iClick Interactive Asia Group Limited

Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia Group Limited Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Ms. Lisa Lee, Investor Relations Director. Lisa, please go ahead.

Hello, everyone, and welcome to ICLIC's second quarter 2021 financial results conference call. The company's results were issued earlier today and are posted online. You can download the Earnings Press release and sign up for our distribution list by visiting the IR section of our website at ir.i-click.com. In addition, during the call, management will give their prepared remarks in English. During the Q&A session, we will take questions in both English and Mandarin, and the third-party translator will provide consecutive translations. All translations are for convenience purpose only. In case of any translation discrepancy, management's statement in the original language shall prevail. Jian Tang, TJ, Chairman of the Board, Chief Executive Officer and Co-Founder of iClick, will first provide a high-level review of the second quarter 2021 results and share his thoughts on our execution strategy ahead. Chief Financial Officer Terrence Lee will follow and give us additional insights. on the financial results for the second quarter and provide guidance for third quarter and full year of 2021. He will then turn the call back over to TJ for closing remarks before the call is opened for Q&A. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U.S. Private Security Legislation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other and uncertainties is included in the company's 20-F, as filed with the US Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable rules. Please also note that SPIClick's earnings press release and this conference call include discussions of an audited gap financial information, as well as unaudited non-GAAP financial measures. ICLIC's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures. I will now turn the call over to our chairman, chief executive officer, and co-founder, Jian Tang. TJ, please go ahead.

