Inspired by this success, we will continue to develop self-produced content and create more influential and commercially valuable event IPs. In summary, we have made solid progress despite some external challenges.

Speaker Change: More importantly.

Speaker Change: Through events like this one we hope to enhance the influence and Mana T. Jason of esports event eyepiece and promote the esports industry sustainable development.

Junhong Huang: Our successful sale of League of Legend Champing Skin at the Legend Cab demonstrated Hu Ya's prowess in eSports event monetization. Legend Cab's high popularity across platforms and showed out of live finals also underscored our self-organized events commercial value.

Speaker Change: Our successful sale of league of Legends champion skiing added the legend car demonstrated we ask for our waste in esports event monetization legend toughest high popularity across platforms and showed out offline finals also underscore our sales org.

Speaker Change: Nice events commercial value.

Junhong Huang: Inspired by this success, we will continue to develop self-produced content and create more influential and commercial value-event ideas.

Inspired by this process, we will continue to develop self produced content and create more influential in commercially very valuable event Ips.

Junhong Huang: In summary, we have meant solid progress despite some external challenges. We will continue to consolidate our foundation and actively develop our business as we explore the industry's long-term possibilities. While maintaining our core competitiveness in game live streaming, we will drive game-related services development with content and platform ecology, upgrades, technology, advancement, and product innovation, expanding VR's presence in the game industry value chain.

Speaker Change: In summary, we have many solid progress despite some.

Speaker Change: External challenges, we will continue to consolidate our foundation and actively develop our business as we explore the industry's long term possibilities.

Junhong Huang: We will continue to consolidate our foundation and actively develop our vision as we explore the industry's long-term possibilities. While maintaining our core competitiveness in game live streaming, we will drive game-related services development with content and platform ecology, upgrades, technology advancement, and product innovation, expanding HUYA's presence in the game industry value chain. With that, I will turn the call over to our Acting Co-CEO and VP of Finance, Ashley Wu, to share more details on our results. Ashley, please go ahead.

Speaker Change: While maintaining our core competitiveness in gambled lives, Jamie we will drive for game related services development with content and platform ecology upgrades technology advancement and product innovation, expanding we are present in the game industry value chain.

Ashley Wu: With that, I will turn the call over to our acting co-CEO and VP of Finance, Asli Wu, to share more details on our results. Asli, please go ahead. Thank you, Vincent, and hello, everyone.

Speaker Change: With that I will turn the call over through our <unk> co CEO and VP of finance <unk> to share more details on our results as Murray. Please go ahead.

Ashley Wu: Thank you, Ritchie, and hello, everyone. I'll start with an update on our professional content enrichment. In terms of licensed content, we broadcast over 80 licensed professional esports tournaments in the second quarter of 2024. The LOL Mid-Season Invitational attracted great attention, and the LPL, KPL, and CFPL professional leagues remain among our most popular events. The Waterruns champions, QCM and ESL Pro League Season 19 for Counter-Strike 2, were also welcomed by our users.

Murray: Thank you.

Murray: Hello, everyone.

Ashley Wu: I'll start with an update on our professional content enrichment. In terms of license content, we broadcasted over 80 license professional eSports tournaments in the second quarter of 2024. The LOL mid-season imitational attracted great attention, and the LPL, KPL, and CFPL, professional leads, remained among our most popular events. The vulnerable champion, QCN, and ESL Pro League season 19 for content strike 2, were also welcomed by our users. In addition to covering extensive leading license eSports events in China, we are expanding the range of international eSports content, available on our platform. For instance, we are broadcasting the inaugural eSport workout in Saudi Arabia, starting in July, further enriching our high-quality eSports content library.

Ill start with an update on our professional content enrichment.

Speaker Change: In terms of license content.

Murray: Broadcasting over 80 license professional esports tournaments in the second quarter of 2024.

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Speaker Change: Ethan imitation now attracted great attention.

Speaker Change: And the LPL APM and CFP Al professional league remain among our most.

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Ashley Wu: In addition to covering leading licensed esports events in China, we are expanding the range of international esports content available on our platform. For instance, we are broadcasting the inaugural eSports World Cup in Saudi Arabia, starting in July.

In addition to counting extensive meeting licensed esports events in China.

Speaker Change: Extending the range of international esports content.

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Speaker Change: We are forecasting.

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Speaker Change: In Saudi Arabia, starting in July.

Ashley Wu: Further enriching our high-quality e-sports content library, on the in-house quantum front, we broadcasted over 20 self-organized e-sports tournaments and entertainment PGC shows during the quarter. In addition to the LOL Legend Cup and the Yijin Daodi program that we mentioned earlier, we also co-hosted the first Thunder Honor Cup for Honor of Kings with another game live streaming platform in the second quarter.

Speaker Change: In reaching our high quality esports content library.

Ashley Wu: Under in-house content funds, we broadcasted over 20 self-organized eSports tournaments and entertainment PTC shows during the quarter. In addition to the LOL LegendCop and the Yijing DaoD program that we mentioned earlier, we also co-hosted the first funder owner cop for owner of change with another game like Dreaming platform in the second quarter. This event brought together professional teams from KPL to participate, capture massive reward attention, and Thomas Traded HUYA's increased cooperation with other game players, with other industry players in professional content cooperation.

Speaker Change: On the in house content fronts.

Broadcasting over 20 self organized esports tournaments and entertainment PGE shows during the quarter.

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Speaker Change: We also co hosting.

Speaker Change: So first on the comp for honour of Kings with NASDAQ in nitrogen main platform in the second quarter.

Ashley Wu: This event brought together professional teams from KPL to participate, capture massive viewer attention, and demonstrated HUYA's increased cooperation with other game players, with other industry players, in professional content co-creation for esports events, targeting community participation. We successfully hosted the Nanning Village Games for Honor of Kings and the Shandong Village Games for Peacekeeper Elite in the second quarter. By combining this e-sports event with local cultural elements, such as Traditional Costumes and Swimsuits.

Speaker Change: <unk> brought together professional team from KPMG to participate capture massive <unk> attention.

Speaker Change: And Thomas J D. We asked increased cooperation with <unk> with other industry players in professional content cooperation.

Ashley Wu: For each fourth event, targeting community participation. We successfully hosted the Lightning Village Game for honor of Kings and the Shandong Village Game for his keeper elite in the second quarter. By combining these esports events with local cultural elements, such as traditional costumes and food scenes, we brought more immense cultural experiences to a broader audience while also promoting esports popularity.

Speaker Change: So E source events packaging community participation. Please.

Speaker Change: We successfully hosted the nanny knowledge gain for.

Speaker Change: Honor of Kings and the Shandong will each game for Keith.

Speaker Change: Peacekeeper elite in the second quarter.

Speaker Change: By combining these esports in brands with local cultural elements.

Such as traditional casting and 15.

Ashley Wu: We brought more immersive cultural experiences to a broader audience while also promoting esports popularity. Furthermore, we held our annual gala event, HUYA Boon Night, in April to recognize and reward our broadcasters. This year's event featured on-stage performances by renowned singers and our popular streamers, as well as an all-star esports competition.

Speaker Change: More in Memphis, cultural experiences to a broader audience, while also promoting east coast popularity.

Ashley Wu: Furthermore, we held our annual Gala event for Ya Boon Night. In April to recognize and reward our broadcasters, the year's event featured on stage performances by Renault singers and our popular streamers, as well as an all-star esports competition. We also introduced upgraded interactive features for this event to engage Boon Night and offline audience. The number of viewers for this event on our platform, once again set a new record.

Speaker Change: Furthermore, we held our annual gala event.

Speaker Change: Mike.

Speaker Change: In April to recognize and reward our broadcast chess.

Mike: The event featured a stage performances by having now seen us and our popular streamers.

Mike: As well as an east coast competition.

Ashley Wu: We also introduce upgraded, interactive features for this event to engage both online and offline audience. The number of viewers for this event on our platform once again set a new record. Turning to our financial performance, despite the decline in live-streaming grammar news,

Mike: We also introduced upgraded.

