YY - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Inc.'s First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After 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, Jane Xie, the company's Senior Manager of Investor Relations. Please go ahead, Jane.

Jane Xie

operator. you, Thank Hello everyone. XXXX quarter conference first call. earnings JOYY's to Welcome

of Xueling us Li, CEO and are General our David today Mr. Li, Manager the of [ph], and Alex Chairman Mr. Joining COO; Leo Finance. JOYY; Ms. Ting

also For this The the will and available of few a available be quarter conference XXXX quarter ir.joyy.sg. management call financial today's replay Q&A webcast then at section. call website of will this call, our a provide in review first hours. conduct will fourth we of results A on and are a

our Before release, we continue, Safe call forward-looking I Harbor to apply in refer as press you earnings will make to statements. our this we statement which

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David Xueling Li

XXXX in executing We of plus to everyone. call. and short-form reached first live by progress earnings commercialization video streaming. milestone quarter another our through product localization Hello, our globalization Welcome strategies our

Street the exceed revenue user all, XX.X%, revenue year-over-year X.XX to Bigo by quarter, and grow to non-GAAP total million, Bigo’s of income million. from grow JOYY XX.X% grow especially during with net quarter. million, this by first paying US$XXX year-over-year US$XXX positive by XX.X% During Above year-over-year to expectations turned

much shown that we have need harvest is can how thinkers. be we believed by in that's long-term much always how fall have the we to spring, why We determined in and the

five on and devote that edge focused, persistent strategies the and content goal trajectory are competitive achievement global marketing of sustain so as quarter’s a can commercialization we a growth interactivity call and our an is on JOYY, strategic Bigo’s products. our our can cultivate the to execution inclusive over years. of JOYY our a mission long-term long-term ecosystem everyone the long-term seen. oriented milestone reached heard competitiveness our feel At last always sharpening social remain in mentioned of our to long our we’ll As Having be expanding and for will business a where and fundamental influence, resources today the past been where call, result haul. to that we community has earnings

first the Bigo and XX% During sessions hosted active more streaming Likee's of XXXX, than active of XX% quarter their more create of than live user short-form Live's videos. own user

user streamers have products into of streamers production mentioned generated of immersive the content full that suit have content. belonging we a and in aim and contributing to our costs interactions a relationships pool our our to content entry the features, content forge of to We user leveraging our live as Going we empowering product and At live streaming, another. way addition sense amateur production. lower plan connections live further pool via social gratification incentive their continuously. the video offerings, through with in combining a live creators we content the reservoir we social intrinsic encouraged operators forward, entertainment. facilitate short to same hosting and have original ease with By metrics users through By expanding accumulated user tools, massive one with video barrier and reduce mall users of and seek to intimate their time, to localized we sessions content grassroot for call, streaming interactions the chain programs, live user social last with content user social thus combining social augment continue streaming users expand of Thanks our and ecosystem. relation provide collection, content help

our based preference. local content on users' insights into addition, In

streamers and to and entertainment with an leveraging we our partnered leading have companies, able our have By and increasing pool. social high-quality of our volume platform, show producers, the the to high-quality premium live initiate content of content for content gaming expand to ecosystem content to influence creators more the TV We agencies introduced social and also together the engine persistently. our been from content propelling the creators, We long-term. growth attract user believe base

we the have and As such, certain product gradually promotion as for strategy such HAGO’s. Likee adjusted products

user spend and resources our we we of the field As Consequently, content social the these on allocated a reduced advertising and ecosystem fluctuation in decline may our -- the the near-term. experience developments products our products, base towards suffered instead. some those in

the ecosystem prioritizing in experience our content user our and advertisement improve our contribute social to However, that will we competitiveness. and believe long-term

strategic our product long achieve will boost the sustainable that run. growth the confident are to in enable and our We adjustment business

new made some preliminary For explorations the the opportunities border will to on call stay new we the and services. discussed have and last enterprise that the cross sector, initiatives, business attuned we cloud-based that e-commerce in we video audio in

such market competitive plan to our and we explore gradually in products build up new our advantage technologies. As we opportunities, to continue

