2/18/2025

speaker
Operator
Operator

Thank you for standing by and welcome to the ITE fourth quarter and fiscal year 2024 earnings conference call. All participants are in a listen only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Ms Chang Yu, IR Director of the company. Please go ahead.

speaker
Chang Yu
IR Director

Thank you, operator. Hello, everyone. And thank you for joining ITE fourth quarter and fiscal year 2024 earnings conference call. The company's results were released earlier today and available on the company's investor relations website at .ite.com. On the call today are Mr. Yu Gong, a founder, director and CEO, Mr. Jun Wang, our CFO, Mr. Xiao Gui Wang, our CCO, Chief Content Officer, Mr. Youqiao Duan, Senior Vice President of our membership business, and Mr. Xianghua Yang, Senior Vice President of movies and overseas business. Mr. Gong will give a brief overview of the company's business operations and highlights followed by Jun, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session. Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Treasury's litigation reform act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are now limited to those outlined in our public filings to the CSDC. ITE does not undertake any obligation to update any forward-looking statement except as required under applicable law. I will now pass on to Mr. Gong. Please go ahead.

speaker
Yu Gong
Founder, Director, and CEO

Hello, everyone, and thank you for joining us today. Starting from late November, we have observed a significant rebound in business performance across multiple metrics, including nine additions of subscribing members and the user time span, along with a reinforced position in the total drama will shift market share according to enlightened data. This was boosted by the robust comeback of our top tier content. In just three months, two of our highly popular dramas were criminal police or Xingqiu, and drifting away, the past 10,000 in the IT popularity index. Further solidifying IT's unrivaled leadership in the suspense genre. We also enhanced our supply of premium female-oriented content, which is also one of our key content categories, with Moon in Breezer, Baiyue Fanxing exceeding 9,500, and Love Song in Winter, Dongzhi, exceeding 9,000 in IT popularity index. Alongside the strong return of our premium long-term video content, we have made Bricks Swooms in the mini drama space. Now our portfolio carries a selection of over 10,000 titles. We have also revamped our products to improve user experiences. On top of that, we have upgraded our ad placement system to more effectively manage the growing traffic of mini dramas. All these efforts have led to swift growth in our user base and look forward to what the future holds. In addition to operational improvements, we are encouraged by the healthy recovery in consumer sentiment towards quality long-form videos as evidenced by historical high theatrical movie box office performance during the Chinese New Year. This trend re-invites our confidence in the quality of long-form video content, and we are optimistic for long-form video industry in the coming year. As we step into 2025, we aim to boost membership revenue by raising the quality and the share of our video content. We also aim to expand the advertising revenue by enlarging our ad inventory, which will benefit from the growth of mini drama business. Together, these two elements will serve as the fuel engines driving our revenue growth. Now let's move on to the details of our core business segment. Starting with long-form videos, which is the cornerstone of our content ecosystem. We have sustained our leadership in the core drama category, capturing the highest total viewership market in the world. In the past, we have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. We have seen the highest total viewership market in the world. Our exciting flight of offering goes beyond Q4, notably 15 away from our flagship light on the outer brand, surpassed our popularity in dance score of 10,000, reaching just the 60th of its release. It was also the first drama with fewer episodes to reach such heights. In Q4, for premium female-oriented content, we made great progress in stabilizing our content release schedule and captivating audiences with love stories, soon our love on theater. Notable among this is the Asian custom drama Fount of Fortune, which successfully attracts new members' size-ups. In addition, modern fashion, the Asian fashion drama Love Song in Winter was praised for its innovative blend of suspense and romance, reaching a peak IT popularity in dance score of