YY - Earnings call transcript Q1 2022

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the JOYY Inc.'s First Quarter 2022 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'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

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

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

Before we actual that risks statements, inherently continue, from I to cause remind expectations. to to results would which we you like current and subject may our forward-looking may that differ uncertainties make are

latest with on documents annual and other For SEC. the XX-F report uncertainties, detailed discussions of our risks Form filed the and to please refer

Finally, call otherwise please mentioned now Please conference call all I to in Mr. ahead, during sir. Xueling over turn CEO, our this figures will note US and David dollars. unless are the go stated, that Li. Chairman

David Xueling Li

Welcome our XXXX quarter to first earnings call. everyone. Hello

of from weakness, quarter to restrictions, the first exchange a the Let first topline of during world our our parts our growth In to contributed as line an the seasonality, quarter. with started and emerge overview unfavorable start call previous combination of macroeconomic with a expectations me course, impact results. including various pandemic foreign drag on

million, decreasing million, year-over-year. first the X% decreasing group's year-over-year. quarter total For by X% of $XXX.X XXXX, which was was by BIGO's revenue Among revenue $XXX.X our

XXXX. operating improvement When achieved is mainly year growth our environment steady resilience compared the period, of improvement the market resilience first to weak business efficiency. in model to and prior seasonality. sustainable global demonstrated quarter Such profitability to However, our despite has and further a we our during attributable challenging

period. prior we of margin improved net non-GAAP in million, to XX.X%. a its the margin $XX.X to million, YY grew profit expanded X.X% of Excluding non-GAAP $XX.X to X.X% non-GAAP net loss BIGO's profit to non-GAAP net margin year and while net recorded net compared Live, our non-GAAP a

remained $XX.X our reached some the positive In our increasing in facing complexities last operation fourth cash flow I addition, the healthy talked macro quarter business. about of quarter. and the million

company, global international not worldwide are immune a to operations, macroeconomic As we with volatilities.

outbreak in from growth, XXXX lockdowns. experienced general, engagement initial COVID-XX the entertainment early business social mid-XXXX, previous amidst an industry, and greater we a During the of to enjoyed in online as activities acceleration user [ph]

trends significant of our a growth for word lingered era, pandemic the as effect suffered power and and long-term from recovery the However, inflationary and their consumers’ implied post-pandemic These COVID pressures. in the adverse challenges global short economy run. into posted confidence, the macro reduced growth spending global business damped

a high long-term medium irrevocable. of of activities social long-term the and offline entertainment from users individual transitioning However, and entertainment diversified demand perspective, from remains online social global to trend is still

On thoughts further East, headroom our look our substantial we for Europe, I share market. which low, top penetrate further include penetration East operational key operating on product regions, America, rate still of into creates us to South Asia, the philosophy. relativity that, our want for As is Middle the some and North Pacific

the over remain our single which to certain fluctuations minimize in exposure, in us strategy, flow periods. localization regions. vital the we help cyclical our the First, diversification rapid global been globalization from and to has our committed growth Globalization business region through cushioning past

our professionals and team integration. backgrounds We by localization, will with drive operation localize international content our further to innovation recruiting

and upgrading we immersive optimize recommendation the offering user further the diverse our experience community the user our and time, seek services rich, innovation, and by grow we social local interface entertainment with same At premium continuously into content Second, will offerings. by With products to that and ultimately engine our the networking reach further experience space better networking product users, needs, our growth. efficiency we fuel neutral our users. monetization to be content and should expand social and able products content, our of a reach social diversified

Third, strategy the balance a we in growth believe current execute profitability We crucial flow growth. that and is to maintaining safeguard under our sustainable strong will to and operating XXXX. our between OI-driven market to a growth long-term continue element, cash mid our

current operation As size breakthroughs. way. stronger history, products the user-centric marketing to iteration and persistence, evolving achieved capacity opportunities a been We of on model, our with on company maintain listing to challenges have in believe execution XX adapting striving have established cash that in sustainable position growth a and emerging years our significant are growth and to a XXXX robust and macroeconomic conditions navigate we we with the constantly flows, along established continuous

me me we deeper -- let progress dive our drive deep into Now each in of product let made the lines.

