Q2 2026 JOYY Inc Earnings Call

August 26, 2026

Operator 2: Ladies and gentlemen, thank you for standing by and welcome to JOYY Inc.'s Q2 2026 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. I would now like to hand the conference over to your host today, Xinyuan Liao, the company's Head of Investor Relations. Please go ahead, Xinyuan.

Operator: Ladies and gentlemen, thank you for standing by and welcome to JOYY Inc.'s Q2 2026 Earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. I would now like to hand the conference over to your host today, Xinyuan Liao, the company's Head of Investor Relations. Please go ahead, Xinyuan.

Speaker #1: After the management's prepared remarks, there will be a question-and-answer session. I'd now like to hand the conference over to your host today, Xinyuan Liao.

Speaker #1: The company's Head of Investor Relations. Please go ahead, Xinyuan.

Speaker #2: Thank you, operator. Hello, everyone. Welcome to JOYY's second quarter 2026 earnings conference call. Joining us today are Ms. Qing Li, Chairperson and CEO of JOYY, and Mr. Alex Liu, Vice President of Finance.

Xinyuan Liao: Thank you, operator. Hello, everyone. Welcome to JOYY's Q2 2026 earnings conference call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY, and Mr. Alex Liu, Vice President of Finance. For today's call, management will provide a review of this quarter, followed by a Q&A session. The financial results and webcast of this conference call are available on our website, ir.joyy.com. Please note that today's call contains forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

Speaker #2: For today's call, management will provide a review of this quarter, followed by a Q&A session. The financial results and webcast of this conference call are available on our website, ir.joyy.com.

Speaker #2: Please note that today's call contains forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations.

Speaker #2: For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

Speaker #2: Please also note that JOYY's earnings press release and this conference call include disclosures of GAAP and non-GAAP financial matters. A reconciliation of these non-GAAP measures to GAAP measures is included in today's earnings press release.

Xinyuan Liao: Please also note that JOYY's earnings press release and this conference call include disclosures of GAAP and non-GAAP financial measures. A reconciliation of these non-GAAP measures to GAAP measures is included in today's earnings press release. All figures referenced on today's call are in USD, unless otherwise noted. I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead.

Speaker #2: All figures referenced on today's call are in U.S. dollars, unless otherwise noted. I will now turn the call over to our Chairperson and CEO, Ms. Qing Li.

Speaker #2: Please go ahead.

Speaker #3: Hello, everyone.

Ting Li: Hello, everyone. I am Ting Li. Thank you for joining us. Building on a strong first quarter, we delivered another solid result in Q2, recording accelerated revenue growth and notably, improvement in operating profit. Our social entertainment, BIGO, and the Shopline business all advanced in tandem. Our globally diversified ecosystem continued to unlock growth momentum, propelling our long-term value to its next level. In the second quarter, we generated total revenue of $591 million, up 16.3% year-over-year and 6.3% Q/Q. Social entertainment revenue was $423 million, up 7.4% year-over-year and 5.6% Q/Q. BIGO, including both first-party and third-party businesses, generated $134 million in revenue, up 53.1% year-over-year, with our third-party, BIGO Audience Network, sustaining strong growth of 74.1% year-over-year. Shopline revenue reached $34 million with year-over-year growth further accelerating to 28.6%.

Speaker #2: I'm Li Qing. Thank you for joining us. Building on the strong first quarter, we delivered another solid result in Q2, recording sustained revenue growth and a notable improvement in operating profit. Our social entertainment, legal aid, and Shopline businesses all advanced in tandem.

Speaker #2: Well, our globally diversified ecosystem continued to unlock growth momentum, propelling our long-term value to its next level. In the second quarter, we generated total revenue of $591 million.

Speaker #2: Up 16.3% year-over-year and 6.3% quarter-over-quarter. Social entertainment revenue was $423 million, up 7.4% year-over-year and 5.6% quarter-over-quarter. Legal aids, including both first-party and third-party businesses, generated $134 million in revenue, up 53.1% year-over-year, with our third-party legal items net worth sustaining strong growth of 74.1% year-over-year.

Speaker #2: Shopline revenue reached $34 million, with year-over-year growth further accelerating to 28.6%. Non-live streaming revenue surpassed 31.8% of total revenue for the quarter. Non-GAAP operating profit reached $49 million, up 28.2% year-over-year, and non-GAAP EBITDA reached $57 million, up 18.1% year-over-year.

Ting Li: Non-live streaming revenue supported 31.8% of total revenue for the quarter. Non-GAAP operating profit reached $49 million, up 28.2% year-over-year, and non-GAAP EBITDA reached $57 million, up 18.1% year-over-year. Operating cash flow for the quarter was $65 million. As of 30 June 2026, we held $3.06 billion in net cash. Since the start of this year, we have accelerated our capital returns year to date through 21 August 2026. We have repurchased a cumulative $216 million in shares and paid $142 million in dividends for a total return of $359 million in shareholders. Meaningful shareholders' returns remain a key part of our strategy as we continue to execute the $1.5 billion shareholder return program running through the end of 2028, which our board authorized this May. At this mid-year mark, I would like to take a few minutes to share our perspective on our overall strategy.

Speaker #2: Operating cash flow for the quarter was $65 million. As of June 30, 2026, we held $3.06 billion in net cash. Since the start of this year, we have accelerated our capital returns.

Speaker #2: Year-to-date, through August 21, 2026, we departure. Accumulative $216 million in share and paid $142 million in dividends. For total returns of $359 million, in shareholders, meaning for shareholders' returns remain a key part of our strategy as we continue to execute our 1.5 billion shareholders' return program, running through the end of 2028, which our board revised this May.

Speaker #2: At this mid-year mark, I would like to take a few minutes to share our perspective on our overall strategy. Today, JOYY is steadily evolving into a multi-engine global technology company.

Ting Li: Today, JOYY is steadily evolving into a multi-engine global technology company. In H1 of this year, the core social entertainment business maintained a steady recovery, with all flagship products returning to solid growth and profitability continuing to improve. This further validates the effectiveness of the judgments we have made to our content ecosystem, user experience, and localized operations over the past several quarters. At the same time, our second growth curve, comprising AdTech and Smart Commerce, sustained a strong performance, making an increasingly greater contribution to the group. Looking ahead, we remain committed to building a global technology ecosystem driven by AI. By leveraging the synergies of social entertainment, programmatic advertising, and omni-channel e-commerce, we are fueling our growth flywheel and building the core competitiveness that will define our future. First, social entertainment remains an important strategic cornerstone for the group.

Speaker #2: In the first half of this year, the whole social entertainment business maintained a steady recovery. With all flagship products returning to solid growth and profitability continuing to improve, this further validates the effectiveness of the judgments we have made to our content ecosystem, user experience, and localized operations over the past several quarters.

Speaker #2: At the same time, our sales growth curve, comprising ad tech and smart commerce, sustained a strong performance, making an increasingly greater contribution to the Group.

Speaker #2: Looking ahead, we remain committed to building a global technology ecosystem driven by AI. By leveraging the synergies of social entertainment, programmatics, advertising, and omnichannel e-commerce, we are fueling our growth flywheel and building the core competitiveness that will define our future.

Speaker #2: First, social entertainment remains an important strategic cornerstone for the group. We will continue to strengthen the growth momentum and profitability of our core products.

Ting Li: We will continue to strengthen the growth momentum and profitability of our core products, while accelerating the build-out of our social product portfolio. These initiatives are expected to further reinforce the recovery trend and growth resilience of our core business, providing a stable foundation for profitability and cash flow generation. At the same time, we are cultivating our AdTech and Smart Commerce businesses to boost overall revenue expansion. We will prioritize enhancing the standalone competitiveness of each business, expanding our customer base and business footprint, and further deepening our data, technology, and product capabilities. Looking ahead to 2028, as this business continues to scale, we currently expect non-live streaming segments to contribute close to half of the group's total revenue and operating profit. We see this as a testament to the strength of our multi-engine growth strategy and the validation of our long-term strategic approach.

Speaker #2: Well, accelerating the build-out of our social product portfolio, this initiative is expected to further reinforce the recovery trend and growth resilience of our core business, providing a stable foundation for profitability and cash flow generation.

Speaker #2: At the same time, we are cultivating our ad tech and smart commerce businesses to boost overall revenue expansion. We will prioritize enhancing the standard loan compatibility and competitiveness of each business.

Speaker #2: Expanding our customer base and business footprint, and further deepening our data, technology, and product capabilities. Looking ahead to 2028, as this business continues to scale, we currently expect non-live streaming segments to contribute close to half of the group's total revenue and operating profit.

Speaker #2: We see this as a testament to the strength of our multi-engine growth strategy and a validation of our long-term strategic approach. AI is a critical foundational technology supporting our long-term strategy across all of our businesses.

Ting Li: AI is a critical foundational technology supporting our long-term strategy across all of our businesses. We continue to leverage AI to drive measurable product enhancements and efficiency gains across a range of scenarios, including our streamer ecosystem, content distribution, payment experience, advertising vertical models, and Shopline merchant operations. We are also applying AI to enhance our team's data analysis, decision-making, and execution capabilities. By turning proven experience and workflow into replicable AI capabilities, we can accelerate knowledge sharing and scale best practices, further improving overall operating efficiency. In addition to our long-term business development, shareholder returns remain a persistent strategic priority. Our strong cash position and robust operating cash flow provide a solid foundation for ongoing business investment and shareholder returns. We expect to continue actively advancing our share repurchase and dividend programs as the company grows over the long term.

Speaker #2: We continue to leverage AI to drive measurable product enhancements and efficiency gains across a range of scenarios, including our streamer ecosystem, content distribution, payment experience, advertising vertical models, and Shopline merchants' operations.

Speaker #2: We are also applying AI to enhance our team's data analysis, decision-making, and execution capabilities. By turning proven experience and workflow into reputable AI capabilities, we can accelerate knowledge sharing and skill best practices, improving overall operating efficiency. In addition to our long-term business development, shareholder returns remain a persistent strategic priority.

Speaker #2: Our strong cash position and robust operating cash flow provide a solid foundation for ongoing business investment and shareholder returns. We expect to continue actively advancing our share repurchases and dividend programs as the company grows over the long term. We remain committed to validating the strategic path through solid operating results, driving great market recognition of our long-term value.

Ting Li: We remain committed to validating this strategic path through solid operating results, driving greater market recognition of our long-term value. Next, I will walk through our Q2 results and share our outlook for the future. In Q2, social entertainment revenue grew 7.4% year-over-year and 5.6% Q-over-Q. Within this segment, live streaming revenue grew 7.3% year-over-year and 5.9% Q-over-Q. Core live streaming paying users grew 3.9% year-over-year and 1.7% QOQ. On the traffic side, our global average mobile MAUs reached 277 million, up 5.5% year-over-year, supported by strong user engagement and organic growth. Our instant messaging product increased its contribution towards total MAUs to 82%. Bigo Live, our flagship product, recorded stronger sequential growth in Q2.

