Earnings call transcript Q1 2023

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Operator

Ladies and gentlemen, thank you for standing by and welcome to JOYY Inc.’s First Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] 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

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

of David Chairman Li, and us Vice COO; today of Li, Mr. are President 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 you cause we to forward-looking are to differ continue, risks I would current results subject actual that statements, like remind our inherently may make we from may that to and uncertainties expectations. which

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

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

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

David Xueling Li

Hello, with a first everyone. XXXX despite macro ongoing kicked quarter quarter call. uncertainties. We Welcome XXXX strong off earnings to our

briefly first detail upon shortly. of notable achievements, our touch which in I me Let more most will discuss some

quarter, from guidance. our including in $XXX.X recorded million of momentum. of $XXX.X growth profit revenue First, million Notably, the BIGO, during high-end we the maintained exceeding revenues, our we

profit a net a XXX.X%, group’s margin non-GAAP non-GAAP Our net net $XX.X of segment profit margin representing a a non-GAAP non-GAAP net with recorded XX.X%. The reached increase of million, million, year-over-year of $XX.X X.X%. with BIGO of

our $XX.X further a cash of during million the robust positive position. enhancing operating financial maintained also healthy We quarter, flow

XX% mobile progress. million, BIGO over adjustments our average In year. operational significant third, X.X% the increasing average X mobile make grew by MAUs MAUs following And year quarter. to returned Second, continued growth. quarter, to XXX.X of positive global MAUs increasing previous optimizations, the years by and from steadily, reached Likee Live’s first our quarter-over-quarter global

increased first after quarterly core the base achieved last and financial the half Importantly, of At once hitting X% a breakeven, year. DAUs X.X% second revenues in its this Likee on basis. again by Likee’s sequentially milestone by time, grew user same

have ongoing outlook, may shoots consumer spending green uncertainties we still regarding that confidence some entertainment. given we of on remain curiously macroeconomic industry and pressure optimistic social While seen online user recovery,

Looking to the driver remain key our growth. Globalization of a to future, our business we growth long-term committed remains strategy.

units, global operational will prioritize We continue sustainable robust and top strengthen capabilities profitability localized business growth, to financial by fundamental operating our technical to monetization business and across continues be and our success. improve Harnessing flows. high-quality, our and generating our resilience all further cash worldwide to priority

commitment and and diverse user on businesses innovation, building We our cultivate positioning global community content, line users to align with sustainable to with our further strategies. In strengths our long-term we growth, provide core our that high-quality, our our will intend to global through and interactive experiences and global offerings. localized concentrate product exceptional resources

and competencies localized our commitment. Evolving technology operations required both core in global continuous

implementation take on this localized of to some efforts would to progress opportunity our Today, mentioned our many have on I and We discuss like technology recent of operations. development.

has our approach optimized operating drive and efficiency. technological user improve Our experience been technology product leveraging cutting-edge innovations, always to

AI expertise recognition, XXX experts natural vision, image At specializing development spans around applications, language including Their and X,XXX BIGO, computer R&D we comprehension, personnel, the diverse facial of including a employed approximately AI. in processing. and of engineers range

and for intelligent user nuanced to also personalized manage talented to user quality. advance AI and creators developing highly users Our AI our effectively In data, BIGO for capabilities, and recognition content communities and identify allows we improve to channel our team and direct users recommendations content. use resources valuable Live and interest-based behavioral leverages video more text, interests image thriving It to more Likee, analyze content to our ecosystems. us This process relevant improved has toward discovery and is them.

all in regulatory and and with operate world to over moderators teams we to the established cultural norms. our of content content a and XXX AI powerful ecosystem. As improved cultivating has content over compliance utilizing countries local the align tool regions, moderation. our we proven ensure we content local be have content significantly professional and have quality improving for By AI, our efficiency regulatory

violations directory everyday, AI in more models filtering a on XXX million various to and we based X inappropriate rooms short to recognition need for rating million millions XX and developed to a policy X.X than languages. videos have a of on database livestreaming approximately million We X million review daily images basis. X.X of content BIGO created With on over

of Our mere successful reduced detection the XX.X%. a has accuracy our moderation manual rate AI brought and the rate implementation system over X.XX% to AI to of

