Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Inc. Fourth Quarter and Full Year 2022 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. Jane. ahead, go Please

Jane Xie

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

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

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

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

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

otherwise that are figures Finally, in unless dollar. during call US please stated, this conference all note mentioned

Li. Mr. ahead, now our Xueling to turn the sir. David over I will call and Please Chairman CEO, go

David Xueling Li

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

and non-GAAP with fourth $XX.X profit an the quarter $XX in -- of fourth and overview $XXX.X million BIGO. from our from in include non-GAAP revenues of In million revenue BIGO start a million include we results. in net recorded quarter, profit, me $XXX.X net generated million Let

non-GAAP net of segment a net $XXX net of BIGO our -- year margin net with recorded at For of profitability level come revenues we of million non-GAAP in as further XX.X%. earn non-GAAP non-GAAP X.X%. group the level of in the a which improved full BIGO. $XXX.X XXXX, million margin we billion achieved the at $X.X profit a with from non-GAAP million group The profit We

despite challenges, we the on our spending user content the created to users' of strong that our uncertainty on high-quality of focus growth, efforts dollar a continue these US control by engagement the top headwinds, community, by of products normalization, downward factors impacted results. backed year as and marked macro and on our online actions pressure pursue various post-COVID combination payment, concentrating high improved short-term XXXX and economy [ph] to sustainable, execution inflation companies line significant our contribution multinational be of yield keeping capabilities, the By could we we've taken and our quality, strong growth. on

$XXX.X First, our second non-GAAP non-GAAP net in Live. generating This improved year-over-year we level XX% net sustainable at the cost XXXX. year of net consolidation and efforts group since of by and level profit continuous the million efficiency. continued profitability to represent profit positive Thanks growth operational at to path profit of consecutive our group the optimization a YY our non-GAAP our in

user of XXXX, fourth in Second, last from in Bigo of offerings we and the achieved XX.X% which in user experience. This as witness the XX.X% spending. of our its of growth drive accelerating quarter its Live it -- the the by marketing and was the year-over-year disciplined was grew improve Such year. acceleration social MAU period by in noteworthy. as continuous more up content of normalization Live Bigo during of highlights acquisition a backdrop And cultivation capabilities, post-COVID a

maybe and of micro limited another macro that Heading remains quarters. global linger -- two it's XXXX, its possibility or possible the into elements one headwinds visibility for

and not are will to online. spending short-term increasing trends they and offline their the -- from reverse pivoting value this However, secure time among of using

market We fit lives As products a and enrich we with users through remain their potential. our committed facilitating activities growth massive services. online to our and

growth. As need such, balance actively strategic and pursuing to uncertainties between we slight macro short-term long-term navigating

better with and our will means uncertainties, near to entertainment profitability continue term. focus the on we macro retain our current This the the of In do business quality we will less. in

our continue order our refine our flow. we We we resources operations our and ultimately, will will to long-term with ship content will efforts organic social out continue the strategy we improve high-quality product maintain our further both cash its In of high line both Optimizing in capabilities. to business localized try in operating discipline as and meantime, and growth. and marketing and to core further strive our in which investments spending social potential experience, in growth business steady revise into our that our will maintain

Reinforce position confident growth opportunities act are remain in and to self our the that We flows. financial swiftly as rise. sufficient size our we long-term can cash strong

Now let's take a closer our products. look at

Bigo obtained by bigger XX.X% In the trajectory, Asia other during fourth increased growth line. million acquisition Live's year-over-year thanks user MAUs strong user year-over-year. logins We the to Bigo increased effective increase XX.X efficiency Southeast to Live's and in the will the notably its MAUs markets XX.X% emerging with quarter, quarter, start and

global. you group might to creators Netherlands, localized diverse -- month local as join The Bigo see of the one November, highlights fans Sneijder Trippier, pro England, and Kieran football out live forma football local commentary sessions. its selected Cup, by ambassadors were football host better During World the XXXX Live the well-known Live's World stake live Live's responses such as to Bigo Wesley professional content Cup with interviews a Live’s communities. at In players and rolled Bigo Bigo on the engage around and to