Speaker #2: Next, I will walk through our Q2 results and share our outlook for the future. In Q2, social entertainment revenue grew 7.4% year-over-year and 5.6% quarter-over-quarter.

Speaker #2: Within this segment, live streaming revenue grew 7.3% year-over-year and 5.9% quarter-over-quarter. Core live streaming paying users grew 3.9% year-over-year and 1.7% quarter-over-quarter. On the traffic side, our global average mobile MUs reached 277 million, up 5.5% year-over-year, supported by strong user engagement and organic growth.

Speaker #2: Our instant messaging product increased its contribution towards total MUs to 82%. LEGAL LIVE, our flagship product, recorded stronger sequential growth in Q2. This momentum was driven by ongoing enhancements to our streamer incentives and growth mechanism, a richer content ecosystem, and AI-powered improvements to content distribution and payment experiences.

Ting Li: This momentum was driven by ongoing enhancements to our streamer incentive and growth mechanism, a richer content ecosystem, and AI-powered improvements to content distribution and payment experiences, alongside localized upreaching campaigns. Together, these efforts effectively drove user engagement and greater willingness to pay. In Q2, Bigo Live's average daily active streamers increased 4.4% QOQ, while newly signed streamers on Live increased 5.4% QOQ. As we further enhance our streamer recruitment, incubation, and development mechanisms, the supply of high-quality content on our platform should continue to expand. In content distribution, we continue to develop and refine our AI-driven content understanding capabilities. In particular, our focus is on improving onboarding content for new users and deepening user consumption. By more effectively identifying and distributing high-quality content across regions, we can better match content with users' interests and improve their consumption experiences.

Speaker #2: Alongside localized operating campaigns, together these efforts effectively drove user engagement and greater willingness to pay. In Q2, Legal Life averaged daily active streamers increased 4.4% quarter-over-quarter, while newly signed streamers going live increased 5.4% quarter-over-quarter.

Speaker #2: As we further enhance our streamer recruitment, incubation, and development mechanisms, the supply of high-quality content on our platform should continue to expand. In content distribution, we continue to develop and refine our AI-driven content understanding capabilities.

Speaker #2: In particular, our focus is on improving onboarding content for a few users and dependent users' consumption. By March 15th, by identifying and distributing high-quality content across regions, we can better match content with users' interests and improve their consumption experiences.

Speaker #2: To improve the payment experience, we have been expanding our AI-generated content and interactive virtual gifts in May. These gifts accounted for 34.3% of total virtual gift consumption, further validating the value of AI in increasing our content supply and enhancing users' interactive experience.

Ting Li: To improve payment experience, we have been expanding our AI-generated content and interactive virtual gifts. In May, these gifts accounted for 34.3% of total virtual gift consumption, further validating the value of AI in reaching our content supply and enhancing users' interactive experience. At the same time, our new VOIC product portfolio continued to drive solid growth. In Q2, revenue from these new products increased more than 400% year-over-year and 39% Q-over-Q, gradually becoming a meaningful complement to our social entertainment growth. Our current Q3 guidance projects moderate single-digit year-over-year growth for social entertainment revenue. In the second half, we will continue to strengthen localized operations, enrich content supply, and further optimize user and payment experiences. As core live streaming paying users expand steadily and our new VOIC product portfolio contribute to further incremental growth, we expect stronger momentum for our social entertainment business.

Speaker #2: At the same time, our few new voice products from Google continue to drive solid growth. In Q2, revenue from these new products increased more than 400% year-over-year and 39% quarter-over-quarter, gradually becoming a meaningful complement to our social entertainment growth.

Speaker #2: Our current Q3 guidance projects moderate single-digit year-over-year growth for social entertainment revenue. In the second half, we will continue to strengthen localized operations and enrich content supply, and further optimize user and payment experiences.

Speaker #2: As core live streaming paying users extend steadily and our new voice product portfolio contributes to further incremental growth, we expect stronger momentum for our social entertainment business. Based on current trends, we are confident that our social entertainment business will achieve four-year revenue growth in 2026 and sustain a steady growth trajectory beyond.

Ting Li: Based on current trends, we are confident that our social entertainment business will achieve full-year revenue growth in 2026 and sustain a steady growth trajectory beyond. In Q2, BIGO Ads generated $134 million in revenue, up 53.1% year-over-year and 7.1% QOQ. Notably, our third-party business, the BIGO Audience Network, continued its strong momentum, delivering 74.1% year-over-year growth and 9.3% QOQ growth. Accelerating traffic expansion, a more diversified advertiser mix, omni-channel positioning, and significant algorithm efficiency gains are all strengthening the flywheel effect. On the supply side, BIGO Ads' developer ecosystem and global traffic coverage continued to expand. Our SDK traffic maintained a steady increase of 37.7% year-over-year in Q2. On the demand side, our strategic presence across multiple verticals, combined with AI-driven algorithm integration, growing traffic scale, and regional market expansion drove strong advertiser demand.

Speaker #2: In Q2, legal aids generated $134 million in revenue, up 53.1% year-over-year and 7.1% quarter-over-quarter. Notably, our third-party business, the Bigger Audience Network, continued its strong momentum, delivering 74.1% year-over-year growth and 9.3% quarter-over-quarter growth. Accelerating traffic expansion among a diversified advertiser mix, omni-channel positioning, and significant algorithm efficiency gains are all strengthening the flywheel effect.

Speaker #2: Our supply-side, legal aids developer ecosystem, and global traffic coverage continued to expand. Our SDK traffic maintained a steady increase of 37.7% year-over-year in Q2.

Speaker #2: On the demand side, our strategic presence across multiple verticals, combined with AI-driven algorithm integrations drawing traffic scale and regional market expansion, has driven advertiser demand.

Speaker #2: As a result, performance advertising demand across multiple channels, including web and IAA, delivered standout results. Web-based demand, primarily from lead generation and e-commerce, grew 91.7% year-over-year and 14.4% quarter-over-quarter. In Q2, we continued to expand our advertiser base in several verticals, such as value-based income e-commerce, further enriching our advertiser mix. As we approach the peak seasons in the second half, we are making early preparations in Q3 and remain optimistic about the growth prospects of web-based demand.

Ting Li: As a result, performance advertising demand across multiple channels, including web and IAA, delivered standout results. Web-based demand, primarily from lead generation and e-commerce, grew 91.7% year-over-year and 14.4% QOQ. In Q2, we continued to expand our advertiser base in sub-verticals such as web-based e-commerce, further enriching our advertiser mix. As we approach the peak seasons in the H2, we are making early preparations in Q3 and remain optimistic about the growth prospects of web-based demand. Meanwhile, IAA spending recorded 70.3% year-over-year growth. On the algorithm side, continued investments in algorithm and engineering infrastructure, platform algorithm capability, and cost efficiency are converting into a positive circle that will drive the next stage of Beagle X development. As we accumulate our customer feedback data and refine our multi-channel attribution capabilities, our user profiling and targeting capabilities are improving.

Speaker #2: Meanwhile, IAA spending recorded 70.3% year-over-year growth. On the algorithm side, continued investments in algorithm and engineering infrastructure, platform algorithm capabilities, and cost efficiency are converting into a positive cycle that will drive the next stage of bigger AIGC development.

Speaker #2: As we acclimate our customer feedback data and refine our multi-channel attribution capabilities, our user profiling and targeting abilities are improving. Building on this, we continue to integrate our vertical-specific models and strengthen our platform algorithm capabilities.

Ting Li: Building on this, we continue to integrate our vertical specific models and strengthen our platform algorithm capabilities. We are focusing on traffic segmentation and budget matching, traffic bidding, and post-campaign optimization. Together, these efforts are improving the matching efficiency between budget and traffic, and overall monetization efficiency. At the same time, we are advancing upgrades to our algorithm and engineering system, and continuously optimizing compute scheduling and server costs, which allow us to manage infrastructure costs more efficiently, even as request values grow rapidly. As we build our three-layer system of vertical algorithms, platform algorithm capabilities, and engineering infrastructure, the data accumulated from growing customer and traffic base will feed back into model optimization efforts. We expect this will drive a value circle across delivery, performance, advertiser budget, and traffic monetization efficiency, and provide stronger technological momentum for the next stage of scale growth in our advertising business.

Speaker #2: We are focusing on traffic segmentation and budget-matching traffic bidding and post-campaign optimization. Together, these efforts are improving the matching efficiency between budget and traffic.

Speaker #2: We, and overall monetization efficiency, at the same time, are advancing upgrades to our algorithm and engineering systems and continuously optimizing compute scheduling and several costs, which allow us to manage infrastructure costs more efficiently even as request volumes grow rapidly.

Speaker #2: As we build our three-layer system of vertical algorithm, platform algorithm capabilities, and engineering infrastructure, the data accumulated from a growing customer and traffic base will feed back into model optimization efforts.

Speaker #2: We expect this will drive value across the delivery and performance cycle, enhance advertiser budgets and traffic monetization efficiency, and provide stronger technological momentum for the next stage of skill growth in our advertising business.

Speaker #2: Looking ahead, we will continue to deepen our focus on key verticals such as lead generation, e-commerce, and gaming. We aim to further bolster our differentiated competitive advantage by expanding customer scale and density.

Ting Li: Looking ahead, we will continue to deepen our focus on key verticals such as lead generation, e-commerce, and gaming. We aim to further bolster our differentiated competitive advantage by expanding customer scale and density, entering more regional markets, and improving our algorithms and product capabilities. Based on our progress to date, we remain confident in our established long-term targets for the third-party advertising business. We are continuing to scale. We expect a steady structural improvement in profitability as the AdTech business gradually becomes an integral driver of the group's revenue and profit growth. Turning to Shopline. In Q2, Shopline generated revenue of $34 million, up 28.6% year-over-year and 12.5% QOQ, with revenue growth building up from Q1. Business from cross-border merchants sustained strong growth of 73.5% year-over-year, driving the acceleration in overall revenue expansion.

Speaker #2: Entering more regional remarks and improving our algorithm and product capabilities. Based on our progress to this stage, we remain confident in our established long-term targets for the third-party advertising business.

Speaker #2: We are continuing to scale with expect a steady structure improvement in profitability as we add tech business gradually becomes integral driver of group's revenue and profit growth.

Speaker #2: Turning to Shopline in Q2, Shopline generated revenue of $34 million, up 28.6% year over year and 12.5% quarter over quarter. With revenue growth beating us from Q1, business from cross-border merchants sustained strong growth of 73.5% year over year.

Speaker #2: Driving the acceleration in overall revenue expansion, last quarter we reported Shopline as a standalone segment for the fourth time and defined it as an AI-native, web stack, omnichannel commerce infrastructure.