also bring leveraged experience to We technology our have innovative users. interactive to

or virtual avatars XD For virtual uploaded various multilingual technology, generated by mouth enabling to and real-time. and movements, users pronunciation, be Hago’s users. interact with in other example, and Using avatar photos synchronize adjusting parameters Hago’s directly in virtual new we expressions facial their social facial in from avatars learning each can our digital engage in an between create models immersive deep users empowered Space users scenes, XD experience. to XD

musical virtual can scene, rhythm the even to of For the beats. characters dance karaoke

companies transform The also of value and efficiency evolution industry to operational multitude various across for technology applications. opportunities worldwide. enhance a is presents AI set economies to the and create of It rapid

across improve We ways interactive our AI integrate to operational are and our order committed business, users and our to further captivating to efficiency. interacting and accessible globe in to into the exploring experience deliver

products. at our Now, a look closer let’s take

We BIGO will Live. with start

consecutive XX.X other sustained double-digit across the with growth momentum XX% in Europe, with its emerging growth user growth the growth for in XX.X% year-over-year. key markets year-over-year in Southeast and Asia During the quarter, BIGO XX.X% MAUs several East first by fourth million. its observed increasing was quarter, Live Middle Growth X.X% regions, to and

Live’s user BIGO The quarter. respectively. the first its paying livestreaming of X.X% number in recovery BIGO Live in users by growth terms America revenues increased of the North Europe monetization, and North participation and In Europe, and saw in events first paying our in active from steady the XX.X% series in rebounded of We quarter. the previous quarter regions with launched a successfully and year-over-year across and and users. Middle all encouraged major creators operational from America, engaged East

is brought brand of to livestreaming enhancing exclusive DHABI. behind-the-scenes Bang at and footage set MX DHABI creators In enables ULTRA Live audiences, music, a participants February, wide ABU online such most BIGO event, Big Festival. Live exciting a competition cosplay, Championships. the most Eastern ULTRA live recruit interact the of thousands genres North categories festival collaborated in across the Live user variety and also BIGO its event’s duration the In The Legends: BIGO us as Live BIGO further Star first wide to make longest impactful Bang Search Music Live’s Middle competition to American BIGO launched the dance, boosted edition talent The World local East, exceptional to-date. quarter awareness BIGO the between Ultra community. when audiences. in of etcetera. the venue and world range with up with ABU experiences, performances Mobile cooking open it concert a and booth talent marked content once Middle collaboration of engagement largest, Live it also first running, X-month to and the the again famous

automatic XX.X% content terms on tagging content Furthermore, on average strategic In BIGO channel. technology, algorithms. content channel utilizing channel’s increase In we the These and vision of the sequential BAR its in creation recommendation in improvements development, incentivizing in content in first BAR. sequential Live X.X% resulted growth also in resulted the our by of enhance improved to an per content high-quality user remains the focused BAR an quarter, computer video production. distribution efforts impressions and have

mainly engagement livestreaming grow. social sound interactive X.X% increased to users of and multi-person continued has multi-person the tools. interfaces the including For room going by by is new and interaction, hosts number increased and X.X%. features and optimized number due of effects to rooms live user Sequentially, This

first healthiness acquisition efficiency sustainability user the our capabilities. turn Likee’s on Next, enhancing To have since organic adjusting ecosystem focusing the of proactively of and monetization let’s and and been marketing quarter strategy model, growth Likee. to and we its ensure XXXX

to have Likee’s by happy It second during hitting also breakeven achieved meaningful the the half increased first first sequentially the this some that are revenue quarter. progress seen during first after year. of quarter. We quarter, announce the we X% in last milestone in

Likee’s terms and of quality user In communities improved. interactions engagement, user of interest-based grew