engaging creators. who Live for which a Cup. We users, also an to XXX The groups established dedicated during room connecting on World fully This and decision posted content. Bigo chat successfully concurrent speakers, support discussion create to create to remain community original encourage experience we our up the value effort and the share to

first In BIGO January, at flagship XXXX Theatre. Capitol annual Singapore's Awards Gala historical hosted event, the our we

our in honored tenants stage, -- platform platform. Bigo we what talent year. to when with building of boosting creators is the contribution Bigo class performance diversity incubate viewers recognize Bigo worldwide community communities and visit over in to the and also watch, to event, X from award our and hold effort is further Bigo exposure making the our a Lives today the on their our Live promote on in in contribution approximately will past activity and the from was XXX global families the just During featured across Live into future million continue our top of

user go-live X.X% X.X% increased quarter, In the live sequential session, comprehensive number number and introduced of the live new per in features. and its -- the streaming rooms Live of recommendation by effectiveness Live by conducted and a Bigo This experience. live the during of increased streamers a first on live On session the interactive a Bigo average basis, live upgrade and tools fourth quarter. the of improved streaming

Turning to Bigo Live monetization.

of to assumed micro-chains. paying East, we continued was Notably, quarters. America, activities negatively will by offline and growth the user In number user During global sequential entertainment have the paid for during impact fourth and several impacted North lines negatively quarter, Middle the also users of Europe monetization as spending was world. the to be two in the number diverted consecutive

efficiency content we Looking pivot world we product improve Middle Pacific services local Europe, the aside Southeast a our Bigo include, around America and and via in and and Improvement user regions acquisition Live and operations. Asia. priority, further in and in as user innovative innovation aim XXXX, engagement interaction Bigo continue to the rates remain will the user to multiple Live’s penetration expand East, Eastern

by advance year-over-year. and likely life live monetization loss brand. of XX% streaming users was our Furthermore, like Bigo optimization, expectation, to in experience its boost operation the following tends by session will Live year playing with line to paying sales Net efforts our its in user proactive growth XXXX a and in narrowing

the breakeven achieving Likee More hit in XXXX. another milestone second by importantly, half of

collaborate the companies feature, with industry initial of to to multiples, from communities. further Likee Loop efforts cultivate of variety Following launch expanded its in its order interest-based its has

one each community Take space [ph], largest popular group gives with a law games include gaming with live -- and mobile example, of interest to Likee, various which of gamers the as shared [ph], mobile to other. the interact offer an PUBG is Converse

on Likee watched December all platform. XXXX, streaming partners of from other each achievements Likee’s game become industry. of honoring and ceremony world In Millions annual the the viewers Awards over with TIM XXXX live the event video the award in official

content time Likee’s retention grew in XX.X% previous the interaction quarter. fourth over and saw the by the improved and user an XX-day we the Loop by and quality offerings, spent Likee. Boosted In X.X% by quarter, user refined average units on user increase Likee’s

ahead, XXXX, as to further and constant achieve we Likee’s models monetization we diversified into intend enter profitability. by Looking implant monetization efficiency

continue to our interactions refine input, take will social local centered they We creator communities. and prioritize universe as among further interest-based on our

believe, Likee’s flow, regions we growth Likee’s user operating user As gradually will user and gradually in certain we growth base, will the base over stabilize improve capabilities time. resume and organic cash

on Next, Hago.

away transitioned casual positioning fourth being quarter, Hago we quarter. previous substantially a mentioned focused year substantially has ago, on narrowed the Hago’s the primarily operation In interactive as an set, product Hago’s loss over about upgrade in During platform, games. from

a adverse range multi-user platform, social more is can enjoy of where user much ARPUs. engaging it with a a Now, interactions

the high clear. Following our patterns upgrade, user on Hago socializing become

First, by such further chat Space of video with customized few you multiplayer casual joining every Hago social one avatars. opine they some to where in after XD interact of participating each other as audio can view a multi-player rounds games then using may in users by rooms choose Hago’s channels games, and and

a variety its level, monetization mine, of the items. process same With features the efficiencies the much as to basis. games --engage, the developing which choose friends of reach life frequent enhanced refined play level user monetization of streaming and families, basis certain may advertisement, by on a Hago pay their other throughout a interaction join group and to virtual live has more is