We progress further will updates our new provide initiatives further maturity. business when to

of updates let you in me with share our products. Now, core each quarterly

first its to revenue grew million, XXX.X% by Bigo quarter, $XX.X MAU the grew while year-over-year. Live’s During by year-over-year X%

from East Eastern with As grew with XXX.X% is user by XXX.X%. satisfy Live’s grew paying by Bigo Pacific increasing multi-market, from into better the paying demands from coverage Region its Revenue by Live Bigo social features with basis, penetrate upgrade becoming interactions. XX.X%. for continue grew and we by increasingly increasing deeper XX.X% On to Middle revenue the users by users revenues to diversified. paying Europe by increasing social year-over-year geographic Product-wise, XXX.X% XX.X% user

and for on multiple space the made have easier simultaneous users to in streaming, the Live, guests of X.X% time screen session, by Bigo X.X%, much by result, of live live streaming hosted information facilitating quarter. more interactions on the allocating a increased increased session multi-user hosts on total By streaming with parties initiate streams, number a displays interactions platform. live of to the live average a in even background more that user we sequential with on As basis,

to XX.X% the in sequential As And respectively. result, spent chat rooms multi-user in a X.X% by chat increased multi-user viewers the chat quarter. time audio increased XX.X% rooms conversation base, rate streamer and the by in and user video rooms, average

as X% addition, increased further penetration fine rate over also the interaction last sequentially by called user our we its social feature tuned BAR, In quarter.

from boosting declined during As to by our audition, our participate host $XXX to those with million. adjustment content on part year-over-year Live the and of Likee's efforts elected our show prime host TV platform. platform influence our the several develop its in ecosystem, collaborated live promotion of we audio strategy to XX.X% Indian MAUs entertainment to Hunan Through popular government host Bigo show, we in the Meanwhile, spend thereby both region. the hosts and product

growth a of by X.X with in usage content content the by multiplying and algorithm support daily the users particular, times introduced its data phone X.X However, maintained year-over-year quarters times, format recommendation XX.X region about same East times, on paying quarter. from creators on videos by basis year-over-year by to increasing user paying experience. producers Likee's basis Middle quarter. platform's Asia In with revenue further optimize pace tools, markup the the increasing a provide our multiplied approximately during users time, times, and revenue we professional At cell its the of multiplied revenue wise, the a content its Southeast improve while during by times. rapid attracting a X.X we XX more from the user from full-screen with XX% Likee’s effective for of Product

increasing XX,XXX daily KOLs average live streaming live content by We high by XX.X% distribution. the based of XXX,XXX channel streaming and In organized respectively. and our activities, quarter, sequential have enhanced as active stream trusted and more quality refined also than seen algorithms in the using on we basis, in KOLs XX.X% whose the increased were also engagement network recommendation sessions followers live

with attracting platform's Content-wise, users' As season February, chat a in talented sequential and on the the on streaming within chat organized high social result, basis. of increasing average creators. increased streaming we Star Indonesia live MAUs content time the in rooms XX.X% Likee live spent Idol a a effective improved by of X.X% live user group interactions streaming by second rooms

the due in gain their more reality of reality in to in produce and careers, raise platform MAUs which large high large quality for with largest adjustment those new -- their of collaborating types strategy, One also platform. HAGO’s experienced later product winners, our Since on Indonesia a has exposure, effectively content profiles, decline to our few to creators public creators show the organizing shows, and quarters. to half was past launch some XXXX, Likee the popular turn TV of Tarore, By to invited on events national the second promotion Ihsan Indonesia. content platform scale variety the Idol, created motivated

XX.X was MAUs HAGO’s During the period, million.

