BLCT - Earnings call transcript Q3 2020

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Operator

Good day, ladies and gentlemen, thank you for standing by and welcome to BlueCity’s Third Quarter 2020 Earnings Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, we are recording today's call.

If you have any objections, you may disconnect at this time.

call the Lingling company. the Investor Head turn of Relations I'll over Kong, to of Now, Ms. Lingling please Kong, proceed.

Lingling Kong

Thank you, XXXX quarter to BlueCity’s operator, and hello, earnings everyone. conference Welcome third call.

available and Mr. released as We earlier from a as replay website. company's today. in is A Chief today IR Financial release results Baoli of press Newswire will on us Li, Chief services. on are Executive Joining also hours this well Officer; our available Mr. The website Ben Officer. ir.blue-city.com be Ma, few call the at IR

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

and inherent involve risks statements Forward-looking uncertainties.

expectations forward-looking applicable and Further today's company other update SEC. for to does expressed as any financial non-GAAP these and the only. with is will public uncertainties regarding today. that comparison be during such, except As actual the assume note results information measures risks purpose company’s in under the may filings the any included not call, discuss The certain company's from Please statements, required materially also management obligation different law.

remarks to in Chinese opening renminbi. I translate Mr. Chinese. CEO, measures our results otherwise mentioned press of over reconciliations GAAP Ma. turn let Baoli to be conference Ma call me that GAAP the call earnings during With Our in found stated, our his release. deliver non-GAAP in note that, will the and Mr. will please now figures Also, can remarks. unless then all are

Mr. our Ma, discuss over highlights. Ben please financial Our Li CFO, Mr. take and to will go ahead. business

Baoli Ma

generated and to XX.X%. for up conference quarter million, adjusted a we monetization strong you growth, with revenue steady XXX,XXX, demonstrates strong on the capabilities ability We and RMBXXX.X drive and Notably, Thank finished our today. first for users still call Hello, This improving execution. time. net of result income paying healthy joining year-over-year note, total our XX.X% total up earnings everyone. positive of third

position In addition LGBTQ to solid community. organic growth, leadership we strengthened in the our further

that services products and and have a acquisition geographies. strategy expansion portfolio We other developed and provides subgroups to different through

Let breakthroughs latest our fronts. with me on share you those

Today, acquisition. leading social Finka, in China gay generation. app networking acquisition the younger a completed of targeting we First, have

We strategic Finka both in to by metrics it LGBTQ centered community. injecting our younger importantly, us our and are user elements Blued With swipes has complements this enabled our excited in dating dominance training about further leadership acquisition, and product have this acquisition. more and into we app demographics. functionality more our on and in strengthened But enrich the community.

confident are forward future a building in synergies. We their strategic complementary and look business and development to

of and continue version we introduced as America, In a expansion, our services simplified app. in providing markets. more diversified Blued global Second, we we are to accelerate Latin localized different the

rolled Asian markets, exclusive an voice feature. For we chat some tailored room out

Our goal the needs the closely is to build of matches local a product that communities.

and better we where to we a continue of develop join affinity of users engage new quarter, and community. the with of can a Third, groups version China and In the introduced this “Community” services. Blued, products feature variety like-minded innovate

experience LESDO of newly the men’s promoting like in icebreaker and an our services. innovation continued the connected as user health-related friends. such as demonstrates Catch effective highlight effort through HIV services, comprehensive which and brand further to on variety serves e-Health, deepens performance so-called are that also We the sub a wide community. health services platform of our connection also primarily our between the improves new related This health that one the bounds of of function, including features, provide I would product

X approximately million. from e-Health to revenue RMBX.X grew quarter, This times

in the awareness service represents see it capabilities. a advantages e-Health drive potential and and huge and first community we of which revenue, Although, total LGBTQ in treatment our still acquisition of our fraction of HIV a mover small user prevention

As to prevention interest and in prevention, up HIV make towards AIDS the and donate lead the we awareness HIV in recently Day. to promoting efforts relentless RMBX advance public non-profit million we support continue pledged to

and HIV many corporate towards years academic prevention Our has actions been of by strongly recognized well supported partners. governmental, and

