QTT - Earnings call transcript Q1 2021

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Operator

Hello, ladies and gentlemen. Thank you for standing by for the First Quarter 2021 Earnings Conference Call for Qutoutiao Incorporated. At this time all participants are in a listen-only mode. After management's remarks, there will be a question-and-answer session. Today's call is being recorded. the to turn Chi host, now Du. will call your over Sai I Sai go Chi. Please ahead,

Sai Chi Du

very Welcome Inc. you Newswire available earnings and Thank online. much. results Services conference of first operational have call XXXX earlier quarter today, of been released Qutoutiao, were The and financial everyone company's by to made the

and You IR today's website Tan our Participants on CFO, section call Mr. view include our at earnings CEO, release press Zhu. the also Xiaolu of can by the our will visiting Mr. ir.qutoutiao.net. Eric

the Before of discussion we Private continue, will contain please Act Harbor note XXXX. that forward-looking today's statements provisions made Safe Reform U.S. the of Securities Litigation under

statements inherent and Forward-looking involve uncertainties. risks

release these the required note company's to I unaudited materially conference GAAP filed a unaudited uncertainties that may obligation be and Exchange to this update press the the company's views is and as of not different release discussions included start Qutoutiao’s includes will of measures reading such, forward-looking GAAP call business. measures company Please applicable measures. press in expressed except U.S. financial any commentary and the results Commission. by as as other information filings reconciliation and on The other public does statements, well financial law. non-GAAP the unaudited risks Qutoutiao's as Eric’s the non-GAAP As and earnings regarding Securities prospectus under with measures. from contains today. the unaudited out any Further assume

Eric Tan

execution, operational of applications we we meaningful in conference forward. to adjustment, forward, going Chi. and as of various COVID-XX, stages for of today’s business After call. of on a year changes environment financial After initiated at how thanks, terms we as a footing overall by year which thinking everyone, well last march Sai better business you, triggered stronger our portfolio much consistent today the several started following can effort quarters And in the is and development. the Thank with of balanced healthy XXXX position joining

business up the while today of of stepping We continue and Novels, growth literature been free has a growth to A operate our online important will leader initiatives. more pillar which for pioneer us is very efficiently, Midu our industry.

round in as on have last the latest financing, the significant we brought of in earnings investment franchise. the Midu Following new of announced growing we phase a release,

our on story We produced literature is our and QX drama are short with leverage the literature the now works. lines. began in online strategically quality the the on brand way we been series of to offer. China industry create since otherwise to users IP mini collaborating users. work as with has IP an series Midu appreciate known reputed in-house know TV of It’s them work experiment come more of expand of engaging leading the for and Kuaishou and Literature to Midu We creating the rich to last content where and and for curating clips overall years for and based scope side has to for the year to to quality a diversity highest or short as a available quality partner value expansion

time, and Given experiences. engaging literature online the made many more for enjoying reading free users the of a Literature's platform as have we better result, user China quality work our retention available been a And high first on fact have trend. are observed that the

our last register adjusted loyalty by team use With forefront engine literature to and more to provided which content, this parting content, our is not profile recognition, has been essentially provide to were drive us out more for loyalty content-driven cultural improving strategy impact editor noted and and year, otherwise at in that or and results but with margins transition. flashing acquisition clearer offerings. positioning online Elsewhere, to [ph] DAU business, million effective by operating user getting we acquisition be doubling and better points the Midu from and [ph] target has little the the Having also unified near most caused the second now our efficiency of and handled to accelerate a peaked seeing the term as basis. with are with we shift of continue good differentiated better Midu be improved. economics economics, who drive on by nurture business and adding our profitability. much been part Remember, has has been ways overall quarter lacking, revenues users the To conducive where user to the better shared and we our points content-oriented. XX overarching overall our We underlying strong turned over in-house It coming Midu, strategy a to us. comprehensive product a year-over-year office. which a brand free is traditionally characterized

to trend and a revenue marketplace operation leaner typically now opportunities infrastructure. bit can than Our efficient term better is well turn A what in corporate fact leverage is to going the as quite dictate. we sequential structured would our and focus our benefit us capture in QX seasonality outward longer

growth to we and call remain year we XXXX, full to balanced This and turn will profitability. remain of confident profitability, concludes Xiaolu. and portfolio CFO, over much. year Eric's Thank now applications, further our our of grow the towards and group level our approach full achieving we very the remarks, while you of For develop I committed

Xiaolu Zhu

for Chi, today's Eric. thank joining Sai everyone And you, thank you call. and Thank you,

quarter go before and for you providing me Let financial the with outlook first next the through of rest year. the highlights

and XXX million for flattish RMBX,XXX with of of quarterly the MAU Our net RMBX.XX revenues rather average first were DAU million XX ARPU and million, of sequentially. quarter

of advertising due we to Chinese our for of recovery season peak being season As underlying came indicates business. the this low and the New overall QX off Year, stability and QX traditional

were expenses Please of increasing and exclude content non-GAAP costs more bit to detail. to a decrease at more revenues of compensation. RMBXXX which million, with look I procurement cost. a IT despite in year-on-year budgeting our expenditures be note, Cost will referring efficient Let's due stock-based XX% measures

a margin, XX% X% As which is profit we on expansion gross generated gross X% a year-on-year result, sequentially. RMBXXX margin to million both and

with sales well program seen as results managed Our marketing has and better expenditures. been we have smaller

of was improvement which For a the percentage to the and from amount reduction ago. XX% XX% million, first total percentage represented became a a as point quarter, XX year year-on-year, a revenues, RMBXXX

which our first with strong in despite QX was the of first revenues peak and the gives during RMBXXX off Midu, confidence financial R&D teams. the very X.X%. RMBXX quarter to of and a good we XXXX, outlook in which in incurred is quarter the investment XXXX, expenses were increased and just G&A year. quarter, quarterly operating maintained discipline. million observed X Since result Coming operating during line were quarter, with for of we Our XX% in recent whole a for previous under of just the point IPO, profit the decrease have loss to this a range the us ago we percentage broke given the quarter small we the cost quarters. X% And R&D our which a was revenues season million of year RMBXX of ratio comparison expenses in loss was since line even million operating with fourth the during streamlined