increased meaningful However, driven Meanwhile, user HAGO narrowed Its a operation interactivity by sequential its HAGO’s year-over-year, further product users. loss XX% achieved paying of by year-over-year commercialization. a in increase in XX.X% non-GAAP in and basis. progress its revenue

by social user as solid Its a the with its the we into live social HAGO’s viewer Family. our satisfying their users for multi-user rates through During session streaming entertainment friends achieved channel basis conversion our HAGO HAGO, audio and interaction feature demand of increased by spend combining addition the quarter. average called video, in penetration with chat feature user interest-based rooms growing the to feature and by a on of of average audio and conclusion, supporters X.X%. -- financial time establish interactions paying a instant chat In networking. we HAGO’s products, text, audio rate and and rooms user -- support sequentially. X.X%. we results Family social room in average introduced number expanded audio across during by we X.X%, Virtual to new quarter, games, This launching multiple time streamer enables By to first created Its thus instant on operating XX.X%, channel chat

that, ecosystem remain Leo financial Finance, enhancing more social Going call localized Manager detailed content user I and of our and quarterly enriching social entertainment our to With explanation our now forward, to General we the experience. Alex turn of [ph]for results. committed will further our

Unidentified Company Representative

JOYY’s in first Since will on information to we David. Huya, of quarter disclosed Renminbi is After company operational press majority Huya completed financial us schedule reflected reporting historical the to be US of our apply the near from in to company's our information Dollar matters our customary are our results. sale Live reporting YY denominated the as one continuing of quarter the changed investment for certain equity an Also to earnings stated. fourth Controller, future. accounting to from I in X, arrears results XXXX, we January release independent provide that who with results. as consolidated and Finance otherwise, Live now in of XXXX investment the as Thanks, unless The YY of measure of this Okay. talk present the disclosures in from are USD, was revenues specifically financial XXXX. about currency financial illustrate equity expenses operations deconsolidation our Hello, and measured enable a the and financial in accordingly Please X accounts February, basis, everyone. non-GAAP the discontinued on operations the better quarter statements of note starting completed successfully financial starting financial are?

of we quarter growth momentum first our XXXX, the results. robust and and strong financial maintained delivered operating During

first quarter million particular in Other total $XX.X million, matters period $XX.X to the India primarily $XXX in company's million. of the first million of same increased content for $XXX.X streaming quarter in commission $XXX.X year-over-year to by late from expenses decreased fees improved first increased Gross operating offset first of costs apps after increased million to quarter the by for XXXX. XX.X% the company's by to usage to live the XX.X% driven for sharing from $XXX quarter continued of research of same same in for of and fan-based $XXX to million XXXX, enhance revenues XXXX, streaming $XX the certain to from the to by of revenues period in to XXXX quarter Bandwidth Sales $XXX.X XXXX $XXX.X related the the revenues. the increased age Revenue million expansion In of mobile Chinese and period development outside revenues and same large which the and year-over-year in in period in from India. $XXX.X profit from XXXX. Bigo. the increased the increased partially same increase to global quarter same live in company's first line by revenues in efforts by period $XX the million user-based from and XXXX, the $XXX.X increased the quarter increased expenses period period to in million year-over-year million efforts the million. in in Operating expenses the year-over-year sales $XX.X improved quarter divestment million was the expenses of margin $XXX.X XX.X% XXX.X% Cost Gross net June $XXX.X million. our emphasis the XX.X% XX.X% marketing streaming same and the million in capabilities. growth in revenues its markets. part in increased period first activities XXXX, Our first to increased first from the block by XXXX. the as million to our for Among of million from costs in the marketing in with research X.X% users of to

the of million operating for of in quarter period to operating was XXXX, compared US$XXX.X XXXX. period due US$XX primarily was quarter narrowed in first same to to the XX.X% for loss same operating the loss the Bigo. margin from The million first loss GAAP XX.X%, narrow Our

gain Non-GAAP to quarter, US$XX.X Our US$XX.X same disposal Non-GAAP quarter a same million, of quarter, Non-GAAP as the business first from US$XX.X controlling Bigo the narrowed of income in same the period in XXXX. continuing from margin by from XX.X% XXXX US$XX.X first compared impairment to million investments was positive narrowed to excludes XX.X% attributable net operations the in quarter of goodwill GAAP million year to well the XX.X% was compared for in continuing compensation in Net in achieved as of of to interest quarter share-based to net margin business of to same first for the non-GAAP first JOYY XXXX. XXXX. loss the and X.X% of of and compared has the Notably loss on of of the US$XX.X loss first in loss controlling million the from net XXXX period attributable US$XX.X amortization US$X.XX for in and market with the net operations of per to improved of of from quarter first intangible the to the from the X.X% interest period XX.X% subsidiaries prior net non-GAAP operating the was period to compared loss period. per million quarter million first US$X.XX operating from in XXXX. in acquisitions, Non-GAAP XX.X% was corresponding loss compared assets diluted period same was which margin XXXX, Diluted decreased period quarter the was XXXX. year X.X% XXXX US$X.X US$X.X JOYY of prior non-GAAP the was of narrowed same in US$X.XX period. of loss ADS X.X% ADS million XXXX. expenses, in to net first loss negative to in of XXXX. net period in