Ting Li: Last quarter, we reported Shopline as a standalone segment for the fourth time and defined it as an AI-native one-stop omnichannel commerce infrastructure. What we offer merchants is not a simple store build tool, but a full, open, connectable, and extensible omnichannel retail operating system. I would like to take this opportunity to share how AI is bringing new changes to the e-commerce industry and to Shopline. It is fundamentally reshaping the way consumers discover products, compare options, and complete purchases. New traffic and transaction entry points emerge. Commercial scenarios were becoming more diverse and fragmented. Against this backdrop, merchants need a unified, open, and connectable e-commerce infrastructure more than ever, one that links product, transaction, and customer relationships across different channels. As commercial entry points diverge and diversify, merchant demand for a unified operating system grows, making Shopline's value as an omnichannel commerce infrastructure even more pronounced.

Speaker #2: What we offer merchants is not simply a software build tool, but a fully open, connectable, and extendable omnichannel retail operating system. I would like to take this opportunity to share how AI is bringing new changes to the e-commerce industry and to Shopline.

Speaker #2: AI is fundamentally reshaping how we consumers discover products, compare options, and complete purchases. New traffic and transaction entry points are emerging. Commercial scenarios are becoming more diverse and fragmented.

Speaker #2: Against this backdrop, merchants need a unified, open, and connectable e-commerce infrastructure more than ever, one that links products, transactions, and customer relationships across different channels.

Speaker #2: As commercial entry points diverge and diversify, merchant demand for the unified operating system grows, making Shopline's value as the omnichannel commerce infrastructure even more pronounced.

Speaker #2: In the first half, for Shop Line, merchants' page views from AI channels grew nearly 15-fold year-over-year, and order volumes grew over 35-fold year-over-year. It's gradually becoming a common e-commerce scenario for customers and consumers to discover products through AI and entry.

Ting Li: In H1, for Shopline, merchants page views from AI channels grew nearly 15-fold year-over-year, and order volumes grew over 35-fold year-over-year. It is gradually becoming a common e-commerce scenario for consumers to discover products through AI entry points and complete transactions directly in merchant stores. Shopline has expanded its integrations with multiple leading AI agents, including ChatGPT, Claude, and Cursor. This enables merchants to capture the traffic and transactions from these new entry points while converting order, customer relationships, and operating data across channels into a lasting asset for merchants. Drawing on more complete operational data accumulated on Shopline, AI can better process and interpret a merchant's actual operating conditions and use that understanding to improve operations, and this is making efficiency. In addition, Shopline Copilot, which allows merchants to manage their online stores more efficiently using natural language, has entered internal testing.

Speaker #2: Point and complete transactions directly in merchant stores. Shopline has expanded its integrations with multiple leading AI agents, including ChatGPT, Cloud, and Cursor. This enables merchants to capture the traffic and transactions from this new entry point.

Speaker #2: We are converting orders, customer relationships, and operating data across channels into lasting assets for merchants, drawing on more complete operational data accumulated on Shopline.

Speaker #2: AI can better process and interpret a merchant's actual operating conditions and use that understanding to improve operations and decision-making efficiency. In addition, Shop lines Co-Pilot allows merchants to manage their online stores more efficiently using natural language.

Speaker #2: It has entered internal testing. Our goal is not only to leverage AI to unlock new traffic entry points for merchants, but also to gradually integrate AI across the entire merchant operating journey.

Ting Li: Our goal is not only to leverage AI to unlock new traffic entry points for merchants, but also to gradually integrate AI across the entire merchant operating journey, helping merchants connect with consumers, manage operations, and drive growth more efficiently in an increasingly fragmented business environment. Our revenue is powered by two engines. On one hand, high-retention subscription services provide a stable revenue foundation. On the other, value-added services such as payments and marketing allow us to participate more deeply in merchants' GMV growth. As merchants reach consumers through more channels, driving continued growth in order volumes and GMV, Shopline's revenue will expand accordingly. In Q2, value-added services maintained rapid growth and continued to increase their share of revenue. Because value-added services like payments typically carry lower gross margins than subscription services, this revenue mix shift led to the modest sequential pullback in gross margin from Q1.

Speaker #2: Helping merchants connect with consumers, manage operations, and drive growth more efficiently in the increasingly fragmented business environment. Our revenue is powered by two engines.

Speaker #2: On one hand, high-retention subscription services provide a stable revenue foundation. On the other, value-added services such as payment and marketing allow us to participate more deeply in merchants' journey growth.

Speaker #2: As merchants reach consumers through more channels, driving continued growth in order volumes and GMV, Shopline's revenue will expand accordingly. In Q2, value-added services maintained rapid growth and continued to increase their share of revenue.

Speaker #2: Because value-added services like payments technically carry lower gross margins than subscription services, this revenue mix shaped the modest sequential pullback in gross margin from Q1.

Speaker #2: What matters more to us is that value-added services can scale on our existing merchant base, based on platform capabilities, without a proportional increase in scale and R&D investment.

Ting Li: What matters more to us is that value-added services can scale our existing merchant base on platform capabilities without a proportional increase in scale and R&D investment. As a result, their ongoing growth is expected to deliver stronger operating leverage, driving steady improvement in Shopline's operating profit and margin. As merchant base and GMV continue to increase, we expect value-added services to make a great contribution to Shopline's revenue and profit expansion in the future, further aligning our long-term growth with merchant success. Our current Q3 guidance implies Shopline's revenue growth rate in the mid-20s year-over-year. As revenue and gross profit continue to increase and operating efficiency further improves, Shopline remains firmly on track along its established path in profitability. Moving on to the share buybacks. In Q2, we repurchased a total of $108 million in shares through 21 August of this year.

Speaker #2: As a result, their ongoing growth is expected to deliver stronger operating leverage, driving data improvement in Shopline's operating profit and margin. As the merchant base and GMV continue to increase, we expect value-added services to make a significant contribution to Shopline's revenue and profit expansion in the future.

Speaker #2: For the align, our long-term growth with merchant subsidy. Our current Q3 guidance implies Shop Line revenue growth rate in the mid-20s year over year, as revenue and gross profit continue to increase and operating efficiency further improves.

Speaker #2: Shop Line remains firmly on track along its established path in profitability. Moving on to the share buybacks in Q2, we reported a total of $108 million in shares through August 21 of this year.

Speaker #2: We have reported a cumulative total of $216 million, maintaining a steady buyback pace. Given our strong operating momentum and long-term prospects, we believe our current share price does not yet fully reflect the company's intrinsic value.

Ting Li: We have repurchased a cumulative total of 216 million, maintaining an accelerated buyback pace. Given our strong operating momentum and long-term prospects, we believe our current share price does not yet fully reflect the company's intrinsic value. Going forward, we will continue to actively advance our share buyback program while balancing business investment and long-term development. As our social entertainment and advertising businesses grow in scale and profit contribution, we will continue to work with our board to further refine our shareholder return framework, allowing shareholders to more fully benefit from the company's operating results. In closing, our Q2 results fully validate our multi-engine growth strategy. The value of our strategic positioning and ecosystem is only beginning to unlock. Looking ahead, as each of our three business segments becomes stronger and more competitive, we expect greater synergies across the group, driving our long-term value creation to its next phase.

Speaker #2: Going forward, we will continue to actively advance our share buyback program while balancing business investment and long-term development as our social entertainment and advertising businesses grow in scale and profit contribution.

Speaker #2: We will continue to work with our board to further refine our shareholder return framework, allowing shareholders to more fully benefit from the company's operating results.

Speaker #2: In closing, our Q2 results fully validate our multi-entry growth strategy. The value of our strategic positioning and ecosystem is only beginning to be unlocked. Looking ahead, as each of our three business segments becomes stronger and more competitive, we expect greater synergies across the group, driving our long-term value creation to its next phase.

Speaker #2: With that, I will now hand the call over to Ethelou, our Vice President of Finance, to walk through our financial results in detail.

Ting Li: With that, I will now hand the call over to Alex Liu, our Vice President of Finance, to walk through our financial results in detail.

Speaker #1: Thanks, Misty. Hello, everyone. In the second quarter of 2026, we recorded total net revenues of $591 million, securing year-over-year growth of 16.3% and quarter-over-quarter growth of 6.3%.

Alex Liu: Thanks, Misty. Hello, everyone. in the second quarter of 2026, we recorded total net revenues of $591 million, securing a year-over-year growth of 16.3% and quarter-over-quarter growth of 6.3%. Our non-GAAP EBITDA for the quarter was $57 million, up 18.1% year-over-year and 24.4% quarter-over-quarter. Our operating cash flow was $65 million, and we ended the quarter with roughly $3.06 billion in net cash. As previously communicated, we accelerated our share buybacks since the start of 2026. As of 21 August, we have bought back $128 million worth of our shares under the up to $600 million share repurchase program authorized in May, bringing total share repurchase to $216 million year-to-date. I will now dive deeper into our detailed financial performance. Social entertainment revenues were $423 million for the second quarter, up 7.4% year-over-year and 5.6% quarter-over-quarter.

Speaker #1: Our non-GAAP EBITDA for the quarter was $57 million, up 18.1% year-over-year and 24.4% quarter-over-quarter. Our operating cash flow was $65 million, and we ended the quarter with roughly $3.06 billion in net cash.

Speaker #1: As previously communicated, we accelerated our share buybacks since the start of 2026. As of August 21, we have bought back $128 million worth of our shares under the up to $600 million share repurchase program.

Speaker #1: Authorized in May, bringing total share repurchase to $216 million year-to-date. I will now dive deeper into our detailed financial performance. Social entertainment revenues were $423 million for the second quarter.

Speaker #1: Up 7.4% year-over-year and 5.6% quarter-over-quarter. In particular, live streaming revenue growth accelerated to 7.3% year-over-year and 5.9% quarter-over-quarter, further confirming the recovery momentum of our core business.

Alex Liu: In particular, live streaming revenue growth accelerated to 7.3% year-over-year and 5.9% quarter-over-quarter, further confirming the recovery momentum of our core business. Core live streaming paying users increased by 3.9% year-over-year, while ARPU returned to positive growth, up 2.4% year-over-year. Live streaming revenues from developed countries continued to deliver strong growth, increasing by 11.8% year-over-year. BIGO Ads revenues increased by 53.1% year-over-year and 7.1% quarter-over-quarter to $134 million. In particular, our third-party advertising business, BIGO Audience Network, delivered another exceptional result, recording 74.1% year-over-year and 9.3% sequential growth. On the traffic front, Ad Beacons Network and ad requests increased by 37.7% year-over-year in the second quarter. We continued to optimize our auto reserved to improve ad campaign performance and drive advertisers spending. Our multi-vertical strategy also helped us capture broader market opportunities. Web-based demand increased by 91.7% year-over-year, while mobile-based demand remained strong with IAA spending up 70.6% year-over-year.

