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spk07: Hello, ladies and gentlemen. Thank you for standing by and welcome for the Li Zhu Inc's second quarter for 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the management's remarks, there'll be a question and answer session and just be advised that today's call is being recorded. But I'll now turn the call over to your host, Effie Kang, head of capital markets for the company. Please go ahead.
spk03: Thank you very much. Hello, everyone, and welcome to Li Zhiying's second quarter 2021 earnings conference call. We released our financial and operating results via Newswire services earlier today, and they are available online. Participants on today's call will include our founder and CEO, Mr. Marco Lai, our COO, Mr. Zilong Li, and our acting CFO, Ms. Chen Fanglu. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, an earnest highlight presentation and a webcast replay of this conference call will be available on the IR section of our website at ir.leach.fm. Before we continue, please note that today's discussions will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements typically contain words such as make, will, expect, target, estimate, intend, believe, potential, continue, or other similar expressions. Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated many of which factors are beyond our control. The company, its affiliates, advisors, representatives, and underwriters do not undertake any obligation to update this forward-looking information, except as required under the applicable law. Please note the lead just earned its press release, and this conference call includes discussions of unaudited gap financial measures as well as unaudited non-gap financial measures. Li Zhi's press release contains a reconciliation of unaudited non-GAAP measures to unaudited GAAP measures. I will now turn the call over to our founder and CEO, Mr. Marco Lai. Please go ahead.
spk06: Hello, everyone. Thank you for attending today's phone call.
spk03: Hello, everyone. Thank you for joining us today.
spk06: We are very happy to share with you continue to grow strongly. We firmly implement the globalization strategy with audio and video as the core. We hope to bring more diverse audio and video products to a wider audience. By strengthening the development of speech technology, we continuously optimize the form of products and continue to improve the user experience. Our user size has maintained a steady growth. Overall, the average number of active users increased to 60.9 million. Among them, the number of monthly paid users continued to grow to 49.4 million. With the further improvement of commercialization capabilities, our revenue in the second quarter created a new high and achieved 59% of the net profit, reaching 5.59 billion yuan.
spk03: We are very pleased that all aspects of our business maintained robust growth in the second quarter of 2021. We are dedicated to the audio-centric globalization strategy and to bring diversified audio products to a broader user base. Our continuous efforts to advance in-house technology development, optimize product features, and improve user experiences resulted in a steady growth of our user base in the second quarter. with total average mobile MAUs reached 60.9 million, and average monthly paying users rose to 494,000. Driven by ongoing enhancements in our commercialization capability, our revenue in the second quarter has reached another record high of RMB 559 million, up 59% year-over-year. This quarter, the core indicators
spk06: The second quarter, we continue to maintain a highly active and interactive community atmosphere with our young users-based audio and video community. In addition, we have further promoted the fusion of audio and video entertainment blocks and broadcast blocks, Our solid performance of Coremetrics during the quarter
spk03: We affirm the effectiveness of our strategy and the increasing efficiency in our execution, underscoring our competitiveness in the online audio market. In the second quarter, our audio-centered UGC community built on the Leach app to appeal to the younger generation, continue to demonstrate high levels of user engagement and interaction. In addition, we have further improved the integration of our pre-recorded content divisions and audio entertainment division and effectively increased user penetration rate of audio entertainment to 14.6% in the second quarter of 2021 from 13.2% in the same quarter last year. This achievement also brings more space to improve paying user conversion, further strengthening our commercialization capabilities in audio entertainment and driving the strong growth in revenue.
spk06: On the other hand, through the effective operation of the streaming content platform, we will further expand the group of middle-aged users in high-end cities. We hope to combine the innovation of the streaming mode and the combination of multi-end applications to further strengthen the influence of streaming and enrich our audio and video ecosystem. In the second quarter, we will use streaming as a starting point for the original broadcast team to create a more diversified space for creation, and jointly created a broadcast live broadcast plan for multiple brands and enterprises to provide a differentiated broadcast experience for the audience. In addition, we are continuing to promote the layout of the audio and video of the car, and accelerate the landing of audio and video products, including With the cooperation of leading companies and platforms in the direction of car audio, and the optimization of the car scene for mobile phone products, we have greatly improved the audio experience of users at different ends. We are concerned that users of Leeds Broker have also made obvious improvements in the second quarter in the listening market.