close repurchase like an our June of up August company update of XXXX. of the addition to expected will to XXXX first be quarterly quarter June shares shareholders In of and XX our we paid would approved the announced the US$X.XX to XXXX, which to XXXX, plan August per its in with million ADS XXXX. on execution on to to XX, XX, program breakout accordance November on XX, business and may be dividend $XXX the May a on dividend of on which distributing provide for we share as repurchase XXXX, Also, of is

shares. of As repurchased company March the of XX, approximately million had its $XXX.X XXXX,

our David’s development and As content offerings. further high market our speech, community, our invest cultivate mentioned, in engaged in user to reach, business highly quality global continue to expand initiatives we will augment

actively maximize will value. also We to ways shareholder explore other

views current our excluding in epidemic’s revenue COVID-XX in and XXXX, Therefore, and the uncertainties Huya Live XX.X% between to our We from million, currently the have limited $XXX subject YY For last XX%. the reflects market same markets change. of and preliminary conditions, the second of be and on expect our million, are and visibility year-over-year to which net to we business the geopolitical this impacts only revenues period and surrounding representing forecast operational which long-term operate. contribution $XXX between year, of the we quarter a increase

Operator, Thanks. call Okay. prepared we to up now like our That concludes the questions. to would open remarks.

Operator

you. Instructions] you. Thank [Operator Thank

Alex Please, go Our first from ahead. question Poon comes Morgan Stanley. at

Alex Poon

for taking rumors are about Bigo the some question Thanks management the regarding, my My Language] there change at [Foreign question. first is level.

to user like and retention situation growth, key the you etcetera? My would there Thank regarding and operating actual countries the I understand ratio impact paying is So, operation? Bigo on the question key is about -- operating much. any very user second regions

David Xueling Li

[Foreign Language] is Hi. This David.

to has potential the have made in long-term the we confidence business Let and Live's Live conviction or In few exercise still months and our satisfy past mean But unchanged market strategy your remains potential execute YY potential personnel near gradually were question. unlimited changes needs development. of some years. XX us to me still even answer market in better that with Bigo of Xx Such would is following may mentioned changes. as what execute did the that Bigo the believe evolving global our the before, in global for the four revenue and future

for strategy would As Likee, there be changes. some

As our business advertising ecosystem in was advantage by our on advertising community. market remarks, we to of We towards spending I seize reduced more trying end. my technology that and and model the prioritize has our believe the have our share in prior content mentioned Previously, sector. social driven to by aggressive resources prepared more spending our

and content pool advantages. offerings in our Via into together technology introduce operation retention we on our rate whereby and try ecosystem, more the creators our would to combine to resources by also the and our that, love premium more content with content localized advantage our to love high-quality improve we we'd forward, operations. content our prioritize content Going gradually

and with history for business years' more already a Bigo, operations is over company that, years few I So have become five the past its it mature. think

in revenue, to and develop Bigo more seek our grows system and we manage talents. a recruit, As scale further mature establish to

Going business forward, our goals. we technology expertise, develop to talent global long-term local and with our better will team continue vision and to acumen recruit further also more achieve

Operator

comes from Daniel question Please, Next JPMorgan. ahead. Chen go at

Daniel Chen

the [Foreign Language] My question is deal. Baidu related to

management So, you. Thank on update YY could Live? your with on transaction related provide Baidu

David Xueling Li

David. [Foreign Language] is This

the don't any we Regarding have Baidu, latest of information. new updates

to filings X, Baidu. sale mentioned are and on SEC still March February the the were in in Live of disclosed and still the the substantially There X YY progress. As matters customer we have that on completed

when as you. by law. required For security will further disclosed be and it applicable information, Thank

Operator

Our ahead. Chung go Jefferies. next question comes Thomas Please, from at

David Xueling Li

Hi, Thomas.

