- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Incorporated Third Quarter 2022 Earnings Call. [Operator Instructions] I would 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

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

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

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

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

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

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

David Xueling Li

everyone. quarter our call. earnings third XXXX to Hello, Welcome

Let with of revenues results. BIGO, uncertainties, line global macroeconomic million guidance. previous million our recorded including from overview me $XXX.X with Despite we of in in quarterly revenues, start our an $XXX.X

have optimization improve measures Our decisive and proactive effective. our been operational to efficiency proven

$XX.X During million when XX.X% excluding net non-GAAP at in quarter, a XX.X%. net the $XX.X net net third BIGO margin non-GAAP a margin of non-GAAP YY recorded we profit the segment with of million generated profit, a of The non-GAAP Group with level, Live.

growth. cost a of structures power further as are businesses. synergies, discretionary same increasing of been our of time remained and lifted users' and half regions impact ensure to trends and the business. continues of global users' are core diverted unfavorable we adjustments the XXXX, our enhance million At restrictions some cash activities. management sustainability our Ongoing present, Since international At to and and comprehensively for series spending purchasing exchange and to inflow undertook consistently in affecting operational importantly, are and rates $XXX.X uncertainty have reopening product Meanwhile, reaching inflation and adversely operating we efficiency, continue, spending. travel reviewing processes health More short-term monetization strong, being macro offline the our ultimately the the operational first improve quarter. time,

forward-looking measures to above stated Our of to optimization have challenges. navigate effective goals macro equipped and strategic planning the through our execution better current us the

global inflow profitability and XXXX, As even XXXX, a as our deteriorated. result, expanded during achieved further we macro and operational our in full-year conditions cash profits improved

our the three XXX.X% its $XXX.X quarters During up to XXXX, first of non-GAAP net year-over-year. BIGO segment million, expanded profit

continue efficiencies. we operational current the will further growth while to macro Given enhancing sustainable, high-quality environment, our prioritize

opportunities. remain forward, capture to growth our to delivering we we our value are users our on increasing position us long-term Going near-term business headwinds, product creators. better long-term focused macro will confident resilience that Despite of and strategy

growth high growth yielded Our in comparable Live's growth we effectiveness Sequentially, encouraging, efforts of the with quarter, and pandemic year-over-year results. have positive increasing XX.X reaching in MAUs our the considering XX.X% million. also impressive increased that historic a period acquisition new to was of a by This witnessed user disciplined the efficiency scale spending, such was Bigo during of strategy. particularly demonstrating is marketing period. of achieved the

community our activities our premium the content, improve further factors local innovate Looking These growth and over initiatives ahead, product to satisfaction X positively time. continue experience and monetization, will we user tailored organize interactive that user markets. to of features, ultimately, diverse correlate and cultivate user facilitate will with

on the Middle risks any Southeast allowed flexibility single the us to including America, from greater us across Europe, operations Asia, and diversified have number In overall relying regions, a North addition, market. mitigate of given East, and that our arise

resources markets dynamic governments the market strategy generate conditions differing markets. with will we devote contain enable us and current closely more challenges, the adjustments of pandemic outperforming will against higher and to and a refined monitor single-market-focus, ROI backdrop macro macro shifting of this measures As volatilities. towards employ to tackle Compared a

Going globalization remain we forward, committed our to strategy.

further continue to knowledge. will localized vision, operational capabilities enhance international and We our teams' global and our local technological local talented by strengthening experience,

closer our of Now in look let's each take developments lines. a at product the

growth We trajectory Despite operations product headwinds and effective Bigo local maintained its the will Live. macro monetization with and feature thanks Bigo start upgrades. challenges, Live to user

third X.X%, increased increased Live's East and year-over-year MAUs while the in emerging year-over-year. X.X% MAUs Notably, in Bigo Asia Europe and the quarter, XX.X% MAUs markets During other and respectively, by million. Middle increased in XX.X% to Southeast XX.X by

Bigo also this observed Southeast regions, users a Middle across of growth the paying number number North trend America, Live's Europe, as quarter. in various the and in Asia sequential users recovery paying We resumed East of

premium the During operations quarter, cultivated content developing Bigo and diverse, content. localized ecosystem further its by Live emphasizing

