JOYY Inc.

Ladies and gentlemen, thank you for standing by and welcome to Joy Inc.' 's first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. I'd now like to hand the conference over to your host today, Jane Shee, the Company Senior Manager of Investor Relations. Please go ahead, Jane.

Thank you, Operator. Hello, everyone. Welcome to Joy's first quarter 2021 Earnings Conference Call. Joining us today are Mr. David Sherling Lee, Chairman and CEO of Joy, Ms. Ting Lee, our COO, and Mr. Alex Liu, the General Manager of Finance. For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A session. The first quarter 2021 financial results and webcasts of this conference call are available at ir.joy.xg. A replay of this call will also be available on our website in a few hours. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call as we will make forward-looking statements. Finally, please note that unless otherwise stated, All figures mentioned during this conference call are in U.S. dollar. I will now turn the call over to our Chairman and CEO, Mr. David Hsieh-Ling Lee. Please go ahead, sir.

Hello, everyone. Welcome to our first quarter 2021 earnings call. We reached another milestone in our product commercialization progress. by executing our strategies of globalization through localization and short-form video plus live streaming. During the first quarter, total revenue of Joy exceeded street expectations and grew by 88.1% year-over-year to US$643 million. Especially, revenue from Beagle grew by 92.5% year-over-year to US$581 million, with paying user growth by 72.1% year-over-year to 1.67 million. Above all, Beagle's non-GAAP net income turned positive during this quarter. We have always believed that how much we can harvest in the fall is determined by how much we have shown in the spring. And that's why we need to be long-term thinkers. As mentioned on our last quarter's earnings call, Beagle's achievement today is a result of our persistent execution of long-term business strategies over the past five years. Having reached a milestone in commercialization, we remain goal-oriented and long-term focused We will devote our resources to sharpening our competitive edge and expanding our marketing influence so that we can sustain our growth trajectory for the long haul. At Joy, we view the social interactivity and the content ecosystem as a strategic core. that are fundamental to the long-term competitiveness of our products. Joy has always been on a mission to cultivate an inclusive and global community where everyone can be heard and seen. During the first quarter of 2021, more than 17% of BeagleLive's active users hosted live streaming sessions, and more than 19% of Likey's active users created their own short-form videos. Going forward, leveraging our product metrics, combining short video content with live streaming, we seek to further expand users' social connections where our content offerings facilitate immersive social interactions through live streaming and help users forge intimate social relationships with one another. We aim to provide the user with a sense of connection, belonging, and the gratification through social interactions, in addition to relaxation and entertainment. At the same time, as mentioned in the last call, we plan to continue augment our localized content ecosystem. Thanks to our products intrinsic social features, we have accumulated a massive pool of amateur live streamers and content creators, contributing a vast reservoir of user-generated content. By empowering users with a full suite of video production tools, we have eased their way into hosting live streaming sessions. and lower the entry barrier for the content production. By combining user chain costs and user incentive programs, we have encouraged more users to reduce original content, thus expanding our pool of grassroots live streamers and content creators continuously In addition, based on our insights into local users' content preference, we have partnered with gaming companies, TV show producers, and entertainment agencies to attract more high-quality live streamers and content creators to our platform and introduce an increasing volume of premium content our content pool. By leveraging the social influence of leading content creators, we have also been able to expand our user base persistently. We believe the high-quality content and the social ecosystem together form the initiator engine propelling our growth for the long term. As such, we have gradually adjusted the product promotion strategy for certain products such as Leaky and Huggle. As we reduced our advertising spend on those products, we allocated our resources toward development of our content and social ecosystem instead. Consequently, this product user base suffered a decline and may experience some fluctuation in the near term. However, we believe that Prioritizing advertisement in our content and social ecosystem will improve our user experience and contribute to our long-term competitiveness. We are confident that our strategy adjustment will enable both our products and business to achieve sustainable growth in the long run. For new business initiatives, we discussed on the last call that we would still attend to new opportunities in the cross-border e-commerce sector and that we have made some preliminary explorations in cloud-based audio and video enterprise services. As we continue to explore such new market opportunities, we plan to gradually build up our competitive advantage in our products and technologies. We will provide further updates when our new business initiatives progress to further maturity. Now, let me share with you quarterly updates in each of our core products. During the first quarter, BeagleLife's MEU grew