We see economics. continue to unit improving

awarded, On engagement historically represents user better which rest Eric we financing. it It's we business key expenses. much have the Midu, part ARPU round reduced result mechanical of a rather of but points, growth repositioning long-term and a segments loyalty which strategy Excluding achieved has after phase strategic enhanced a has and little us. reduction is of of stronger entered investment significantly believe Midu, basis loyalty our push latest is both healthier offered our to runway points of and new the The the for great a of business relevant immediately the mentioned, of not as forward.

in with to user seeing of strategic leading acquisition. Together their and consistently to and user which the rates, Midu. We us have virtuous expectations. algorithms key allowed are partners, are nurturing cycle results into we from to improving trends our has terms content retention it content players efficiency ARPU of Better aspect Monetization are investing which for we improved. fields, IP every generate and more our respective meeting promising creation in are are

financial current positioned quarters, year strategic and Midu's revenues executing profile rest we we disciplined we over of of a the double will combination approach with to maintain well DAU And the the be initiatives will end. a the the After with with with and the We management necessary the of past business. few business. Midu that into financial successfully feel able by we investments confident are all have as

the terms in albeit with to today. continue of concludes improving remarks expect business our be you underlying and rest stable the to we Thank movements prepared DAU much. for the of Midu, revenue year, expect and due seasonality, excluding That We very trend. to profitability, some the

We please are now open for Operator, questions. proceed.

Operator

comes Thomas Chong first Your [Operator Please the [Jefferies]. from Instructions] question line ask question. of your

Thomas Chong

question Can vertical? KPI particular management think about Thanks key two categories? And the and Can my on the with we industry particular, again QX any And evening. be what's for seeing year I color about quarters? management our any in to slowdown actually And should revenue? this reiterate have guidance. of in trend a revenue the Thank that how we would in momentum good management questions. about grateful? regard Midu. for you. is comment any KPI Hi, taking how number coming the user terms advertising in across the Are

Xiaolu Zhu

you much. Thank so

approach guidance, took investment said regarding the this towards first your especially remarks, regarding question, a balanced have on So growth, marketing revenue in side. we the prepared as year and QX we the

require So for spent. ROI very marketing we a we do dollar every good

especially in particular March and taken have somewhat the and we base from May I in user education. entire to see March do base. actions the for like the in sectors in we industry regarding stable So of QX the particular, this said, Internet some weakness think market, year because being expect online government some to in by That advertising regulatory - also revenue

do early to we late mood be QX QX. the the bit see - think and a I dampened in in

see for However, XX advertising activities. for demand a strong June we e-commerce the do

but outlook XXXX, do to for trend weakness and full far, in change So I our sectors the in does But certain advertising we think, market year. certain still some not overall, QX. being see it's the we we think recovery that for see limited continue so in

double So regarding year and want as we have to your second question DAU Midu's its we for said revenue end. Midu, by before,

a just to be in will over year target two DAU which ago, XX means this DAU - Midu around QX, And last already May, end May So X so we for surpassed our million, has so million last million. million. the while, year, said, Midu's X was as weeks peak the year XX

end the I are also also, track And Midu. for same think we improving right monetization is the we So ARPU, rate that on for target actually time. the achieve year Midu at as goal said, to

you. think for revenue to target achieve. the more confident are we So I Thank

Thomas Chong

Thank you.

Operator

[Operator of Instructions] from ask Your your next Please question question. line [Citigroup]. Wei Vicky comes the

Vicky Wei

Good evening. Thanks questions. management taking for my

provide up the comment the about of on user cost strategy about some color acquisition following user your So Thank you. management implied acquisition for Midu? growth Midu, and can

Xiaolu Zhu

Sure. Thank Vicky. you,

Midu, in terms DAU over year think get million to I So the is end. by XX for goal to of

make up to we marketing to get said, sure we will take we on to that want do we So that being disciplined number. all that that the dollars spend we Midu. for a But ROIs also get sure approach make

better the for And improving said the promising far, rate before, we Midu, and - retention as because as have also getting well. results user ARPU quite we rates monetization so are are is the

will has So in and and that believe for year. do that Thank for rest you. this runway we we do continue are very I good and of think we business the us, good the making Midu a to long investment

Vicky Wei

Thank you.

Operator

to closing [Operator Instructions] to the I'd questions the remarks. are company turn further no As call now, the for there over like back

Sai Chi Du

a very if do hesitate And contact further any day. us. questions, And Thanks again good you time. have to please your for have not

Operator

call. concludes This conference this

now may your You Thank disconnect lines. you.

Qutoutiao (QTTOY) 1 Jun 212021 Q1 Earnings call transcript