Going initiatives events. will of and awareness wide more world in launch a around participating and by promote to and forward, public the we continue variety LGBTQ organizing social

has to anniversary to been we the to want one the are. registered I November mention of BlueCity's predecessor. XXth Finally, me, encouraged Danlan.org, effort, along journey thank was recognized, users the and meaningful who from of person and for XX yet of those million helped globe. like way memorable all a would us that XXXX who to We long the founding around It be

best We product capability members execution to providing benefit aspects a consolidation in progress understanding, We demand. we We our our will operational the achieve that of consumer leading conclude, fast-growing to through made the near are and dedicated market can robust advancement our technology growth business. and QX from improvement. the quarter. many position, And innovation, meaningful services strong deeper To in industry strong future. was believe

turn Now, provide over who to call CFO, our details Ben, on performance. business financial will the let and me

Ben Li

And Thank you, Mr. joining for you, our Ma. call everyone, thank today.

as a the X.X and business to our the better margin same profit same grow generated than another year-over-year. it was increase financial of period capability Gross significant RMBXX in for XX.X% was men. at nearby Finka first other users swipe a for mentioned, income we in profitable million, the of a that RMBXXX.X which Finka manner. adjusted net right users We as app in Gross geo-social year. impressive to last focused demonstrated solid uses you and model people the year. just remarkable better Blued, is which are who from and November. on left of life. potential complements Total in pursue swipe a matched broader networking that of and business a sense. positive Finka points millennials Notably, of mostly quality time, second-tier the we our was acquisition and first XX.X%, Finka percentage a quarter community period announced As were improvement, feature a in the and million, growth. get swipe Mr. which last delivered the building development dislike would connecting end strong live revenues to much a XX.X% whole XX.X% like up Ma is cities with with the

pay are services. such, willing to high-quality As they more for

registered September X/XX XXXX, users, of approximately app X users As average users of daily with about Finka active million and active monthly the had Blued.

financial growth we As will providing by support assistance. and technological Finka, integrate its operational accelerate and we

add huge us share members expand to we our Likewise, offerings, global overseas for see to experience drive and backed Finka which similar and on to younger enabling Specifically, expansion further further profiles, growth with the ideas service to potential Finka's features Finka who will optimize product more appealing overseas, by fresh operations. community, of users, monetization our and will years opportunities.

operations. our recent development to Turning in

We improving continue operating to resources develop to efficiency.

engagement. minds feature touches We Blued the interactions different also tells experience, user With AI-driven short generated X August, invested a BlueCity and as capabilities our as other video series from “Community” out has numerous Leveraging to We love in episodes, The the strong million within X always. series technologies, rolled views the materially all-new of and we and this networking as and original edition it innovations social analytics promoted XX our improve our new stories members we of an of launched Blued hearts angles. called, over series apps. same-sex the technology data believe app. on well In user level Dear China Sirs.

common the interest Although to even is groups, “Community” join feature, richer background on and and enjoy can which online. social users interaction based similar the Facebook groups

We have significantly are by each reviewed its launch. that see talks pleased of the to and since user interactions increased number

is of data of leading foster foundation and belonging and the resources, since to improving activities. human base acquisition. introduction acquisition are that, provide of our governance networking pleased see November, users social new monthly community the cooperation. analytics user smooth and build very optimize XXXX. investing in algorithms a live and active the a We're point. greater solid will effective integration product in growing LESDO streaming August with starting in pleased plan our Since of expect We And we marketing its of app in roll that technology community. LESDO, December, as share China, a a and just of out this are to results in The of for increased revenue lesbian times and meaningful services LESDO X.X offerings, will improvement, corporate and version Our service which a contribute sense we a to by

the and MAU local and encouraging mobile a compared support to in a XX% interface, community. app internationally. so results the with presence The increasing optional BlueCity's for reflecting DAU with countries continue brand some streamlined update both photo the Latin America in and build user to improve global far We verification Blued to introduced We major awareness are prelaunch. LGBTQ our major

We in developments are efforts. and future our through operational marketing confident