Live interact users. and UK, across globe, and of the media once U.S., with for unique fresh of Middle all-new Malaysia, collaborated France, of of a Bigo mascot East in of series pre-existing the one in BIGO region. variety dozens North experience. largest radio Dino. Thailand, show, a including an X-foot landmarks starred the gaming East, wide held the mascot, stream high, and its The Singapore, XX-foot to elements with create combined Bigo For viewing appearing standup popular most again local livestreaming broadcasters professional the Malaysia's The Live events Africa at a In to top mainstream launched content with world countries including the Bang Mobile Italy, Germany, tournaments and forms online also Middle Live streamers Bang entertainment and of example, fall tour visited on-site to some Legends: Bigo Gagaga, Live's and show in comedy. featuring Bigo

communities. Live awareness the performances the users, Bigo During audiences. bridging encouraging join local online their a at promoted invited to local At This challenges, of experience tour, meet time, popular to stimulate events. interaction. friends our number and among host Live to Bigo create Bigo streamers in videos a and the interest memorable festivities Live product users unique, efforts helped local same and these local These offline for brand a for tour-related combined and of number online launched

of to diversification the and increased content creator XX.X%, XX.X%. its feature iteration BAR contribute and engagement per and the views community to content increased BAR's in improvements the user user of video Our continued localized support Sequentially, by volume channel. by average

to turn let's Next, Likee.

respective order are we disciplined optimize and Likee sales As and in currently cost the reduced growth. to we for focus to and continue narrowing ultimately steadily further loss-making, line achieve the such compared the We in XX% year their as aim our their loss. period products capabilities narrow and strategy, quarters expectations, to self-sufficiency. previous year. a their on operating Likee's and this mentioned last to that In organic in Likee's quarter, marketing in of three stick still loss was steady progress the monetization to improvement structures with made Hago, to same operating in by respective first operating losses the third quarter,

interactions. to and Loop On second users content the the Europe has launch quality trial This in around product in further U.S. officially update front, improved of helped Likee feature following the Loop has world. feature interests the connected other share introduced regions to the of with similar Likee's better quarter, user the and the

sequentially, in X.X% sequentially. anime the result, Overall, in-app user per users community of per Likee on XXX% instant day videos grew time the increased same average As the number while by by period. a user in increased shared messaging by spent XX.X%

include efforts activities, regular addition expanded to its local to on impact positive operational Likee localized activities its have a In that communities.

countries, conservation. in Asian information launched in For as dedicated on partnered are relief, of an Southeast with aiming public and currently to example, users energy Minute breaking awareness Likee's after raise disaster the Separately, local a other flooding of XX users to Likee of pages details real emergency for launch facing Likee to some a number response, time. School government share energy campaign crisis,

During attracted and tips of conserving the with X the the creators other Minute providing than users. importance important participation from and access and electricity, more teachers to videos of useful campaign, information. power-saving convenient XX users The campaign about posted million School

can we Next, to Hago. turn

upgraded paying over rate further operating third the monetization launched and thanks to feature the Space. immersive, and Hago enhanced users and Hago's paying new users. user interact increased a freedom revenue while During its new user loyalty substantially loyalty and quarter to chat scenes spending. number contributed long Both greater over the growth loss of were XD quarter. which to improved appearance its one-on-one such previous Hago Users the to its XD these disciplined updates avatars, both of costumes benefits, feature and to tail quarter, in granted introduced an the narrowed promoted as Thanks penetration of updates and and initiatives engage Hago Both livestreaming upgrades, spent in improved experience. their significantly the time also Hago year-over-year, opportunity interactive its voice drove and in given spending. increasingly virtual and Space's innovative, user interaction karaoke. users' further average previous both designing

by from sequentially. importantly, revenues More increased Hago XXX% Space

relatively seeking Hago's user further further to revenue improve to the experience Space's Hago Although, its feature and bring small, contribution monetization is diversify we streams. still to innovations more

Finally, return. some updates on capital

bought shares. During our $XX.X an the quarter, back additional of we third million

$X.X As repurchase of our have of announced of shares, previously million out a total $XXX we repurchased the September XX, of of program billion.

