JOYY Inc.

Ladies and gentlemen, thank you for standing by and welcome to Joy, Inc.' 's fourth quarter 2024 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 would now like to hand the conference over to your host today, Jane Shear, the company's Senior Manager of Investor Relations. Please go ahead, Jane.

Thank you, Operator. Hello, everyone. Welcome to Joy's fourth quarter 2024 earnings conference call. Joining us today are Ms. Ting Lee, Chairperson and CEO of Joy, and Mr. Alex Liu, the Vice President 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 financial results and webcasts of this conference call are available at ir.joy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I'd like to remind you that we may make forward-looking statements, which are inherently subject to risk uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risk uncertainties, please refer to our latest annual report on Form 20F and other documents filed with the SEC. We will also discuss certain non-GAAP financial measures. They are included as additional clarifying items to aid investors in further understanding the company's performance and the impact that these items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. you may find a reconciliation of differences between GAAP and non-GAAP financial measures in our earnings release. 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 chairperson and CEO, Ms. Ting Li. Please go ahead, Ms.

Li. Hello, everyone. I'm Li Ting. Welcome to our fourth quarter 2024 earnings call. As we recently announced on February 25, 2025, we successfully completed the sale of our live streaming business for Mainland China Wi-Fi Live. I believe the full closing of this transaction makes the beginning of a new chapter for Joy's corporate development. As the fourth step, we are excited to announce that, effective from March 34th, our NASDAQ ticker symbol will be changed from YY to Joy. This aligns with our strategic vision and our globalization strategy entering into the new era. Over the past few years, Joy's position as a global technology company has solidly failed thanks to our global growth strategy. We have focused our resources and attention on markets across the world, with an emphasis on developed countries that demonstrate higher monetization efficiency and ROI. This strategic approach has yielded strong results. In 2024, our global market revenue, excluding mainland China, accounted for 89.6% of our total revenue. Notably, developed countries saw a year-over-year revenue increase of 24.6%, boosting their share of the group's revenue to 53.9%. Moving forward, we will continue to deepen our penetration in key markets to build on this success. Improved global infrastructure, a diversified product portfolio, and localized operations will build our brand influence and reinforce our status as a global technology company. As we drive our development operational efficiency, will remain a key forecast. We will pursue a balance between growth and efficiency, driving high-quality top-line growth while maintaining profitability and a positive cash flow. AI remains a key component of our strategy. The rapid advancement of AI has brought both transformative changes and new opportunities. With our accumulated proprietary data and in-house algorithm team, we are well positioned to capitalize on these new trends. AI will empower our business by enhancing product development. optimizing data analysis, and improving our customer service. These advancements will directly improve both our operational efficiency and our users' experience, taking our global operations to new heights. As AI usage rapidly increases, we also recognize that people will seek more emotional, interpersonal connections. Providing users with meaningful connections and they can truly value will be essential to long-term success for social media platforms in the AI age. This notion will inform our long-term strategic direction. Empowered by AI, we can build more comprehensive user profiles, which will ultimately improve content recommendation and matching among our users. We will continue to drive product optimization and operational innovation, leveraging AI in combination with the personal touch of talented creators on our platform to provide users with emotionally resonant connections and interactive experiences. As we begin this important new chapter, we also want to reform that as a leading global technology company, Joy will hold itself to higher standard of responsibility towards our users and community. As a guardian of global community of 263.1 million users, we remain committed to strictly adhere to all regulatory requirements while integrating social responsibility and sustainability into our global operations. we will continue to update our community guidelines and enhance our technological capabilities to create a safe platform for our users. While actively collaborating with industry partners to promote industry standards that support sustainable, responsible growth, Now let's review our overall performance for the fourth quarter and the full year. In the fourth quarter, our group revenue reached $549.4 million, achieving a non-GAAP net profit of $96.1 million, up 57.1% quarter-over-quarter. Our core business segment, Bigel, achieved revenues to $480 million. Bigel's non-GAAP operating profit reached $81 million, up 11.2% quarter over quarter. For the full year 2024, our group revenue was $2.24 billion. The Bigel segment achieved revenues of $1.99 billion, a year-over-year increase of 3.3%. Thanks to strong operational execution throughout 2024, we made progress across multiple core objectives. We constantly enhanced our localized operations worldwide. delivering steady growth and group profitability. For the full year 2024, the group achieved a non-GAAP operating profit of $136 million, a year-over-year increase of 4.2%, and a non-GAAP net profit of $298.5 million, a year-over-year increase of 2%, The Beagle segment for a year operating profit reached $286.3 million. Exceeding our previous expectations, Beagle's non-GAAP net profit reached $314.6 million. A year-over-year increase of 4.2%. This profit growth was achieved despite significant adjustments to our audio live streaming products in non-com markets in 2024, which had a dozen million negative impact on our bottom line. The upward trend in our operating profit in spite of these adjustments indicated that our core business profitability has improved substantially. Meanwhile, the group's non-life-dreaming revenue made high growth throughout the year. This primarily included Big O's advertising and all other segments' SaaS revenue. For the fall year 2024, the group's non-life-dreaming revenue increased 55.9% year-over-year to $449.8 million, according for 20.1% of total group revenue, an increase of 7.4% compared to 2023. In 2025, we expect that the group's non-livestreaming revenue will maintain double-digit growth with its proportion of group revenue increasing indefinitely. We expect this will provide momentum for the recovery of our revenue growth at the group