Mike: Interactive features.

Mike: To engage both online and offline audience.

Mike: The number of Reorders or events on our platform once again set a new record.

Ashley Wu: Turning to our financial performance, despite the decline in mainstreaming revenues, rapid growth in game-related services, advertising and other business revenues, drove a quarter-over-quarter increase in our total revenues for the second quarter. This marks our first quarter of sequential revenue growth. This is the fourth quarter of 2022. Also, with more users paying for in-game items and other services as the game-related services business expanded. We are live-paying users continue to grow in the second quarter, a quarter-over-quarter to 4.5 million.

Mike: Turning to our financial performance.

Despite the decline in live streaming revenues.

Ashley Wu: Rapid growth in game-related services, advertising, and other business revenues drove a quarter-over-quarter increase in our total revenues for the second quarter. This marks our first quarter of sequential revenue growth. This is the fourth quarter of 2022.

Joe: Growth in Cambridge Native services, our casing and added business revenues Joe.

Joe: Quarter over quarter increase in our total revenues for the second quarter.

Joe: Our first quarter of sequential revenue growth.

Joe: It's the fourth quarter of 2022.

Ashley Wu: Also, more users are paying for in-game items and other services as the game-related services business expanded. HUYA Life paying users continued to grow in the second quarter. Up quarter over quarter to $4.5 million. However, our second quarter gross profit was affected by lower live streaming revenues and higher content spending. However, with the increased contribution from our higher-margin game-related services business to total revenues, as well as our continued operational efficiency improvements, we further enhanced our operating results and achieved a close-to-break-even non-gap operating margin. Specifically, we effectively drove savings in sales and marketing expenses and labor costs.

Joe: Also with more users paying for in game items and other services as the game related services business expanding.

Speaker Change: Yeah life paying users continue to grow in the second quarter.

Speaker Change: Quarter over quarter to $4 5 million.

Ashley Wu: Our second quarter growth profit was affected by lower-light streaming revenues and higher content spending. However, with the increased contribution from our higher margin game-related services business, to total revenues as well as our continued operational efficiency improvements. We further enhance our operating results and achieve a close-to-break even non-gab operating margin. That's the story. We effectively drove savings in sales and marketing expenses and labor costs, reducing our total operating expenses by 26.3% year-over-year.

Speaker Change: Our second quarter gross profit was affected by lower ninth streaming revenues and higher content spending.

Speaker Change: However.

Speaker Change: With the increased contribution from <unk> from our higher margin <unk> services business share of.

Speaker Change: Total revenues as well as our continued operational efficiency improvements.

Speaker Change: Further enhance our operating results and achieve our close to breakeven non-GAAP operating margin.

Speaker Change: Additionally, we effectively drove savings in sales and marketing expenses and labor cost.

Speaker Change: Our total operating expenses by 26, 3% year over year.

Ashley Wu: Reducing our total operating expenses by 26.3% year-over-year. Let's move on to our Q2 financial details. Our total net revenues were RMB $1.54 billion for Q2, compared with IMB $1.84 billion for the same period last year. Live streaming revenues were RMB1.23 billion for Q2, compared with IMB $1.72 billion for the same period last year, mainly due to the continuous microeconomic and industry environment.

Ashley Wu: Let's move on to our Q2 financial details. Our total net revenues were RMB 1.54 billion for Q2. Compare with IMB $1.84 billion for the same period last year Light Streaming revenues were IMB $1.23 billion for Q2 compared with IMB $1.72 billion for the same period last year primary due to the continued soft microeconomics and industry environment as well as our proactive business adjustments to support our strategic transformation and prudent operations game related services advertising and other revenues were IMB $399 million for Q2 compared with IMB $1.22 million for the same period last year primary due to increased revenues from game distribution and advertising services and in-game item sales.

Speaker Change: Let's move onto our Q2 financial details.

Speaker Change: Our total net revenues were RMB 154 billion for Q2.

Speaker Change: Compared with RMB 184 billion for the same period last year.

Speaker Change: Nice streaming revenues were RMB, one <unk> billion for Q2.

Speaker Change: Compared with RMB 172 billion for the same period last year.

Speaker Change: Primary due to the continued soft macroeconomic and industry environment.

Ashley Wu: As well as our proactive business adjustments to support our strategic transformation and prudent operations. Game-related services, advertising, and other revenues were RMB309 million for Q2, compared with IMB $122 million for the same period last year, mainly due to increased revenues from game distribution and advertising services and in-game item sales. Cost of revenues decreased by 14% year-over-year to RMB 1.33 billion for Q2.

As well as our proactive business adjustments to support our strategic transformation and prudent operations.

Speaker Change: Game related services.

Speaker Change: <unk> and other revenues were RMB 390 million for Q2.

Speaker Change: Compared with RMB $122 million for the same period last year.

Speaker Change: Primarily due to increased revenues from game distribution and advertising services and in game item sales.

Ashley Wu: Pulse of revenues decreased by 14% year over year to IMB $1.33 billion for Q2 primary due to decreased revenue sharing fees and content cost as well as families cost revenue sharing fees and content costs decreased by 13% year over year to IMB $1.17 billion for Q2 primary due to decreased light streaming revenue sharing fees associated with the decline in light streaming revenues partially offset by increase in related services advertising and other revenue sharing fees as well as content costs for in-house produced content. Families cost decreased by 40% year over year to IMB $1.61 million for Q2 this was primary due to improved bandwidth cost management, favorable pricing terms and continued technology enhancement efforts.

Cost of revenues increased by 14% year over year to RMB 133 billion for Q2.

Ashley Wu: Primarily due to decreased revenue sharing fees and content costs, as well as boundless cults. Revenue sharing fees and content costs decreased by 13% year over year to RMB $1.17 billion for Q2. Primarily due to decreased live streaming revenue sharing fees associated with the decline in live streaming revenues. Partially offset by increased game-related services, advertising, and other revenue-sharing fees, as well as content costs for in-house produced content. Barrett's called, decreased by 40% year-over-year to RMB $61 million for Q2.

Speaker Change: Primarily due to decreased revenue sharing fee and content cost.

Speaker Change: As well as bandwidth costs.

Speaker Change: And youre sharing E sand content costs increased by 13% year over year to RMB 117 billion for Q2.

Speaker Change: Primarily due to a decrease that streaming revenue sharing fees associated with the decline in live streaming revenues.

Partially offset by increased and related services, our tightening and other revenue sharing fee.

Speaker Change: As well as content costs for in house produced content.

Bandwidth cost.

Speaker Change: By 40% year over year to RMB 60.

Speaker Change: 61 million for Q2.

Ashley Wu: This was primarily due to improved bandwidth cost management, Durable Pricing Terms, and Continued Technology Enhancement Efforts. Gross profit was RMB215 million, and gross margin was 13.9% for Q2, excluding share-based compensation expenses. Non-gap gross profit was RMB$290 million, and non-gap gross margin was 14.2% for Q2. Research and development expenses decreased by 11% year-over-year to RMB $129 million for Q2, primarily due to decreased personnel-related expenses and share-based compensation expenses. Sales and marketing expenses decreased by 48% year-over-year to RMB$62 million in Q2.

Speaker Change: This was primarily due to improved bandwidth cost management.

Speaker Change: Ruble pricing terms and continued technology enhancement efforts.

Ashley Wu: Due to decreased marketing and promotion fees, as well as personnel-related expenses. General and administrative expenses decreased by 21% year-over-year to RMB $64 million for Q2, primarily due to decreased professional service fees, personnel-related expenses, and share-based compensation expenses. Other income was RMB$13 million for Q2, compared with RMB$24 million for the same period last year, primarily due to lower government subsidies. As a result, operating loss was RMB$26 million for Q2, compared with RMB$33 million for the same period last year.