X.X% user core Likee’s increased quarter, first base DAUs sequentially. by the During

encouraged sequentially. In the by understanding creators’ into them services platform, already create ecosystem. positioning professionals creator as the music, increased first official its on with an optimized and Likee of collaborating racing, delved and including content food, Likee sports. content actively various community also bolstering reinforced its creators interest-based fields, This needs, by deeper X.X% the number high-quality an vibrant further in quarter, to

to continued corporate also our the positive operations daily responsibility and We integrate impact into on community. create social

charitable partnered experience blessings Jordanian Ramadan for During the Meal of and Ramadan, with during Likee videos Share This initiative organization to encouraged Tkiyet users TUA holiday. campaign. the Um the a their Ali post share

of event. behalf. For every TUA user in on campaign, Nearly money the Likee in a to certain donated users the their amount who XXX,XXX participated participated

Hago. to on Next,

During engagement. activity boosting remained enhancing user social Hago the quarter, dedicated to and

and Hago’s platform. and and In rate focus created quarter, of As been interconnected the Hago years strategic its X.X% Hago past groups offers opportunities we multi-user X including a sequentially. social families, video the rooms, mentioned user and By has audio interaction Space, has a the multiplayer range social increased Hago chat first social a highly over growing of channels by community. penetration channels previously, utilizing transitioning have social gradually users become to

by minutes. the daily average spent In grow, time reaching to continued XX.X users addition,

of and spending the satisfaction, its will among the Furthermore, their of expressed how indicated continue many net Philippines, social Hago their conducted appreciation Brazil, to a optimize for in disciplined enhances score have Mexico. of consistent structures. Hago marketing particularly the surveys and We results enhancement which cost have user to users rounds also strategy experiences. multiple Indonesia, adhere promoter users, and

coming operating a in expect gradual improvement We Hago’s quarters. over losses the

capital Finally, return. some updates on

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

volatility, will we the recent step second repurchase Given quarter, our to of reward the up share in support shareholders. our market long-term

Live’s MAUs. delivered first as quarter, growth at in we To macro in we accelerated near-term the achieved BIGO results and strong maintained challenges, level the group conclude, solid despite profitability the

remain lives technology. ahead, committed through Looking to we enriching

cultivate exceptional content, innovation, to continue and will provide through users our offerings. interactive user localized community our global experiences We to product diverse and

long-term we placed confident are growth are We seize shareholder opportunities that to sustainable generate and well value.

Vice This our concludes to financial of our Alex President updates. will I remarks. Finance, call now turn my the Liu, prepared for

Alex Liu

the solid Hello, Despite first David. quarter. macro we everyone. Thanks, achieved results uncertainties, in

our measures to million. our the group and cost of thanks revenues by see level deliver and and Our effective we both quarter-over-quarter at in were optimization of continued profits higher We quarter continued execution sequential it at for paying to guidance, X.X% in the to end encouraged product and first efficiency. exceeded better the recovery X.X% BIGO’s to quarter, year-over-year X.XX third improved consecutive also increased operational users as level,

activities, to in operational As drove engagement and X.X% expansion carried cultivate by we user we content $XXX.X of the diverse, progress global sequentially which localized reversed boosted users quarter, out in trend base user million. continued the in active quarter. the effective first premium increased further our to We mobile and

through XXXX Next quarter first let walk our detail. you performance in the me for of

$XXX.X revenues of among which to quarter. decreased and fees $XXX.X our million. in Cost revenue-sharing net for the million, the costs total were content to first Our decreased $XXX.X quarter million revenues

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

increased marketing building expenses increased due and prioritized personnel-related period our expenses million same the quarter increased period $XXX.X $XXX.X for Our effective million, from and $XX.X to $XX.X capabilities. over resources in million million of to from to the optimization our the sales sales due of overall XXXX, expenses into decreased control Among technological marketing primarily R&D operating in were and marketing the of $XXX.X expenses same strategies. we from XXXX. R&D $XX.X operating expenses million expenses, million as to

Our $X.X period XXXX. same million, in operating million income the quarter was the income $X.X for compared GAAP operating to of

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

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

net JOYY loss of quarter period the of to first X.X% GAAP million to net was compared income million, of XXXX. in XXXX. quarter the net attributable the compared interest margin controlling income $XX.X quarter Group’s net $XX.X loss of the controlling of period to compared the margin $XX.X in $XX.X XXXX, corresponding of in of GAAP quarter, in margin million period in net in the in in the The X.X% Non-GAAP JOYY same was of of period X.X% XXXX. was income compared attributable to was to same X.X% income the net million interest non-GAAP same XXXX. to