repurchase the up extended has $XXX the program, expiry of may to Board million until which XXXX. we under Our November, date

we actively third drove environment. our continue of execution the to of achieved localized, to to in forward-looking offerings, the further By To profitability on share community. measures program long-term and of long-term a strategic content volatile reward the strategy, improvement our diverse product our our emphasizing steady, support planning our Bigo spite user Live's will our and during upgrades, in shareholders. optimization efficient effective growth focusing adhering We macro utilize of combination repurchase quarter, of order the growth conclude, in

continue invest our We to delivering on the building adaptive in to our creators via flexible focus long-term and and will and users products. value macro environment, capabilities to remain

become opportunities confident capture This Alex prepared remarks. updates. to will concludes for better will Manager positioned are turn our value. as be of and my sustainable financial growth generate the now to General we and Liu, increasingly I efficient shareholders' resilient, Finance, call we We that long-term

Alex Liu

everyone. Thanks, David. Hello,

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

YY was customary on with future, YY the Live sale completed February XXXX. X, As ceased of consolidation be have matters in we February, the to substantially completed XXXX certain since of Live business

was total negatively paying affect Our million user uncertainties for to period the million in and to third of rates due the sentiment. XXXX, compared revenues which same macroeconomic $XXX.X primarily quarter exchange net $XXX.X unfavorable

due costs, the such with operational in result maintained the million the continued same revenue we and sharing of as continue bandwidth from as healthy proactively profit in implemented profitability. a costs our improved million decreased measures, to gross and As series of we growth to by revenues Revenue-sharing period of operational gross year-over-year, in third execute of in cost XXXX. and Other strategy of Gross of to primarily operating content in a $XXX.X period to million. XX.X% efficiency. million same decreased was compared year-over-year sustainable XX.X% Cost our $XXX.X with quarter XXXX, for a optimization XX.X% margin $XXX.X third growth third also quarter, cost. of trajectory increased fees the optimization the a quarter optimization to $XXX.X our costs

$XXX.X third the for decreased to operating Among acquisition. to the and from user of expenses the $XXX.X and million expenses period on $XXX.X spending same disciplined to from expenses, operating million decreased quarter marketing XXXX. million by X.X% due efficient in sales Our million $XX.X

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

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

income quarter XXXX. the Non-GAAP interest the the in one-off compared to of same company's $X.X an period the as million $XX.X a gain XX.X% Our income in of net non-GAAP prior income reached from X.X% period up year-over-year. net of Together upon maintained compared in our Net of X.X% strong operating third remeasurement that of XX, was million, has of non-GAAP cash announced XXXX XXXX, the It JOYY GAAP for as mainly net the operations August Group's to recorded of year improving margin was with compared net improved $XXX.X was investees margin profitability, million XXXX. in investment net first accumulated well. operating interest the net XXXX The quarter with continuing to of the to JOYY XXX.X% XXXX, year corresponding equity BIGO's flow compared income income third was third expanded million $XXX.X its prior for $XX.X three quarter X.X% of period non-GAAP third XX.X% in compared means attributable net margin of of profit quarter to period income X.X% XX.X% the XXXX. period. controlling to was XXXX the the of margin the continuing the income have third BIGO Notably, of to consolidation quarter third margin net to in controlling period. income segment from operations on quarter, the same in in in million $XX.X XXXX. in X.X% million due to from in non-GAAP income same quarters non-GAAP of we the to attributable by

$XXX.X we XXXX, XXXX. of activities of net of September inflows operating sheet balance with remain of a quarter a strong of healthy XX cash We booked position as million. third the cash For billion $X.XX from

of to $X.XX the Importantly, dividend to business will of the dividend on accordance and plans with repurchases. November, we quarter December for dividends returns third of announced record distributing we and XXXX, in In August shareholders have our be as through XXXX, to ADS shareholders XXXX. approved XX, continued of of enhance a per close previously quarterly share

$XX.X have quarter. million repurchased our third we shares repurchase announced Additionally, of under the share our programs previously during

have programs. September total share our approximately in XX, of repurchase we As $XXX $X.X of repurchased XXXX, million billion

capabilities should in keeping enhancing to our current invest return balance building and cash to Given cash between long-term position, be our we shareholders. able for sufficient our

the create We condition. will for value actively under current shareholders continue to our utilize repurchase share to market

we Going users to to value committed our forward, creators. delivering remain and

into We environment, capabilities, user investment building and our the macro community business. and will adaptive remain global to prioritize growth to of long-term drive effective our continue high-quality and

operational expect only to million. on quarter net be questions. which and on in have the remarks. subject For forecast reflects prepared and That $XXX XXXX we we the revenues operate. XXX our business now outlook, surrounding current concludes preliminary markets we macroeconomic the are change. currently for our open uncertainties of Therefore, between limited fourth this like views We and the our visibility and would Thanks. Operator, our market our to the up conditions, which to to call business

Operator

Thank Instructions] at Jefferies. Chong first [Operator question from Your Thomas comes you.