over 9,000. Looking ahead, we are committed to further refining our production lineup and release timing for the next year. We have also seen the rise of the Asian custom drama and modern tales that resonate with our female audiences. Turning to movies in Q4, we have maintained our leading position in viewership for 12 consecutive quarters, according to enlightened data. The performance was highlighted by our original production of Frozen Wind, which was the best performing comedy movie on our platform this quarter. There are actual releases like Upstream, and the volunteers, the Battle of the Lies and the Death, also secured top positions on the IT popularity chart during Q4. For animations in Q4, our production capabilities for Chinese animations continue to improve. The legend of Skyloft, Shenwu Tianzun, remains its popularity among audiences. We also further boosted our offerings with exclusive new art pieces such as Urban Miracle Doctor, Dong Shi Gu Xian Yi, and Limitless, Drift Zone, Guo Neng Wu Xian, Dun Wu. For Japanese animations, we exclusively released Dragon Ball Dai Ma, Dragon Ball Dai Ma on our platform, receiving positive feedback. Looking forward to 2025, we are dedicated to enhancing the production and management of our long-form videos. Our primary goal is creating exceptional content, elevating its commercial potential while optimizing the production and distribution process for increased efficiency. For dramas, we will focus on improving the pipeline, stability, and the show of our top tier premium content. We aim to strengthen our leadership in realistic and suspenseful themes while enhancing our audiences, which have shown strong momentum. Other than titles we also discussed, such as Drifting Away, we are also going to release titles from Light on Delta, including Breaking the Shadow, Justifiable Defense, A Life for a Life, and Low IQ Cry. Our Strong Line art also features highly anticipated female-oriented dramas. Moon, Embracer, Bai Yue Fan Xing, The Fell Next Season 2, Wu Suo Wei Qu, and Love of the Divine Tree have already been released and have gained strong traction among female audiences, while more compelling releases to come. For working shows, our strategy is centered on our visibility. We are committed to maximizing the commercial value of our classic IPs while exploring innovative new shows. For flagship multi-season IPs, our Strong Line art includes Become a Farmer, Five Heart, Season 5, The Drap of China, 2025, and The King of Stand-up Comedy, 2, We are also introducing several fresh new IPs, including The Blooming Journey, 一路繁花, Sin Asher, 夏舟新生, and the greatest showman, 大娛乐家. Notably, The Blooming Journey was released in January and quickly received a peak IP popularity of over 8,000 while topping the enlightened rankings. For the comedy genre, building up the success of The King of Stand-up Comedy, last year we launched a stream of shows, happy off work, during the Chinese New Year holiday, further strengthening the IPs in groups. For movies, creaming comedy is our top focus, especially original theatrical releases that can generate top box audience value. In 2025, our original movie, Winter to Summer, 一路超平安, and 木木不说话的爱 will hit the theaters. Audiences can also enjoy the article hits from our movie channel, including Her Story, 好中节, Burning Stars, 无心计划, Hot Pot Artist, 火锅, 艺术家, and Octopus with Broken Arms, 乌鲨. We also plan to increase our production capability for online films. In the field of animation, we are thankful for our collection of enduring serials and devote resources specifically to high quality Chinese animation. Our objective is to raise both the quality and financial performance of our original work. Major titles to be launched include Super Cupid, 超能立方, Over the Divine Realms, 神国之上, The Fated Magical Princess, 魔法公主的小烦恼, and the sequels to beloved children's animations, including the 如福诗伟队 and Princess Doremi Season 4. 音乐公主爱美丽. Moving on to mini dramas. We achieved exciting milestones in just three months. Firstly, we have successfully rewrapped our apps. Now the mini drama in the IT main app focus primarily on subscription-based models, while the IT light app provides all-page slides for mini dramas supported by advertising models. Secondly, we have largely completed the construction of backend systems, especially for content recommendations and advertising capabilities. This not only elevates the viewing experience, but also allows fresh monetization opportunities. Furthermore, our mini drama portfolio has quickly expanded to over 10,000 titles now, capturing 95% of the leading mini drama content providers in the market. This