Ashley Wu: Growth profit was IMB $215 million and growth margin was 13.9% for Q2 excluding share-based compensation expenses, non-gap growth profit was IMB $219 million and non-gap growth margin was 14.2% for Q2 research and development expenses decreased by 11% year over year to IMB $129 million for Q2 primary due to decreased personnel related expenses and share-based compensation expenses sales and marketing expenses decreased by 48% year over year to IMB $62 million for Q2 primary due to decreased marketing and promotion fees as well as personnel related expenses General and administrative expenses decreased by 21% year-over-year to RMB 64 million for Q2. Primary due to decreased professional services, personnel related expenses, and shared based compensation expenses.

Speaker Change: Gross profit was RMB $215 million and gross margin was.

Speaker Change: <unk>, 9% for Q2.

Speaker Change: Excluding share based compensation expenses.

Speaker Change: non-GAAP gross profit was RMB.

Frank: Frank and $19 million.

Frank: And non-GAAP gross margin was 14, 2% for Q2.

Frank: Research and development expenses.

Frank: <unk> by 11% year over year to RMB 129 million for Q2.

Frank: Primarily due to decreased personnel related expenses and share based compensation expenses.

Frank: Sales and marketing expenses.

Frank: <unk> by 48% year over year to RMB 62 million for Q2.

Frank: Due to decreased marketing and promotions.

Frank: As well as personnel related expenses.

Frank: General and administrative expenses decreased by 21% year over year to RMB 64 million for Q2.

Frank: Primarily due to decreased professional service fees.

Personnel related expenses and share based compensation expenses.

Ashley Wu: Other income was RMB 13 million for Q2 compared with RMB 24 million for the same period last year. Primary due to lower government services. As a result, operating loss was RMB 26 million for Q2 compared with RMB 33 million for the same period last year. Excluding shared based compensation expenses and monetization of intangible assets from business acquisitions, non-gap operating loss was RMB 3 million for Q2 and non-gap operating margin was negative 0.2% for Q2.

Frank: Other income was <unk>.

Frank: $13 million for Q2.

Frank: Compared with RMB $24 million for the same period last year.

Frank: Murray due to lower come from Mr. <unk>.

Frank: As a result operating loss was RMB 26 million for Q2, compared with RMB 33 million for the same period last year.

Frank: Excluding share based compensation expenses and amortization of intangible assets from business acquisitions non.

Ashley Wu: Excluding share-based compensation expenses and amortization of intangible assets from business acquisitions, the non-gap operating loss was RMB3 million for Q2, and the non-gap operating margin was negative 0.2% for Q2, close to breakeven. Interest income was RMB$103 million for Q2, compared with RMB$125 million for the same period last year.

Frank: non-GAAP operating loss was <unk> 3 million for Q2, and non-GAAP operating margin was negative <unk>.

Frank: 2% for Q2.

Ashley Wu: Procedure Brick, Yiwen. Interest income was RMB 103 million for Q2 compared with RMB 125 million for the same period last year. Net income attributable to HUYA Inc was RMB 30 million for Q2 compared with RMB 20 million for the same period last year. Excluding shared based compensation expenses, impairment loss of investments, and monetization of intangible assets from business acquisitions, net of income passes. Non-gap net income attributable to HUYA Inc was RMB 97 million for Q2 compared with RMB 117 million for the same period last year.

Frank: Close to breakeven.

Frank: Interest income was <unk> 103 million for Q2.

Frank: Compared with RMB $125 million for the same period last year.

Ashley Wu: Net income attributable to HUYA, Inc. was RMB$30 million for Q2, compared with RMB$20 million for the same period last year. Excluding Share-Based Compensation Expenses, Impairment Laws of Investment, Amortization of Intangible Assets from Business Acquisition, and Lack of Income Taxes. Non-Gap Net Income attributable to HUYA Inc. was RMB97 million for Q2, compared with RMB$117 million for the same period last year. Non-Gap Net Margin was 6.3% for Q2. Diluted net income per ADS was RMB 0.13422; non-GAAP diluted net income per ADS was RMB0.42 for Q2.

Speaker Change: Net income attributable to <unk>, Inc. Was RMB 13 8 million for Q2.

Speaker Change: <unk> with RMB 20 million for the same period last year.

Speaker Change: Excluding share based compensation expenses impairment loss of investment and amortization of intangible assets from business acquisitions net of income taxes.

Speaker Change: non-GAAP net income attributable to <unk>, Inc. Was RMB 19 7 million for Q2.

Speaker Change: Compared with RMB $117 million for the same period last year.

Ashley Wu: Non-gap net margin was 6.3% for Q2. Dynamic net income per ADS was RMB 0.13 for Q2. Non-gap net income per ADS was RMB 0.42 for Q2. As of June 30, 2024, the company had cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits of RMB 8.2 billion, compared with RMB 9.4 billion as of March 31, 2024.

Speaker Change: non-GAAP net margin was six 3% for Q2.

Speaker Change: Diluted net income per ads was RMB <unk> 13 for Q2.

non-GAAP.

Speaker Change: Net income per ads was RMB <unk>.

Speaker Change: <unk> 42 for Q2.

Speaker Change: As of June 32024, the company had cash and cash equivalents short term deposits Shelton in last month and long term deposits of RMB eight 2 billion.

Speaker Change: Compared with RMB nine 4 billion as of March 31, 2024.

Ashley Wu: Finally, let me provide an update on our shareholder returns. Upon review of our financial, business friends, capital requirements, and cash position, we are pleased to declare a special cash dividend of RMB 1.08 USD per ordinary shares or per ADS, totaling approximately RMB 215 million for our shareholder. Furthermore, under our up to 100 million US dollars share a repurchase program that began in August 2023. We have repurchased 17.1 million HUYA shares with a total aggregate consideration of 36.7 million US dollars as of the end of June 2024.

Speaker Change: Finally, let me provide an update on our shareholder returns.

Speaker Change: Upon review of our financials business trend capital requirements and cash position. We are pleased to declare a special cash dividend of 1108 U S dollars.

Speaker Change: Ordinary shares all per avs.

Speaker Change: Totaling approximately $215 million for our shareholders.

Speaker Change: Furthermore.

Speaker Change: Under our up to $100 million share repurchase program that began in August 2023.

Speaker Change: We have repurchased 17 1 million.

Speaker Change: Sure.

Speaker Change: Total equity consideration.

Of $56 7 million U S dollars as of the end of June 2024.

Ashley Wu: HUYA's Board of Directors has also authorized the Renewal and Continual usage of the unutilized culture under the existing share repurchase program of 43.3 million US dollars until March 31, 2025. We believe that HUYA's solid violation and improving financial fundamentals will continue to support our ability to deliver shareholder returns going forward.

Speaker Change: Well, we as board of Directors has also authorized there'll be new and continue usage after unutilized quarter under the existing share repurchase program of $43 3 million U S dollars until March 31 2025.

Speaker Change: We believe that <unk> solid balance sheet, and improving financial fundamentals will continue to support our ability to deliver shareholder returns going forward.

Unknown Executive: We step at the light to open the call to your questions. Thank you, Ashley, and hello, everyone. If you are dialing by phone, please press five to ask a question, then press six to unmute yourself. If you are accessing the call from test and meeting, or both meeting applications, please click the raise hand button at the bottom left. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your questions in English.

Speaker Change: With that I'd like to open the call to your questions.

Thomas Chong: Today's first question comes from Thomas Chong from Jeffries. Thomas, your line is open. Please go ahead.

Speaker Change: Thank you Ashley and Hello, everyone. If you are dialed in by phone. Please press <unk> to ask a question then perhaps six to our mute yourself if youre accessing the call from Tencent meeting, although meeting applications. Please click the raise hand button at the bottom left.

Ashley Wu: As of June 30, 2024, the company had cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits of RMB $8.2 billion. Compared with RMB$9.4 billion as of March 31, 2024. Finally, let me provide an update on our shareholder returns. Upon review of our financials, business plan, capital requirements, and cash position, we are pleased to declare a special cash dividend of 1.08 U.S. dollars per ordinary share or per ADS, totaling approximately US$250 million for our shareholders.

