JOYY Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Joy Inc.'s second quarter 2026 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'd now like to hand the conference over to your host today, Xinyuan Liu, the company's head of investor relations. Please go ahead, Xinyuan.

Thank you all, Peter. Hello, everyone. Welcome to JOY's second quarter 2026 earnings conference call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOY, and Mr. Alex Liu, Vice President of Finance. For today's call, management will provide a review of this quarter, followed by a Q&A session. The financial results and webcasts of this conference call are available on our IR website, ir.joy.com. Please note that today's call contains forward-looking statements made under the safe harbor provisions of the US Private Securities 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. For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20F and other documents filed with the SEC. Please also know that Hello, everyone. I'm Ling Ting. Thank you for joining us.

Building on the strong first quarter, we delivered another solid result in Q2, recording accelerated revenue growth and a notable improvement in upgrading profit. Our social entertainment, legal aid, and the shop line business all advanced in tandem, while our globally diversified ecosystem continued to unlock growth momentum. propelling our long-term value to its next level. In the second quarter, we generated total revenue of 591 million, up 16.3% year-to-year and 6.3% QQ. Social entertainment revenue was 423 million, up 7.4% year-to-year and 5.6% QQ. Beagle 8, including both first-party and third-party businesses, generated $134 million in revenue, up 53.1% year-to-year. With our third-party, Beagle Audience Network sustained a strong growth of 74.1% year-to-year. Shopline revenue reached $34 million with year-to-year growth further accelerating to 28.6%. Now, live streaming revenue surpassed 31.8% of total revenue for the quarter. Now, gap upgrading profit reached $49 million up 28.2% year-to-year. and Nungab EBITDA reached $57 million, up 18.1% year-to-year. Operating cash flow for the quarter was $65 million. As of March 30, 2026, we held $3.06 billion in net cash. Since the start of this year, We have accelerated our capital returns year-to-date through August 21, 2026, with a cumulative $216 million in shares and paid $142 million in dividends for a total return of $359 million in shareholders. meaningful shareholders returns remain a key part of our strategy as we continue to execute on the 1.5 billion shareholder return program running through the end of 2028, which our board resides this May. At this mid-year mark, I would like to take a few minutes to share our perspective on our overall strategy. Today, Joy is steadily evolving into a multi-engine global technology company. In the first half of this year, the core social entertainment business maintained a steady recovery, with all flagship products returning to solid growth and profitability continuing to improve. This further validates the effectiveness of the judgments we have made to our content ecosystem, user experience, and lookalike operations over the past several quarters. At the same time, our second growth curve, comprising ad tech and smart commerce, sustained a strong performance are making an increasingly greater contribution to the group. Looking ahead, we remain committed to building a global technology ecosystem driven by AI. By leveraging the synergies of social entertainment, programmatics, advertising, and omni-channel e-commerce, we are fueling our growth Fuyong Liu, Ting Li, Ting Li These initiatives are expected to further reinforce the recovery trend and growth resilience of our core business, providing a stable foundation for profitability cash flow generation. At the same time, we are co-inviting our ad tech and smart commerce businesses to boost overall revenue expansion. We will prioritize enhancing the standalone competitiveness of each business, expanding our customer base and business footprint, and further expanding our data, technology, and product capabilities. Looking ahead to 2028, As this business continues to scale, we currently expect non-live streaming segments to contribute close to half of the group's total revenue and operating profit. We see this as a testament to the strength of our multi-engine growth strategy and the validation of our long-term strategic approach. AI is a critical, foundational technology supporting our long-term strategy across all of our businesses. We continue to leverage AI to drive measurable products, enhancements, and efficiency gains across a range of scenarios, including our streamer ecosystem, content distribution, payment experience, advertising vertical models and the shop-line merchant operations. We are also applying AI to enhance our team's data analysis, decision-making, and execution capabilities. By turning proven experience and the workflow into replicable AI capabilities, we can accelerate knowledge sharing and skill best practices for their improving overall operating efficiency. In addition to our long-term business development, shareholder returns remain a persistent strategic priority. Our strong cash position and robust operating cash flow provide a solid foundation for ongoing business investment and shareholder returns. We expect to continue actively advancing our share reportures and dividend programs as the company grows over the long term. We remain committed to validating the strategic path through solid operating results, driving great market recognition of our long-term value. Next. I will walk through our Q2 results and share our