JOYY Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Joy, Inc.' 's second quarter 2025 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. I would now like to turn a conference call over to your host for today, Ms. Jane Sieh, the company's senior manager of investor relations. Please go ahead, Jane.

Thank you, operator. Hello, everyone. Welcome to Joy's second quarter 2025 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 would 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-GAF 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 preferred in accordance with GAAP. You may find a reconciliation of the differences between GAAP and non-GAAP financial measures in our earnings release. Finally, please note that unless otherwise stated, All figures measured 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. Thank you for joining us today. This call marks my first anniversary as CEO, and I'm excited to share some of our latest progress with you. We deeply liked our live streaming business while driving robust growth in our non-live streaming businesses, particularly our ad tech business. We continue our transformation into a global tech company powered by multiple growth entries. Today, I will first briefly summarize our Q2 results, followed by a review our progress over the past year to highlight the key pillars that will guide our growth. Finally, I will share detailed updates on each of our business units. Starting with our Q2 results, we delivered a solid performance as our live streaming business reached a stable footing. while our advertising business achieved robust and accelerated growth. We recorded total revenue of $508 million, representing 2.7% QQ growth. Our non-GAAP operating profit reached $38 million, with year-to-year growth of 27.9%. Non-GAF EBITDA reached 48 million, growing 25.7% year-to-year. To break this down, live streaming revenue grew 1.1% QQ, while non-live streaming revenue achieved 25.6% year-to-year growth. contributing 26.1% of total revenues. Meanwhile, our operating cash flow reached $58 million. As of June 30, we mentioned $3.3 billion in net cash on our balance sheet, a sign of our strong financial resilience. Next, I want to highlight the four key words that have driven our progress in the past year and will continue to guide our growth. High-quality operations, sustainable growth, AI-driven innovation, and organizational vitality. First, high-quality operations. APP removals in late 2024 prompted us to take decisive actions to further enhance our community safety infrastructure and proactively strengthen our business ecosystem. By turning AdWords City into a community opportunity, we have emerged more and better positioned for the future. We are committed to continuous improvement as a cornerstone of our competitive advantage, building a robust business that delivers long-term value while pursuing our vision of creating a great enterprise. Next, sustainable growth Our strong operational foundation has allowed us to cultivate our huge growth engine and achieve sustainable growth. Building on a diverse product portfolio, localized operations, and enhanced global market penetration, our live streaming operations continue to generate reliable profits and cash flows. Leveraging our operational strength and technology expertise accumulated in the 2C sector, we accelerated our expansion into the 2B sector, and we have seen huge progress in our ad tech business in the past year. Thirdly, AI-driven innovation. We believe that AI holds transmoders potential to empower our business. Today, we are applying AI extensively in our recommendation systems and advertising algorithms. In live streaming, our AI usage is all about boosting user engagement. Early this year, for instance, we launched multi-lingual real-time voice recognition and translation function for our products. This enables users across languages to interact in real-time, strengthening relationships between people from vastly different backgrounds and driving monetization. We have merged large language models with multi-modal content understanding to create dynamic topics summarized and interactive comments that depend the user-streamer connection. Our use of AIGC has transformed how we produce virtual items and images. We are able to create personalized, localized items in a much shorter time span. In advertising, we leverage AI to deeply analyze and dynamically model user intentions, interests, and behavioral patterns. This allows us to precisely profile mid- to long-tail traffic segments, greatly enhancing targeting accuracy, especially in cold start scenarios AI powers our entire advertising value chain, from user profiling and targeting to generative ad creation, real-time building, and dynamic budget allocation. Our automated data-driven decision-making is continuously improving. Driving higher conversion rates, better third-party developer monetization, and fueling Big O 8's expansion across more verticals. Lastly, organizational vitality. After 20 years of building milestone successes, we are turning our entrepreneurial drive into enhancing organizational execution and efficiency. by modularizing our foundational R&D and operational processes. We are building agile, scalable capabilities and empower us to replicate past wins across emerging products and businesses. We are also prioritizing the creation of an empowering workplace for our global talents. Above all, Our people are the cornerstone of our ability to achieve our strategic ambitions. Next, let me share with you the latest update for the respective businesses. In the second quarter, our group's live streaming revenue reached $375 million. with bigger live streaming revenue at $355 million, both stabilizing QoQ. During the quarter, our global average mobile MLs grew sequentially to $263 million. We continued to refine our user acquisition with an ROI-driven approach. As a result, BeagleLive's user numbers grew 2.3.22, while 30 days ROI from new devices improved 4.4% sequentially. Our organic user growth was also strong, driven by improving user experience. Today, majority of our total global MAUs are from our IAM product. High-frequency usage and strong user-sickness fueled by enhanced features such as HD audio-video calling and rich media messaging have been pivotal to IAM's organic expansion. In the second quarter, the annual use of our IAM increased by 3 million. with the average daily user time spent up 12.8% year-over-year. We are building our long-term strategy on the foundation of high-quality global traffic that drives sustained monetization across live streaming, advertising, and potentially others. As we prioritize quality, over volume, we will continue to closely monitor the effectiveness of our user acquisition through ROI and our long-term user thickness. We enhanced content quality and refined the paying user experience during the second quarter, which drove higher user engagement and conversion efficiency. Specifically, we optimized BeagleLive's cross-regional content distribution algorithm and real-time AI translation. These changes significantly drove continued