Over strategy, have expansion for [pay-led] users. local a community few the the clear years, executed features serving we on past globally with LGBTQ

financial will quarter. our I through Now, go this for highlights

All on financial about XXXX, third contained basis, stated Before and otherwise quarter website. our Detailed are percentage the available presented is I all in a our which results, of for press please otherwise. go year-over-year IR earnings are unless into that numbers are is unless release, specified. details RMB, note changes on analysis in our

monetization the million, by as period of to revenue, live XX.X% overseas same RMBXXX.X increased XX.X% offerings Quarterly quarter Growth as diverse during X.X% million. streaming the XX.X% from increased pay XX.X% for million, increased Revenue Our services. activities users total XXX,XXX. of as up better by our promotional year-over-year. from to from RMBX,XXX, increased Revenues total services top year. contributed year. services for and to users to the X.X% the expansion. RMBXXX.X to ARPPU period live X.X% services from well services same up reached content RMBXX.X by last streaming was for was of of geographic driven membership Revenues our from rich revenues paying willingness last up

XX.X% membership services users X.X% quarterly Our RMBXX. paid while increased increased to XXX,XXX, ARPPU to to for

and total million, content, due growth RMBXXX.X mainly the line Revenues to revenue. streaming was RMBXX.X products. our of costs, revenue-sharing The of in merchandise attributable live XX.X%. up have of compared membership RMBX.X sales. Other million were along of Our increase services. to users growth continued growth customized fee-paying adopted revenues with third unique The to XXXX. was advertising increased quickly, with from revenues RMBXX.X from the our quarter services with to were the increase our thanks primarily growing rich million by of the XX% million, Cost services

of expenses year. percentage RMBXX.X in gross improvement points compensation million, higher related share-based XX.X% total The as up mainly portion to Gross in down XX.X%, last the smaller lower representing live of from XX.X%, of year. gross from a margin total XX.X% revenue, last had IPO. also came was quarter was margin profit revenue Live We revenue. third revenue-sharing X.X streaming was the than streaming

growing As model. membership with services we platform, a faster more to using revenue-sharing higher the the have service stream adoption diversify providers and margin. members model, is reduce and more achieve means and expect we gross further can of our revenue margins, attractions, we percentage which can this shift higher popular subscription-based fee Meanwhile, with sustainability, the further towards

The share-based XX.X up expenses, the development added as was million, to ramped were in XXX.X%. to was in net expenses of RMBXXX.X Technology million, personnel due the related adjusted expenses technology to promotion line compensation business. net advertising growth the adjusted advertising related as they mainly with last remarkable were headcount This RMBX.X RMBXX to net loss million, RMBXXX.X operation increase our professional staff the increase loss capabilities RMBX.X with well due income expansion. were mainly year. was We R&D Net and and IPO. and The improvement. IPO. The share-based with were expenses IPO. expenses as the RMBXXX.X The relating compensation year-over-year. at XX.X%. share-based and up IPO. was last increase X,XXX%. compared compared a with services mainly Looking in marketing related to employees, was the our business Furthermore, up and due million, they connection enhanced to as cost to of XX.X% were sales higher the compensation and more Selling marketing were compensation and in RMB up share-based increased development due RMBX.X G&A increase a expenses up year. of million million million expense It to and was loss well million the fees expenses

our streaming will membership services. forward, Going and upgrade the model consumption to we continue services to live of promote advance paid

selective community We will our expansion within also prudent and global base the broaden acquisitions. user LGBTQ via

let million, the that, we me growth RMBXXX We XXXX, XX% are a XX%. guidance. our prospects. RMBX,XXX That offer million for confident full RMBXXX We prepared revenues to growth RMBX,XXX XXXX. my in revenue year-over-year expect concludes for Therefore, representing fourth quarter long-term our net of year in outlook of to of remarks. With reiterate million of range to

Let's the for questions. now Operator, call open go ahead. please

Operator

[Operator Instructions].

the of question line Champine Loop. Laura comes from first Our of

Laura Champine

that indicate you on color It the growth. Can on a growth quarter seems your QX the this both in heading trajectory? to guidance strong live revenues very dynamics streaming more into in for streaming seems give live fourth on around quarter slowdown. But the slight QX posted -- specifically and

Ben Li

last strong your Language]. is quarter This I that Laura. Thanks, -- Ben. Do quick also streaming Ma? impact Yes, we revenue right to do to clear mind of contribution with vision to the gets Okay. China just very in now. Laura. here But we opposed a Thanks, a everything additional very norm as is translation have and back year. the quarter third [Foreign have see of you the do live less negative COVID-XX a question Mr. management to do that in

online, people consume in general. to less would So spend like -- time

like see, in whole the is that same guidance might would And that to be Laura. impacted to the we do the for critical reasons of one quarter, extent. some hold the just So year, fourth we

Laura Champine

And anyway that How migration declined slowdown customers paying sequentially. was dynamic the you Another for did drive the MAU drove grew paying in very interesting but your growth? towards But me paying your MAUs -- rapidly. what users?