outlook for the future. In Q2, social entertainment revenue grew 7.4% yearly and 5.6% QQ. Within this segment, live streaming revenue grew 7.3% yearly and 5.9% QQ. Call live streaming paying users grew 3.9% QE and 1.7% QQ. On the traffic side, our global average mobile MUs reached 277 million, up 5.5% year-to-year, supported by strong user engagement and organic growth. Our instant messaging product increased its contribution towards total annuals to 82%. LegalLife, our flagship product, recorded stronger sequential growth in Q2. This momentum was driven by ongoing enhancements to our streamer incentives and growth mechanisms, a digital content ecosystem, and AI-powered improvements to content distribution and payment experiences. Alongside localized upgrading campaigns, together, this effort effectively drove user engagement and greater willingness to pay. In Q2, Big O Life's average daily active streamers increased 4.4% Q2, while newly signed Streamer Building Life increased 5.4% KQ. As we further enhance our streamer recruitment, incubation, and development mechanism, the supply of high-quality content on our platform should continue to expand. In content distribution, we continue to develop and refine our AI-driven content understanding capabilities. In particular, our focus is on improving onboarding content for a few users and the dependent users' consumption. By most distinguishing identifying and distribution high-quality content across regions, we can better match content with users' interests and improve their consumption experiences. To improve payment experience, we have been expanding our AI-generated content and interactive virtual gifts. In May, these gifts accounted for 34.3% of total virtual gift consumption, further validating the value of AI in reaching our content supply and enhancing users' interactive experience. At the same time, our few new voice products continued to drive solid growth. In Q2, revenue from these new products increased more than 400% year-to-year and 39% QQ, grandly becoming a meaningful Our current Q3 guidance projects moderate single-digit year-to-year growth for social entertainment revenue. In the second half, we will continue to strengthen localized operations, enrich content supply, and further optimize user and payment experiences. As call live streaming paying users expands steadily and our new voice product portfolio contributes to further incremental growth, we expect stronger momentum for our social entertainment business. Based on current trends, we are confident that our social entertainment business will achieve four-year revenue growth in 2026 and such trends A Deadly Growth Trajectory Beyond In Q2, BiggerAids generated $134 million in revenue, up 53.1% year-to-year and 7.1% QQ. Notably, our third-party business, the BiggerAudio Network, continued its strong momentum. delivering 74.1% year-to-year growth and 9.3% QQ growth. Accelerating traffic expansion, a more diversified advertiser mix, omni-channel positioning, and significant algorithm efficiency gains are all strengthening the fly-view effect. On the supply side, Beagle 8's developer ecosystem and global traffic coverage continued to expand. Our SDK traffic maintained a steady increase of 37.7% year-to-year in Q2. On the demand side, our strategy presents across multiple verticals, combined with AI-driven of Rizun, Intuition, Turing Traffic Scale, and Regional Market Expansion Job Strong Advertiser Demand. As a result, performance advertising demand across multiple channels, including web and IAA, delivered standout results. Web-based demand, primarily from lead generation and e-commerce, grew 91.7% yearly and 14.4% QQ. In Q2, we continued to expand our advertiser base in sub-verticals such as base-based e-commerce. Further, in rating our advertiser mix, as we approach the peak season in the second half, we are making early perished in Q3 and remain optimistic about the growth prospects of WEG-based demand. Meanwhile, NIA spending recorded 70.3% year-to-year growth. On the algorithm side, continued investments in algorithms and engineering infrastructure platform algorithm capabilities and cost efficiency and converting into positive circle that will drive the next stage of bigger AIDs development. As we accumulate our customer feedback data and refine our multi-channel attribution capabilities, our user profiling and targeting capabilities are improving. Building on this, we continue to integrate our vertical-specific models and strengthen our platform algorithm capabilities. We are focusing on traffic segmentation and budget matching, traffic bidding, and post-campaign optimization. Together, these efforts are improving the matching efficiency between budget and traffic and overall monetization efficiency. At the same time, we are advancing upgrades to our algorithm and engineering system and continuously optimizing compute scheduling and several costs, which allow us to meditate infrastructure costs more efficiency even as required values scaled rapidly. As we build our three-layer system of vertical algorithms, platform algorithm capabilities, and engineering infrastructure, the data accumulated from a growing customer and traffic base will feed back into model optimization its efforts. We expect this will drive value circle across delivery performance, advertiser budgets, and traffic monetization efficiency, and provide stronger technological momentum for the next stage of skill growth in our advertising business. Looking ahead, we will continue to deepen our focus on key verticals such as lead generation, e-commerce, and gaming. We aim to further bolster our different shortage competitive advantage by