Thomas Chong

we the Can My for about and BIGO revenue about current across the think taking geographies? we management management Thanks provide trends? well macro different as questions. question QX among environment the how And is breakdown should the guidance. business if into other my trend also, as look a reopening,

David Xueling Li

the X to and in From our Australia local the Italy. your users’ time, can David. Zealand macro Live Asia of at as such the countries, XXXX, This affecting Western of as dollar question. we different reopening restrictions of currencies quarters lifting inflation, see to first And uncertainties travel also post you, aggressive latest could of trends first Pacific look respective a in of expect U.S. can take and see the in currently see still sentiment. Thank still achieve paying observation, regions, we activity, the around against The QX countries to are countries, negatively appreciation is positive the the is various if market together managed we increased that will closer Thomas. year-over-year that growth and negative macro the U.K. lower some also I BIGO macro that Bigo and as Annual operational of as some offset of host also the promote challenges. the part number in end Gala impacts. create reflects Yet macro European its regions in guidance so an and Philippines levels and But and activities our impact. like our such to we some negative such of tradition, user New regions current with facing will QX, are same take each some world at we

we their different business diversified sometimes markets. markets. environment, ultimately, related that in has But improves the contain employing that been it could to and So it’s tools believe that of also the that be level fiscal to their to might government to our across it development macro respective related be remain the pandemic policies of those meaningful the and

towards as and We order those monitor conditions outperform markets others devote resources a shifting you. will to higher in continue market Thank more generate ROI. closely to to the compared that

Operator

Your Poon Morgan Alex from Stanley. next question at comes

Alex Poon

My question in cost margins. And discipline? is to margin look management at us share how the on should we progress with related Can XXXX?

Alex Liu

the Thank you, will I Liu. take for question. Alex, your This Alex question. is

expected expenses by we mainly marketing we XX.X% when that in quarter, also, due was and as costs. Bigo of And optimization you as operational growth disciplined the X%. costs, of personnel Live a to last the well BIGO the margin margin if were profits a And in the XX.X% Our improved you XX.X% with closer take BIGO third to see net BIGO than third of segment, still quarter, segment content continued to year-over-year at segment’s was even in see margin a year our achieved spending payment achieve to this gross achieved that net stick non-GAAP lowering non-GAAP managed better from can Group can up and efficient look And in MAU. we channel of quarter XX.X%. the a quarter that effective in lower

BIGO the previous quarter. Still, of has gross and margin X the our if to Annual non-GAAP decrease for fourth net over margin expect the our look the reached Gala, from up first XX.X%, quarter, the impact impact, you year full seasonality of X.X% segment margin XXXX. for at already the non-GAAP we segment the the net quarters, BIGO accumulated considering For for

So, profoundly original the improvement has and expectations. was outdone our quite significant

you. we coming So, and for adaptive improve believe continue the flexible high-quality our We will will self-sufficient, improve prioritize costs steadily global in our operational to our and to on and an of Thank further are expenses currency increasing number constant our we efficiency. turning that be growth year the environment. still to XXXX, optimize We’ll basis. able macro a profitability remain products non-GAAP as to

Operator

at Suisse. comes next from Wang Jasmine Credit Your question

Jasmine Wang

taking the for My management question Thanks question. my side. is on user

is next for growth what the So, are drivers? the outlook user what and year And beyond?