Speaker #1: Call live streaming paying users increased by 3.9% year-over-year, while Up returned to positive growth, up 2.4% year-over-year. Live streaming revenues from developed countries continued to deliver strong growth, increasing by 11.8% year-over-year.

Speaker #1: Vehicle edge revenues increased by 53.1% year-over-year and 7.1% quarter-over-quarter, to $134 million. In particular, our shared party advertising business, Vehicle Audits Network, delivered another exceptional result.

Speaker #1: Recording 74.1% year-over-year and 9.3% sequential growth. On the traffic front, SDK network and ad request increased by 37.7% year-over-year in the second quarter. We continued to optimize our ad reserve to improve campaign performance and drive advertiser funding.

Speaker #1: Our multi-vertical strategy also helped us capture broader market opportunities. Web-based demand increased by 91.7% year-over-year, while mobile-based demand remained strong, with RAA spending up 70.6% year-over-year.

Speaker #1: We remain firmly committed to our three-year strategic goal for the vehicle audits network of $1 billion in revenue. As the business continues to scale, we are confident in its ongoing profitability, with room to further improve its economics over the medium term.

Alex Liu: We remain firmly committed to our three-year strategic goal for BIGO Audience Network of $1 billion in revenue. As the business continues to scale, we are confident in its ongoing profitability, with room to further improve its economics over the medium term. Shopline generated revenue of $34 million, with growth accelerating to 28.6% year-over-year and 12.5% quarter-over-quarter. Revenue from cross-border merchants increased by 73.5% year-over-year, while its revenue contribution rose by 7.2 percentage points compared with Q2 last year, making it an increasingly important driver of Shopline's overall growth. Gross profit was $202 million in the quarter, up 8.8% year-over-year and 6.5% quarter-over-quarter, with gross margin remaining sequentially flat at 34.1%. Social entertainment gross margin was up quarter-over-quarter as we continued to improve user engagement and monetization.

Speaker #1: Shopline generated revenue of $34 million, with growth accelerating to 28.6% year-over-year and 12.5% quarter-over-quarter. Revenue from cross-border merchants increased by 73.5% year-over-year, while its revenue contribution rose by 7.2 percentage points compared with Q2 last year.

Speaker #1: Making it an increasingly important driver of supply's overall growth. Group's gross profit was $202 million in the quarter, up 8.8% year-over-year and 6.5% quarter-over-quarter.

Speaker #1: Gross margin remained sequentially flat at 34.1%. Social entertainment gross margin was up quarter-over-quarter as we continued to improve user engagement and monetization. Vehicle edge gross margin was down quarter-over-quarter due to a shift in revenue mix.

Alex Liu: BIGO Ads gross margin was down quarter-over-quarter due to a shift in revenue mix, reflecting a higher contribution from lower margin Shopline advertising revenues. Shopline's gross margin was also down quarter-over-quarter, primarily driven by a higher contribution from lower margin value-added service, particularly payments and marketing. While this service carry lower gross margin than subscription revenues, they technically require less incremental sales and R&D investment to scale. We therefore believe this mix should give you benefit Shopline's operating leverage and long-term profitability. Our operating expenses for the quarter were $188 million, up 4.7% year-over-year and 2.6% quarter-over-quarter. Sales and marketing expenses were higher year-over-year, consistent with revenue increase. G&A expenses were also higher year-over-year, primarily due to increased share-based compensation expenses.

Speaker #1: Reflecting a higher contribution from lower-margin, share-party advertising revenues. Shopline's gross margin was also down quarter over quarter, primarily driven by a higher contribution from lower-margin value-added services.

Speaker #1: Particularly, payments and marketing. While the service carried a lower gross margin than subscription revenues, they typically require less incremental sales and R&D investment to scale.

Speaker #1: We therefore believe this mix shift will benefit Shopline's operating leverage and long-term profitability. Our operating expenses for the quarter were $188 million, up 4.7% year-over-year and 2.6% quarter-over-quarter.

Speaker #1: Sales and marketing expenses were higher year-over-year, consistent with the revenue increase. G&A expenses were also higher year-over-year, primarily due to increased share-based compensation expenses. R&D expenses were lower year-over-year as we remained prudent and disciplined in our total spending through enhanced resource sharing and operational synergy across different business units.

Alex Liu: R&D expenses were lower year-over-year as we remained prudent and disciplined in our total spending through enhanced resource sharing and operational synergy across different business units while strategically allocating incremental shares of our R&D resources towards BIGO Ads. Our non-GAAP operating income for the quarter was $49 million, up 28.2% year-over-year and 29.4% quarter-over-quarter. Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $63 million, representing a non-GAAP net margin of 10.7%. Our non-GAAP net income was lower year-over-year due to a higher FX loss of $14 million as the US dollar weakened. Excluding the impact of FX losses, our non-GAAP net income would have been $77 million, broadly in line with the prior year. For the second quarter of 2026, we booked net cash inflows from operating activities of $65 million.

Speaker #1: While strategically allocating incremental shares of our R&D resources towards vehicle edge, our non-GAAP operating income for the quarter was $49 million, up 28.2% year-over-year and 29.4% quarter-over-quarter.

Speaker #1: Non-GAAP net income attributed to controlling interest of JOYY in the quarter was $63 million, representing a non-GAAP net margin of 10.7%. Our non-GAAP net income was lower year-over-year due to a higher FX loss of $14 million.

Speaker #1: As the U.S. dollar weakened. Excluding the impact of FX losses, our non-TAB net income would have been $77 million, broadly in line with the prior year.

Speaker #1: For the second quarter of 2026, we booked net cash inflows from operating activities of $65 million. Our balance sheet remains healthy with a strong net cash position of $3.06 billion as of June 30, 2026.

Alex Liu: Our balance sheet remains healthy with a strong net cash position of $3.06 billion as of 30 June 2026. Now moving to capital allocation. Shareholder returns continued to be an important component of our capital allocation strategy. As of 21 August 2026, we have returned $359 million to our shareholders through dividends and share repurchase this year, already exceeding the total amount returned to shareholders for the full year of 2025. We believe we remain substantially undervalued and will continue to actively execute our share repurchase program. Turning now to our business outlook. Driven by continued growth momentum across our social entertainment, BIGO Ads, and Shopline's business, we expect our total net revenues for the third quarter of 2026 to be between $602 million and $622 million, implying year-over-year revenue growth of 11.4% to 15.2%.

Speaker #1: Now, moving to capital allocation. Shareholder returns continue to be an important component of our capital allocation strategy. As of August 21, 2026, we have returned $359 million to our shareholders through dividends and share repurchases this year.

Speaker #1: Already exceeding the total amount returned to shareholders for the full year of 2025. We believe we remain substantially undervalued and will continue to actively execute our share repurchase program.

Speaker #1: Turning now to our business outlook—driven by continued growth momentum across our social entertainment, Bigo Live, and Shopline businesses, we expect our total net revenues for the third quarter of 2026 to be between $602 million and $622 million, implying year-over-year revenue growth of 11.4% to 15.2%.

Speaker #1: For the full year of 2026, we remain confident in delivering solid revenue growth across the group. On the profitability front, based on better-than-expected operational performance in the first half of the year, we achieved enhanced operating leverage from improved efficiency across our business segments.

Alex Liu: For the full year of 2026, we remain confident in delivering solid revenue growth across the group. On the profitability front, backed by a better-than-expected operational performance in the H1 of the year and enhanced operating leverage from improved efficiency across our business segments, we now expect the group's full year 2026 non-GAAP operating income to grow around 20% year-over-year, up from our previous expectations of teens level growth. To summarize, we delivered a strong set of results in Q2, with all three business segments delivering encouraging growth and operating profitability continue to improve. Looking ahead, we remain confident in our growth outlook and will stay focused on improving operating efficiency, sustaining profitability growth, and creating long-term value for our shareholders. That concludes our prepared remarks. Operator, we would now like to open up the call to questions.

Speaker #1: We now expect the group's full-year 2026 non-TAB operating income to grow around 20% year-over-year, up from our previous expectations of teens-level growth.

Speaker #1: To summarize, we delivered a strong set of results in the second quarter, with all three business segments delivering encouraging growth and operating profitability continuing to improve.

Speaker #1: Looking ahead, we remain confident in our growth outlook and will stay focused on improving operating efficiency, sustaining profitability growth, and creating long-term value for our shareholders.

Speaker #1: That concludes our prepared remarks. Operator, we would now like to open the call to questions.

Speaker #2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two.

Operator 2: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. Your first question comes from Xueqing Zhang with CICC. Please go ahead.

Operator: Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. Your first question comes from Xueqing Zhang with CICC. Please go ahead.

Speaker #2: If you're on speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call.

Speaker #2: Your first question comes from Suking Zhang with CICC. Please go ahead.

Speaker #3: Okay. So度亮眼的业绩表现。我的问题是关于直播业务的。有看到公司的社交娱乐业务下的直播收入二季度实现了同比环比双增长。那能不能请管理层帮我们阐述一下这个复苏的一个可持续性以及后续的展望。谢谢。Sales management for taking my question and congratulations on the strong quarter. My question about live streaming business. We see live streaming revenue return to both year on year and the quarter on quarter growth in the second quarter.

Xueqing Zhang: 感谢管理层接受我提问，恭喜公司这季度亮眼的业绩表现。我的问题是关于直播业务的，有看到公司的社交娱乐业务下的直播收入，二季度实现了同比、环比双增长。那能不能请管理层帮我们阐述一下这个复苏的一个可持续性，以及后续的展望？谢谢。Thanks management for taking my question, and congratulations on this strong quarter. My question about live streaming business. We see live streaming revenue return to both year-on-year and the quarter-on-quarter growth in the second quarter.

Speaker #3: Could management elaborate on the sustainability of this recovery and share your view on the longer-term outlook for the live streaming business? Thank you.

Xueqing Zhang: Could management elaborate on the sustainability of this recovery and share your view on the longer term outlook for the live streaming business? Thank you.