Ben Li

the Ma first. Mr. translation Language]. do to [Foreign Laura. will I Sure,

Baoli Ma

[Foreign Language].

Ben Li

Laura, some brief color answers, based add actually, on will more his Gao] [Mr. quick I made statements. and

geopolitical this down. -- The seems -- actually And our just revenue even challenges offline due that Ma in Mr. attribution the not MAU of that to because online quarter part so Gao] affect have not being your main do in given [Mr. one So for monetized it well-known does or history, just explained some why the is globally. India slow marketing was we issue statements, the actually number have are our the that strong mentioned the two, contributions do MAU, one go to revenue the share we now have X the side. it the Gao] that given into then based details. competence impact globally. does right strong on engagement And that But impact answers no [Mr. the users. market our before player, That's to background we for we of but belongs detailed quick number

from our allocated Number interesting model this to be feelings on time, membership new management features general. interface and introduced could this platform, the attractive the features developing actually based team, time, users our enjoy over users’ So three that this and on time keep improving quarter-over-quarter on we platform. is on in that our keep

question, brief So to that's quick your a Laura.

Operator

from I'll move question from Securities. Mei on Tiger the next the line to of He U.S.

Mei He

Language]. [Foreign

X have I So questions.

streaming streaming this down reason costs both meanwhile quarter, about future that First, Y-on-Y. the In business. app streaming we grew, is live streaming both Q-o-Q revenue stand, how what live and seen the lot in and behind have live Y-o-Y, and Q-o-Q a

look would acquisition. Finka sustain? And Secondarily, So is how the reason to you what behind? on

have will next if acquisition, financials the Finka So we next factor Finka? higher year? potential of how is of quarter the the our impact revenue terms or monetization in What completed for or profit

Ben Li

[Foreign Language].

Baoli Ma

[Foreign Language].

Ben Li

growth, at reason, earlier Should earlier by the revenue-sharing X to in number the Tiger the stage. and and online Okay, the reason -- by regards sorry, been the answered target. Mei the [Mr. time that live the I X and questions -- over growth do ARPPU revenue also slowdown streaming anyone from decreasing just question Securities, and and translation? He Gao] mentioned regarding The to

revenues every are and are also And enhanced the streaming actually management is power bring for the we definitely right down live ARPPU community this platform also investment our it operation of live platform in the strong streamers. online general. through enhancing the globally, to to total growing, LGBTQ somewhere high for number the Okay. are live XX%. to And streamers we in The on general. developing all features also over live we the it's key efforts the in player more we X now with the the quarters. given in operation to and over between methodology ARPPU of from achieved have at because that's from specify the revenue, in make the XX% year, to share below we to that do driver acquisition have streaming live several users that something streaming applied the more attractive had already time target more XX% now, quarters, the down keep market right And just total, attract see do we rates for time-to-time. by live from last DAU X trying this negotiation still growth streaming. time and reason key And attention based And around from more XX% XX% revenue we still getting this and MAU between And with effort to just management's successfully to that that trying next around the

our So enhance gross to streaming by tactics that our sharing live streamers. lower is the the with margin down live

and the The Finka second to general product. in model, the this next business through quarters performance question the XXXX diversity regards for of quarter also and the financial Finka's

And only. paper merging Yes. to app but been sector with has the And later. retrofits by the sometime going requested level million that, acquisition Speaking the Finka in and membership monetization are just a the of rights. annually according currently, of in as requirements, stronger very share we now everything GAAP also complete still, are made information Blued that right to everything in general. something, live with deal. or is services, this of right And audited the from purpose we now RMBXXX detailed information on for were the total said, from sharing streaming, is That general, revenue pie the

of answers. questions the a that's I think and quick the brief

Operator

comes from line the of question Next Group]. of [Brian AMTD Lee

Unidentified Analyst

strong this Yes, as you quarter turned profit -- it's as quarter. a company your

side. the question my So on expenses

and declining XX% and deduct sequentially a So ratio your if we also adjusted SBC, base. was OpEx and on yearly

see, can accounted XX% on and trend we is as total revenue. operating nearly marketing, achieve this your continue? leverage And can sales and can marketing of still the for So sales one, you the

in and -- Finka. just So acquired particular, you

synergy So when can you acquisition? with the realize the

Baoli Ma

Great. Okay.