expansive and diversified content portfolio has paved for our next stage of development. The revenue program has likely increased our user base and the viewing time span on mini dramas in the fourth quarter, with this positive trend expected to continue. Notably, in December, our platform had its first mini drama generating monthly revenue sharing income, exceeding 1 million RMB. As we enter the next phase, we are aiming to refine our products and service offerings with personalized recommendations, by tuning our advertising system to appeal a broader base of new advertisers, broaden our content catalog with fresh and elaborate titles, and cultivate IT's original mini drama ecosystem to provide a steady stream of high-quality content. Moving on to membership services, membership revenue in the first quarter was RMB 4.1 billion annually and sequentially, primarily due to a lighter content slit during the first two months of the quarter. However, starting from late November, we have observed a strong comeback in creating content offerings as previously discussed, driving a significant turnaround in our membership business. To be specific, we have improved our long-form video content and introduced inclusive mini drama for members, aiming to improve member retention and attracting new subscribers. Additionally, we have maintained a tighter supply of premium content and stepped up our promotional efforts so subscribers can eagerly anticipate new releases, thereby driving their loyalty to our platform. Beyond content enhancement, we have classified our membership offerings into two primary categories. One category is tailored for individuals, the other for families. Both categories include an ad-supported basic service tier as well as an agenda service tier. Moreover, the family category also features a premium service cycle, which is the ad-stemming plan. This plan grants additional privileges, including unlimited access to express packages that provide early access to finals of our premium content. We have also strengthened the ability to log in on up to eight supported devices and opportunities to participate in major offline events. This week's classification benefits our membership business in multiple ways. One, it simplifies the structure of our membership plan, making their positioning clear. Two, it captures broader user needs and user goals from value-seeking individuals to those desiring more premium perks. Three, it effectively addresses the issue of unauthorized password sharing. In the first quarter, to offer an improved solution to account sharing, we introduced the extra member feature. Additionally, our ad-supported basic plan has seen a consistent uptake in subscriptions, especially among users in low-tier cities. In addition, the plan also helps to cater to mass audiences. They also intend to optimize member offerings, streamline operations, and improve distribution channels. Moreover, they aim to elevate the IT member grant and service standards, ultimately boosting the value experience by our members. Moving on to the advertising business, revenue during the quarter came in at RMB 1.4 billion, growing 7% sequentially and showing a reduced rate of annual decline when compared to the prior period. For brand ad revenue show, double-digit sequential growth. This was primarily driven by the double-digit brand ad revenue growth generated by all premium drama. In 2025, we aim to evolve our brand advertising business by diversifying our revenue streams and exploring new innovative advertising opportunities. In the next few years, we plan to refine our service, which will help retain our current network and attract newcomers from sectors like food and beverage, cosmetics and toiletries, and communications. We will also keep an eye on emerging sectors such as healthcare, home furnishing, and tourism. Additionally, we aim to increase the art of healthcare clients and explore opportunities in mini-drivers and advertiser customized shows. Performance ads continue to grow both annually and sequentially. This was largely driven by operational improvements and major e-commerce campaigns and robust service provided to clients from the Internet services sector. Notably, revenue contribution from e-commerce sectors during the W11 shopping festival increased by over 40% annually, and revenue from Internet services during the quarter increased by over 30% -over-year. To sustain this momentum going forward, we are enhancing our technical and platform capabilities to secure a larger share of budgets from healthcare clients in sectors such as e-commerce, Internet services, and video game sectors.