David Xueling Li

Thank your This is question. take you I your for David. will question.

look achieved Firstly, acquisition user can its organic third large localized of we premium diverse And in become at more marketing mainly without X.X%, Bigo our continuous our the of and proportion our in activities. increased continued with to quarter, and that Live, increase a Q-on-Q the MAU XX.X% of means increase Bigo to of quarter. Live's operational spending contributed in by growth the efforts products can has innovate effective. see meaningful a that strategy we offerings and was cultivation that that Live's our was content Bigo It

and dozens communities promoting with the in with our For cities prepared remarks my in awareness interacting visiting among manner. just world example, a various of Bigo cause for teams world streamers live Live effective users brand and quarter, a the we the I our organized offline tour around in highlighted countries local local as in

localized in to growth. Bigo and quality activities, explore both innovation sustain and online, operational user order its efficient help innovation our high features offline to Live We product in in our together content will with and continue

at priority their improve products Hago, these At their our and loss we on retention the further enhance in on the level time, to If rates products at organic to focus and we'll of products sequential the of operating still user to are self-sufficiency. monetization For we capability continue and also quarter growth. the fundamentals and improved a were operating their same loss Likee have these and step of current look quarter, achieve is see can these X recent to both that one narrowed basis. breakeven products'

and we Thank after approaching Hago revisit So, base they be would user you. a in position better with believe Likee self-sufficiency, that both adjustment. to the expansion

Operator

Your Zhang Renaissance. China next question comes from from Yiwen

Yiwen Zhang

our the also, question including management My was Thanks is the comment our my for taking which This user in regarding well is and important year operation, spending? hosted East, engagement Can Cup. impact World Middle the market. user as question. it on

David Xueling Li

is our question. believe This you. your I and both David. I business. answer World Cup Thank that positive have on will the impacts negative

During DAUs’ short of our the such from entertainment as spend users expect media users’ Cup, time traditional increased an time engaged such on streaming or such as off-line games in where mobile more our held entertainment divert we be there in is activities, through as especially some Middle possibly East, watching participating will in live TV negative the social spent spent, event number products and countries user products which the World the to time some and team. with videos. might Therefore, our a impact of

activity However, for in special this be content us also a opportunity could to users. for our an bring

team-specific For streaming Cup Cup, to World a have host enjoy World activities rooms, such and to football Live special commentary Bigo our users to series also Likee and KOLs related Cup and help the live launched event-specific sessions inviting theme, the launching World et example, as on also of we better cetera.

activity Bigo World monetization an number activity, So, you. expect should operational and of together and that we activities Thank host user QX Annual be creator Cup will Live considering Gala, on promote with its user impact neutralized. increased to in from the

Operator

Your Citi. next Gong Brian question comes from at

Brian Gong

strong on translate myself. trend cash the our geopolitical the different to in of can markets? plan business hand? on also any And what overseas usage management will I is view update and management regulatory our How risks does

David Xueling Li

This Brian, question. will I questions. David. answer for your you, your is Thank

compared a that players say that it's for And just But means are also risk first a be a look global it a for then when some it's And company. and the fact emerge say neutralized but you diversification, risk regards better. risk and risk clear to geopolitical there because focus usage, your always to there opportunities, better a market single market at expenditure. normal player factor When set say of reasons geopolitical would that impact as operational time, we some we industry. single our it would the like of with question to compared uncertainties, level, position risk but to does such today, long-lasting in emerge. positive current for usually, risk, a our our we I'd we in would on it's growth macro For global actually in more the global some global the business operations reason, cash given that in as geopolitical regions. and and global a With to reviewing player are for become various a not we might have have sharpening selective company exposure. And priorities been on comes global created that for

that mid- will prioritized our growth. long-term we believe our that also for businesses have crucial in be and investments businesses to core We

making making we enough So, sure between it's holders. organic a our of businesses that own of return matter sufficient we balancing, also capital to and growth our ensure to that have capital core sure our balancing for

cash improving our healthily You have see that flow and been strong a operating have very flow, we cash position. cash from very can operating our

generous we still in been As a that very growth, enhancing is returns. seeking shareholder have company

especially million the million, have share to cap. approximately repurchase remaining still profit repurchases, quarters. the is at it to we you X XXX% of of to sizable, which $XXX look have today, dividend and non-GAAP already equivalent we first of program market net our And dividends and first you of when our distributed the very $XXX.X as which is in X in million $XXX share quarters, program If total up compare via

to flexible invest for and our financially So a cash continue shareholders. keeping balance strike and to to sum sufficient business between up, return enhancing we our remain will in

believe taken the speaking I everyone We you. look that have you thank call. Thank next forward to all already our and joining So, with very much questions of quarter. we for

Operator

attending conference now Thank for today's The you. you presentation. concluded. is Thank

disconnect. now You may

JOYY (YY) 29 Nov 222022 Q3 Earnings call transcript