Ashley Wu: Furthermore, under our up to $100 million U.S. share repurchase program that began in August 2023, we have repurchased 17.1 million HUYA shares with a total aggregate consideration of $56.7 million U.S. as of the end of June 2024. HUYA's Board of Directors has also authorized the renewal and continual usage of the unutilized quota under the existing share repurchase program of $43.3 million U.S We believe that HUYA's solid balance sheet and improving financial fundamentals will continue to support our ability to deliver shareholder returns going forward. With that, I'd like to open the call to your questions. Thank you, Ashley. And hello, everyone. If you are dialing in by phone, please press 5 to ask a question, then press 6 to unmute yourself.

Operator: If you're accessing the call from Tencent Meeting or Vogue meeting applications, please click the Raise Hand button at the bottom left. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Today's first question comes from Thomas Chong from Jeffries. Thomas, your line is open.

Speaker Change: For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese place immediately repeat your question in English.

Speaker Change: Today's first question comes from Thomas Chong from Jefferies.

Thomas Chong: Your line is open. Please go ahead.

Thomas Chong: Please go ahead. Thank you for accepting my question. My question is about the current user strategy of the company because we see that the movement of this quarter, MAU, and Coin-Omni have increased, and our PIN users have also increased. So, I'll transfer myself.

Thomas Chong: Thank you Glenn and congestion.

Ladies and gentlemen.

Speaker Change: 101 patients required Nicholson with Candida hotel.

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John Jones: Such as Marcel mentioned before taking my question My question lifestyle car user strategies.

Thomas Chong: Next, I'm going to put in my question. My question is how current user strategies, as we saw this quarter, year-over-year and sequential growth of mobile MAU and also sequential growth of paying users. Thank you for the question. I will answer it.

Junhong Huang: My question is our current use of strategies. As we saw this quarter year and the financial growth of mobile MAU and also the financial growth of PAU is next. Thank you for your question. In the second quarter of this year, HUYA's mobile MAU was 83.5 million, mainly due to the excellent performance of many self-made eSports events this quarter. In addition, the launch of new games and the continuous improvement of user experience are also conducive to enhancing user activity.

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John Jones: Sure.

John Jones: Okay.

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Junhong Huang: First of all, in this year's second quarter, HUYA's moving-end MAU is 83.5 million. This is mainly due to the excellent performance of our multi-sport e-sports event this quarter. Moreover, the increase in new users and the continuous improvement of user experience have also helped to enhance the activity of users. So, while we continue to adopt a cautious channel promotion strategy, the number of users has grown compared to Q1 and the same period last year. Thank you for your question.

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Junhong Huang: In the second quarter of this year, HUYA's mobile MAU was 83.5 million, mainly due to the excellent performance of many self-made esports events during that quarter. In addition, the launch of new games and the continuous improvement of user experience are also conducive to enhancing user activity. Therefore, while we continue to adopt a cautious channel promotion strategy, the number of users has increased compared with Q1 and with the same period last year. In terms of user strategy, we plan to continue to attract and consolidate users through high-quality broadcaster content and professional content, including our pyramid-shaped e-sports event system, which is the e-sports event system with full-fledged e-sports events and the e-sports event system that continuously improves the influence of e-sports events and e-sports events where the public participates.

Speaker Change: Thank you for your question and the second quarter of this year, who asked mobile and they you was $88 5 million, mainly due to the excellent performance of many self made esports events this quarter.

Speaker Change: In addition, the launch of new games and the continuous improvement of user experience are also conducive to enhancing user activity. Therefore, while we continue to adopt a cautious channel promotion strategy. The number of users has increased compared with Q1 and <unk>.

Junhong Huang: Therefore, while we continue to adopt a cautious channel promotion strategy, the number of users has increased compared with Q1 and with the same period last year. [inaudible] Right now, we have begun to selectively deliver HUYA's live broadcast and video content to other live broadcast and short video platforms, as well as multiple product lines in the Tencent ecosystem. We are also able to participate in more of HUYA's live broadcast. At the same time, we also believe that the content and the quality of the live broadcast can bring more business opportunities.

Speaker Change: The same period last year.

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Junhong Huang: In addition, we will also carry out user interaction through the game and e-sports community on the platform to improve the user experience of the HUYA platform and corresponding game projects. And based on the live streaming and game data we have, combined with AI capabilities, we can better promote the production of high-quality content and the introduction of interactive live streaming gameplay to enhance overall user participation.

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Junhong Huang: In terms of user strategy, we plan to continue to attract and consolidate users through high-quality streamer content and professional content, including our pyramid-shaped esports event system that is a complete copyright esports event system with self-organized events and increasing influence, as well as mass participation events. In addition, we will carry on the interaction of game users through the games and events communities on our platform to improve the user retention of HUYA and corresponding other game projects.

Speaker Change: In terms of user strategy, we plan to continue to attract and to consolidate users two high quality stream of content and promotion professional content, including our pyramid shaped esports events system that is a complete copyright esports events.

Speaker Change: Self organized events and increasing influence as well as mass participation events.

Speaker Change: In addition, we will carry the interaction of Carey of game users through the gains in events communities on our platform to improve the user retention of Oems and corresponding other game projects.

Junhong Huang: Based on the live broadcast and game data that we have combined with AI capabilities, we can better promote the output of high-quality content and the launch of interactive live broadcast gameplay so as to improve our user participation as a whole. On this basis, we also pay great attention to the development and upgrading of the platform ecosystem. In the overall more open industry environment, HUYA is a pioneer in breaking down barriers in the industry.

Speaker Change: Based on the live broadcasting Gan data that we have combined with AI capabilities, we can better promote the output of high quality content and the launch of interactive live broadcast again clay so as to improve our user participation as a whole.

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Junhong Huang: We are strengthening cooperation with multiple platforms and products, including professional content creation, broadcasting live broadcasts across platforms, and commercializing messages, in order to reach more widely used users and further expand the influence of the HUYA platform. We have now started to selectively transfer the content of HUYA live broadcasts and videos to other live and short video platforms, as well as multiple product lines in Tencent Ecology. In June this year, the total movement of HUYA content ecology reached nearly 120 million, and the volume is still growing. On this basis, we focus on the construction and upgrading of the platform ecology.

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Speaker Change: On this basis, we focus on construction and upgrading of the platform ecology.

Junhong Huang: In an overall more open industry environment, HUYA acts as a pioneer in breaking industry barriers, and we are strengthening cooperation with multiple platforms and products, including professional content co-creation, Cross-Platform Live Broadcast and Commercialization Initiative so as to reach a wider range of users and further expand the influence of HUYA platform. Right now, we have begun to selectively deliver HUYA's live broadcast and video content to other live broadcast and short video platforms, as well as multiple product lines in the Tencent ecosystem. In June this year, the total mobile MAU reached by HUYA content ecosystem reached about 120 million, and this volume continues to grow.

Speaker Change: And then although more open industry environment.

<unk> acts as a pioneer in breaking industry barriers and we are strengthening cooperation with multiple platforms and products, including professional content co creation.

Speaker Change: Cross platform life broadcasts and commercialization initiatives.

So as to reach a wider range of users and further expand the influence of <unk> platform.

Speaker Change: Right now we have begun to selectively deliver who you ask lifebelt cost and video content to other Lifebelt question short video platforms as well as multiple product lines in the Tencent ecosystem.

Speaker Change: In June this year, the total mobile Miu reached by who we are content ecosystem reached about $120 million and this volume continues to grow.

Junhong Huang: Our target audience will not only be the users of HUYA's live streaming but also the users of more platforms across the Internet. Therefore, we can also participate in a larger market. At the same time, we also believe that the content and platform upgrades can bring more commercial possibilities. Especially in the process of HUYA transforming from a pure game live platform to provide more game-related services, the distribution of game content and the live streaming of broadcasters can help drive the promotion of game distribution, enhance the influence of broadcasters, and bring more opportunities for the income of game distribution, advertising, and prop sales. Therefore, we do not only serve users on HUYA but also users on more platforms across the entire environment and industry.