speaker
Unknown
Unknown

We

speaker
Yu Gong
Founder, Director, and CEO

will continue leveraging AI for video and production and expand our clients to improve monetization efficiency. We are also excited about the incremental ad inventory that mini-drivers could bring in 2025. Moving on to technology and products, we continue to advance the industrialization of the video business, thereby improving our operational efficiency. Our intelligent production management system has become essential for production tools managing various tasks on site, providing them with advanced production tools and management capabilities. In the first quarter, we further enhanced the system to incorporate highly efficient production supply management capabilities. With regard to virtual production, we have increased the technology to push the boundary of content creation. We are proud that our project, Funds of Fortune and My Journey to You, Yunzhi Yu, have both won multiple prestige industry awards for their excellent use of virtual production. Meanwhile, we have made impressive progress with our digital asset collection. Throughout the year, we have assembled an in-math digital asset library from hundreds of dramas, variety shows, movies, and animation. It is recognized as one of the leading collections in China. We are now leveraging their assets in new video projects and expanding into offline experiences. Looking forward, we are setting our sights on wider applications, including content creation, IP value-added services, and immersive virtual reality experiences. Moreover, we have been expanding AI applications across content production and operations. AI's influence has been transformative, notably in refining our project assessment process, providing valuable insights for a pre-significant 5,000 screenplays and novels. Additionally, AI plays in character design and custom selection as a project approval stage based on the character description from screenplays that streamlining the creative process. Lastly, for our business performance in regions outside of mainland China, we maintained solid performance in the first quarter with both total revenues and membership services revenue gained annually and sequentially growth. Notably, membership revenue from Hong Kong, UK, Thailand, and Australia grew by over 30% year over year. The average daily number of subscribing members also increased both annually and sequentially, with Hong Kong and Thailand growing over 40% year over year. The popularity of our original content continued to strengthen. Songs of Fortune was the best performing C-China drama on our overseas platform in 2024, with a high-doubt version topping the viewership rankings in Thailand. Additionally, our first original overseas variety show, Starlight Boys, extended its success beyond our platform, achieving top positions in local Google rankings for variety shows across numerous Southeast Asian countries. Furthermore, Thai dramas have emerged as a popular content category on our international platform, reconfigured only to see dramas. Encouraged by this trend, we are planning to increase our investments in our regional Thai productions. We have been focusing on expanding our international brand recognition soon, which is specific to the US. Last quarter, we launched our first-ever I-Try Conference Overseas, which set a new benchmark as the most comprehensive and best-attended press conference ever hosted by our Chinese retail platform in Thailand. We have been working with exceptional artist participation. As we said on I-Try on 2025, our main focus abroad will be to drive revenue expansion. We plan to enhance our C-China offerings and improve the monetization ability of region content. Having established our first presence in Asia, especially Southeast Asia, we are set to expand our footprint into Middle East, Latin America, and Brazil. Our approach includes reinforcing ties with telecom partners, seeking innovative collaborative opportunities, and writing up marketing initiatives to boost our brand and content impact. In summary, we closed the year by embracing a series of reinventions and innovations that successfully propelled our business forward, setting a strong start to 2025. We are confident that the strong comeback of premium long-form videos coupled with our continuous innovation in mini-dramas will serve as fuel engines during the 10th growth for 2025. Now let me pass it on to Tuna to go through our financial performance.

speaker
Jun Wang
CFO

Thanks, Mr. Gong, and hello, everyone. As Mr. Gong mentioned earlier, driven by the premium content,

speaker
Unknown
Unknown

we have

speaker
Jun Wang
CFO

experienced a significant rebound in main operating performance in comparison to November 2024. Now let's take a look at Q4 key numbers. In Q4, the total revenues were RMB 6.6 billion, down 14% annually. Membership services revenue reached RMB 4.1 billion, down 15% annually, primarily due to a lighter content slate. However, as Mr. Gong just mentioned, premium content had a strong rebound from late November 2024 to now. For online advertising, revenue decreased by 13% year over year to RMB 1.4 billion. This was primarily due to the decrease in brand advertisement business, partially offset by the growth in performance at business. Content distribution revenue reached RMB 406.6 million, down 20% annually, primarily due to a lower revenue from distribution of theatrical movies invested by IEEE, and a decrease in other transactions, partially offset by increased revenue from cash transactions. Other revenues decreased by 10% annually to RMB 670.2 million. Moving on to costs and expenses. Content cost was RMB 3.4 billion, down 9% annually, primarily driven by our improvement in the content strategy, as well as a lighter content slate in the quarter. Total operating expenses were RMB 1.3 billion, down 5% annually, primarily due to disciplined marketing spending. Turning to profits and cash flows. Non-GAAP operating income was RMB 405.9 million, and its corresponding margin was 6%. Net cash provided by operating activities totaled RMB 519 million, positive for 11 consecutive quarters. As of the end of Q4, we had cash, cash equivalent, short-term investments, and long-term restricted cash included in the prepayments and other assets of RMB 4.5 billion. For detailed financial data, please refer to our press release on our IR website. Now I will open the floor for Q&A.

speaker
Operator
Operator

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Please ask questions in Chinese first and then translate the questions into English. Please also limit yourself to one question at a time. If you wish to ask further questions, please rejoin the queue. Your first question comes from Su King Zhang with CICC. Please go ahead.

