LIZI - Earnings call transcript Q2 2022

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Operator

Hello, ladies and gentlemen. Thank you for standing by for LIZHI Inc.

Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After management’s remarks, there will be a question-and-answer session. being is call conference recorded. Today’s the I’ll Effy to host, over Head now of turn Kang, company. Capital your the call Markets for go Please ahead.

Effy Kang

Inc.’s Lu. are and our our Lai; Mr. operating much. welcome via will newswire conference will Thank will include everyone. Q&A Mr. the our a of session. today with Chengfang results Participants Mr. behalf CFO, We second COO, and and on then Marco on I Ms. earlier will on of LIZHI call remarks Li and they call. with financial very, development. Acting remarks Li; CEO, prepared earnings prepared online. financial quarter begin results Founder our you conclude released and services call Lu, Ms. XXXX available Zelong Hello, business to And today’s deliver

recorded. As is a conference reminder this being

and our section call on be earnings available highlights addition, at In webcast website presentation conference this replay will our ir.lizhi.fm. IR of the a of

today’s or we Reform Act under the typically Litigation believe, expect, please Securities Before target, may, continue, provision Private as XXXX. expressions. continue U.S. estimate, discussions note These such Safe will Harbor contain potential, the statements of statements other will, of made similar forward-looking contain words intend, that

the obligation beyond update factors under control. underwriters affiliates, uncertainties. actual go a results Zelong involve to reconciliation inherent and statements statements measures well our impacted cause over release could will measures, number which or measures. note GAAP company, conference that I except the for of include are not representatives unaudited our do to information, as this now ahead earnings Mr. Li. Please accuracy anticipated, to non-GAAP of unaudited many Please any unaudited LIZHI’s projected and financial this advisors, applicable and The forward-looking required be measures. as by those non-GAAP unaudited may undertake differ Forward-looking its a risks to The call GAAP and refer call that of law. LIZHI’s earnings discussions also turn these of from to risks release press financial of press uncertainties business as COO, Please materially

Zelong Li

diversified Hello, of total the remained business amounted our average joining dual development interactive executing to for we quarter paying strategy. revenue focused call. quarter pillar you social and second And our million. entertainment RMBXXX XXXX earnings million, XXXX, monthly quarter, and effectively average matrix In approach the globalized mobile networking on In MAUs conference audio-based second everyone. totaled thank XX.X XXX,XXX reached users product plus of second

efficiency effective to steps We the quarter strategies. of while continuing and technologies, also took our operational development to elevate our during execute suite organizational advance in-house the of

quarter of net of and the million same to the second net period income a in year-over-year high further we record increase As Moreover, XXX points and a quarter, representing our profitability sequentially loss versus in achieved result, on improved a and gross RMBXX.XX XXX XX% a profit achieved we quarter-over-quarter. basis last new GAAP basis, margin of recorded which year. an of consecutive points up basis increased third XX%, a

At we marketing our Now, product operational our interactive our recently augment This interactive enriching as interactive share new live business of product entertainment overall further [ph] entertainment to and profitability. second I’d the incubated strategy existing in improved year, our focus To the and this regarding our development and details directed matrix. identified entertainment has accordingly. as such interactive quarter. the efficiency like resources more audio the business launched and our significantly streaming operating we beginning ecosystem, entertainment tactics

we entertainment entertainment high-quality creativity growth business. the interactive additional strengthen value through foundation our quarter, platform creators, of of operational content the for which also activities, boosted and a a long-term addition, our profitability from further our building by second the we diverse creator business. In effectively unified content interactive unlock greater creator laying In content operational engagement the will

through hosted their we competitions. a users fortifying example, interactive creator Creator Summer For innovative Carnival productivity events improving with connection content and

content. such creators, the Fan relevant the organize to cover the rate our of we encourage that pleased average of and second and cultivate which mobile events, the connectivity partner XX.X% reached Hero, and Voice also quarter. Rift see long-term contest user foster XXX We in interactive Hall creating real-time basis League and gaming users points Furthermore, support on our the their brand new boosting audio as with X.XX Legends: the song to by platform. Shining a We to of to launched to business novel brand year-over-year interact the MAUs increased sharing the penetration developments in were Wild and entertainment generation million