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Junhong Huang: [inaudible] Therefore, we do not only serve the users on HUYA, but also uses on more platforms across the entire environment and industry. We can also participate in a larger market. At the same time, we believe that upgrade of content and platform can bring more commercial opportunities, especially in a process of HUYA's transformation from a pure game. In addition, live broadcast platform to providing more game related services and the distribution of game content on multiple platforms and the broadcast content can help to drive distribution and promote and promotion of the games and enhance the influence of broadcasters and bring more opportunities for revenue to grow in game distribution, advertising and prop sales. Thank you.

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Speaker Change: Therefore.

Speaker Change: We do not only serve the users on who we are but also uses on more platforms across the entire environment and the industry. We can also participate in a larger market at the same time, we believe that upgrade of content and platform can bring more commercial opportunity.

Junhong Huang: We can also participate in a larger market. At the same time, we believe that the upgrade of content and platform can bring more commercial opportunities, especially in the process of HUYA's transformation from a pure game live broadcast platform to providing more game-related services, and the distribution of game content on multiple platforms and the broadcast content can help to drive distribution and promotion of the games and enhance the influence of broadcasters and bring more opportunities for revenue to grow in game distribution, advertising, and prop sales. Thank you. And our next question comes from Maggie Ye from CLSA. Maggie, please go ahead.

Especially in a process of <unk> transformation from a pure again live broadcast platform to provide a more again related services.

Speaker Change: The distribution of game content on multiple platforms and the broadcast contents can help to drive distribution and promote and promotion of the games and enhance the influence of broadcasters and bring more opportunities for revenue to grow and gain distributions advertise.

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Maggie Yew: And our next question comes from Maggie Yew from Phil S.A. Maggie, please go ahead. Thank you, Maggie Yew from Phil S.A.

Speaker Change: And our next question comes from <unk> from CLSA.

Speaker Change: Please go ahead.

Maggie Ye: Good evening, Mr. Guan. Thank you for the opportunity to ask this question. We have issued a 2.5 billion U.S. dollar stock loan this time, and at the same time, we have extended the stock buyback plan. Considering that as of the end of June, there are still nearly 8.2 billion U.S. dollars in cash deposits and short-term investments on the company's account, I would like to ask Mr. Guan what the overall strategy is for the use of cash? Good evening, management. Thanks for the opportunity to ask questions.

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Maggie Ye: We declared $250 million U.S. dollar special cash dividend this time and also renewed the share repurchase program. In meanwhile, we still have cash deposits and short-term investments of RMB 8.2 billion as of the end of June. Please could you share with us the overall strategy of capital allocation and the use of cash going forward? Thank you.

Speaker Change: Oh, okay.

Speaker Change: Good evening management, thanks for the opportunity to ask questions.

Speaker Change: Clear 215 men in the U S dollar a special cash dividend at this time I also have a new share repurchase program and Meanwhile, we still have cash deposits and short term investments.

Ashley Wu: Maggie Yew from Phil S.A. Please could you share with us the overall strategy of capital allocation and the use of cash going forward. Thank you. As of the end of June this year, HUYA held cash and cash equivalence in deposit, totally approximately RMB 8.2 billion equivalent to US dollars 1.1 billion, of which more than half was still overseas. The change in this amount of funds compared to the end of March was mainly due to the distribution of RMB 150 million US dollars in dividends, share repurchase expenses, and other payments.

Speaker Change: RMB eight 2 billion as of end of June.

Speaker Change: Please could you share with us the overall strategy of capital allocation and the use of cash going forward. Thank you.

Speaker Change: How does it or do you have an appetite.

Ashley Wu: As you mentioned, as of the end of June this year, HUYA had a total of 8.2 billion yuan in cash and savings, which is about 1.5 billion US dollars. More than half of it is overseas. Compared with the amount of capital, the change in March is mainly due to the fact that we distributed 1.5 billion US dollars in equity, the spending of stock purchases, and some payments from other exchanges. After the announcement of a new $250 million special cash supply and payment, we expect that the company will still have nearly $900 million in cash and savings and will not borrow money. As of the end of June this year, HUYA held cash and cash equivalents and deposits totaling approximately RMB 8.2 billion, equivalent to US dollars 1.1 billion, of which more than half was still overseas.

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Speaker Change: As of the end of June this year, who we are how.

Speaker Change: <unk> cash and cash equivalents and deposits totally approximately RMB eight 2 billion equivalent to U S dollars $1 1 billion of which more than half was still oversees the change and does the amount of funds compared to the end of March.

Ashley Wu: The change in this amount of funds compared to the end of March was mainly due to the distribution of $150 million in dividends, plus share repurchase expenses and other payments. After we announced and paid the new special cash dividend of U.S. dollars $215 million, this time, it is estimated that the company will continue to have cash, the cash deposits will be nearly U.S. dollars 900 million with no debt.,, Sponsored ADR Class A,,, Regarding the use of cash, we currently have sufficient cash for the company's daily operation and future

Speaker Change: It was mainly due to the distribution of 150 million U S dollars in dividends share repurchase expenses and other payments.

Ashley Wu: After we announced and paid the new special cash dividend of US dollars to RMB 150 million, this time it is estimated that the company will continue to have a cash cash deposit nearly US dollars RMB 900 million with no debt. Regarding the use of cash, we currently have a sufficient cash for the company's daily operation and future development. While consolidating the financial fundamentals, we are also expecting operating cash flow to improve.

Speaker Change: After we announced and paid a new special cash dividend of <unk> $250 million.

Speaker Change: This time it is estimated that the company will continue to have a cash to cash deposits.

Speaker Change: Nearly <unk> dollars 900 million with no debt.

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Speaker Change: Regarding the use of cash we currently have sufficient cash for the company's daily operation and future development Wildcat.

Ashley Wu: While consolidating the financial fundamentals, we are also expecting operating cash flow to improve. The company will continue to set aside a portion of funds for potential business development and as a reserve fund in the event of uncertainty in the external environment. In addition, we remain open to investment projects related to the industry chain to seize related development opportunities.

Speaker Change: While consolidating the financial fundamentals, we are also expecting operating cash flow to improve.

Ashley Wu: The company will continue to set aside a portion of funds for potential business development, and as a reserve fund for the event of uncertainty in the external environment. In addition, we remain open to investment projects related to the industry and to seize related development opportunities, so we will also set aside a portion of funds accordingly. In addition, we support our shareholders' share of funds and cash flow, but overall, the shares policy has also increased, including financial and time-consuming and the growth of the company's economic growth and improvement.

Speaker Change: The company will continue to set aside a portion of songs for potential business development and as a reserve fund for it in the event of uncertainty in the external environment.

Speaker Change: In addition, we remain open to the investment projects related to the industry churn to seize related development opportunities. So we will also set aside a portion of sound accordingly.

Ashley Wu: So we will also set aside a portion of sound according to, At the same time, we will continue to pay attention to shareholder returns, especially cash returns. In addition to the $400 million announced this year, the company's management team also intends to continue to pay attention to the future. Youyi, Sponsored ADR Class A. In terms of repurchase, our repurchase plan has been postponed to the end of March, 2025.

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Ashley Wu: In the return方面, our return plan has also increased to 25 years to 3 months. In addition, the return of RMB 4,300 million US dollars has also increased. The company will also consider the factors in the future, including the situation in the market, and the股票流动信挡, which will continue to continue. At the same time, we will continue to attach importance to shareholder returns, especially cash returns to shareholders. In terms of dividends, in addition to the special dividend of US dollars, RMB 400 million announced the share, the company's management also intends to continue to share the company's profits and sepluses with our shareholders who support us in the future.