speaker
Su King Zhang
Analyst at CICC

Thank you. Looking ahead to 2025, what's your content timeline? What about the quality of these titles? How many of them have the potential to become blockbusters? Thank you. Thank

speaker
Xiao Gui Wang
Chief Content Officer (CCO)

you, Su King. We will invite our chief content

speaker
Chang Yu
IR Director

officer, Mr. Xiaobai Wang, to answer this question. Go ahead.

speaker
Yu Gong
Founder, Director, and CEO

Thank you.

speaker
Chang Yu
IR Director

Our main goal for this year 2025 is to intend both the quality and the share of our premium talk long form video content, also ensuring greater stability and a continued strong start to the year.

speaker
Yu Gong
Founder, Director, and CEO

In terms of the core drama, the number of scenes we plan to show will increase significantly compared to last year. In terms of content presentation, we will focus on making the content rhythm tighter and more compatible with the current social mood and user aesthetic changes.

speaker
Chang Yu
IR Director

In the most critical areas such as the drama genre, the number of premium talk to dramas planned for release this year will significantly increase compared to last year. We will also focus on creating a tighter narrative pace that better aligns with the current social sentiment and user aesthetic changes. In terms of suspense and crime dramas and female-oriented content that are our two main programming pillars, for this year we will continue to maintain our absolute leading advantage in the suspense and crime genre. And for this year, the Lighthouse Theater has several works planned in addition to the already launched Drifting Away, there will be more releases such as Creaking Shadows, Justifiable Descent, A Life for a Life, Low-End Crime, Dead End, and Beneath the Undertow.

speaker
Yu Gong
Founder, Director, and CEO

In terms of

speaker
Chang Yu
IR Director

female-oriented content and multi-season titles, we will further strengthen our offering and continue to provide more content that is more suitable for the audience. In terms of female-oriented content and multi-season titles, we

speaker
Yu Gong
Founder, Director, and CEO

will further strengthen our offering and continue to provide more content that is more suitable for the audience.

speaker
Chang Yu
IR Director

Additionally, we will continue to maintain our advantage in the realm of realistic genre. The pipeline includes Northport, What a Wonderful World, Offing Spawn, 8,000 Miles of Cloud and Moon, Baoxing, Lonely Old Town. Thank you.

speaker
Operator
Operator

Your next question comes from Li Zhang with Bank of America Securities. Please go ahead.

speaker
Li Zhang
Analyst at Bank of America Securities

Hi, good evening. Thank you for answering my question. I would like to ask about the progress of the mobile business since last year's launch. Also, do you have any new strategic plans for 2025? Thank you. I would like to know if you have any strategic plans for 2025. Thank you.

speaker
Chang Yu
IR Director

Our CEO is actually taking this question. He first of all would like to clear the definition of mini-dramas that we've been talking about in his opening remarks. For mini-dramas, we identify them as the vertical format, one to three minutes long. This is the main area that we're focusing on. For the horizontal mini-dramas, which is quite similar to the Longhorn video content that we have to edge on, this is something different.

speaker
Yu Gong
Founder, Director, and CEO

The main reason for this is that we need to adapt to the change in user behavior habits. As the pace of life is getting faster, it's becoming harder to focus. We need to be more casual about the needs of the entertainment industry. The second is the change in the market. The market scale of Weiju last year was different from the one of the third-party organizations, but it definitely exceeded the market scale of the Chinese film and television. This year, although the Chinese film and television is not doing very well, we estimate that Weiju's market scale will also exceed the market scale of the Chinese film and television.

speaker
Chang Yu
IR Director

The third is the fast-paced content. They have a shorter attention span, and they also enjoy content in a more fragmented time as well. That's the first reason. Also, from the industry perspective and the market perspective, for 2024, the market size for mini-dramas, although there are different data that's estimated by third parties, we believe it should be greater than the Chinese box office for 2024. For 2025, we are glad to see a strong rebound of the theoretical box office during the Chinese New Year. However, we still think the mini-drama market should still exceed the Chinese box office in 2025.