translation, of conducting Now do questions? just Brian, all just you mind, to efficiency for answer English

Unidentified Analyst

Sure. No Thanks. problem.

Ben Li

cost on -- general, quarter is on for based In touch base share-based actually XX Okay. our USD total, P&L or touched around this compensation the in something. million

huge, that was them non-cash So treatment, actually just that was a accounting general. but in just most And G&A. in of

conclude that very you So very not decreasing see pace. this it's do growth. but you percentage just I this OpEx of promising, a will a kind going to can as excluding promising we tell total revenue them, of What in is keep

from I think of a governance process, actually next cetera. quarters. because enhance selection, onwards. we that our Just period a see our we're -- tenders just the do will process, That But norm corporate up is starting be or legacy by. recent a just from procurement And this conducted by the the et lot over the corporate governance, passed election, so process, during recent our enhancing that IPO in quarter in was impact to not do building we strengthening year -- quarters

to to we going are answer that as the this going operation it percent total going revenue, The but have promising, in future we as to it XX%. cost grow our management decrease, bigger, as aggressive mentioned sales. the pace pace. this in optimize more. of Still, Yes, going was is was we if S&M, strong see but to aggressive as holds do we not So the are yes, confidence potential question. be result you general. total to of That's regarding to a spend And revenue, that in not

acceptable statement the that percentage and is as So the S&M total management as that quarter for a just XX% my mentioned by as in revenue. earnings last percent of of healthy I

especially to going we a going -- So are be company. we global to are

future revenue marketing we of level in quarters percentage keep for So the and are sales, onwards. general, to of yes, going in that

cetera, we'll For OpEx, business departments functional synergy. to to asking going about Certainly, are terms, keep et cetera. we also a that cetera, several combine and the optimize procurement Finka the our process to were for the course, for the operate definitely. I significant you together that just if are Yes, G&A, looking the and department cetera, agreed we two synergy, cost assume finance we very legal at opportunity separately to deal are like a according IT-related, IPO, to and procurement, for of very our negotiation going the that machine, definitely we our -- et or et yes. the the Brian? these have We like post the especially next optimize resource, brand with in modulation et content to addition general, stronger And vendors, human but cloud, cetera. for quarters, independently we merge et

Operator

Ladies last and gentlemen, question interest take we of Pei in Bo from will time, now the from the Oppenheimer.

Bo Pei

[Foreign And going Language]. for to translate I'm myself. then

have X I questions. So

and LESDO one first we And is LESDO in August. acquired about The Finka.

curious our mentioned for in expansion So I'm app this going markets. plan about our we like remarks overseas to promote the in Finka, we prepared just overseas

since in overseas just wondering for if then X And MAUs the is, our So of question we our strategy. I China. mean, similar IPO have M&A LESDO? second strategy I'm

So market? of pandemic the slowing is market, the then overseas down efforts I'm just And strategy curious in about in global is our general? in our overseas kind M&A

Ben Li

Language]. [Foreign

Baoli Ma

[Foreign Language].

Ben Li

status for Okay. we I'll quo in general. the LESDO, this overseas of -- LESDO, also do the summer. in any translation regarding questions first general, in for And plans two acquired the which expansion

have stronger management the -- So has some going post-acquisition. half user we mentioned by also LESDO Thus, strong [Mr. efforts this making in remarks, form, the even product with make that activities, has several to later, that the increased the over of times limited post-acquisition, LESDO those kind enhancement MAU results. to confidence on Gao] a management great marketing be the is achieved general. -- marketing Based growth of actually conducted year and that, the as activities has And the X.X answered of during prepared LESDO. we earlier the months,