by 9% year-over-year to $29.1 million, while its revenue grew by 106.2% year-over-year. As BeagleLife penetrates deeper into multi-markets, its geographic coverage is becoming increasingly diversified. On a year-over-year basis, revenue from Europe grew by 227.8%, with paying users increasing by 118.9%. Revenue from Eastern Pacific region grew by 147.5%, with paying users increasing by 63.2%. And revenues from the Middle East grew by 46.1%, with paying users increasing by 39.9%. Product-wise, we continue to upgrade BeagleLive's social features to better satisfy the users' demands for social interactions. As a result, in a sequential basis, the total number of users that hosted a live streaming session on BeagleLive increased by 6.5%. with the average time of live streaming session increased by 1.9%. In the quarter, by locating more screen space to display the background information of hosts and guests on live streams, we have made it much easier for users to initiate simultaneous interactions with multiple parties on live streaming, facilitating multi-user interactions on the platform. As a result, a sequential base, the average viewer's time spent in multi-user multi-user audio chat rooms and video chat rooms increased by 9.7% and 16.1% respectively. And the user-to-streamer conversation rate in multi-user chat rooms increased by 11.2% in the quarter. In addition, as we further find our social interactions feature called VAR. Its user penetration rate also increased by 7% sequentially over the last quarter. As part of our efforts to develop a pan-entertainment content ecosystem, we collaborated with the popular vietnamese tv show live host and host audio on our platform through those auditions we elected several hosts from biggo live to participate in the show thereby boosting the influence of both our platform and its hosts in the region meanwhile During the Indian government spent our adjustment to product promotion strategy, like its MEOs declined by 12.6% year-over-year to 115 million. However, its revenue maintained a rapid pace of growth, multiplying by 4.2 times year-over-year during the quarter. In particular, on a year-over-year basis, latest revenue from the Middle East multiplied by 40.3 times, with paying users increasing by approximately 10 times. while its revenue from the Southeast Asia region multiplied by 1.6 times, with paying users increasing by 1.7 times. Product-wise, we introduced a full-screen format for LightKey's short-form videos and further optimized the platform's content, recommendation, algorithm, during the quarters to improve its user experience. At the same time, we provide content producers with more effective data support and markup tools, attracting user usage from about 10% of our professional content creators on a daily basis in the quarter. We have also seen the increased engagement of high quality KOLs in live streaming activities. As the average daily live streaming sessions organized by KOLs whose active followers were more than 10,000 and 100,000, increasing by 12.8%. 18.5% respectively. In a sequential basis in the quarter, we also refined our recommendation algorithm within the live streaming channel and enhanced trusted network-based content distribution. As a result, users' social interactions within the platform's live streaming chat rooms improved with the average user time spent on live streaming chat rooms increased by 25.5%. And the effective live streaming MAUs increasing by 9.5% on a sequential basis. Content-wise, We organized the second season of Likey Star Idol content in Indonesia in February, attracting a high-talented group of creators. One of the content winners, Ethan Taro, was later invited to platform on Indonesian Idol, the largest national variety show in Indonesia. By organizing those type of large-scale events and collaborating with popular TV variety shows, Leiki has effectively created a platform for new creators to gain exposure, raise their public profiles, and advance their careers, which in turn motivated creators to produce more high-quality content on our platform. Since the second half of 2020, also due to our adjustment to product promotion strategy, Hago's MAUs experienced some decline in the past few quarters. During the period, Hargo's MAU was $13.1 million. However, Hargo achieved meaningful progress in its user interactivity and product commercialization. Its revenue increased by 66.8% year-over-year. driven by a year-over-year increase of 28% in its paying users. Meanwhile, Hadoop's non-GAAP operation loss narrowed further in a sequential basis. During the quarter, in addition to launching a number of multi-user audio chatroom games. HAGO introduced a new social feature into its channel called Family. This feature enables users to establish a virtual family with their friends and supporters and support instant interaction through text, audio, and video. thus satisfying users' growing demands for interest-based social networking. By combining instant entertainment with social interactions on Hargo, we increased Hargo's average time of live streaming session in audio chat rooms by 8.5%. Its average viewer time spent on audio chat rooms by 6.2%. Its user to streamer conversion rate by 2.2%. And the penetration rates of our feature channel by 10.9% sequentially. In conclusion, As we expanded our paying user basis across multiple products, we achieved solid operating and financial results during the first quarter. Going forward, we remain committed to further enhancing our localized content and social ecosystem and enriching our users' social entertainment experience. With that, I will now turn the call to our General Manager of Finance, Alex Liu, for a more detailed explanation of our quarterly financial results.