speaker
Yu Gong
Founder, Director, and CEO

The second is the transformation of the application. The second is the content of the content library. The third is the construction of the background system. The construction of the background system has now been completed in a phase. Especially the content has reached more than 10,000. This is the number of the -to-head platform in this industry.

speaker
Chang Yu
IR Director

The third is the areas for user product transformation, content portfolio, and also building a background system development. Currently, our mini-drama content library has over 10,000 titles, and it has reached a scale that's comparable to the leading mini-drama platforms in the industry. So, how do we achieve such a significant improvement in a very short amount of time? First of all, for our team, actually, we have a very mature, whether it's an IT team, a technology team, product team, also the operational team. All of these have over 10 years of experiences. Although mini-drama is a new genre, there are a lot of know-hows that we can replicate from the long-term video experience. That's the first reason. The second reason is we have a very deep connection with the industry and also the industry resources. Specifically, for content providers for the industry, most of them we have actually collaborated with them in the past, or we have existing collaborations. So, the above two reasons help us to achieve such progress in a short amount of time. For our main IT app, the position is still focusing on the long-term video content, and then focusing on the subscriber-based revenue model. For IG life, we have quickly revamped this app, and now it's prioritized in three mini-dramas, and then supported by the advertising model. In terms of the user time span for the main IT app, the mini-drama timeshare now is actually close to the scale of animation, cartoon, and also variety shows.

speaker
Yu Gong
Founder, Director, and CEO

For

speaker
Chang Yu
IR Director

IG life, the mini-drama timeshare is the second largest content genre, only second behind long-term video content. I'll quickly introduce the next stage of key caps. The first one is we'll focus on introducing the mini-drama titles for ITE. The second is to build the IT original mini-drama ecosystem. For the Chinese New Year period, we have already launched quite a few titles. The next two tasks are focusing on hopefully we can integrate the inventory of mini-drama advertisements, and also to enhance the monetization capabilities of mini-dramas. We would like to actually explore more advertising budgets and also the new formats of advertising budgets from this app space. Last but not least, we will try to increase more investment in terms of user growth. Hopefully we can attract more users to bring them to ITE to watch mini-dramas. Thank

speaker
Yu Gong
Founder, Director, and CEO

you.

speaker
Operator
Operator

Your next question comes from Lincoln Kong with Goldman Sachs. Please go ahead.

speaker
Lincoln Kong
Analyst at Goldman Sachs

Thank you, Benjamin. Thank you, Benjamin, for taking my questions. My question is about the membership business. Regarding the recent content performance and how is the impact from those measures like Family Card or Star Diamond member extra content gifts on the impact on the membership business, as well as the strategy for full year 2025. Thank you.

speaker
Chang Yu
IR Director

Thank you, Lincoln. I will invite Mr. Youxiao Duan, the Senior Vice President of the membership business, to take this question. Go ahead. Thank

speaker
Yu Gong
Founder, Director, and CEO

you, Mr. Youxiao. We have

speaker
Chang Yu
IR Director

reclassified our membership offerings into two primary categories. One for individuals and for families. For individuals, there are actually two plants with no large screen access. And for families, there are three plants with large screen access. The membership rights and benefits are divided into three tiers, basic, standard, and premium. The new reclassified membership system actually allows users seeking either high cost effectiveness or premium benefits experience to find products that suit their needs.

speaker
Yu Gong
Founder, Director, and CEO

The second,

speaker
Chang Yu
IR Director

we strengthen the breakdown on password sharing while introducing the extra account service as an authorized sharing solution, effectively expanding the membership base and improving member retention.

speaker
Yu Gong
Founder, Director, and CEO

The third,

speaker
Chang Yu
IR Director

we enhance the benefits for premium members. The newly added benefits for Star Diamond members, the limited complementary early access to the express packages that provide early access to finales of premium content, increased value and perception of premium membership. After the launch of the new benefits, the number of Star Diamond members have largely increased, with most of the new members attracted by the express package benefits. And the existing Star Diamond members have also been noted for more active on the platform. We have a few areas that we're focusing on for 2025. First, we'll continuously enhance the stability and continuity of our top care premium content programming and strengthening the pre-release promotion for upcoming content, establish mindshare among users to improve their loyalty to the ITE.