MAU In start Bigo year-over-year Let's quarter, X.X% with by grew Live. first Bigo million. the Live's $XX.X to

local multiple respectively. the As [ph] the when and with impacted revenue live seasonal affected just against our prior speaking, paying global X.X% Live's I Geographically dollar, Bigo currencies quarter have and in compared user uncertainties economy in less year-over-year, and periods. US was X.X% first mentioned, operation streaming year by depreciating weakness decreased by Europe

momentum During the and X.X% both their respectively. revenue of our and number users increased paying by from the Europe year-over-year, quarter, and growth sustained XX.X%

improvement localized LIVE, first driving content the in continued user to offerings we engagement. our diversify premier on its quarter, BIGO During

their different interest. connect with BIGO European Europe shows community or produce a within and join feature talented Since and community we background Malaysia, and time the we enhance thus, X.X% WeTV thereby, video and with engagement diversification promoting to it interest groups increased our posts to to others example, like-minded with launch various enabling themed the significantly users venue streaming diversified time each In offer been sessions, people campaign user duration similar access friends, with viewer our to users LIVE. for our the has and users, production to of live sequentially pools. can content been by users launched the BIGO and improved we themes new the average inclusive respectively. of content engaging average interactions. an dedicated which of and content partnered and March, as local live community, for LIVE legal, others, user dining social flourish interact this real-time sessions hosted to as non-real interest-based quickly television of connect global streaming join fostering, Thanks inviting pop-dance, evidenced especially and feature, community, stream improving and X.X% its space streamers from and well with the have as in has reached spend, users. establish countries consolidation -- In to with exclusive to important efficiency our reality interactive our content, as always premium For on various a such fitness, the user dramas

Next, let's to turn Likee.

continued and adjustment adjustment strategy, Following first Likee's Likee's MAU revenue X.X fluctuation MAU of seasonal and coupled livestreaming quarter, macro year-over-year. in quarter, the uncertainty with XX.X% first declined Likee's marketing million reached the its the to the proactive fluctuations. in our proactive due by

better content localized the Middle creators our cultivate in tools through operational However, markets, creators East its livestreaming a quarter, XX.X%. with additional year-over-year and In revenue community services. program. continued other by a in leverage on diversified recording to region equipping than its turned comprehensive support out and interactive nurturing Likee fourth increase by Likee the talented slightly focused

feature, Likee's local diversify features, wedding interactions launched Likee comprehensive creators a wedding local season. ceremonies creators operations Southern team creators a and To their most the certain increased own that social users the content feature attracting we designated interactions dresses, encouraging experience the Likee. online. traditional Likee we feature voice sequentially of networks on quarter. their to life, wedding groups, additional introduction share believe direct produce and number during their make-ups certified related local content wedding support fans real-time designed Following community The to views. SuperFollow online launched million exclusively barriers private the offline, users SuperLike also and their individual users' social groups enabling share to We trend allow will launched the in chat with page psychological of create culture challenges the help creators and number product -- Likee and regions on in Asia and to brand program. first personal Thanks their to in encouraging needs, to feature social showcase of by and our between X.X% own group meet reduce

the Likee User penetration livestreaming two. quarter, its During livestreaming growth between with increasing livestreaming the as and time average of and Likee’s improved Likee and on sequentially. growing optimization viewer videos features continue rate by by with to -- livestreaming integration XX.X% DAU enhanced increase fourth spent engagement XX.X% optimize -- short

HAGO. on Next,

product XX.X% product by to new monetization the quarter, trajectory multiplayer user invention year-over-year. its maintained team's During and insight, XX.X% paying experience. livestreaming on will increased Based features number Hago by user in deep growth its enhance several innovations social upgrade social first further as our user revenue of HAGO explore grow and

items, launched digital screens. a voice in interact XD user reserved the after and XD activities in to in User social more avatar, games. activities casual and avatars Hago XD and launched, another Hago this gifting. quarter, virtual Hago called plans own track, catering engage new following impact feature a features In screens, Space, This the their Certainly experience Hago introducing a channel quarter, we gaming, positive enrich including have virtual allowing create few penetration. variety further virtual user feature XD with was can user's and on Space by of to

share program. to quarter, of In on quarter, Finally, back a shareholders return first bought to capital enhance the the In shares. some through million repurchase XX.X their cumulative we [ph] return. first and our protect updates we interests continue

the of program shares million repurchase previously billion. of XXst, in out of we XXX.X repurchased have As our announced total of $X.X March

capitalizing middle operating diversified our environment resilience demonstrated challenging product metrics in growth prospects together, long-term a social of efficiency the market. global our quarter. global confident remain during to by amidst We improvements, global and the entertainment the continuous business Taken first

will along our the I updates. emerging seek to Liu social shareholders. General delivering We of Manager prioritize committed will flow, of now to remarks. and This prepared maintain concludes my financial the the We for opportunities way. saving Finance, to strong our and value cash while content our Alex our remain a cultivation to call to long-term ecosystems continue turn business