expanding customer skills and density, entering more regional remarks, and improving our algorithms and product capabilities based On our progress to this stage, we remain confident in our established long-term targets for the third-party advertising business. We are continuing to scale. We expect a steady structural improvement in profitability as the ag-tech business gradually becomes are integral drivers of group's revenue and profit growth. Turning to ShopLine, in Q2, ShopLine generated revenue of $34 million, up 28.6% year-to-year and 12.5% QQ. With revenue growth speeding up from Q1, business from cross-border merchants sustained strong growth of 73.5% year-to-year, driving the acceleration in overall revenue expansion. Last quarter, we reported ShopLine as a standalone segment for the first time and defined it as an AI native one-stop omni-channel commerce infrastructure. What we offer I would like to take this opportunity to share how AI is bringing new changes to the e-commerce industry and to shop life. is fundamentally reshaping the way consumers discover products, compare options, and complete purchase. A new traffic and transaction entry points emerged. Commercial scenarios were becoming more diverse and fermented. Against this backdrop, merchants need a unified open and connectable e-commerce infrastructure more than ever when that links products, transactions, and customer relationships across different channels. As commercial interpoints diverge and diversify, merchants demand for the unified operating system growth, making shoplines valued as omni-channel commerce In the first half, for Shopline, merchant page views from AI channels grew nearly 15 fold a year-to-year, and the order volumes grew over 35 fold a year-to-year. It's gradually becoming a common ecommerce scenario for consumers to discover products through AI entry, point and complete transactions directly in merchant stores. ShopLine has expanded its integration with multiple leading AI agents, including TriGPT, Cloud, and Cursor. This enables merchants to capture the traffic and a transaction from these new entry points. Well, converting orders, customer relationships and operating data across channels into a lasting asset for merchants. Drawing a more complete operational data accumulated on the shop line. AI can better process and interpret a merchant's attitude operating conditions and use that understanding to improve operations and decision-making efficiency. In addition, shopless co-pilot, which allows merchants to manage their online stores more efficiently using natural language, has entered an internal testing. Our goal is not only to leverage AI to unlock new traffic entry points for merchants, but also to gradually integrate AI across the entire merchant operating journey, helping merchants connect with consumers, manage operations, and drive growth more efficiently in an increasingly Our revenue is powered by two engines. On one hand, high retention subscription services provide a stable revenue foundation. On the other, value-added services such as payments and marketing allow us to participate more deeply in merchants' GMV growth. As merchants reach consumers through more channels, driving continued growth. In other volumes and GMV, shop lines' revenue will expand accordingly. In Q2, value-added services maintained rapid growth and continued to increase their share of revenue. Because value-added services like payments, technically, carry lower cross-margin and subscription services. This revenue makes shift tilt to the modest sequential pullback and goes margin from Q1. What matters more to us is that value-added services can scale on our exciting margins based on platform capabilities without a proportional increase and Skill and R&D Investment. As a result, their ongoing growth is expected to deliver stronger operating leverage, driving steady improvement in shop life operating profit and margin. As margin base and GMV continue to increase, we expect value-added services to make a great contribution to shop-line revenue and profit expansion in the future for the alliance of long-term growth with merchant subsidized. Our current Q3 guidance implies shop-line revenue growth rate in the middle 20th year year as revenue and growth profit continue to increase and operating efficiency further improves. ShopLine remains firmly on track along its established path in profitability. Moving on to the share buybacks. In Q2, we repurchased a total of 108 million in shares through August 21 of this year. We have repurchased a company check total of $216 million. maintaining an accelerated buyback pace. Given our strong operating momentum and long-term prospects, we believe our current share price does not yet fully reflect the company's intrinsic value. Going forward, we will continue to actively advance our share buyback program while balancing business, investment, and the long-term development as our social entertainment and advertising businesses grow in scale and profit contribution. We will continue to work with our board to further refine our shareholders' return framework, allowing shareholders to more fully benefit from the company's upgrading results. In closing, Our Q2 results fully validate our mountain entry growth strategy. The value of our strategic positioning and the ecosystem is only beginning to unlock. Looking ahead, as each of our three business segments become stronger and more competitive, we expect greater synergies across the group. driving our long-term value creation to its next phase. With that, I will now hand the call over to X Liu, our vice president and finance to walk through our financial results in detail.