a by rooms. rate total This day optimized our user spend in a During next quarter, X.X% X.X%. user and by algorithm in our the we increase social to retention initiative located China's plan users help fourth drove recommendation the sequential

new side a Space. and to XD Hago We beginner launched also screen optimization areas introduce of printing the

user by over Hago virtual As and time quarter. from spend items revenues improved X.X%, increased previous a on the the result, by Space new XX.X%

product while of in argument we with patterns capabilities, its further futures further interactions, XXXX, recovery user which are improve consistent organic monetization of we is crucial to its over users going Hago's time. and growth strategy user such our socializing and Hago efficiency, and facilitate eventual optimize throughout Hago user enhance as to gradual to maintaining the profitability intended better Likee, efforts our at to achieve level In retention stabilization expect growth

shares. we updates in In points of aggregate and on million. full our XX we the paid of repurchased year shares some capital $XXX.X million an XXXX, of $XXX.X Finally, additional quarter, total cash have of during amount of fourth the qualify dividends return

our actively remaining reward long-time of confident to support to long-term and our are continue program in we share We shareholders. purchase the will affect utilize the

macro strategy To drove despite and conclude, performance certain our environment. XXXX planning in execution strong solid effective

facility our innovative and Looking products through improving we their range services. diverse user ahead, online of and remain to activity life and committed enrich our

sharpened and macro growth focus building position With our headwinds, financial driving for capabilities, business while on our lasting resilient to value well-positioned are creating and short-term core gather model, strong we shareholders. long-term opportunities

Alex. Now,

Alex Liu

David. Thanks,

David Xueling Li

Liu. Now, I handover Alex to

Alex Liu

Yes. Thanks, David. everyone. Hello,

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

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

During quarter which to continued the million, costs million. for content decreased of [indiscernible] optimize and among as the to and enhance we multiple US$XXX.X operating cost product the fees on US$XXX.X decreased fronts. and have structure Cost efficiency to sharing quarter, revenues

to the improved due and optimization revenue-sharing was margin US$XXX.X original in in primarily cost period quarter, XX.X% XXXX, other from Gross with million profit cost. to XX.X% gross same of operational the of our

Our XXXX. the of period $XXX were in quarter $XXX.X increased million from operating the for same expenses million

$XXX.X due million expenses, [ph] the million sales acquisition. on from spending Among decreased user to [indiscernible] and to marketing operating disciplined expenses

corresponding XXXX, supply. to consolidation R&D personnel-related expenses $XX.X -- expenses of in to the $XX.X increased eco period increased million primarily due million and from R&D of of

for loss quarter to million the compared operating $XX.X XXXX. was operating period million income GAAP Our $XX.X of

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

non-GAAP XX.X% the the in prior Our for operating compared margin quarter was year income period. X.X% to

calculations of of same in JOYY primarily quarter GAAP to net loss was interest million period an the from to $XXX.X trends from an income $XX.X million continuing underlying excluded $XXX.X quarter. operations of during recorded controlling net in our impairment in The due XXXX, recurring of non-GAAP loss the million of to loss not the our equity compared reflected is attributable impairment is investment operating from and performance. the

$XX was in the to compared XXXX. controlling continuing net to XXXX the -- the million same The in Non-GAAP of X.X% Group's JOYY net XX.X% of operations margin interest non-GAAP was attributable the quarter from of income period $XX.X income quarter same period of in million XXXX. in

maintained flow Together operating a improving with our cash we strong have profitability, as well.

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

financial Now, I would walk briefly through like highlights. the to full-year

for compared in $XXX.X -- XXXX. million, the revenues US $XXX.X dollar to net total Our million year full to were

We have sustainable consecutive year. to group for the sustained our level at second path profitability the

of non-GAAP income Our the expanded controlling from its $XXX XX% year net margin for XXXX X.X% in to was from XXXX. of in full prior of in $XXX.X XX.X% year. the to X.X%, from with non-GAAP notably X.X% XXXX $XXX.X and the net income full million net was year attributable in improved non-GAAP income XXXX million, Non-GAAP JOYY for margin to million XXXX, income company BIGO's up shareholders interest up net

to to of dividends Importantly, XXXX shares dividends approximately million amount which year and we aggregate represent XXX.X% million, of have totally continued been $XXX.X income. net [ph], $XXX.X altogether enhance our share In through the and paid of repurchased of our have repurchase. shareholders returns non-GAAP [ph] in we full