Alex Liu

Thanks David. Hello everyone.

information financial Please the details of in stated. is unless and specifically let Now, our press disclosed go non-GAAP through information otherwise continuing me earnings operations results. a presented financial on financial our basis, note release the

X, As to the completed was substantially XXXX, the in YY Live customary matters February with certain future. of completed on sale be

business We YY XXXX. February ceased of Live since consolidation have

In partially increased same BIGO US$XXX.X costs in streaming US gross the in During continued quarter of first the company's same million million quarter the increased bandwidth decreased the period improved with the depreciation currencies million XXXX, XXXX. seasonality in increased US$XX.X macroeconomic US$XXX.X some million same against first from in uncertainties, US$XXX.X US$XXX.X XX.X% the of by dollar, was live revenues our quarter, to US$XX.X primarily US$XX.X profit certain result LIVE. period in revenues user-based to to usage efficiency and of in as of increased by quarter first of quarter improved the content from the US$XXX.X for net from to in with US$XXX for period XXXX, offset compared our first in our XX.X% of and revenues and quarter the of XXXX. XX.X% particular, million to the costs first first bandwidth due the to the total same year-over-year Cost XXXX. decreased revenues of Revenue-sharing was Bandwidth of to the million. million million quarter for by usage, expansion period decreased margin other to US$XXX.X fees million a million. X.X% first Gross due

XXXX. operating products, execute due HAGO. US$XXX marketing from sales and continued US$XXX.X Among US$XXX.X decreased first from we As spending to of certain and the million leverage expenses US$XXX.X period and including our marketing to to marketing to for quarter the a Likee decreased million same operating in strategy, on operating expenses, disciplined million expenses and sales by enhance XX.X% the prudent million

expansion continued and entire segment we both and in for a result, to a BIGO profitability non-GAAP achieve As our steady GAAP group. the

the quarter loss to Our for same GAAP of in XXXX. same for million was income Operating operating compared the operating margin period million, X% of was first income of the quarter period to the US$X.X XX.X% margin XXXX. operating first compared in of loss US$XX

of intangible compared US$XX.X of million XXXX. Our acquisitions for million quarter, which subsidiaries disposal loss income was operating operating the assets amortization goodwill period share-based impairment quarter, US$XX.X as first this and and same to non-GAAP excludes non-GAAP investments of expenses, gain as of business from on in in and compensation well business, of the

GAAP quarter, of XXXX, of Group's was loss XX.X% of margin expanded XXXX. cash million of prior XXXX. to to to the to first JOYY in for US$XX.X net JOYY compared of BIGO's operations margin improving in income with the corresponding net to in compared continuing income income from first non-GAAP compared margin to improved prior operating million, as non-GAAP was X.X% controlling in Our loss XXXX Non-GAAP Net net X.X% of of loss well the non-GAAP booked period million, US$XX.X XX.X% in continuing X.X% XXXX same was margin operating income net first US$XX.X million quarter loss loss of million. non-GAAP in XXXX. X.X% same in the from margin XXXX. $XX.X the profitability, year interest US$XX.X was controlling flow the to Notably, of the a of of in XXXX. the million its from margin operations period cash first period. of non-GAAP our loss X.X% of operating X.X% attributable period. quarter activities margin We period net for first period of maintained year non-GAAP net loss attributable of the non-GAAP quarter The was interest the in of to US$XX.X first the Together with from in compared income in strong net we operating net compared inflows first net quarter the net quarter quarter to same have the

continued XXXX, August of on shareholders first we of close paid have on is quarterly to of returns of in a of repurchase. announced XXXX, the X, XXXX, be for enhance be share Importantly, shareholders dividend dividend expected as and June and quarter XX, ADS we will US$X.XX to per accordance our to with which plans, to the business through previously July distributing In approved November dividend record XXXX.

plans, additional September to in shares repurchased repurchase In Board Directors, US$XX.X Additionally, billion these company share and under quarter, of has have XXXX, in shares an November the company which its its million the under of total. up first repurchase the our US$X.X programs. authorized additional may of

these As and profitability approximately confidence programs. the of long-term had repurchased effort million company demonstrates our in shares March This the XX, XXXX, in US$XXX.X total its company's growth of under prospects.