addition, In creators structure our optimized cost activity challenges, the content longtail gross these and enhance terrific margin. support we of further which through other overall and

of paying space. rates. in real-time TIYA upgraded we enriching concentrate As interactive quarter, social growth, to user our we and diversified business, more product creating incubating and audio resources rate global approach further the user on the respect second elevate next the incubate of by interactive With that expanding to interactive entertainment to commercial of group product features the product further we development, penetration our group the entertainment will continue a covers interactive stage key our our global format

for activities As social social as to innovative ways, format reinforcing attributes. an and online the bear social online users. innovative an entertainment, the Through social young functions we integration and audio-based TIYA’s user’s to interaction such to guide people choose [ph] and in real-time we and hope added various interactions provide online of space images example, create

did same time grew, compared and of monthly was user. brand interaction per so new the the the and As by year-over-year the period by time average of year-over-year. the year. increased penetration rate engagement average spent of activity with XX% pairs upward June, number XXX% user average connections end At rates up group last and of the quarter, brand the XXX% spent trends increased TIYA’s second user user In per in daily

through a our our capabilities. a strengthen can potential to for IaaS, to our group online media the unleashing security product architecture, our we Cloud Voice the in-house potential will capabilities hybrid strategy, The expand leveraging and development business Going engagement demands. SaaS. boundaries We user exploring cloud and more of Cloud, the provide international we visitors. three matrix Based experience, computing on experience been development in-house based product business market will of tools, By hybrid is versatile well and empowering years social have platform on models, and which of products markets forward, consistently multiple we PaaS for incubating matrix our localized namely, based development the we trendy and thrilling cloud platform. with space. our stop Voice well-established on comprehensive our new platform created leading unveiled market diversified of reliability. while markets our diversified and young and strengthening have user’s Meanwhile, opportunities to computing innovation our our portfolio. leverage and been our technology interests unified enriching technology operation commercialization differences, our we operate market improve multi-dimensional the products diverse line our In closely self continue solution advantages infrastructure connected more lifestyles, technologies, and a cloud through Recently, cloud new one an iRock strategy, people’s developed globalization a hobbies, integrating we build cloud to group’s as as optimize of meet

audio technology more and developed streaming real-time and from platform and products. VoderX a the features PaaS instant network tailored a audio social and support an Together and DOREME, provide video Thanks innovative messaging self high technologies. On various quality and real-time side DOREME RTC fast, features messaging secure, networking platform. Voice audio our Cloud VoderX, transmission and to services

management aims driving addition, by In and management group’s internal segments Cloud to platform the also other marketing analysis development business Cloud marketing data related automated efficiency product asset efficiency. and Voice integrate intelligent through intelligence upgrade business to of across data R&D, which accomplishments and operational the database, sustainable development which believe integrate rollout intelligent platform, services, long-term our Cloud advance Voice SaaS and technology cornerstone and is are plan our the businesses, technology then We through our further business optimize capabilities business helped proprietary business and the In the our Voice business. We global summary, smart the analysis. to quarter LIZHI’s data in-house expansion. our services, self-developed our development and second the have for business in innovation ultimately, of empowering foundation solid a laid represented development.

capabilities. social resources Going and devoting globalization and initiatives audio strategy, execute forward, optimize elevating by or networking will refine our to and continue resource product entertainment location based our technology interactive advancing core and business our matrix key our we to

potential commercialization our Thank unleash further will We accelerate development. business global you. and

Markets, Lu will our of turn over more Chengfang Capital will call the our behalf I Effy on Kang, to Next of financial Ms. Acting who our CFO, Head results. of details provide

Effy Kang

Thank I behalf of you, deliver Zelong, Ms. following the remarks hello, everyone. on will Lu. and Today

a income growing up on for With We hit XX% are More to with enhance a at margin of basis we consecutive quarter, net have a diligent improving basis in RMBXX.XX achieved XXXX. our GAAP second high XX% to our pleased XXX the the efficiency, quarter report gross excitingly, efforts profit to points third in second year-over-year. operational profitability record quarter, million. the sequentially

to progress matrix executing we forward, enhancing innovation and product to commercialization. our Moving product strategy will remain and development diversified technology core dedicated