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Ashley Wu: 4,300 The company will also consider a variety of factors, including market conditions and stock liquidity, to design and implement strategies. At the same time, we will continue to attach importance to shareholder returns, especially cash returns to shareholders. In terms of dividends, in addition to the special dividend of US dollars 400 million announced this year, the company's management also intends to continue to share the company's profits and surpluses with our shareholders who will support us in the future. Of course, the specific dividend policy, including the amount of the dividend and the timing of payout, is subject to further review and approval by the company's Board of Directors.

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Speaker Change: At the same time, we will continue to attach importance to shareholder returns, especially cash returns to shareholders.

Speaker Change: In terms of dividends. In addition to the special dividend of U S dollars $400 million announced it this year the company's management and also intends to continue to share the company's profits and surpluses with all shareholders, who support us and the future of <unk>.

Ashley Wu: Of course, the specific dividend policy, including the amount of the dividend and the timing of payout, is subject to further review and approval by the company's port of directors. The company will continue to consider a variety of factors, including market conditions and stock liquidity to formulate an implementation strategy for our repurchase. Thank you.

Speaker Change: Course, the specific dividend policy, including the amount of the pop dividend and the timing of payout is subject to further review and approval by the Companys Board of directors.

Ritchie Sun: In terms of repurchase, our repurchase plan has been extended to the end of March 2025, and there is currently a repurchase quota of approximately US$43 million. The company will continue to consider a variety of factors, including market conditions and stock liquidity, to formulate an implementation strategy for our repurchase. Thank you. Our next question comes from Ritchie Sun from HSBC. Hi Ritchie, please go ahead.

Speaker Change: In terms of repurchase our repurchase plan has been extended to the end of March 2025, and there is currently a repurchase quarter off a portion lately 43 million U S dollars.

Speaker Change: The company will continue to consider of variety of factors, including market conditions and stock liquidity to formulate and implementation strategy for our repurchase.

Speaker Change: Okay. Thank you.

Yiwen Zhang: And our next question comes from Ritchie Sun, from HSBC. Hey Ritchie, please go ahead. Hey, Benzhen, Ashley, Hanyu, Wenchang Hao, thank you for giving me the opportunity. I would like to ask a question to Mr. Ye Wu's question. I would like to ask about the game's related services business, can management discuss the latest progress and the expectation in the third quarter for this business. Thank you. In the second quarter, revenue from our game related services, advertising and other businesses, increased by 162.7 year over year, or 26.6% quarter over quarter, reaching approximately 310 million RMB, and also reached the milestone of accounting for 20%.

Richard <unk>: And our next question comes from Richard <unk> from.

Richard: From HSBC.

Ritchie: Ritchie. Please go ahead.

Ritchie Sun: Hi Vincent, Ashley, and Hanyu. Good evening. Thank you for giving me the opportunity to ask questions. I would like to ask a question about a game-related business. I would like to ask about the recent progress of this business and our expectations for this business in the third quarter. Thank you, management, for taking my questions.

Ritchie: Hi, Ashley.

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Speaker Change: Thank you management for taking my questions I would like to ask about the cadence really does services business can management discuss the latest progress and your expectation in the first quarter for this business. Thank you.

Ritchie Sun: I would like to ask about the games-related services business. Can management discuss the latest progress and the expectations for the third quarter for this business? Thank you. Thank you, Ritchie, for the question. Let me answer the question.

Speaker Change: Okay.

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Junhong Huang: In the second quarter, the revenue of game-related services, advertising, and other businesses increased by 152.7% compared to the previous year and increased by 26.6% compared to the previous year, reaching about 3.1 billion yuan. This is the first time that we have reached the 20% revenue milestone. The rapid development of this part of the business is closely related to our cooperation with more games, a better use of live broadcast content, PGC programs, and innovative operating methods to promote business development.

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Junhong Huang: In the second quarter, revenue from our game-related services, advertising, and other businesses increased by 152.7% year-over-year or 26.6% quarter-over-quarter, reaching approximately 310 million RMB, and it also reached the milestone of accounting for 20% of total revenue for the first time. The rapid development of this part of our business is closely related to our cooperation with more GAN titles, better utilization of live content and PGCE programs, and adoption of innovative operating methods to promote business development.

Speaker Change: In the second quarter revenue from Allergan related services advertising and other businesses increased by 152.7 year over year or 26, 6% quarter over quarter, reaching approximately 310.

Speaker Change: Million RMB.

Speaker Change: And also reached a milestone of accounting for 20% of the total revenue for the first time.

Yiwen Zhang: The rapid development of this part of our business is closely related to our cooperation with more game titles, better utilization of live content and NPCGC programs, and adoption of innovative operating methods to promote business development. I would like to ask a question to Mr. Ye Wu's question. [inaudible] For these these book games, we inevitably integrate the cells of props with corresponding events. For example, the League of Legends Champion Skin cells in Legend Cup like Brocar's Room received very enthusiastic response and was super popular.

Speaker Change: The rapid development of this part of our business is closely related to our cooperation with more again titles better utilization of our live content <unk> programs and adoption of innovative operating methods to promote business development.

Junhong Huang: To sum up, in terms of game distribution, we continue to add long-term game coverage to promote users' return to these games. In recent new games, QL mainly participates in promotion and distributes to DF mobile games. DF mobile games are not only in the top rankings in the live viewing indicators of HUYA platform this year, but they have also exceeded expectations in game distribution. According to the current data, HUYA users' consumption levels per game are significantly higher than that of the entire gaming market, which reflects the high commercial potential of our gaming users.

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Junhong Huang: We have achieved initial results in game distribution, and we are also proud to continue to create a special distribution Model based on game content to target users more accurately through the streamer group, and focus on product design optimization to improve the transfer rate of game downloads and registrations. Looking further into this question, in terms of game distribution, we continue to add coverage of evergreen games to promote the return of users of this game.

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Speaker Change: Looking further into this question in terms of gas distribution, we continue to add coverage of our evergreen games to promote the return of uses of the scans.

Junhong Huang: Amongst recent new games, in the second quarter, we mainly involved in promoting and distributing the DNF mobile game. The DNF mobile game ranks among the top in this year's new game live broadcast viewing indicator numbers on HUYA platform, but we also have achieved better than expected results in terms of distribution.

Speaker Change: Our most recent new games in second quarter, we mainly involved in promoting and distributing the DNF mobile game, the DNS mobile them not only ranks among the top and that's new in this years, new game live broadcast viewing indicator numbers on <unk> platform.

Speaker Change: Also have achieved a better than expected result in terms of distribution.

Junhong Huang: In particular, according to current data available, the in-game spend per user of HUYA distribution channel users is significantly higher than the overall mark, reflecting the high business potential of HUYA platform scan users on the scan. Our current initial results in game distribution are also due to our continuous efforts to create a unique distribution Model based on game content. More accurately, we are able to reach users through our broadcaster groups and focus on product design optimization to increase the conversion rate of game downloads and registrations by users.

Speaker Change: In particular, according to current data available the in game spend per user of <unk> distribution channel uses is significantly higher than the overall market.

Speaker Change: Reflecting the high business potential of <unk> platform scan users understand.

Speaker Change: Our current initial resulting game distribution are also due to our continuous efforts to create a unique distribution model based on game content more accurately we are able to reach users through our broadcast groups and focus on pro.

Speaker Change: That design optimization to increase the conversion rate of game downloads and registrations of users.

Junhong Huang: In the second quarter, we also started selling props for games such as League of Legends, League of Legends mobile games, and Unbreakable Covenant. For these e-sports games, we have innovatively combined the sales of game props with relevant events. For example, in the Legends Cup live broadcast room, the sales of the champion skin for League of Legends gained a sharp rebound. In terms of game advertising, we are also exploring new directions. For example, the recently launched show, Unbreakable Covenant, has innovatively combined the promotion and entertainment content of the game. Each episode corresponds to a different game theme.