Speaker #4: 好的，谢谢雪琴。那这个问题先由我来回答。在二季度我们的直播业务环比增长了5.9%。同比增长进一步加快到了7.3%。这个是由付费用户和up值的双增长所驱动的。在运营层面，二季度我们持续在主播的激励机制、内容的生态搭建以及AI在内容分发和用户内容消费以及付费用户的体验改善等多个方面进行了优化。这些AI驱动的用户体验改善进一步推动了付费转化率的持续提升。所以核心直播付费用户同比增长了3.9%。从区域来看，这轮复苏继续由发达国家市场的收入增长驱动。中东地区在新语音产品矩阵的增长驱动下，也实现了不错的环比增长。那目前来看，我们三季度指引预示了社交娱乐业务将继续录得低个位数至中高个位数的同比增长。随着核心直播付费用户的稳步增长以及新语音产品矩阵进一步贡献增量，我们预计社交娱乐业务的增长动能将能够持续增强。基于目前的业务趋势，我们有信心推动社交娱乐业务在2026年实现全年收入同比正增长，并在此基础上保持稳健的发展态势。

Ting Li: 好的，谢谢雪琴。那这个问题先由我来回答。在二季度，我们的直播业务环比增长了5.9%，同比增长进一步加快到了7.3%。这个是由付费用户和UP值的双增长所驱动的。在运营层面，二季度我们持续在主播的激励机制、内容的生态搭建，以及AI在内容分发和用户内容消费，以及付费用户的体验改善等多个方面进行了优化。这些AI驱动的用户体验改善，进一步推动了付费转化率的持续提升。所以核心直播付费用户同比增长了3.9%。从区域来看，这轮复苏继续由发达国家市场的收入增长驱动，中东地区在新语音产品矩阵的增长驱动下也实现了不错的环比增长。那目前来看，我们三季度指引预示了社交娱乐业务将继续录得低个位数字中高个位数的同比增长。随着核心直播付费用户的稳步增长，以及新语音产品矩阵进一步贡献增量，我们预计社交娱乐业务的增长动能将能够持续增强。基于目前的业务趋势，我们有信心推动社交娱乐业务在2026年实现全年收入同比正增长，并在此基础上保持稳健的发展态势。Thank you, Xueqing, for your question.

Speaker #3: Thank you, Xueqin, for the question. In the second quarter, our live streaming business grew 5.9% sequentially, with year-over-year growth further accelerating to 7.3%, driven by growth in both paying users and app pool.

Ting Li: In Q2, our live streaming business grew 5.9% sequentially, with year-over-year growth further accelerating to 7.3%, driven by growth in both paying users and our tools. On the operations side, in Q2, we continue to optimize across multiple areas, including streamer incentive mechanisms, content ecosystem development, and AI-driven improvements across content distribution, user content consumption, and payment experience. These AI-driven enhancements to the user experience further drove sustained improvements in paying conversion rates. Therefore, our core live streaming paying users grew 3.9% year over year. From a regional perspective, this recovery continued to be driven by revenue growth in developed markets. The Middle East market also delivered solid sequential growth driven by our new VOICe product portfolio. Our current Q3 guidance projects moderate single-digit year-over-year growth for social entertainment revenues.

[Translator]: In Q2, our live streaming business grew 5.9% sequentially, with year-over-year growth further accelerating to 7.3%, driven by growth in both paying users and our tools. On the operations side, in Q2, we continue to optimize across multiple areas, including streamer incentive mechanisms, content ecosystem development, and AI-driven improvements across content distribution, user content consumption, and payment experience. These AI-driven enhancements to the user experience further drove sustained improvements in paying conversion rates. Therefore, our core live streaming paying users grew 3.9% year over year. From a regional perspective, this recovery continued to be driven by revenue growth in developed markets. The Middle East market also delivered solid sequential growth driven by our new VOICe product portfolio. Our current Q3 guidance projects moderate single-digit year-over-year growth for social entertainment revenues.

Speaker #3: On the operational side, in Q2, we continued to optimize across multiple areas, including streamer incentive mechanisms, content ecosystem development, and AI-driven improvements across content distribution, user content consumption, and payment experience.

Speaker #3: These AI-driven enhancements to the user experience further drove sustained improvements in paying conversion rates. Therefore, our core live streaming paying users grew by 3.9% year-over-year.

Speaker #3: From a regional perspective, this recovery continues to be driven by revenue growth in developed markets. In the Middle East market, we also delivered solid sequential growth.

Speaker #3: Driven by our new voice product portfolio, our current third quarter guidance projects moderate single-digit year-over-year growth for social entertainment revenues. As core live streaming paying users continue to grow steadily, and the new voice product portfolio contributes further incremental gains, we expect the growth momentum of our social entertainment business to continue strengthening.

Ting Li: As core live streaming paying users continue to grow steadily and the new VOICe product portfolio contributes further incremental gains, we expect the growth momentum of our social entertainment business to continue strengthening. Based on current trends, we are confident that our social entertainment business will achieve full-year revenue growth in 2026, while maintaining steady business momentum. Operator, next question please.

[Translator]: As core live streaming paying users continue to grow steadily and the new VOICe product portfolio contributes further incremental gains, we expect the growth momentum of our social entertainment business to continue strengthening. Based on current trends, we are confident that our social entertainment business will achieve full-year revenue growth in 2026, while maintaining steady business momentum. Operator, next question please.

Speaker #3: Based on current trends, we are confident that our social entertainment business will achieve full-year revenue growth in 2026, while maintaining steady business momentum.

Speaker #3: Operator, next question please.

Speaker #2: Your next question comes from Daniel Chin with JP Morgan. Please go ahead.

Operator 2: Your next question comes from Daniel Chen with JPMorgan. Please go ahead.

Operator: Your next question comes from Daniel Chen with JPMorgan. Please go ahead.

Speaker #5: 谢谢管理层接受我的问题。恭喜业绩非常强。我是想问一下这个广告业务。我们看到二季度的广告业务增长是非常强劲的。请问管理层怎么看待下半年第3方广告的增长以及利润率的展望？谢谢。 So I will translate myself. So we actually see that the second quarter advertising revenue, advertising business is growing very strong. So how should we look at the outlook for the third-party advertising in the second half of this year in terms of the growth rate and also the margin profile?

Daniel Chen: 谢谢管理层接受我的问题。恭喜业绩非常强。我是想问一下广告业务。我们看到二季度的广告业务增长是非常强劲的，请问管理层怎么样去展望下半年的第三方广告的增长，还有利润率？谢谢。 So I will translate myself. So we actually see that the Q2 advertising business is growing very strong. So how should we look at the outlook for the third party advertising in the H2 of this year in terms of the growth rate and also the margin profile? Thank you.

Speaker #5: Thank you.

Speaker #4: 谢谢，Daniel。那这个问题的话继续由我来回答。在Q2，三方广告的业务确实延续了强劲的增长，收入的同比增长是74.1%，环比的增长是9.3%，整体表现好于预期。这个背后是我们的流量、广告主预算和广告技术之间的相互促进，所以进一步强化了业务的飞轮效应。在流量侧，我们和Max Level Play等聚合平台的合作有持续地深化，全球流量的覆盖进一步扩大，SDK的流量保持了稳健的增长。在预算侧，多元垂类的战略布局成效进一步显现。在线索收集、网页电商和IA游戏等垂类的持续深耕下，Q2的web端广告预算同比增长了91.7%，IA广告预算同比增长了70.6%。同时我们也在持续探索更多线索广告的细分垂类，进一步提升各垂类的客户数量和密度。在平台侧，随着流量和预算的扩展，我们持续迭代了算法和数据的能力，细化了垂类模型，优化了投放策略，同时继续推进算法和工程体系的智能化升级，优化算力调度和机器成本。在业务请求量快速增长的同时，更高效地控制了基础设施的成本，为规模扩张提供了核心支撑。基于目前的业务趋势，我们对bigger ads的三方广告业务继续保持强劲增长充满信心。在利润率方面，三方广告目前仍然处于一个快速扩张的阶段，今年在研发、销售团队的建设以及资源设施上需要持续投入。但是当前业务的单位经济模型还是健康的。我们有信心在保持盈利的基础上，随着规模提升，实现中期盈利能力的持续增强。

Ting Li: 谢谢Daniel。这个问题继续由我来回答。在Q2，第三方广告的业务确实延续了强劲的增长，收入的同比增长是74.1%，环比的增长是9.3%，整体表现好于预期。这个背后是我们的流量、广告主预算和广告技术之间的相互促进，所以进一步强化了业务的飞轮效应。在流量侧，我们和MAX、LevelPlay等聚合平台的合作有持续地去深化，全球流量的覆盖进一步扩大，SDK的流量保持了稳健的增长。在预算侧，多元垂类的战略布局成效进一步会显现。在线索收集、网页电商和IAA游戏等垂类的持续深耕下，Q2的web端的广告预算同比增长了91.7%，IAA广告预算同比增长了70.6%。同时我们也在持续地探索更多的线索广告的细分垂类，进一步提升各垂类的客户数量和密度。在平台侧，随着流量和预算的扩展，我们持续迭代了算法和数据的能力，细化了垂类模型，优化了投放策略，同时继续推进算法和工程体系的智能化升级，优化算力调度和机器成本。在业务请求量快速增长的同时，更高效地控制了基础设施的成本，为规模扩张提供了核心支撑。基于目前的业务趋势，我们对BIGO Ads的第三方广告业务继续保持强劲增长，充满信心。在利润率方面，第三方广告目前仍然处于一个快速扩张的阶段，今年在研发、销售团队的建设以及资源设施上需要持续地投入。但是当前业务的单位经济模型还是健康的，我们有信心在保持盈利的基础上，随着规模提升，实现中期盈利能力的持续增强。

Speaker #3: Thank you, Daniel, for your question. I will take your question. In the second quarter, our third-party advertising business sustained a strong growth momentum, with revenue increasing 74.1% year over year and 9.3% quarter over quarter, exceeding our previous expectations.

Xinyuan Liao: Thank you Daniel for your question. I will take your question. In the Q2, our third party advertising business sustained its strong growth momentum, with revenue increasing 74.1% year-over-year and 9.3% quarter-over-quarter, exceeding our previous expectations. Growth in traffic and advertiser budgets, together with continued improvements in our advertising algorithms, further strengthened our business flywheel. On the traffic side, we continue to deepen our partnerships with mediation platforms, such as MAX and LevelPlay, further expanding our global reach while maintaining steady growth in SDK traffic. On the demand side, our strategic presence across multi verticals continue to drive strong advertiser demand. Leveraging our established capabilities across lead generation, web-based e-commerce and in-app advertising, our Q2 web-based demand grew 91.7% year-over-year, while IAA spending grew 70.6% year-over-year.

[Translator]: Thank you Daniel for your question. I will take your question. In the Q2, our third party advertising business sustained its strong growth momentum, with revenue increasing 74.1% year-over-year and 9.3% quarter-over-quarter, exceeding our previous expectations. Growth in traffic and advertiser budgets, together with continued improvements in our advertising algorithms, further strengthened our business flywheel. On the traffic side, we continue to deepen our partnerships with mediation platforms, such as MAX and LevelPlay, further expanding our global reach while maintaining steady growth in SDK traffic. On the demand side, our strategic presence across multi verticals continue to drive strong advertiser demand. Leveraging our established capabilities across lead generation, web-based e-commerce and in-app advertising, our Q2 web-based demand grew 91.7% year-over-year, while IAA spending grew 70.6% year-over-year.

Speaker #3: Growth in traffic and advertiser budgets, together with continued improvements in our advertising algorithms, further strengthened our business flywheel. On the traffic side, we continue to deepen our partnerships with mediation platforms.