Thomas Chung

[Foreign Language] Thank question Thanks cost about side. as cost you. Can management trend, as the the trend going about for about questions. how we is forward? My well taking off packs and my think margin content should management the share

David Xueling Li

This is Alex.

to For of product the research resources. adjustment localized other operational also mainly promotion synergy activity. reduced prioritizing that was It and development, ecosystem content on the our will advertisement means product and on about allocation mainly the redirected be spending clarification,

mentioned of itself terms Bigo profitable. previously, In profitability it's trend, as Live already

progress products, net this fact operating marks and cost expenses various And improve. segment in positive whole to margin bandwidth be other on good quarter product will across cetera. believe of the gradually the terms et Bigo With non-GAAP turns given we monetization margin The we as able should costs, that such the operating the payment achieve that of of channel cost a more steady start. scale, economy Bigo's leverage items

non-GAAP I margin at net be Bigo look if whole. the should we for think we a achieve as low year, So to full single-digit able

Thomas Chung

you. Thank

Operator

ahead. Our Please next from go question at Hou TH comes Tian Capital.

Tian Hou

if or I do business? could you business. as we wonder Number several you people. That's So more other wonder more about have in the also users group user this David, in clarification new that monetize calls, of some those new and as such and And I updates participation, to also is give on last Bigo -- number I one. ways advertising, two in if the sensitivity us mentioned see around And is the overseas well-developed geopolitics. geopolitics.

That's go potential two my any short you Thank Chinese to questions. foresee streaming a you. and pressure countries, other overseas company video? either on operates as So live regulatory in do or

David Xueling Li

the of revenue, live first clarify decent we to [Foreign Language] healthy to of believe that you is I’d continue promising all, will terms live in other very And tool. of And growth streaming a our monetization coming that coming few love monetization from in see streaming year. do source and

been our we anyone need achieve But to As we have for even to global exploring sector scale we source if very admit well. be advertising, from revenue. it actively would a try this a that for advertising certain in primary still can advertising our of make revenues, challenging as to as

marketing on You the that we to whole and And like terms independent investment to the of marketing, of sales thousands heavy need of source if Facebook you sure advertising, who -- you dominant rely got customers. are know sufficient that Google platform, two start to hiring industry, very into probably sales staff sales in you've advertising platforms and make need tens and in probably of of

higher not that It's period long-term So, would do process, have we time. in be interest a we achieved e-commerce. do gradual of short see a cross-border and within but that more

calls mentioned earnings well, believe I coming supply years, see efficiency manufacturing the still advantages in that of both few quality. also our we competitive product China's do chain in we enjoys still previous terms As and that over as

in process. trade help love and facilitating efficiency So, global participate such we Thank to improve to in still you.

in well For regulatory emphasized have company and has requirements geopolitical company incorporated that sector. we by the and region. and the Singapore policy of strictly day also Since think and the one, in risk, abide prepared each I that been discrete have

-- exceed been with of well total we distributed have are our a across our we in of employees. local terms several reached local lot globe data In number countries. locally Currently thousand. hiring server stored network, has employees also different And the

to Eastern year a reduced. Pacific greatly countries risk as this that see the regions single And XXXX we stand in market of that continue into and each region that can on and other sure think quarter of assets also emerging by such will the in East you policies first we we the Europe, that of we and operate. the regulations as I penetrate markets make So, local Middle multiple

will development We of overall you. the user adjust impact geopolitical in slightly with operating of accordance risks. the expansion and the minimize to our also strategies situation Thank

Operator

Thank you. back remarks. closing all for I management will time That's to have questions. the we hand for

Jane Xie

for look We speaking our quarter. you to joining call. Thank everyone you. with forward next Thank

David Xueling Li

Language] [Foreign

Operator

does Thank call much today. for attending. That you the you. so conclude Thank

now disconnect. may You

JOYY (YY) 28 May 212021 Q1 Earnings call transcript