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

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

which net $XX.X represent non-GAAP continued cash returns and repurchased total have in in dividends In aggregate through share income. million, shares of enhance altogether to declared dividends of the shareholders of and Importantly, quarter, our to we have XXX.X% approximately an repurchases. $XX.X we amount million our

$XXX XX, March under Repurchase Program. XXXX quota at our we of million around have unutilized As still Share XXXX,

circumstances share Given will market position, our second we the repurchases up cash and the current quarter. in our step current

subject As resources, partially plans, and and with forecast both our commitment the financial strengths result global concentrate views business so business revenues we business building for $XXX that $XXX non-core align towards with changes. David to positioning just second operations, are for goals. a of net which on management, strategic million. and million our and some can our that and conditions high-quality, and streamline we the we our mentioned, adjustment outlook, Therefore, adjustments, core expect to as our to our sustainable to of strategically long-term our market our plan quarter reflects in-line the be XXXX of preliminary between operational This growth,

backbones business success. our summary, global the In operational to technology localized our continues be and global capabilities to

and We cultivate pursue growth product our business meanwhile, to users experiences to all content will In the our units. we localized operating continue innovation, provide community high diverse to offerings. user interactive through across continue and global improve will and efficiency quality better

continue to in capabilities, long-term our shareholder self-sufficient better are to our into We flows. high-potential core our to financial our strategies with expect prioritize growth that confident robust in position, opportunities seize are sustainable that maintaining we align value. good we resources position and and building businesses long-term cash our while With generate

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

Operator

with [Operator Jefferies. Please Instructions] ahead. Your Thomas first from go question Chong comes

Thomas Chong

across questions. my the well about is about as Thanks the the BIGO user can different second Live, Thank comment in monetization regions management and for overall as half taking question My management trend? expected performance the you.

David Xueling Li

your for Thank question. will you. the question. first This Thank take is you, Thomas I David.

look First of all previous our expectations. performances the BIGO if of first quarter, beat we actually at Live

previous across all increasing momentum look than almost Live by that Middle growth Asia. of BIGO growth you MAUs XX% the East, America, at elevated year-over-year. user including achieved If we was And First the quarter, all growth, Southeast Europe, regions and user saw its

strategy, effective have regions is these user of positive our adhere this geology. All growth growth to while marketing we due to QoQ disciplined and empowers recorded spends which a growth. mainly year-over-year And organic

the we regions interests our layering different deeper the cultivation various and offerings. analyze and with more MLBB In of and content quarter, user collaboration a groups carry our further content the out of example and During targeted Ultra field. talent Abu America Star premium another Search gumbos content efforts of Festival, top is in to our to across Music and efforts North recruit our Dhabi Big BIGO of and introduce diverse

of regional influenced efforts enhanced with removal. shows. online is together And also campaigns launched our offline post-pandemic with and our observation influential And We driven quarter-over-quarter, both increasing as regions KOLs exposure recovery activities users substantially have paying the trends, in consistent a that road cooperated successfully user two a the quarters, the us America, coming this and of as these and BIGO while series regions to users for holidays continue offline drive were Then expect organic to of user in appeared user we East, we wider saw Europe the and strong more maintain monetization of to of in and to Live growth In during range increased overall signs traditional seasonality affected well. users be at improved local can these by seen we saw quarter. in – strategy early user look there enabling that growth. monetization QX Southeast strong number quarters be quarter, their for In these efficiently the North a growth, the the and previous consecutive weaker by reach from rebounded we and Middle Asia community if some continue momentum. lockdown

some QX, for expect Middle As Asian in we countries. April affect in Ramadan to East Southeast

half quarter-over-quarter that in believe stabilize second of Live we However, growth will gradually the resume and the year. BIGO

Next please. question,

Operator

you. Thank

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

Yiwen Zhang

So, and should optimization, about we is you. My about chance thanks think – operating question our our for taking second for expense logs Thank margin my monitoring cost also for question. path. the example, How half?