As of XXX around and XXXX utilized program. share million for repurchase XXXX, we still the of have quarter end US$

Given to to enhancing continue our position, between invest [ph] for linker build return current and our we late cash keeping balance cash our and shareholders. sufficient will

between net million of US$ our and first outlook, be US$ million. XXX to quarter XXXX XXX business our the For for expect we revenues

the successfully the operational of growth EBITDA Let wrap have -- business as up In that revenue some capabilities of global to fact as macro enhanced execution with access resilience final despite me focus on XXXX, effective growth well growth, thoughts. our [indiscernible]. -- our we high-quality

capabilities. to given macro of sustainable the remain potential business the macro, -- into pursue and growth visibility environment global our actively As the our value. generate opportunity building core and we We the XXXX, adaptive investments confident around in in we prioritize global head low remain our will we long-term long-term shareholder

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

Operator

[Operator Chinese in your first the question, question please in you. repeat asking a When everyone state for question then, convenience Instructions] the English call. on Thank of your

question Your first from Thomas Please ahead. comes Chong Jefferies. with go

Thomas Chong

two questions. for my questions. management taking Thanks I Language] [Foreign have

in when how The you my the Live. among about about Bigo performance in should QX we first And the is you. should inflection how point? question and XXXX Can XXXX, trend trend. think is the about, share geographies? think about And about by the we geographies Thank different second question revenue

David Xueling Li

[Foreign Thank David. question. This is your for you, Thomas, Language]

that recovery the monetization negatively trends macro in region. by So life by affected believe different global QX, we still was uncertainties, noticed the

the our believe Europe Asia region. For resumed to operational active double-digit example, in QX, North and which due we've events Europe, Southeast activity promoted, with a seen growth Q-on-Q. year-end sequential even growth We America creates was recorded in mainly that

region the and offline the spend ping Cup the But of part spending saw East diverted time underperformed after the recover in -- Middle The to immediately began time we was World ban period. as of users' during region hosting concluded. activities the

UK, if back Italy, positive such So different resilient the to headwinds New performance year the Zealand, some as we et and full Philippines, across the macro turn markets growth markets, achieve be the look Australia, more cetera. the year-over-year against out

we in region. So development across believe should our different ahead that year and level highly the related to if of look growth for the economic the be of regions trends we local the their operations XXXX, recovery of

the flexibly exposure allocate flexibility prioritize, will as to globalization efficient are various speaking, locally a and more achieve resources our higher that -- remain we into markets can to with strategy intend we we ROI. Overall globally across a operational stick diversified to

operational We you. and such will Asia, flexible Europe, market closely East region, track our continue as Southeast and will markets, to strategy. America, focus Pacific Eastern in and adaptive on Thank Middle remain changes we key and the the

question, the macro there out of limited, [Foreign Language] global news we And visibility your environment that and remains has well. to as this recently been answer second believe the coming

headwinds possible affect us is macro two we another, for one may that or So it quarters. that believe

believe the at and and easily sure current are to uncertainties, or degree to capture sentiment we of positive making need certain short-term time, paying takes a growth fully opportunities, that we especially take control having Given will we that same operational flexibility, risks the prepared action when macro the and user turn.

Bigo's Similarly, that season our with less the top believe second And should previous sequential according believe to quantitative And activities. and we should year-over-year a stabilize QX. year. segment of sequential growth line QX gradually the in in also resume in we usually resume a experience, the QX half is growth marketing Others seasonality

speaking, be you. half, a and adjust year dynamics we that in the we especially line continue second to of the Thank overall year our will closely market believe So growth, the in track flexibly recovery strategies. operating XXXX top should evolving and

Next please. question

Operator

Thank you.

next Your ahead. from Please with Nomura. Thomas comes question Shen go

Thomas Shen

to Language] two taking [Foreign for I management my questions. question. Thanks have

you such could down share rest is one segments business Bigo first road. of trends the our the the margin key The for and as

question year could the more the you. for company is if XXXX? mention expenses you and Thank that on and margins second The share the the of in entire color