Speaker #3: Such as Max and Level Play, further expanding our global reach, while maintaining steady growth in SDK traffic. On the demand side, our strategic presence across multiple verticals continues to drive strong advertiser demand.

Speaker #3: Leveraging our established capabilities across lead generation, web e-commerce, and in-app advertising, our second-quarter web-based demand grew 91.7% year-over-year, while IA spending grew 70.6% year-over-year.

Speaker #3: At the same time, we continue to expand our advertiser base in sub-verticals, across lead generation and other key verticals, further enriching our advertiser mix.

Xinyuan Liao: At the same time, we continue to expand our advertiser base in sub-verticals across lead generation and other key verticals, further enriching our advertiser mix. On the platform side, as traffic and budgets expand rapidly, we are continuously iterating our algorithms and data capabilities, driving more vertical specific optimizations, and enhancing our bidding and delivery strategies. At the same time, we are advancing AI driven upgrades to our algorithm and engineering systems, optimizing compute scheduling to manage infrastructure costs efficiently, even as request volumes grow rapidly. Based on current business trends, we are highly confident that our third party advertising business will continue to deliver strong growth. Turning to profitability, our third party advertising business is still in a rapid expansion phase, requiring continued investment in research and development, sales capabilities and infrastructure this year.

[Translator]: At the same time, we continue to expand our advertiser base in sub-verticals across lead generation and other key verticals, further enriching our advertiser mix. On the platform side, as traffic and budgets expand rapidly, we are continuously iterating our algorithms and data capabilities, driving more vertical specific optimizations, and enhancing our bidding and delivery strategies. At the same time, we are advancing AI driven upgrades to our algorithm and engineering systems, optimizing compute scheduling to manage infrastructure costs efficiently, even as request volumes grow rapidly. Based on current business trends, we are highly confident that our third party advertising business will continue to deliver strong growth. Turning to profitability, our third party advertising business is still in a rapid expansion phase, requiring continued investment in research and development, sales capabilities and infrastructure this year.

Speaker #3: On the platform side, as traffic and budgets expand rapidly, we are continuously iterating on our algorithms and data capabilities, driving more vertical-specific optimizations, and enhancing our bidding and delivery strategies.

Speaker #3: At the same time, we are advancing AI-driven upgrades to our algorithm and engineering systems, optimizing compute scheduling to manage infrastructure costs efficiently, even as request volumes grow rapidly.

Speaker #3: Based on current business trends, we are highly confident that our third-party advertising business will continue to deliver strong growth. Turning to profitability, our third-party advertising business is still in a rapid expansion phase.

Speaker #3: Requiring continued investment in research and development, sales capabilities, and infrastructure this year. That said, this business has healthy unit economics, giving us confidence that we can remain profitable while steadily improving margins over the medium term as we scale.

Xinyuan Liao: That said, this business has healthy unit economics, giving us confidence that we can remain profitable while steadily improve margins over the medium term as we scale. Operator, next question please.

Ting Li: That said, this business has healthy unit economics, giving us confidence that we can remain profitable while steadily improve margins over the medium term as we scale. Operator, next question please.

Speaker #3: Operator, next question please.

Speaker #1: The next question comes from Thomas Chong with Jefferies. Please go ahead.

Operator 2: The next question comes from Thomas Chong with Jefferies. Please go ahead.

Operator: The next question comes from Thomas Chong with Jefferies. Please go ahead.

Speaker #5: 早上好。谢谢管理层接受我的提问。也恭喜很好的一个result。我的问题是关于我们传联的营收还有利润的指引的。管理层可以分享一下在不同的各个业务线那边，我们今一年的营收，还有利润的指引。 Hi, good morning. Thanks, management, for taking my questions and congratulations on a very strong set of results. My question is about the full-year outlook.

Thomas Chong: 早上好，谢谢管理层接受我的提问，也恭喜很好的一個 result。我的问题是关于我们全年的营收，还有利润的指引的。管理层可以分享一下在不同的各个业务线那边，我们今年的一年的营收，还有利润的指引。 Hi, good morning. Thanks management for taking my questions and congratulations on a very strong set of results. My question is about the full year outlook. Can management comment about the 2026 revenue and profit guidance across different business segments? Thank you.

Speaker #5: Can management comment about the 2026 revenue and profit guidance across different business segments? Thank you.

Speaker #2: 早上好。谢谢你的提问。我是Alex。我来回答一下。就从收入的层面来看的话，展望26年的第三季度，我们现在给予的集团的收入指引是同比增长11.4%到15.2%。那分业务线来看的话，社交娱乐业务侧，我们预计三季度的收入会实现低个位数到中高个位数的同比增长。bigger ads三季度将延续强劲的双位数增长的趋势。Sublime的话，三季度营收同比增速会保持在25%以上。那么展望全年，我们预期社交娱乐业务会实现同比的稳健的增长。bigger ads方面，正如我们刚才所介绍的，不管是从流量的规模、模型的能力，还是广告组的预算上，都具备非常高的确定性的增长动力，将推动bigger ads全年实现一个中双位数的同比增长。Sublime方面的话，随着产品能力的持续完善，跨境商户的快速渗透，以及新市场的拓展，为全年的收入的加速增长也带来了动能。我们预期Sublime的业务同比增速较2025年会进一步加快。全年会有20%以上的营收的增长。那随着三条业务线均进入到了一个上升通道，我们对2026年集团的收入增长还是非常有信心的。经营利润方面的话，展望第三季度，我们预期集团冷盖的经营利润同比会延续增长的这个趋势。那从全年来看的话，社交娱乐业务在直播业务重回稳健增长的同时，那么整个直播业务整体的经营利润将保持小幅的增长。那么对于bigger ads来讲的话，随着收入规模的进一步提升，中期盈利能力也是有望持续增强的。而Sublime的运营费用是相对稳定的，在收入、毛利持续不断增长的驱动下，预期这个亏损会进一步的收窄。那么综上来看的话，基于上半年整体的经营表现是比预期要好，以及各个业务的经营效率提升所带来的经营杠杆，我们预计2026年全年冷盖的经营利润同比的增幅有望达到约20%。对，这个是我们调高了指引。那从净利润层面上来看的话，我还是想解释一下外汇损益这个科目。由于美元兑人民币持续的走弱，我们上半年以及预期三季度都会有比较大的未实现的一个汇兑损失，这个会影响到我们的净利润。但这部分是与运营表现无关的，属于账面的浮动的盈亏。那么在美元升值的时候又会产生相应的账面的未实现汇兑的收益。对。

Alex Liu: Thomas，早上好，谢谢你的提问。我是Alex，我来回答一下。从收入的层面来看的话，展望26年的第三季度，我们现在给予的集团的收入指引是同比增长11.4%到15.2%。分业务线来看的话，社交娱乐业务侧，我们预计三季度的收入会实现低个位数到中高个位数的同比增长。Bigo Live三季度将延续强劲的双位数增长的趋势。Shopline的话，三季度营收同比增速会保持在25%以上。那么展望全年，我们预期社交娱乐业务会实现同比的稳健的增长。Bigo Live方面，正如我们刚才所介绍的，不管是从流量的规模、模型的能力，还是广告主的预算上，都具备非常高的确定性的增长动力，将推动Bigo Live全年实现一个中双位数的同比增长。Shopline方面的话，随着产品能力的持续完善，跨境商户的快速渗透，以及新市场的拓展，为全年的收入的加速增长也带来了动能。我们预期Shopline的业务同比增速较2025年会进一步加快，全年会有20%以上的营收的增长。那随着三条业务线均进入到了一个上升通道，我们对2026年集团的收入增长还是非常有信心的。经营利润方面的话，展望第三季度，我们预期集团non-GAAP的经营利润同比会延续增长的趋势。那从全年来看的话，社交娱乐业务在直播业务重回稳健增长的同时，整个直播业务整体的经营利润将保持小幅的增长。那么对于Bigo Live来讲的话，随着收入规模的进一步提升，中期盈利能力也是有望持续增强的。而Shopline的运营费用是相对稳定的，在收入、毛利持续不断增长的驱动下，预期亏损会进一步地收窄。那么综上来看的话，基于上半年整体的经营表现是比预期要好，以及各个业务的经营效率提升所带来的经营杠杆，我们预计2026年全年non-GAAP的经营利润同比的中枢有望达到约20%。这个是我们调高的指引。那从净利润层面上来看的话，我还是想解释一下外汇损益这个科目。由于美元对人民币持续地走弱，我们上半年以及预期三季度都会有比较大的未实现的一个汇兑损失，这会影响到我们的净利润，但这部分是与运营表现无关的，属于账面的浮动的盈亏。那么在美元升值的时候，又会产生相应的账面的未实现汇兑的收益。对。

Speaker #3: Good morning, Thomas. Thank you for your question. Looking ahead to the third quarter of 2026, our current guidance implies 11.4% to 15.2% year-over-year growth.

Xinyuan Liao: Good morning, Thomas. Thank you for your question. Looking ahead to Q3 2026, our current guidance implies 11.4% to 15.2% year-over-year growth for our total revenue. By business segment, for social entertainment, we expect the Q3 revenue to deliver moderate single-digit year-over-year growth. Bigo Live will continue to deliver strong double-digit year-over-year growth in Q3. For Shopline, we expect it to remain more than 25% year-over-year growth. For the full year 2026, we expect social entertainment to deliver steady year-over-year growth. For Bigo Live, with continued traffic expansion, deepening multiple vertical advertiser base, and ongoing algorithm optimization, we expect strong mid-double-digit year-over-year growth for the full year. For Shopline, supported by maturing product capabilities, accelerating cross-border merchant penetration, and new market expansion, we expect its year-over-year growth to further accelerate, exceeding 20% year-over-year growth for the full year 2026.

[Translator]: Good morning, Thomas. Thank you for your question. Looking ahead to Q3 2026, our current guidance implies 11.4% to 15.2% year-over-year growth for our total revenue. By business segment, for social entertainment, we expect the Q3 revenue to deliver moderate single-digit year-over-year growth. Bigo Live will continue to deliver strong double-digit year-over-year growth in Q3. For Shopline, we expect it to remain more than 25% year-over-year growth. For the full year 2026, we expect social entertainment to deliver steady year-over-year growth. For Bigo Live, with continued traffic expansion, deepening multiple vertical advertiser base, and ongoing algorithm optimization, we expect strong mid-double-digit year-over-year growth for the full year. For Shopline, supported by maturing product capabilities, accelerating cross-border merchant penetration, and new market expansion, we expect its year-over-year growth to further accelerate, exceeding 20% year-over-year growth for the full year 2026.

Speaker #3: For our total revenues by business segment, for social entertainment, we expect third quarter revenue to deliver moderate single-digit year-over-year growth. BIGO Ads will continue to deliver strong double-digit year-over-year growth in Q3.