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Junhong Huang: At present, we have cooperated with games such as Ming Dynasty, DF mobile games, and Party Party. While the show is popular with users, it can also effectively help relevant games attract active players. In the second quarter, we also started selling items for games such as League of Legends, League of Legends Mobile, and Valor. For these eSports games, we innovatively integrate the sales of props with corresponding events. For example, the League of Legends champion skin sales in the Legend Cup Live broadcast room received a very enthusiastic response and were super popular.

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Speaker Change: In the second quarter, we also started to selling against two selling items for again, such as league of Legends League of legends mobile and valor and for these esports fans, we inevitably integrates the cells of swaps with a corresponding event like.

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Speaker Change: <unk> champion scheme sells in legend car like World classroom received very enthusiastic response and was super popular.

Junhong Huang: In terms of game advertising, we are also exploring new directions. For example, we recently launched Competing to the End, or Yijing Daodi, an interactive variety show that innovatively combines game promotion and entertainment content. Each episode corresponds to a different game theme, and it has currently cooperated with Mingchao Wuthering Waves, DNF Mobile, Aggie Party, and other games.

Yiwen Zhang: In terms of game advertising, we are also exploring new directions. For example, we recently launched competing to the end, or Yi Jing Dao, the interactive variety show, which inevitably combines game promotion and entertainment content. Each episode corresponds to a different game theme, and it has currently cooperated with Ming Chao Oudering Waves, DNS Mobile, Eddy Party, and other games. While this program is popular among users, it can also effectively help bringing active players to the corresponding games for us.

Speaker Change: In terms of.

Speaker Change: Again advertising we are also exploring new directions. For example, we recently launched competing to the end or easing the interactive variety show wage innovative Lee combined scam promotion and entertainment content each.

Speaker Change: Each applesauce corresponds to a different game theme and it has currently cooperated with mingchao ordering waves.

Speaker Change: <unk> Mobile AG party and other games. While this program is popular among users. It can also effectively help bringing active players to the corresponding games for us.

Junhong Huang: While this program is popular among users, it can also effectively help bring in active players to the corresponding games. As mentioned, our game-related services also provide new income sources for HUYA's broadcasters to help them improve their income levels. In the first half of this year, several thousand broadcasters have received income from game distribution and prop sales services. We believe this will also help HUYA to consolidate and attract broadcasters and enhance the company's cost of content and income.

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Yiwen Zhang: It is also worth mentioning that our game-related services have also brought new sources of news of income for Huya's broadcasters, helping them to increase their income levels. In the first half of this year, thousands of broadcasters have received income from game distribution and prop sell services. We believe that this will also help Huya to consolidate and attract broadcasters and enhance the company's content cost-to-revenue correlation. In the first half of this year, we also hope that we will try our best to get the opportunity to develop and promote the game that has already been sold to the customers, and will contribute to the content of the game and to the end of the day.

Speaker Change: It is also worth mentioning that our game related services have also brought US new sources of income for core, yes broadcasters, helping them to increase their income levels.

Junhong Huang: It is also worth mentioning that our GAN-related services have also brought new sources of income for HUYA's broadcasters, helping them to increase their income levels. In the first half of this year, thousands of broadcasters have received income from game distribution and prop sale services. We believe that this will also help HUYA to consolidate and attract broadcasters and enhance the company's content cost to revenue correlation. ,,,, This summer, there will be a lot of new games on the market.

Speaker Change: In the first half of this year thousands of broke has to have received the income from gain distribution and pop sell services. We believe that this will also help <unk> to consolidate and attract broadcasters and enhance the company's content cost to revenue correlation.

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Yiwen Zhang: We also have a lot of news on the screen, and we will also[inaudible] and we will also be working hard to seize corresponding opportunities for games that have covered distributions and prop sales will cooperate according to the popularity of the games and the update schedule of the games, and promote related business through live broadcast content and other programs. There are also many new games coming online this summer, and we will further expand the scope of cooperation in different game categories and with different cooperating partners.

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Junhong Huang: We will also further expand the range of cooperative game products and manufacturers. Overall, we are confident that the game-related services business will continue to expand in the future. We currently expect that Q3 game-related services, advertising, and other sectors' income will continue to grow at a double-digit rate compared to Q2. Summer is generally a peak season for our industry, and we are also working hard to seize corresponding opportunities. For GAMS that have covered distributions and prop sales, we'll cooperate according to the popularity of the GAMS and the update schedule of the GAMS and promote related business through live broadcast content and other programs. There are also many new games coming online this summer, and we will further expand the scope of cooperation in different game categories and with different cooperating partners.

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Junhong Huang: Overall, we are confident that the game-related services business will continue to expand in the future. We currently expect revenue from game-related services, advertising, and other segments in Q3 to continue to achieve double-digit growth compared to the second quarter. Thank you. Now we will take our last question today from Yiwen Zhang from China Renaissance. Yiwen, your line is open.

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Speaker Change: Summer is generally a peak season for our industry and we are also working hard to seize corresponding opportunities for games that have covered our distributions and prop cells will cooperate according to the popularity of our games and the update update.

Speaker Change: Schedule up again and promote related business to live broadcast content and other programs. There are so many new games coming online. This summer and we will further expand the scope of cooperation.

Speaker Change: In different game categories and with different cooperating partners.

Yiwen Zhang: Overall, we are confident that the game-related services business will continue to expand in the future. We currently expect revenue from game-related services advertising and other segments in Q3 to continue to achieve a double-digit growth compared to the second quarter.

Speaker Change: Overall, we are confident that again related services business will continue to expand in the future.

Unknown Executive: Thank you.

Speaker Change: We currently expect revenue from game related services advertising and other segments in Q3 to continue to achieve a double digit growth compared to the second quarter.

Yuen Zhang: Now we will take our last question today from Yuen Zhang, from China Renaissance. Yuen, your line is open.

<unk> Zhang: Thank you now we will take our last question today from <unk> Zhang from China Renaissance.

Speaker Change: Your line is open.

Yiwen Zhang: Good evening. Thank you for accepting my question. My question is about our profit margin. I see some fluctuations in Q2's profit margin, and I'd like to understand the reason behind it.

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Speaker Change #102: My only real you ship autos challenges. She has helped by holding a new home and we'll kind of hold should able to Patricia Bhatia. So thanks for taking my question. My question was regarding our margin trend. So we are seeing some fluctuation in gross margin in Q2 of both sequentially on a Y O y.

Yiwen Zhang: And how do we look at the trend of future profit margins? Thank you. So thanks for taking my question. My question is regarding our margin trend. So we see some fluctuation in growth margin in Q2, both sequentially and yyp. So we want to understand what are the reasons behind how we look at the future trend. Thank you.

Unknown Executive: Thank you very much for your time, my question is, what is the reason behind this? Thank you. Thank you very much for your time, thank you. Thank you very much for your time, my question is, what is the reason behind this?

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Speaker Change #103: What are the reasons behind the <unk> about future trend. Thank you.

Ashley Wu: Hello Yifan, let me answer this question. This year, Q2's non-GET profit rate is 14.2%, which is 0.7% lower than Q1, and 1.8% lower than last year. This quarter, the profit rate has fallen slightly, mainly due to the decline in live revenue and the increase in content production costs. Although the live stream income trend is relatively stable, and the number of users is decreasing, the number of users is still decreasing compared to the same period last year.

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Ashley Wu: This is mainly because we took the initiative to adjust our live stream business in the second half of last year. However, live stream income in the first half of last year is still relatively high, and it is also affected by the public relations and industry environment. The consumer will to recover is still relatively slow. For example, sponsored ADR Class A, the non-GAAP gross profit margin in the second quarter of this year was 14.2%, representing a 0.7% lower than the first quarter and 1.8% lower than the same period last year.

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Yiwen Zhang: The non-Gab gross profit margin in the second quarter of this year was 14.2%, representing a 0.7% lower than the first quarter. And 1.8% lower than the same period last year. The slight decline in gross margin in this quarter was mainly due to the decline in light broadcast revenue and the increase in the content production cost. Although the trend of light broadcast revenue has stabilized and the quarter over quarter decline has further narrowed, its scale is still significantly lower than the same period last year.