and actively repurchase to create We for market will to current continue shareholders conditions. value utilize our share

Going cultivation social forward, into just we David mentioned, while as investment prioritized ecosystem. the and of our content

strategy. and to us This We ROI in to improved business growth with continue to each operating flexibility our seek a plan will execute will for financial strong and sustainable provide cash our invest we maintain products continue to our enhance driving operating flow. of our fundamental to leverage, capabilities. We greater returns believe

exchange environment business. business also the global impact countries. activities continue for our in volatilities to post online For anticipated lockdowns we of pandemic and related negative uncertainties certain from outlook, Macroeconomic our social fluctuations, rates entertainment some gradual have on user's we lift

XXXX remarks. macroeconomic net our call of Operator, which our million limited geopolitical change. which expect now We and only we US$XXX for second and preliminary to views market market, the COVID-XX open-up we pandemics Thanks. to and be visibility and That current have on to subject environment. like revenues reflects prepared long-term business forecast the operate. surrounding Therefore, currently our uncertainties We conditions, to are in our million. operational concludes and the would the on this between US$XXX impact the questions. quarter

Operator

you. Thank

ahead. first Please Poon session. Alex question-and-answer come the begin go will Instructions] now Our Morgan at question [Operator will Stanley. We from

Alex Poon

weakness [Foreign normalization and related in post-COVID My first our the costing revenue to the question half. is first Language]

Thank to like started just us So our expect have should us, casual Can subscription weaker growth? when to management share XXXX Twitch share on business full revenue growth? year-over-year on My macro strategy? return the a Vietnam. second the growth you recently has management we to about new do in management question we is with business can also plans? positive plan monetization mentioned to new you. and TikTok, business, And now look any game Do revenue at related we also with start how year impact environment

Jane Xie

Thank you, Alex.

the users' as as travel, resume just since impact adopted the social that For XXXX, noticed half mentioned, activities. the And pandemic I global during financial still of has negative the your as pandemic offline easing well actually long-term there effects on as of users online regions first been multiple have we a the plans are last global second have question, monetary year in economy policy. as on especially continuing yet, stimulus

uncertainty removed, their of affected consumption raising gradually growth see being confidence global also and we consumers' policies the paying the also increased inflation these and As economic capability.

macro of pose world-wide and challenges short-term. for want operations. business apply are come we've with So, definitely the to often with is us not But the alone, challenges such trends out challenges. for they that uncertainties these in adverse actually opportunities point And growth our also all companies to

a the past the navigated So, growth two a pandemic reached business meaningful as successfully capture see has uncertainties you and XXXX opportunities. scale. of XXXX, in the years years, between we can billion and have have during profitability operations, the Through We market from multiple our achieved million And revenue since of also, cash to XXXX. year flow. and we year non-GAAP our grow XXXX relatively $X.X in in XXXX healthy managed the to $XXX operating maintain we

us all opportunity. see us by the solid help the So, better growth lay navigate to for posed challenges this foundation environment macro will experience further and a current

track market to same given growth environment, So, and and And dynamics act continue uncertainties progress. closely macro as the for our we XXXX outlook, of profit. our we'll the keyword the balance rising remains prudently is to

the your [Foreign you tried in sustainable And advertisement second actively additional previously business. noticed if been our monetization, new explored and seek to has on actually, growth strategy Thank exploring that question global monetization Language] continue and we we resilience will and of execute have about recently, also maintain our also the have ROI-oriented to previous -- membership We been already And introduced you. years. this tools.

the Likee SuperFollow And feature allows HAGO monetizations. subscription charge HAGO, example, to For publish have group. would by Space monthly last creators some to new this introduced XD the fan also fee and launch, contents and quarter their innovations and recently exclusive feature a

stage admit are would I the early current like development. of features still to However, at stage, in that the these

more they so So targeted small. improve be in -- are and revenue short-term would relatively the contribution user to product their experience, to

For our can is accounting QX, you of Group's example, for in $XX.X see our million, revenue X% that non-livestreaming slightly about revenue. over

we'll further to drive continue observe you. continue explore stream. new So on user we'll diversification revenue features. to feedback these of our to opportunities And Thank