Specifically, in LESDO. I to December, are think streaming live this going features the introduce we

we strategies first Regarding statement, [Mr. player priority China. is the said, That are in overseas to global lesbian underserved Gao’s] to X to win overseas yes, trying going go the for still, that, service our LESDO, the share market to number according market.

trying first, is as long-term do tactic one, to We China move the our number then is in see overseas. So future. that to not

our under Pei is my geography add regarding community plan. that such our is lifetime plan, you, situation, overseas demand is So general And international mission COVID trying expansion own LGBTQ to to general up Bo, not service an -- provider. again, our be

will never So internationally expanding oversea-wise. we globally stop

we remarks are markets. Latin into options a through very but So -- the is compensate situation, under introduced those America products likely earlier our attractive new our from prepared that issues It's to strategy, that our That actually recently market. of said, such just COVID, that plan. can like which trying year, also related this general we recently see geopolitical alternative market, current you our not the law our also just

wait we So regard. That's which Bo. [Foreign quarters number question let's the to or two -- performed, question -- that the management in how have strong do one, that's the that Pei one your confidence Language]. a answer to see

Baoli Ma

Language]. [Foreign

Ben Li

general. as serve just to highlight service and global answer success global this else line, on everyone LGBTQ an into statement would translation that of I platform, announced our community, in to again, mission present the trying is this company, international before Bo to detailed ourselves Pei provider [Mr. Gao] to go like I the the

it question global So Pei with Bo M&A oversea-wise, from interconnection general. the our have some regarding does in actually, expansion plan, strategy second

like as strong opportunities there player international market existing copycat the that question this a general. aspects. a answered to sector, by order general, them, with market explore acquire one, if of two is or efforts time about featured from acquisition product trying territory If either to save any Gao] I’m presentable [Mr. that our Blued, target, do to new to save So market-dominant answered, strategy Number that would have market. is we version in say, in and pleased first, ourselves, customers, good-looking develop for that a our in to does not in to new

statement also general. et that. restriction also, acquisition I exactly believe economic expansion. even does not that other is the cost just one the everyone efforts Europe, just but understands cost. cost for data but protection I up really the mean, Bo not Pei related maybe aspect cost, China-U.S. like [Mr. aspects And now the to My to geopolitical in et cost We own COVID, going by [GDPR] cetera. how in That's M&A abroad. the go cetera, only for many also or organic China from that abroad. only the echoes So tactics are abroad, tension, is that our go even it's growth. either three challenging is Gao] just add the our tension, global quite stated options, of we that consideration a the for of that company cetera, That's a like India also from the issue. view et a this

get I the -- Latin more the this see quarter, And marketing by quarter market, by proactively, and in to developing presence another The do taking enhance solid this we is markets year. more KPI operations serious new we features entered And globalization data, market and [Mr. study to help people resulted in by APAC market have strategy, do -- that more we we this these dominating see, in America, help mean, a to territories clear do doing sales And doing that and to-date, do stated that second et features, by Gao] proactively is in strong from a engaged, since keep quarter. going fourth this to keep our more we developing offline promising we two America we into users are online, promising. alternative stage. one keep and to to just aspect the cetera. is expand, market Latin that that quite Number are et is general, new Number to general. get find cetera,

the Europe, users. mentioned actually, course, that, as very, pay. three users [Mr. to are they willing were well-advocated, number Gao] and They So are They very the good that, users. good more and of America is North are they

So definitely, of company again, to back that law we to international my a success be company. are going mentioned this earlier

face -- sorry. second and Bo, internally and We North America serious from sometime, to some to that -- management first the conquered in Europe Operator? Pei North have get challenging know now get way. even XXXX, moving question. or dialogue Europe to the that's we in be to step preparation trying America has to try already to don't some a that on, not the And XXXX markets. in conquered word, I meaningful to -- answer mentioned and

Operator

in much. questions Thank closing to no me Ben turn let very call back Li, CFO, for you the the queue, Seeing more remarks.

Ben Li

and quarter today's you for forward and you, on thank Thank for you to your operator, progress. support. and to interest you. call reporting look appreciate on next your again participating Thank We all our

Operator

that gentlemen, you conference does participation. today. Thank the conclude for and for Ladies your

You may your lines. now disconnect

BlueCity (BLCT) 2 Dec 202020 Q3 Earnings call transcript