Ashok: The non-GAAP gross.

Speaker Change #112: Profit margin in the second quarter of this year was 14.2% representing a 0.7% lower than the first quarter and one 8% lower than the same period last year. The slight decline in gross margin this quarter was mainly.

Ashley Wu: The slight decline in gross margin in this quarter was mainly due to the decline in live broadcast revenue and the increase in content production costs. Although the trend of live broadcast revenue has stabilized, and the quarter-over-quarter decline has further narrowed, its scale is still significantly lower than the same period last year. This is mainly because our adjustment of the live broadcast business started in the second half of last year.

Speaker Change #112: Due to the decline in live broadcast revenue and the increase in our content production costs.

Speaker Change #112: Although the trend of live broadcast revenue has stabilized and the quarter over quarter decline has further narrowed its scale is still significantly lower than the same period last year. This is mainly because of her our adjustment of the live broadcast business started in the second half of last year.

Yiwen Zhang: This is mainly because of our adjustment of the light broadcast business started in the second half of last year. The year-on-year base of the light broadcast revenue in the first half of the year was still high. And due to the influence of the micro and industry environment, the recovery of users' consumption willingness to rework is still low. The large investment in the second in self-made content in the second quarter has also caused an impact, especially we had the Legend Cup and Thunder Owner Cup and other high quality self-made events with large scale and influence in the quarter.

Speaker Change #112: Year on year base of live broadcast revenue in the first half of the year was still high.

Ashley Wu: The year-on-year base of live broadcast revenue in the first half of the year was still high, and due to the influence of the micro and industry environment, the recovery of users' consumption willingness to rework is still low. The large investment in self-made content in the second quarter also caused an impact, especially we had Legend Cup and Thunder Honor Cup and other high-quality self-made events with a large scale and influence in this quarter.

Speaker Change #112: And due to the influence of the macro and industry environment there are new.

Speaker Change #112: The recovery of users' consumption willingness to rework is still low.

Speaker Change #112: The large investment in a second and self made content in our second quarter has also caused a impact, especially we had the legend cop and Thunder <unk> and other high quality self made events with a large scale and influence in the quarter.

Ashley Wu: In this quarter, the cost-per-view ratio of streamers is basically stable. The amount of the cost of streamers' contracts is also continuing to be optimized. The ratio of game-related services, ads, and other income from last year's Q2 was 6.5%, and this year's Q1 was 16.2%, up from this year's Q2's 20%. Due to the early stage of business development, we have also launched some platform incentive policies, which will cause some fluctuations in the profit margin, but the profit margin of this part of the business is still significantly higher than the live business, so it will have a positive impact on the overall profit margin.

Yiwen Zhang: [inaudible] The live broadcast revenue share ratio remained basically stable, the squadron of the[inaudible] not big enough to upset the impact of other factors of this quarter. [inaudible] the squadron of the squadron of the squadron of the squadron We believe that in the situation in China, China is in a more stable situation. So, in terms of the physical and physical impact, it will mainly be reduced. So, in terms of the physical and physical change, there will be a lot of progress in the Q4 series. In terms of the physical and physical impact, it will be lower. [inaudible]

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Ashley Wu: Sponsored ADR Class A, The live broadcast revenue share ratio remained basically stable this quarter, and the amount of broadcasters' contract costs is also being optimized. The proportion of gaming related services, advertising, and other revenue in total revenue increased from 6.2% in the second quarter last year to 16.2% in the first quarter this year to 20% in the second quarter of this year. As it is still the early stage of our business development, we have introduced some platform-specific incentives.

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Speaker Change #116: The live broadcast revenue share ratio remained basically stable this quarter and the amount of broadcast this contract costs is also being optimized.

Speaker Change #117: The proportion of gasoline related services advertising and other revenue in total revenue increased from six 2% in second quarter last year to 16, 2% in the first quarter this year to 20% in the second quarter of this year.

Ashley Wu: These will cause some fluctuations in our gross margin, but the gross margin of this part of the business is still significantly higher than that of the live broadcast business. So it has a positive impact on our overall gross margin performance, but it is still not big enough to offset the impact of other factors this quarter. As a content-driven company, I would like to point out that content investment has played an important role in attracting and keeping users.,,26.3% The group ratio dropped by 6.4%.

Speaker Change #117: As it is still the early stage of solid business development.

Speaker Change #117: We have introduced some platform specific incentives.

Speaker Change #117: These will cause some fluctuations in our gross margin, but the gross margin of this part of the business is still significantly higher than that of our.

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Ashley Wu: So from the operating profit side, our overall operating performance has improved compared to before., Nonget I'd also like to point out that, as a content-driven company, content investment plays an important role in attracting and retaining users. While increasing investment in self-made content and achieving good results, we have also dynamically adjusted the expenditure of sales expenses. Therefore, sales expenses in the second quarter have been further saved, driving the overall operating expenses to decrease by 26.3% year over year and 6.4% quarter over quarter.

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Speaker Change #125: I'd also like to point out that as a content driven company. The content investment plays an important role in attracting and retaining users while increasing investment in self made content and achieving good results. We have also dynamically adjusted the expenditure.

Speaker Change #126: <unk> expenses, therefore, salus expenses in the second quarter happened, so they're safe driving the overall operating expenses to decrease by 26, 3% year over year, and six 4% quarter over quarter. So from the operating profit.

Ashley Wu: So, from the operating profit perspective, our overall operating performance has improved compared to before, and the operating loss has narrowed both year over year and quarter over quarter, and the non-GAAP operating profit is closing to a break-even point. This will gradually reduce the negative impact on overall gross profit. With the improvement of the overall income structure, it is expected that the seasonal high costs of Q4 large-scale competition will significantly reduce the fluctuation in gross profit.

Speaker Change #126: Our perspective, our overall operating performance has improved compared to before and the operating loss has narrowed both year over year and quarter over quarter and a non-GAAP operating profit is closing to a breakeven point.

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Ashley Wu: From a long-term perspective, in order to better balance the income structure and optimize the cost of broadcasting and content, we believe that there is still room for growth in gross profit. In terms of this year, we expect to maintain the annual interest rate compared to growth in 2023. At the same time, the annual profit level will also increase. We believe that as live broadcast revenue becomes stabilized, its negative impact on overall gross profit margin will gradually decrease.

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Speaker Change #132: We believe that as the live broadcast revenue becomes stabilized and its negative impact on overall gross profit margin will gradually decrease.

Ashley Wu: With the improvement in the overall revenue structure, it is expected that the gross profit margin fluctuation caused by seasonal high costs of large-scale events in Q4 will be significantly reduced. In the long run, based on a more balanced revenue structure and the optimization of broadcaster and content costs, we believe that there is still room for further improvement in our gross profit margin. As for this year, we maintain the expectation that the four-year gross profit margin will increase compared to 2023, and at the same time, the four-year profit level will also increase.

Speaker Change #132: With the improvement of overall revenue structure. It is expected that the gross profit margin fluctuation caused by seasonal high cost of large scale events in Q4 will be significantly reduced.

Speaker Change #132: In the long run based on a more balanced revenue structure and the optimization of broadcast or content content costs.

Speaker Change #132: We believe that there is still room for further improvement on our gross profit margin.

Speaker Change #132: As for this year, we maintained the expectation that the full year gross profit margin will increase compared to 2023 and at the same time full year profit level will also increase.

Speaker Change #132: Thank you.

Operator: Thank you once again for joining us today. If you have further questions, please feel free to contact HUYA Investor Relations through the contact information provided on our website, OPSMT Financial Communications. This concludes today's call, and we look forward to speaking to you again next quarter.

Speaker Change #133: Thank you once again for joining US today. If you have further questions. Please feel free to contact where we ask the investor relations through the contact information provided on our website <unk> financial Communications. This concludes today's call and we look forward to speaking to you again next quarter. Thank you.