Thank you, Lisa. And welcome to the call, everyone. We are excited to share with you yet another quarter of robust growth in both our marketing and enterprise solutions and strong financial and operating performance. In fact, the second quarter saw record performance on numerous metrics, including enterprise solutions revenues, gross profit, adjust EBITDA, and adjust net income, further demonstrating that we have the right data-driven solutions for our clients and that we are enjoying strong demand from our products and services. With our solid execution and a clear strategy to further penetrate the enormous private domain traffic market, we remain confident in our strong outlook for the future. Total revenue in the second quarter grew 34% to $78 million. Looking at our two business segments, enterprise solutions achieved record results for the seventh consecutive quarter, with revenue reaching $13.4 million, up 160% year-over-year. Our marketing solutions segment also continued to deliver healthy growth as revenue grew 22% year-over-year to $64.6 million. Gross profit increased by 46% year-over-year, outpacing revenue growth as we further expand sales growth in marketing solutions and drive increased contributions from our higher margin enterprise solutions business. While we keep investing actively in enterprise solutions, we have still managed to achieve historical highs in adjusted EBITDA and adjusted net income, demonstrating the strong economics of scale we have achieved in marketing solutions. ICLIP is a must leader in assisting clients realize digital transformation through embracing offline to online integration opportunities on the private domain traffic market in China. Encouragingly, according to PWC, online and offline retail sales in China are estimated to reach 2 trillion and 6 trillion respectively. And we believe the total $8 trillion can give us a rough estimate of the enormous market potential we are facing. While our key account clients and mid-tier clientele segments remain distinct, they are equally important growth drivers for our enterprise solution sales. We have over 3,000 existing key account clients in marketing solutions for which we expect to see significant cross-selling opportunities, especially within those industry verticals where we have gained traction, such as cosmetics and food and beverage. As we grow our enterprise solutions business, we will grasp additional opportunities for scalability through replicating our success in these familiar industry vehicles. In the meantime, we are also further growing our presence in the mid-tier market and have received a strong reception from clients for our high value, easy to use SaaS tools and our unique implementation methodology that provides hands-on team-led implementation delivery and guided integration. Maintaining our momentum with key account clients and penetrating rapidly into mid-tier client segments, both organically and through expansion into new vehicles with Baozun remains a top priority for 2021, and we are off to a great start. I would now like to share with you some client-based studies for each of the growth engines, fueling enterprise solutions, starting with our organic key account clients. Bailea Commercial, one of China's leading department store brands, is an exciting example of how iClix integrated solutions have brought impressive value to our key account clients. are traditional strengths. iClick helped to integrate 470 by the offline client stores into a WeChat mini program that functions as a centralized online consumer interface with various smart marketing tools for live streaming, e-commerce, and other areas to attract traffic and stimulate consumption. At the same time, Baileys' use of our standard SaaS product, iSCIM, enabled them to formulate and execute insightful consumer strategies to build consumer loyalty. On the backend, our SaaS product allowed Baileys to digitalize the sales management and evaluation, increasing management efficiencies and optimizing sales performance. Finally, our data analytics technology supported by this target marketing enhanced consumer repurchase rates and provided domain traffic with actionable analytics and insights, including consumption and the social behavior data. Our partnership with Baillie has demonstrated the wide range of services we can provide to maximize our clients' success across business lines and the ability of our standard product to reduce development costs. Amidst the ongoing rollout of our standard products, we have continued to enhance our product metrics to cater to the different needs of our clients. As you may remember, we launched our first cross-border standard product, iSmartGo, just this April. And we are excited to announce that two career companies, Golala, a global fashion wholesale market, and Polad, a fast-growing brand focusing on car seats, and baby products have implemented iSmartGo to quickly and efficiently expand the China footprint. These two client successes demonstrate our strengths in understanding the needs of global brands and assisting them in gaining access to consumers through highly effective integrated solutions. We also note that our partnership with Baozhun is advancing well as we have completed the integration of our resources and systems, and most importantly, have engaged with a number of new top-tier clients. Together, we are driving strong value in the marketplace with the combination of our fully integrated end-to-end solutions that leverage Baozhun's strengths in operation services and back-end systems. With iClick's networking and experience in WeChat ecosystem and our expertise in SaaS product offerings, we look forward to further expanding market share by capitalizing on the enormous market potential of private domain traffic in China. We are also very proud to continue to be recognized as an industry leader, and this quarter we received Big Data and Intelligence Company of the Year from the 12th Tiger Road Market Agency of the Year, Gold Award from Marketing Magazines Agency of the Year Award 2021, and Asia Best-in-Class Digital Marketing Technology from the Hong Kong Mall Award 2021, among others. Regarding China's involving data security regulation landscape, while confusing to many investors given the uncertainty it has brought to the Chinese technology market, we expect this to have limited impact on our business model and operations. In this environment of patent investor consent, it is important to highlight that online education accounts for a very limited contribution to our overall revenues. In addition, we have achieved level three classification for the data security from the Chinese government. Please note that level three is the highest ranking for the non banking institutions, and this is to highlight our compliance with the data security regulations. We will continue to monitor closely and adapt to regulations as they change in the future. Given the recent regulatory developments and micro uncertainties, we note these do have adverse impact on the advertising industry overall, and we are no exception. As a result, we will be more cautious with the growth of the marketing solutions looking into the second half, and we'll focus our resources on the most profitable clients, only for risk management. We are continuing to invest in our enterprise solutions. Despite the short-term headwinds, we are steadfast in our belief of iClix's exceptional value proposition that we bring to brand clients with our integrated enterprise and marketing solutions in the long term. On a separate note, as you may have seen from our press release, I have recently been appointed as the new Chairman of the Board of Directors, in which I will be serving in addition to my role as CEO. I have assumed the role of Chairman of the Board of Directors to consolidate the management and execution of the company's strategic direction in more comprehensive ways alongside my co-founder, Sammy Hung. who will remain a member of the Board of Directors with me. I would like to thank our co-founder, Sami Hain, for his enormous contributions as chairman for more than a decade, and I look forward to receiving his counsel as a member of our Board of Directors. Before I end my opening remarks, I would like to share that the Board of Directors has approved to upside the Shared Purchase Program announced on December 10, 2020 by $10 million from $15 million to $25 million. This demonstrates our continued confidence in our long-term growth prospects. We firmly believe that with the dedication of our employees and the support of our shareholders, we expect to capture additional market share in the quarters ahead, both organically and through strategic partnerships as we lead China's ongoing digital transformation. This concludes my opening remarks. And I would now like to turn the call over to our CFO, Terence Lee, to discuss the second quarter financials. Terence?