Speaker #3: For Shopline, we expect to maintain more than 25% year-over-year growth. For the full year 2026, we expect social entertainment to deliver steady year-over-year growth.

Speaker #3: For bigger ads, with continued traffic expansion, deepening multiple vertical advertiser base, and ongoing algorithm optimization, we expect strong mid double-digit year-over-year growth for the full year.

Speaker #3: For Shopline, supported by maturing product capabilities, accelerating cross-border merchant penetration, and new market expansion, we expect its year-over-year growth to further accelerate, exceeding 20% year-over-year growth for the full year 2026.

Speaker #3: With all three segments on an upward trajectory, we are confident in solid revenue growth for 2026. Regarding operating profit, looking at the third quarter, we expect our non-GAAP operating profit to continue its year-over-year growth trend.

Xinyuan Liao: With all these three segments on an upward trajectory, we are confident in the solid revenue growth for 2026. Regarding operating profit, looking at Q3, we expect our non-GAAP operating profit to continue its year-over-year growth trend, while operating expenses are expected to rise slightly quarter-over-quarter due to the seasonality of certain cost items. For the full year 2026, regarding social entertainment, as live streaming returns to steady growth, overall live streaming operating profit will maintain modest year-over-year growth. As we mentioned earlier, with continued SKU expansion, Bigo Live's midterm profitability is also expected to steadily enhance. For Shopline, with relatively fixed operating expenses, the growth of revenue and gross profit will continue to drive narrowing of its operating losses.

[Translator]: With all these three segments on an upward trajectory, we are confident in the solid revenue growth for 2026. Regarding operating profit, looking at Q3, we expect our non-GAAP operating profit to continue its year-over-year growth trend, while operating expenses are expected to rise slightly quarter-over-quarter due to the seasonality of certain cost items. For the full year 2026, regarding social entertainment, as live streaming returns to steady growth, overall live streaming operating profit will maintain modest year-over-year growth. As we mentioned earlier, with continued SKU expansion, Bigo Live's midterm profitability is also expected to steadily enhance. For Shopline, with relatively fixed operating expenses, the growth of revenue and gross profit will continue to drive narrowing of its operating losses.

Speaker #3: While operating expenses are expected to rise slightly quarter over quarter due to the seasonality of certain cost items, for the full year 2026, regarding social entertainment, as live streaming returns to steady growth, overall live streaming operating profit will maintain modest year-over-year growth.

Speaker #3: As we mentioned earlier, with continued skill expansion, bigger ads, and mid-term profitability, we also expect steady enhancement. For Shopline, with rapidly fixed operating expenses, the growth of revenue and gross profit will continue to drive the narrowing of its operating losses.

Speaker #3: In summary, based on the better-than-expected overall operating performance in the first half of the year, as well as the operating leverage brought about by improved operating efficiency across businesses, we expect our full-year non-GAAP operating profit to achieve around 20% year-over-year growth in 2026.

Xinyuan Liao: In summary, based on the better-than-expected overall operating performance in H1, as well as the operating leverage brought about by improved operating efficiency across businesses, we expect our full year non-GAAP operating profit to achieve around 20% year-over-year growth in 2026. We guided up our guidance. On net profit, I would like to add on a little bit regarding the foreign exchange loss items. Due to the continued weakening of the USD, we recorded significant unrealized foreign exchange losses in H1, and we expect a similar trend in Q3. However, these are not operational mark-to-market fluctuations and are unrelated to our underlying operating performance. Conversely, a strengthening USD would also result in unrealized foreign exchange gains. Operator, next question please.

[Translator]: In summary, based on the better-than-expected overall operating performance in H1, as well as the operating leverage brought about by improved operating efficiency across businesses, we expect our full year non-GAAP operating profit to achieve around 20% year-over-year growth in 2026. We guided up our guidance. On net profit, I would like to add on a little bit regarding the foreign exchange loss items. Due to the continued weakening of the USD, we recorded significant unrealized foreign exchange losses in H1, and we expect a similar trend in Q3. However, these are not operational mark-to-market fluctuations and are unrelated to our underlying operating performance. Conversely, a strengthening USD would also result in unrealized foreign exchange gains. Operator, next question please.

Speaker #3: We updated our guidance. On net profit, I would like to add a little bit regarding the foreign exchange loss items. Due to the continued weakening of the US dollar, we recorded significant unrealized foreign exchange losses in the first half.

Speaker #3: And we expect a similar trend in the third quarter. However, these are not operational mark-to-market fluctuations and are unrelated to our underlying operating performance.

Speaker #3: Conversely, a strengthening U.S. dollar would also result in unrealized foreign exchange gains. Operator, next question, please.

Speaker #1: Your next question comes from Brian Gong with Citi. Please go ahead.

Operator 2: Your next question comes from Brian Gong with Citi. Please go ahead.

Operator: Your next question comes from Brian Gong with Citi. Please go ahead.

Speaker #4: 各位管理层早上好。首先，恭喜公司取得非常好的业绩。然后我想问一下关于Shopline这一块，就是公司明确Shopline目标在2028年实现盈亏平衡，能不能请管理层展开讲一下目前这个业务的状态和增长的驱动力，以及未来扭亏的路径。那我很快翻译一下。 Thanks, management, for taking my question. I have a question on Shopline. We target to achieve profit break-even for Shopline in 2028. For the management, could you give us an update on the latest development and the growth drivers for Shopline?

Brian Gong: 各位管理层早上好。首先恭喜非常好的业绩。然后我想问一下关于 Shopline 这块的，公司明确 Shopline 目标在 2028 年实现盈亏平衡。能不能请管理层展开讲一下目前的业务的状态和增长的 driver，以及未来扭亏的一个路径。我很快翻译一下。Thanks management for taking my question. I have a question on Shopline. We target to achieve profit breakeven for Shopline in 2028. Could the management give us an update on the latest development, and the growth drivers for Shopline. What would be the profit breakeven roadmap for the business? Thank you.

Speaker #4: And what would be the profit break-even roadmap for the business? Thank you.

Speaker #3: 谢谢Brian。这个问题继续由我来回答。那正如我们之前分享的，AI正在成为电商行业和Shopline带来新的这个发展的机遇。随着新的流量和交易的入口不断涌现，商业场景变得更加的多元和碎片化。商户对于统一经营系统的需求也越发强烈。在这个趋势下将进一步凸显Shopline作为全渠道电商基础建设的价值。我们坚定的看好这个赛道的长期发展前景。我们的商业模式和商户的成长是高度一致的。订阅收入为我们提供稳定的收入基础，而支付和营销等增值服务使我们能够更多的参与到商户的交易和GMV的增长当中。商户在Shopline上经营的渠道越多，交易的规模越大，对这些服务的使用就越深。因此我们的增长不仅来自于新增商户，也来自现有商户在平台上持续成长和服务渗透率的提升。第二个季度以品牌大客户为主导的跨境商户收入保持了高速的增长，同比录得了增长是73.5%，带动了整体收入的增长加快。由于扭亏的路径，关于扭亏的路径，我们的研发投入作为主要运营支出已经趋于稳定比较久了。收入和毛利的提升都带来了经营杠杆效应。Shopline在亏损的这个大幅收窄以及在毛利的持续增长下支出保持相对稳定的基础上，我们非常有信心Shopline在2026年继续收窄亏损，并且在2028年实现盈亏平衡。

Ting Li: 谢谢Brian，这个问题继续由我来回答。正如我们之前分享的，AI正在成为电商行业和Shopline带来新的发展的机遇。随着新的流量和交易的入口不断涌现，商业场景变得更加的多元和碎片化，商户对于统一经营系统的需求也越发强烈。在这个趋势下，将进一步凸显Shopline作为全渠道电商基础建设的价值。我们坚定地看好这个赛道的长期发展前景。我们的商业模式和商户的成长是高度一致的，订阅收入为我们提供稳定的收入基础，而支付和营销等增值服务使我们能够更多地参与到商户的交易和GMV的增长当中。商户在Shopline上经营的渠道越多，交易的规模越大，对这些服务的使用就越深。因此，我们的增长不仅来自于新增商户，也来自现有商户在平台上持续成长和服务渗透率的提升。第二个季度，以品牌大客户为主导的跨境商户收入保持了高速的增长，同比录得了增长是73.5%，带动了整体收入的增长加快。关于扭亏的路径，我们的研发投入作为主要运营支出已经趋于稳定比较久了，收入和毛利的提升都带来了经营杠杆效应。Shopline在亏损的大幅收窄，以及在毛利的持续增长下，支出保持相对稳定的基础上，我们非常有信心Shopline在2026年继续收窄亏损，并且在2028年实现盈亏平衡。

Speaker #2: Thank you, Brian, for the question. As we discussed earlier, AI is creating new growth opportunities for both the e-commerce industry and Shopline. As new traffic and transaction entry points continue to emerge, the e-commerce landscape is becoming increasingly diverse and fragmented.

Xinyuan Liao: Thank you Brian for your question. As we discussed earlier, AI is creating new growth opportunities for both the e-commerce industry and Shopline. As the new traffic and transaction entry points continue to emerge, the e-commerce landscape is becoming increasingly diverse and fragmented, driving stronger demand for a unified operating system from merchants. This trend will further underscore Shopline's value as an omni-channel commerce infrastructure. We remain firmly confident in the long-term prospects of this market. Our business model is closely aligned with the success of the merchants. Subscription fees provide us with a stable and recurring revenue base, while value-added services such as payments and marketing services enable us to participate more directly in the growth of the merchants' transactions and GMV. As merchants expand across more channels and scale their businesses on Shopline, they tend to adopt more of our services, making the platform increasingly valuable to them.

[Translator]: Thank you Brian for your question. As we discussed earlier, AI is creating new growth opportunities for both the e-commerce industry and Shopline. As the new traffic and transaction entry points continue to emerge, the e-commerce landscape is becoming increasingly diverse and fragmented, driving stronger demand for a unified operating system from merchants. This trend will further underscore Shopline's value as an omni-channel commerce infrastructure. We remain firmly confident in the long-term prospects of this market. Our business model is closely aligned with the success of the merchants. Subscription fees provide us with a stable and recurring revenue base, while value-added services such as payments and marketing services enable us to participate more directly in the growth of the merchants' transactions and GMV. As merchants expand across more channels and scale their businesses on Shopline, they tend to adopt more of our services, making the platform increasingly valuable to them.

Speaker #2: Driving stronger demand for a unified operating system from merchants, this trend will further underscore Shopline's value as an omnichannel commerce infrastructure. We remain firmly confident in the long-term prospects of this market.

Speaker #2: Our business model is closely aligned with the success of the merchants. Subscription fees provide us with a stable and recurring revenue base. Our value-added services, such as payments and marketing services, enable us to participate more directly in the growth of merchant transactions and GMV.

Speaker #2: As merchants expand across more channels and scale their businesses on Shopline, they tend to adopt more of our services, making the platform increasingly valuable to them.