Operator

question at next Thomas ahead. Chong Our go will Please, Jefferies. come from

Thomas Chong

And [Foreign the Language] questions. question the Thanks about margin half the for management regions? for my trend? landscape we the Thank business My about first should How should side. taking think XXXX? think second expenses expense in as the competitive well is question as And you. about outlook, different we my how the operating is second about

Alex Liu

Language] [Foreign

David Xueling Li

you, your question. Thank for Thomas,

think Regarding I the landscape, macro the pressure environment. your from comes that competitive main question, on

As as activity, I've the at just mentioned, short-term spend paying beginners there well. capacity online would under be time and users of and fluctuation a time same

online and providing range products we that with means wider need engagement with all better better this by service of and user compete industry for So competitors gain both offline. and players, monetization opportunity to a

products we should on what when revisit product of intention to the are fundamentals use we believe users, and planning I that's them original when strategy. were why these -- focus that our we the So drives

our entertainment experience. innovate the social long-term as always has more our It on short-term a are will compared fundamentals in to And the market be uncertainty, marathon risk huge from control social of sustainable still long-term there. critical to competition will potential. ecosystem continuously and to users' that continue products a focus believe increasing cultivate times I and we of than macro ensuring So growth our game. and ever. And will be long-term such content perspective, global products, social the improve

to our worldwide control mentioned, believe that by just already we our advantage And relatively healthy years reached our I [Foreign and business our flow of growth continuous also remains we’ll mentioned growth prudent model, I've market further grasp scale. strong able thanks cash terms Language] competitive already sustainable better non-GAAP have and opportunities efficiency, have I've As the model. and support be the As our BIGO we have just X.X%. risk in a be sustainable and achieve that cash now, growth increase to steady in And our you. established and our non-GAAP growth forward-looking Thank well. and gained achieved margin operational net ensuring achieved to the strategy of operation, in flow proactive the as XX.X%, We first group achieved of and we quarter. operational additional meaningful profitability. capacity profitability margin segment non-GAAP GAAP And improvement have non-GAAP believe both with of net enhanced of two being and a share.

savings So and comparison year, we non-GAAP happening cost the period you operating between improved, gross multiple at if same saw items. was margin across both QX expense last look our and a

the we’ll further and overall So at sustainable our ROI-driven strategy each and product efficiency of improvement the continue given enhance growth our lines. drive macroeconomic further uncertainty, operational the current

segments, in to efficiency. improved narrowing based we're also expecting other segments steadily various improved would items narrow BIGO segment still operating to And year to We're and further we be on further for the stable product improve for expect also to full losses continue -- remain be non-GAAP XXXX. so achieved the savings margin expect XXXX. gross to And further in full various profitability cost segment, efficiency. the XXXX. year in year we the the on year on And lines will Thank operating the And for BIGO due year you. losses level other preceding its

Operator

come Please question Zhang Yiwen Renaissance. Our at next from China ahead. will go

Yiwen Zhang

for my Thanks Language] taking [Foreign question.

you. we usage. balance cash even about cash know repurchase investments should our Thank think we share abundant dividend We how do that sheet. balance regarding How overseas question have business or payout? on there's I the namely, usage So priority,

Unidentified Company Representative

for you your question. Thank

will for on based and long-term the to growth sufficient that terms I based believe shareholders. be cash return for flow position, our able In earning we keeping continue we needs. between cash balance business cash on current be to development also plan enhancing and should usage, our prudent our a of

share business -- ROI-oriented we continue to to create in execute our So, strategy program And have third been the business, in end continue meantime, these we US$XXX support, and billion had of to their will returns organic by the dividends we be quarter terms quarterly growth million dividends reward repurchased our shareholder the to XXXX, cash in our the fuel and XXXX, million and expanded three invest the plans. of growth already dividend more plan. in to approximately have for quarter, first end repurchase And of in execute years. our to in following also the year dividend $XXX a have global have $XXX of first buybacks. the investors actively announced we quarter, plans enhancing under distributed declared the with we long-term as million And $X.X of share year by approximately via value. we In such under the of total size

return very sizable our at as amount. that well. as percentage believe can of look from cap, is you see sincerity current shareholders, our if that So, overall our capital actions our investors market our We the a to

Jane Xie

you Thank call. our of with next end the look that's you. and we joining everyone quarter. forward speaking to for Thank And

Operator

you today. Thank call for very joining. conclude you the Thank all This does much.

now may disconnect. You

JOYY (YY) 1 Jun 222022 Q1 Earnings call transcript