Alex Liu

And questions. thank your you, take will Yiwen. This is Alex. I

a First will of I more guidance considerations. bit two all, our about mainly like and QX Xueling, little elaborate

the is impact there of seasonality. First,

of second streamline which was QX mentioned business seen to in margin, have our points mainly is can last seasonality QX at the if line we XX% first in the still to gross guidance and expenses was some margin segments, so did recovery our and mainly due resources of profitability loss XX.X%, global BIGO our at improved QX towards some the up on higher other XX.X% on the our to on and And look was our non-GAAP some And And recovery we actually look positioning, the continued plan optimization. gross have which just your that we question businesses. core seasonality impacts relatively better by in non-cooperation profile we Although year, also moderate, expectations. we XX.X%, in if quite from products regions, as reflects than of adjustments. the XX.X%. that the the substantially achieved concentrate by margin with and regions. further segment second due on from to our percentage strategically current the starting performance some some And X.X impact our above quarter, monetization trends, may still narrowed in of effect impact you operating we also some mentioned, have global Ramadan non-GAAP a that operating and despite improved is

the remain cause enter expect still the we as quality the achieved of non-GAAP ‘XX, above growth profit we QX, might when high half our cash when during a to and to of margins segments roughly of level, compared year the up, growth will in business profitable flows. improvement. and margin BIGO we prioritize forward segment remain full in expect stable for into accelerates, self quarter. expect looking sum we mentioned margin at sequential year And to But the the in operating our adjustments what business decline business Thank resume So, the second the we expect group you. a with sufficient ‘XX. both we operating we To to year, sequential

Next question, please.

Operator

Henry next So with from Your [ph] comes ahead. question JPMorgan. Please go

Unidentified Analyst

Thanks management for our taking question.

I going Thanks. share your question on some execution have could forward. plan a program, So, management repurchase share the regarding details

David Xueling Li

This is Thank Henry, David. your for you, question.

we net profit. dividend if of in altogether have a of cash numbers, Regarding capital in our at your question representing the repurchased $XX.X return, QX an approximately million million and amount we and of approximately declared shares XX.X our non-GAAP total on look XXX%

end QX, we around the unutilized quota existing million share program. As our repurchase of $XXX under have of

keeping for overall our and Given we quarter. our speaking, investing a share our financially in maintain we to businesses enhancing core flexible step the between repurchases the continue while cash return in current balance second will shareholders. sufficient and And strike market up will circumstances,

Next question, please.

Operator

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

Jasmine Wang

Thanks strategies – taking question question. related Likee. overall such to management is as the for my My product metrics

we So, to of And can ahead, share assumption the year-on-year going Thank with management us outlook? of the update when the and see color any you. looking development growth? user are on Likee’s

David Xueling Li

This the for is question. Thank David. you, Jasmine

These adjustments it also hitting positive should forward, this – for base, I support, in significant As support, its weak on a the Likee second QX, additional interest at forward meaningful Likee’s to proactive made And that to prepared DAUs quite grew remarks, we the year. Likee’s to if during a X.X% a Likee look we to my the can user all in seasonality basis. core see Likee few in in by the and quarterly user quarter monetization, for have secondly, And users half social rate And quarter, still previous East of Europe, after based its work as progress again mentioned community, also aware, despite last also revenue the And sequentially. answer the in continue breakeven increased achieved the will by thirdly, past our to and such a And yet be key and advancing small live quarter. years. milestone get and on also progress, in are uptick cultivating strategy financial back that and an takes advertising on track. mainly X streaming penetration first recovery interactions. focus increase considered the of profit once are Middle that steps the X% markets, we Likee going even creative continue we substantial revenue and was made and due on offerings from content some

and So, user reversing With user profitability these progress our monetization that and its shortly. also in we key of the towards one-step a base growth achieving are markets full sustainable believe, fundamental also growth year and in drivers QX, taken some trend breakeven has for Likee forward improvements. organic

And look So, so our much that’s Thank to forward the Q&A. you. with everyone in We speaking you the end thank today. of next call for quarter. joining our

Operator

presentation. today’s conference for This Thank now concluded. you has attending

disconnect. now may You

JOYY (YY) 30 May 232023 Q1 Earnings call transcript