Speaker #2: As a result, our growth is driven not only by new merchant acquisition, but also by the continued growth of existing merchants and the increasing penetration of our services.

Xinyuan Liao: As a result, our growth is driven not only by new merchant acquisition, but also by the continued growth of existing merchants and the increasing penetration of our services. We have already seen this dynamic play out in our cross-border business. In Q2, revenue from cross-border merchants, mainly led by brand customers, grew 73.5% year-over-year, helping drive a further acceleration in Shopline's overall revenue growth. On the roadmap to breakeven, our R&D expense, which has been our primary OpEx for Shopline, has largely stabilized. Continued growth in revenue and gross profit is driving operating leverage, resulting in significant narrowing of Shopline's losses. With gross profit continuing to grow and operating expenses remaining relatively stable, we are confident that Shopline will further narrow its losses in 2026, and reach operating breakeven by 2028. Operator, next question please.

[Translator]: As a result, our growth is driven not only by new merchant acquisition, but also by the continued growth of existing merchants and the increasing penetration of our services. We have already seen this dynamic play out in our cross-border business. In Q2, revenue from cross-border merchants, mainly led by brand customers, grew 73.5% year-over-year, helping drive a further acceleration in Shopline's overall revenue growth. On the roadmap to breakeven, our R&D expense, which has been our primary OpEx for Shopline, has largely stabilized. Continued growth in revenue and gross profit is driving operating leverage, resulting in significant narrowing of Shopline's losses. With gross profit continuing to grow and operating expenses remaining relatively stable, we are confident that Shopline will further narrow its losses in 2026, and reach operating breakeven by 2028. Operator, next question please.

Speaker #2: We have already seen this dynamic play out in our cross-border business. In the second quarter, revenue from cross-border merchants, mainly led by brand customers, grew 70.3% and 73.5% year over year.

Speaker #2: Helping drive a further acceleration in Shopline's overall revenue growth. On the roadmap to break even, our R&D expense, which has been our primary OPEX for Shopline, has largely stabilized.

Speaker #2: Continued growth in revenue and gross profit is driving operating leverage, resulting in a significant narrowing of Shopline's losses. Gross profit continues to grow, and operating expenses remain relatively stable.

Speaker #2: We are confident that Shopline will further narrow its losses in 2026 and reach operating break-even by 2028. Operator, next question, please.

Speaker #1: Your next question comes from Sardana Song with UBS. Please go ahead.

Operator 2: Your next question comes from Sadonna Sung with UBS. Please go ahead.

Operator: Your next question comes from Sadonna Sung with UBS. Please go ahead.

Speaker #5: Yes, thank you, management, for taking my question. 谢谢管理层接受我的提问。再次恭喜这次强劲的业绩。那我的问题是关于股东回报的。公司这个三年合计15亿美元的股东回报计划，当前这个净现金也比较充裕，也观察到公司在Q2还有Q3至今也加速了回购。想请问管理层怎么展望后续的这个回购执行。集团又是如何平衡增长投入还有股东现金的回馈呢？ I'll translate myself. My question is on shareholder return. The company has a three-year, $1.5 billion shareholder return program with ample net cash at present.

Sadonna Sung: Thank you, Management, for taking my question。谢谢管理层接受我的提问。再次恭喜这次强劲的业绩。那我的问题是关于股东回报的。公司这个三年合计 $15 亿的股东回报计划方面，这个净现金也比较充裕。也观察到公司在 Q2 还有 Q3 至今也加速了回购。想请问管理层怎么展望后续的这个回购执行？集团又是如何平衡增长投入，还有股东现金的回馈呢？ I'll translate myself. My question is on shareholder return.

Sardonna Fong: Thank you, Management, for taking my question。谢谢管理层接受我的提问。再次恭喜这次强劲的业绩。那我的问题是关于股东回报的。公司这个三年合计 $15 亿的股东回报计划方面，这个净现金也比较充裕。也观察到公司在 Q2 还有 Q3 至今也加速了回购。想请问管理层怎么展望后续的这个回购执行？集团又是如何平衡增长投入，还有股东现金的回馈呢？ I'll translate myself. My question is on shareholder return.

Sadonna Sung: The company has a three-year USD 1.5 billion shareholder return program with ample net cash at present. I observed that management has accelerated buyback in Q2 and quarter to date. What will be the pace of future buybacks ahead? How does the group balance growth oriented investments versus cash return to shareholders? Thank you.

Sardonna Fong: The company has a three-year USD 1.5 billion shareholder return program with ample net cash at present. I observed that management has accelerated buyback in Q2 and quarter to date. What will be the pace of future buybacks ahead? How does the group balance growth oriented investments versus cash return to shareholders? Thank you.

Speaker #5: I observed that management has accelerated buybacks in Q2 and quarter to date. What will be the pace of future buybacks ahead? And how does the group balance growth-oriented investments versus cash returns to shareholders?

Speaker #5: Thank you.

Speaker #4: 谢谢Sardana。我是Alex，我来回答一下您的问题。其实在我的讲稿中是有提到的，我们今年全年截止到8月21号已经累计回购了2.16亿美元。哪怕从5月份的新的股东回馈计划开始到现在，在新的计划下，我们也已经回购了1.28亿美金。那么在增长的投入和股东回报的平衡上，其实对于我们来讲并不冲突。对我们公司的特点大家是了解的，存量资金底子是非常厚实的。增量资金也是持续的充沛。首先我们账上截止到二季度末还有30.6亿美元的净现金。其次我们三大业务线都已经进入到了清晰的增长的轨道。那么业务基本面和现金流的贡献会持续的改善。所以股东回馈和增长投入，我们是可以两手抓的。同时我们认为当前股价其实仍未充分反映我们三大业务的长期增长潜力。那么积极进行回购也是管理层对公司长期价值和发展前景信心的一个体现。接下来我们会继续积极的推进股东回馈。那么随着经营利润的持续提升，我们相信股东可以期待分享更多的回报。谢谢。

Alex Liu: 谢谢 Sedona。我是 Alex，来回答一下您的问题。其实在我的讲稿中是有提到的，我们今年全年截止到 8 月 21 号，已经累计回购了 $2.16 亿。哪怕从 5 月份的新的股东回馈计划开始到现在，在新的计划下，我们也已经回购了 $1.28 亿。那么在增长的投入和股东回报的平衡上，其实对于我们来讲并不冲突。对我们公司的特点大家是了解的，存量资金底子是非常厚实的，增量资金也是持续地充沛。首先，我们账上截止到二季度末还有 $30.6 亿的净现金。其次，我们三大业务线都已经进入到了清晰的增长的轨道，那么业务基本面和现金流的贡献会持续地改善。所以股东回馈和这个增长投入，我们是可以两手抓的。同时我们认为当前股价其实仍未充分反映我们三大业务的长期增长潜力，那么积极进行回购也是管理层对公司长期价值和发展前景信心的一个体现。接下来我们会继续积极地推进股东回馈，随着经营利润的持续提升，我们相信股东可以期待比较更多的回报。谢谢。

Speaker #2: Thank you, Sardona, for your question. As I just mentioned, since the beginning of the year until August 21st, we have already bought back a total of $216 million of our shares.

Xinyuan Liao: Thank you Sedona for your question. As I just mentioned, since the beginning of the year to 21 August, we have already bought back USD 216 million of our shares in total. Even under the new share buyback program authorized this May. As of 21 August, we have bought back USD 128 million of our shares. There is no inherent trade-off between investing for growth and returning capital to shareholders. We are backed by a strong net cash balance and robust cash generating capabilities. Firstly, we have a net cash position of USD 3.06 billion on our balance sheet by the end of the second quarter. Secondly, all these three of our business segments have embarked on well-defined growth trajectory, which will drive continuous improvement in underlying business fundamentals and cash flow contribution. Therefore, our shareholder return framework is built on an exceptionally solid and resilient foundation.

[Translator]: Thank you Sedona for your question. As I just mentioned, since the beginning of the year to 21 August, we have already bought back USD 216 million of our shares in total. Even under the new share buyback program authorized this May. As of 21 August, we have bought back USD 128 million of our shares. There is no inherent trade-off between investing for growth and returning capital to shareholders. We are backed by a strong net cash balance and robust cash generating capabilities. Firstly, we have a net cash position of USD 3.06 billion on our balance sheet by the end of the second quarter. Secondly, all these three of our business segments have embarked on well-defined growth trajectory, which will drive continuous improvement in underlying business fundamentals and cash flow contribution. Therefore, our shareholder return framework is built on an exceptionally solid and resilient foundation.

Speaker #2: Even under the new share buyback program authorized this May, as of August 21st, we have bought back $128 million of our shares.

Speaker #2: There is no inherent trade-off between investing for growth and returning capital to shareholders. We are backed by a strong net cash balance and robust cash-generating capabilities.

Speaker #2: Firstly, we held a net cash position of $3.06 billion on our balance sheet by the end of the second quarter. Secondly, all three of our business segments have embarked on well-defined growth trajectories, which will drive continuous improvement in underlying business fundamentals and cash flow contribution.

Speaker #2: Therefore, our shareholder return framework is built on an exceptionally solid and resilient foundation. We believe that the current share price still does not fully reflect the long-term growth potential of our three businesses.

Xinyuan Liao: We believe that the current share price still does not fully reflect the long-term growth potential of our three businesses. Our active share buybacks demonstrate the confidence from the senior management team in the company's longer-term value and prospects. Going forward, we will continue to actively return capital to shareholders. As our operating profit continues to grow, we believe shareholders can look forward to greater returns in the long run. Thank you.

[Translator]: We believe that the current share price still does not fully reflect the long-term growth potential of our three businesses. Our active share buybacks demonstrate the confidence from the senior management team in the company's longer-term value and prospects. Going forward, we will continue to actively return capital to shareholders. As our operating profit continues to grow, we believe shareholders can look forward to greater returns in the long run. Thank you.

Speaker #2: And our active share buybacks demonstrate the confidence from the senior management team in the company's longer-term value and prospects. Going forward, we will continue to actively return capital to shareholders.

Speaker #2: As our operating profit continues to grow, we believe shareholders can look forward to greater returns in the long run. Thank you.

Speaker #1: There are no further questions at this time. I'll now hand back to the company for closing remarks.

Operator 2: There are no further questions at this time. I will now hand back to the company for closing remarks.

Operator: There are no further questions at this time. I will now hand back to the company for closing remarks.

Speaker #2: Thank you. Yes, thank you for all of the questions. So we may conclude the call today. If you have any further questions, please feel free to reach out to the IR team.

Xinyuan Liao: Thank you. Yeah. Thank you for all of the questions. We may conclude the call today. Yeah, if you have any further questions, please feel free to reach out to the IR team. Thank you.

Speaker #2: Thank you.

Operator 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.