growth in cross-regional taping, particularly in Europe and the Americas. We launched the Streamer Academy, which provide tiered training, enhanced live streaming tours, and operational support to help streamers improve quality and reach. This fueled a 1.6% QQ increase in active streamers on BeagleLive. We also revamped BeagleLive Premier Paying User Benefits system during the quarter. Introducing refined tiered incentive and exclusive privileges, this drove a 13% KOQ increase in premium paying users. As a result, Beagle's overall live streaming paying users grew 3.7% KOQ. Looking at our performance, In the second quarter, our live streaming revenue in development countries returned to positive QoQ growth. In particular, BeagleLive's revenue in Europe rose 6.5% QoQ, marking the fourth significant rebound in the regime since we implemented a series of content strategy optimizations in the second half of last year. Our live streaming revenue in Southeast Asia was also up QQ, with bigger live revenue in this market rising 3.9%. We anticipate continued growth in paying users in the second half from hedging localized campaigns. enhanced content and payment experiences, and the incremental contribution from our new audio product Li-Amp in the Middle East. We are confident that our live streaming business will regain momentum and continue to deliver sustainable cash flow. In the second quarter, BigOA achieved in ad revenue, representing approximately 29% year-to-year growth and 9% QQ growth. In particular, revenues from our ad network recorded mid-double-digit year-to-year growth. Last quarter, I outlined our strategic for entering into the ag tech business and how we can utilize our inherent advantages to build a sustainable competitive edge. Today, I want to focus on where we stand in this trillion dollar market and the bigger edge strategic positioning for long-term growth. We are building significant scale on the traffic side. Our reach spans roughly 263 million users through our own social apps. And we extend this reach substantially by seamlessly integrating developer traffic across major channels. Our first-party traffic monetization remains stable, we believe steady first-party AIDs revenue with strong profitability, and we expect to maintain growth through improved user engagement and ad series. In the meantime, we have significantly scaled our third-party network traffic through successful integrations with uploading Macs and Unity-level play mediation platforms. Growing developer SDK adoption has driven nearly 80% traffic growth versus the second half of 2024, where new integrations with multi-channel platforms further expanded our traffic reach, including CTV. Meanwhile, we saw robot growth across IAP, IAA, and web-based channels. With daily transactions, volumes reaching recorded levels. With based lead generation, continued to post double-digit gains. Powered by pixel features, optimization enriched customer data, feedback, and improved building strategies. In IAA, we expanded partnerships with top gaming campaigns, with firms including TripleDot, PeoplePhone, and Fugle, expanding their campaigns on bigger apps, which contributed to faster sequential growth. Graphically speaking, we are seeing strong performance in multiple regions. In the fourth half of 2025, North America delivered approximately 24.2% sequential growth. In Europe, where we kicked off our expansion during the second quarter, revenue grew by a high single-digit percentage QoQ. Finally, our proprietary user data asset enhanced by customer feedback and multi-channel attribution continuously improves our profiling and targeting precision. Deep signatures across our business segments including accumulated vertical insights, data assets, established algorithm capabilities, and relevant experiences in cold start scenarios have given us a head start in developing specialized models tailored to each vertical. Additional, our global networks, infrastructure, and tech capabilities originally built for our live streaming businesses offer significant cost advantages. In summary, our advertising business has delivered consistent sequential growth and profitability for multiple consecutive quarters. This success stems from the number of key strengths including expansion of our traffic, rising advertiser, demand across channels and verticals, and quickly involving algorithms supported by our global tech and network infrastructure fostering a self-reforcing strategic flywheel. BigOA has emerged as our second major growth engine. Representing a strategic long-term priority for the group, we are pursuing expansion in North America, Japan, and Europe, unlocking substantial new opportunities, leveraging joint ecosystem and deep insight into e-commerce and social media verticals we are accelerating the training and optimization of AI-driven models to establish a distinct competitive advantage. On our product front, we are enriching our ad formats, strengthening integration with attribution platforms, enhancing advertisers' data feedback and advancing algorithms to maximize targeting, precision, and drive long-term ROI. Big OAs' structural advantages, combined with our proven execution capabilities and the vast market opportunities ahead, reinforce our commitment to building a meaningful and lasting presence in the EdTech industry. We are determined to execute on our strategic plan and retain full confidence in our team and ability to drive long-term success. Finally, let's turn to capital allocation. As discussed previously, we are actively exploring new growth engines and have already seen promising initial results. In the short term, we expect to prudently expand headquarters and marketing resources to support our ad tech business while maintaining healthy profit margins. In the mid-year to long term, Once our non-live streaming businesses reach a certain scale, investments, infrastructure upgrades, tech development, talent expansion, and marketing efforts are all potentially high return capital allocation options. From January 1 through June 30, we have distributed $135 million to our shareholders through dividends and share buybacks. We view our shares as substantially undervalued and remain committed to actively utilize buybacks under the previous approached program. Looking forward, with our live streaming business, stabilizing and the rising revenue and profit from advertising and other emerging businesses. We expect the company's consolidated operating profit to continue to improve and our shareholders to benefit from long-term profitable growth. In closing, our call live streaming business has stabilized in Q2. Positioning us for sustained growth, our ag-tech platform is rapidly scaling as our second growth engine. And we are building our long-term capabilities, particularly in our data and algorithms, and establishing our differential competitive advantages across market and the verticals. We look forward to sharing ongoing positive developments in the coming quarter. I will now turn the call over to Mr. Axel Liu, the Vice President of Finance, to provide our financial updates.