level. Meanwhile, we expect the economic of our non-livestreaming business to be meaningfully improved, given enhanced monetization and disciplined spending in 2025. As we set the stage for ongoing growth, shareholders' returns remain a high priority for management. In 2024, we repurchased for a total of $309.2 million, representing 15.1% of our total outstanding shares as of the end last year. As of December 31, 2024, our net cash position stood at $3.3 billion. We believe the current market valuation significantly undervalues our company, especially when considering our profitable live streaming business and rapidly growing non-live streaming business. We are happy to announce that our board has approved a quarterly cash dividend program for the following three years. The aggregate amount of the cash dividend is expected to about $600 million, consisting of about $200 million per year. Additionally, our Board has approved additional share repurchase programs, under which we may repurchase up to $300 million of our share until December 2027. This program replaces our previous share repurchase program which would expire in November this year. We remain formally committed to unlocking shareholder value through our consistent capital return initiative. Next, let me share more specific progress across our product line. Let's begin with BeagleLive. In line with our goal of providing meaningful personal experiences to our users, we continued to focus on cultivating a safe, high-quality, and diverse content ecosystem on BeagleLive. In the fourth quarter, we updated Big O Life's community guidelines and comprehensively enhanced its community safety technological capabilities. We introduced our exclusive multi-model content, multi-region model, which was fine-tuned with our scenario's special fixed data and leveraged third-party light models to further strengthen our content moderation capabilities. On the product filter front, we refined user verification processes and stratification motion system to direct traffic towards high quality, verified user content at the same time. We exercised a stricter measurement of user generated content to ensure our users would have safe, high quality experiences. In addition, we formed partnerships with multiple industry players and worked with relevant authorities to jointly prevent and punish any potential malicious use of platform. We remain committed to constantly improving our safety features to ensure secure experience for our users. On the content front, Beagle Live continued to deliver the level of quality users have come to expect. The annual Beagle Awards Gala was held at Marina Bay Sands Theatre in Singapore. Over 1,000 guests from around the world attended in person, and nearly 500,000 viewers tuned in via livestream. The event honored over 200 outstanding content creators and families for their contributions to BeagleLive's vibrant user community, and filtered performances from 35 global active across various genres. The Beagle Award Gala has become a core tradition for the platform and has helped countless talented creators expand their influence and reach the global stage. In addition to the main global venue, Beagle Live also held regional galas in Dubai, Thailand, and Elwell. In 2025, BigoLife will expand its community initiatives through creator partnerships focused on diversity, philosophy, education, and more. We remain dedicated to building value for the platform's creator base and helping our global creators grow. During the quarter, we utilized our proprietary AI model to analyze ultra-long user behavior sequences and refined our content recommendations on BeagleLive. This improvement, together with our continuous efforts to expand BeagleLive's high-quality content offering and optimize its live streaming room viewer filters drove a 2.1% sequential increase in average viewing time per user during the fourth quarter. By strategically directing traffic to mid-tier hosts and optimizing live streaming tools such as beauty and body filters, BeagleLive achieved a 1.2% increase in host next day retention and a 2.9% increase in average live stream time per host, both quarter over quarter. Next, let's look at LIKEY. LIKEY remains focused on two call markets, the Middle East and Europe. In the fourth quarter, LIKE's DAOs in core European countries increased by 4.4% quarter-over-quarter. Driven by growth in paying owners, LIKEN's live streaming revenue grew 2.2% sequentially. In 2024, LIKEN recorded its second consecutive profitable year. We continued to elevate Leike's content and community engagement in its core markets. In January, Leike partnered with the globally popular game Junsheng Impact to deepen its penetration among Gen Z users. The campaign featured Junsheng-themed short video and live streaming content with special and a co-branded offline event in Europe. During the campaign, the initiative generated over 5.7 million viewers, and the offline event attracted 11,000 participants, even programming several popular creators with millions of following to join Nike. Beyond these targeted operational activities, likely increased support for quality creators, driving a 13% quarter-over-quarter increase in viewing time spent on short videos. The proportion of content creators as a percentage of daily active users grew steadily compared to the third quarter. indicating healthy levels of engagement. Last quarter, we mentioned that we have redirected some of LightE's operational resources, including personnel and traffic, to a new product to unlock our monetization potential in LightE's core market. We are pleased to report that the new product has launched smoothly and is currently generating small-scale revenues. We look forward to building the scale of this new product over the next few quarters, at which time we will share more updates. Finally, on HAGO, in the fourth quarter, driven by its blockbuster year, and operational event. HaGo's quarterly live streaming revenue achieved quarter-over-quarter growth. In the fourth quarter, HaGo's cash flow remained positive, achieving its goal of positive cash flow for the second consecutive year. HaGo's user engagement further improved during the fourth quarter as well. Average time spent in channels increased by 8.6% quarter over quarter to 108.2 minutes. The product's next-day retention rate also continued to improve. In 2024, we made substantial progress in improving operational efficiency and diversifying our revenue stream. Looking ahead, we remain deeply committed to driving diversified growth across our global operations and solidifying our position as a leading global technology company. Through AI-driven innovation, we are comprehensively enhancing our operational efficiency and cultivating meaningful experiences for our users. We will continue to prioritize platform safety and integrate social responsibility into our global operations. Based on our solid operational execution, we remain confident in driving sustainable growth in our global business and creating long-term value for our shareholders. Thank you. Thank you.