speaker
Yu Gong
Founder, Director, and CEO

The second, we'll

speaker
Chang Yu
IR Director

focus on building a mass market membership service to increase membership scale and revenue. While focusing on attracting new members, we'll prioritize improving member retention and user engagement, and also we'll increase the revenue scale and revenue share from external channels.

speaker
Yu Gong
Founder, Director, and CEO

The third,

speaker
Chang Yu
IR Director

we'll systematically optimize the membership product and operations, including further refining the membership product system and pricing.

speaker
Yu Gong
Founder, Director, and CEO

The fourth, we'll

speaker
Chang Yu
IR Director

strengthen the quality of membership services and the ITE grant, enhancing the quality of membership services and the ITE grant, and also increasing the quality of membership services and the ITE grant. We'll enhance the perception of membership benefits and privileges, and also improve the overall net promoter score for ITE amount members. Thank you.

speaker
Operator
Operator

Your next question comes from Maggie Yee with CLSA. Please go ahead.

speaker
Maggie Yee
Analyst at CLSA

Good evening. Thank you, Manager Chen. We just heard about the company's very good membership revenue and growth in overseas markets. We would like to further understand the company's core strategy for overseas business in 2025. Thank you. I'll translate. Just now we heard about some encouraging performance in overseas markets in terms of both membership revenue and subscribing members. Would you please provide an update on the core strategy for our overseas business in 2025? Thank you.

speaker
Xiao Gui Wang
Chief Content Officer (CCO)

Thank you, Maggie. We'll invite Mr. Xiangca, the Vice President

speaker
Chang Yu
IR Director

of our overseas business, to take this question.

speaker
Yu Gong
Founder, Director, and CEO

Go ahead. Good evening. I'm Liang Fanhua. I'll answer this question. The overall strategy

speaker
Chang Yu
IR Director

for our business outside of mainland China in 2025 is to pursue rapid revenue growth while maintaining profitability. In the past few years, we have focused on several markets including Southeast Asia, Hong Kong, Macau, and North America, and have achieved satisfactory development. For 2025, we have set different strategies for different markets. For the markets where we entered since the early days, such as Thailand, Malaysia, and North America, our goal is to achieve both profit and revenue growth. For the new foreign markets such as Indonesia and South Korea, the focus is on revenue growth for 2025. At

speaker
Yu Gong
Founder, Director, and CEO

the same time,

speaker
Chang Yu
IR Director

we're also planning and preparing for the long-term growth of our business, and hoping to break into new markets in 2025, such as the Middle East, the Spanish-speaking Latin American market, and the Chinese-speaking Chinese market.

speaker
Yu Gong
Founder, Director, and CEO

For content-wise,

speaker
Chang Yu
IR Director

we will strengthen the programming for three dramas in 2025, and the content slate is actually more suitable for the preferences of our overseas viewers in 2025 compared to the content we launched in 2015.

speaker
Yu Gong
Founder, Director, and CEO

In terms of

speaker
Chang Yu
IR Director

local dramas and local content, after years of efforts, we have actually assimilated some experience that will continue to invest in markets such as Thailand and Malaysia, which will serve as important support for our user growth in the future. For content promotion, advertising placement, and also the collaboration with telecom carriers and other channels, our core methods will lead to the content value. In 2025, we will increase our investment in these areas in the market. In short,

speaker
Yu Gong
Founder, Director, and CEO

in 2024, the foreign business's revenue and revenue growth will be much higher. Starting in December of 2024, with the continuous promotion of high-quality content, the overall growth of foreign business will be faster than in 2024. This will also give us more confidence in the growth of our revenue in 2025.

speaker
Chang Yu
IR Director

That concludes our

speaker
Operator
Operator

question and answer session. I will now hand back to management for closing remarks.

speaker
Chang Yu
IR Director

Thank you everyone for participating in the call today. If you have any questions, don't hesitate to contact us. Thank you and see you next quarter. That does conclude our conference

speaker
Operator
Operator

for today. Thank you for participating. You may now disconnect.

Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

Q4IQ 2024

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