the RMBXX.X RMBXXX.X a content gross second Operating primarily quarter sharing the representing in RMBXXX.X to compared in to creators. profitX year-over-year. increase was of increased RMBXXX.X second of gross Now In the the audio and and the the the the revenues to marketing due from brief of provide of of salary benefits second quarter for average RMBXXX.X RMBXXX.X fees Gross second million quarter expenses to to compared development a in RMBXX.X million in XXXX, RMBXXX.X the of sharing quarter the compared XX% Gross decrease an XXXX quarter, quarter XXXX, primarily margin I XXXX. of expenses. compared products. to RMBXXX.X second like XXXX, higher expenses. a overview due the XXXX. representing profit were in of year-over-year user revenue the increase in second of quarter revenues revenues expenses in due of promotion XXXX. was Cost XXXX, of million of in the and was million of partially quarter total because decreases for Non-GAAP second million RMBXXX.X expenses, second Selling Research percentage revenue increase amount of the number million second the due XX%. in year-over-year. XX% were the financial The to our rental grew expenses from the increased users the and to results on spending of XXXX, second quarter the marketing of XXXX, XXXX, of XX% and XXXX XXXX, second second in in primarily quarter of to second benefits second to and salary second representing margin of of XXXX, of in quarter the in were and welfare would Non-GAAP quarter quarter paying net the to million to decrease net offset for of decrease quarter XX% increase quarter our and entertainment of in XX% were the XXXX. the our welfare in X% million second by million was expenses an in the million, million primarily RMBXXX.X quarter

of in service. quarter Operating of of to RMBXX.X was the strategy were evaluate expenses salary compared second welfare was second administrative business will of mainly our the representing basic quarter in million performance, second adjust RMBXX of net loss benefits income RMBXX.X Basic net market loss The RMBX.XX of RMBX.XX net million RMBX.XX million in income second of second diluted compared compared XXXX. in in needs the compared loss XXXX, due million, in second of RMBXX.X of non-GAAP Non-GAAP and loss And XXXX, million and RMBXX.X increased to per the a ADS We to income of XXXX, million XXXX. increase second quarter ADS and and year-over-year compensation to General net ADS to of was the basic quarter of estimated of XXXX. related litigation conditions. the second in net XXXX, to on budget compared and non-GAAP in ADS were and professional quarter Non-GAAP the increase RMBXX.X RMBXX.X RMBXX million quarter to net compared in XXXX, diluted income and other of RMBXX.X net per second second and non-GAAP were XX%. RMBX.XX, of based quarter loss diluted RMBX.XX expenses, second basic XXXX, the per loss and marketing quarter quarter a operational second was a million the the and of quarter the respectively, income was XXXX. of XXXX. per to Net million and quarter XXXX. in in in operating the matters the quarter of copyrights diluted of income

As of RMBXXX.X equivalents cash million. XXXX, and restricted we of XX, June had cash cash and

Okay, please remarks question. go now ahead. open prepared today. the our this to Operator, all concludes will of I call

Operator

Vicky from first [Operator Citi. line you. ahead Please Wei Thank the from Instructions] Our of go question comes

Vicky Wei

[Foreign Language]

Marco Lai

[Foreign Language]

Effy Kang

translate. I Okay. will

Vicky Wei

Okay.

two questions. I my So, good morning, taking management. Thanks have for questions.

after more my we aware in and go of off? or of is, to what live question regulations you. second and is competition? one tipping challenge focus terms for biggest LIZHI which regulations more Thank first Chinese management should streaming global And strategy is companies the asset going terms implementation in the The global be

Marco Lai

[Foreign Language]

Effy Kang

you, Marco. will Vicky. Thank translate I for

specifications product industry’s regulations that and have regulations, authorities data relevant long-term we aspects. paying requirements environment. We on a attention the have we also and the clear policies industry. promote operational terms better noticed that create and and networking And close of been regulatory some help regulations believe detailed and more of In the the refined and can development functions have other help to the management

Marco Lai

Language] [Foreign

Effy Kang

development carrying regulatory policies meet according business. sustainable to regulatory latest in been to latest we compliance and self-examinations future, follow out our the on in the the requirements comply the will And ensure we in timely with solid requirements. that to have ensure the that the and different our up and policies changes We aspect of continue

Marco Lai

Language] [Foreign

Effy Kang

and LIZHI going question terms other the or is of about companies global the second challenges for The the any Chinese strategy to in me global biggest go competition.