Alex Liu

Language] outlook. the on you question. profitability is margin your This I'll take for [Foreign and question Thank Alex. your

better than OP BIGO X.X%, and margin percentage percentage of So year at up expected. X.X up achieved non-GAAP a XXXX, XX.X%, from by operating profits of of looking achieved year. points, points full X.X% X the by The our segment were non-GAAP margin a last group

group our attributed enhanced product efficiency at level. levels. operating And profitability improve this all at almost also So mainly was to

year including when margin expense XX.X% margins. full and cost, channel last XXXX, see the Bigo X.X look as percentage of XX.X% well. we to expenses gross if multiple closer Bigo operating content we at And maintained to improved by comes cost segment for at from year. was And take has And a points expenses at segment operating and items, our level, happen stable payment Live cost optimization other it and relatively product BIGO's

to by reverts segment also And the profit in full began continued operating year. its a loss make products BIGO XX% other has narrow trend year-over-year. Likee the under its and loss-making to

XXXX as looking term, high-quality resources a the segment, turn. XXXX level the we for capture planning constant year macro growth Therefore, when of growth ensure a growth. action still the flexibility So and full paying uncertainties. resources at margin But our opportunities given take we we compared BIGO same potential time, operational certain the will allocation year retaining XX%, will the segment sentiments to take larger so basis, in concept user operating near the BIGO to for when the currency forward sufficient profit to swiftly roughly when for stable to remain of on non-GAAP for expect prioritize

uncertainties overall and level, strategic navigating between And pursue we speaking, at to actively a short-term intend long-term strike group balance growth.

remain flow to profitable operating XXXX. expect cash year in Thank our We self-sufficient the and in you.

Next question, please.

Operator

you. Thank

ahead. comes with question next Please from Jasmine Credit go Your Wang Suisse.

Jasmine Wang

[Foreign management for visibility macro question my and trend year? My limited. this remains view about that taking is mentioned user user question. you global ARPU your paying of management engagement What is Thank the Language] Thanks willing, number, on the

David Xueling Li

user question. the your David. Thank This for question you trend. I will paying Hi. take your is and ARPU on

-- in and of ARPU. past the affected implied few our paying as in European uncertainties on sentiment our the recent negatively seen trend quarters, we've that global users based macroeconomic have So

gradually We sign since our have monetization. 'XX consecutive the users could in stabilized early we Europe sequential an have However, paying quarters. for observed QX recovery and growth number believe be did and America resumed of year the this users paying have of that two in for that North the

user the are from look further a we rate products we perspective, phase believe improvement. to ratio with relatively at mid development and our penetration low also of still room paying our the empty long-term also of If for and

our and product and for the paying So the we continue paying change don't user year conversion and also we growth we community products believe which of Thank ARPU growth you. believe will 'XX, focus improve user long that recent in still will our And our users the strategy. to driver fundamental trends on the and user satisfaction, user will cultivate user term. in are long-term our also the

question Next please?

Operator

Thank you.

Your go with Zhang next Renaissance. from Please question ahead. China Yiwen comes

Yiwen Zhang

Hago is question update? our view project my on XXXX? and Likee – view So monetization What's Thanks. regarding, our user trend the the for and share

David Xueling Li

[Foreign Language] Yiwen. Thank David. you, This is

breakeven products achieving breakeven year consistent Likee we Likee believe operating able a consider user XXXX. in of product key and both seen XXXX. well, the the approaching the for now both given results outlook with as Hago, on the also profitability. to will have especially priority our and potential product products prioritized out comes Regarding believe be We that that basis as is positive half the that second And in we've breakeven, year -- of explore recovery from

Operator

That's for all I'll time remarks. today. to back you. for question-and-answer Thank the now closing management hand session our have we

Jane Xie

you look much Thank for so to we everyone seeing forward you. your Thank and time, next quarter.

Operator

conclude does conference today. Thank our participating. you That for for

disconnect. You may now

JOYY (YY) 15 Mar 232022 Q4 Earnings call transcript