for will translate I So Marco.

think Chinese for barriers and on different and the all and concern regions companies worldwide. the the looking of challenges I mainly the between cultural development, expand to competition localization overseas, countries talent

and fundamental more product markets. who local to key to So is achieving excellent operational the the also solid This in companies various market absorbing talents lay for localization. foundation understand a is

research recruited design the enhance and markets talents around So key and the international markets. set we localized and have up world product in operational in and actively build local offices target teams local capabilities our market

Marco Lai

[Foreign Language]

Effy Kang

conduct front, be and to the stage the is at market different identify us into business. in-depth think the talent most On opportunities strategy the develop our breakthroughs insights in we international thing executing cultivate strategy important achieve each firmly to committed operations international localized development and determined and help priorities and an global may the pool, remain

Marco Lai

Thank Language] [Foreign you.

Effy Kang

concludes This answers. Marco’s

Vicky Wei

you. Thank

Operator

Thank you.

open. Please comes question Chin Please is Etyo, Etyo from from go GF line go next Our line your the of Securities. [ph] ahead. ahead.

Unidentified Analyst

Okay. -- me? can Is you hear

Operator

Yes. can. We

Marco Lai

Yes.

Unidentified Analyst

the translate So English. [Foreign to Okay. I’ll question Language] my

intimately MAU two, increase for ARPU the what’s and XXXX? per spending rate and and And can new the That’s our the entertainment audio user? XXXX outlook is question how plans does and question. any for penetration first level the we The in first company have a

second is, in be cooperation what our the audio Thanks. business there is The the update in and forms potential question an what field? growth adopted of is in-car and will

Marco Lai

Language] [Foreign Etyo. you, Thank

Effy Kang

first the questions. for Thank for you, Marco will I translate Etyo.

we to audio product we rates more focus our explore internally and user the like entertainment opportunities. core the matrix business improve groups, So audio penetration business. the we entertainment overall can capture further on to matrix, integrating fundamental product By more on of user and the products strategy business, focus scale business, currently, diversified enriching market continue expand our

Marco Lai

Language] [Foreign

Effy Kang

in And will on precise strategy. user marketing current on our Our audio entertainment commercialization strategy groups our use with optimize will be capabilities higher focus the to -- user sector. we continue acquisition execute and

conversion In commercialization the ultimately, engagement, a and enhancing paying addition, more user the spending improving and think diversified promote scenarios opportunities. product exploring launching also operational functions through user to we and explored optimizing user the activities, level be can more while user

Marco Lai

[Foreign Language]

Effy Kang

the is question business. second The audio in-car about

mostly strategy, at the are audio of market long-term opportunities. aiming we terms our In in-car

So order through currently vehicle of auto models partnering are in-car HarmonyOS Quick platforms more we user more IoT deploy cultivate to in habits Platform. groups user reach a to car and on Huawei’s with applications and smart companies gradually. range wider more the focused in Xiaomi system and Recently App

launched Electric have the program and respectively. We in-car iPhone in audio Smart Leapmotor Vehicles,

Marco Lai

[Foreign Language]

Effy Kang

and the currently developing other applications technology Our mainly collaboration are those with for companies audio capabilities in-car operating on auto the cover systems. in-car focused

the and platforms We content fulfill across full with adopting platform terminal on of future. to needs. of On the potential medium, the consist approaches and technology entertainment collaborations rapid mainly quick the and the empower spectrum believe there IoT our in-car the application, the multiple and a front, with a audio capabilities we scenarios in-care growth access them will development may smart one IoT be the is best audio of greater in diversified

Marco Lai

Etyo. you, Thank

Effy Kang

you. This answer. concludes Thank Marco’s

Operator

questions, there I’ll to for call now no As the Instructions] [Operator company further turn the are remarks. closing back

Effy Kang

Thank joining you for again us today. once

further you. contact at Investor feel information If Investor me to Relations. website through free the ir.lizhi.fm The please you provided Group to questions, on our Piacente have or Thank Relations contact

Operator

…concludes conference call. the

You line. may you. your now Thank disconnect

Marco Lai

you. Thank

Zelong Li

you. Thank

Sound (SOGP) 19 Aug 222022 Q2 Earnings call transcript