spk03: On the other hand, we have successfully expanded the user base to younger and middle-aged cohorts in higher tier cities, supported by effective operations on our vertical podcast platform, Nature Podcast. Through innovations on podcast features and development on multi-devices accessibility, we expect to further increase the influence of podcasting and diversify our audio ecosystem. In the second quarter, we continue to leverage our live streaming podcast feature to generate diverse content creation opportunities for original podcasters. We have also partnered with several brands and companies to devise exceptional live streaming podcast programs, delivering unique listening experiences to audiences. Furthermore, we are working to strengthen our foothold in the in-car audio market and expedite the implementation of our in-car audio products These efforts include expanding collaborations with a wide range of living companies and technology platforms, and optimizing mobile applications catering to in-car usage scenarios, which greatly improve the listening experiences across multiple terminals. We are seeing that users' listening time on each podcast has increased substantially in the second quarter.
spk06: The overseas social media platform TIA continues to grow rapidly. TIA's user size is constantly expanding. In June this year, the number of active users has exceeded 3.5 million. In the last three months, the number of active users has increased by 92%. In terms of operation strategy, we continue to strive to optimize the delivery of product functions and innovative interactive play methods to improve user participation and activity level. In June this year, the number of active groups on TIA has increased by more than 3.6 times compared to March. At the same time, the number of active rooms has also increased by more than 1.8 times compared to March. The diversified topic circle and interest circle on the platform continue to increase,
spk03: TIA app, an audio-based social networking app targeting overseas markets, continued to grow rapidly, highlighted by growing user base with MAUs in June rising to more than 3.5 million, representing a 92% increase over average MAUs in the first quarter of 2021. In terms of our operational strategy for TIA, we are committed to improving user engagement and user-activeness through continuous optimization and integration of product, as well as enrichment of interactive features. In this June, the number of active groups on TIA increased by more than 360% from this March, and the number of active chat rooms increased by more than 180% from this March. We are also seeing that the amount and diversity of social networking topics and interest groups on the platform are increasingly expanding, bringing more new users to join the platform and effectively enhancing TIA's network effect.
spk06: This is to promote the sound technology solution program, Doremi, which is the platform, and more car system and car network platform compatibility. It is only to open Doremi in different car system and car network applications and upgrade the audio quality of different car ends to meet the needs of multiple users for real-time audio interaction. In addition, our AI technology is also continuing to improve the development of various businesses, including better recommendation systems and providing multi-end-to-end personalized audio and video experience. In the future, we will further promote the development of core technology to achieve strong business growth, provide positive support and negative energy.
spk03: Technological empowerment is a crucial driver for our V-Groove business development. In the second quarter, we remain focused on advancing our core technology capabilities. For example, we are striving to make Doremi our in-house developed audio technology solution compatible with more in-car operating systems and internet of vehicles platforms. Our goal is to ensure superior audio quality across different in-car systems and satisfy user demand for real-time audio interaction. our AI technology is also driving our overall business development, including enabling a battery recommendation mechanism and delivering a personalized audio experience across multiple devices. In the future, we will further refine our core technologies to support and empower our robust business growth.
spk06: While promoting business development, we are also actively taking on the responsibility We also hope to play an influential role on the platform and help some young people in the market to create more value with their voices. In addition, during the water disaster in Henan, we fully played the advantage of the voice platform. Through the audio content of the voice source Henan, which is online on the whole platform, we gathered the power of the voice and initiated the voice source. We called on the anchor of the platform to promote some urgent rescue measures to provide more psychological counseling and relevant scientific content. At the same time, through the diversified content form within the platform,
spk03: Alongside driving the effective growth and strategic execution of various business, we also actively undertake corporate social responsibility as a content community platform. For example, on the National Disability Day, we released a short documentary film to highlight the stories of audio content creators with physical disabilities who have showcased their vocal talents through creating audio programs titled See the World Three Years on LiZhi app. We are also hoping to help young people with physical disabilities to create more value via voices through the influence of our platform. In addition, during the Henan Plus last month, Leveraging the advantages of our voice platform, we launched the various audio content of supporting CUNAM through all channels, rallied the power of voices to encourage content creators to publish the emergency rescue measures, and promoted psychological counseling content and relevant science educational podcasts. We also showed our support and respect for rescue staff through various content features delivering the heartwarming initiatives to a wider range of audiences through voice.
spk06: In general, we are very happy to see that in the second quarter of this year, LIS has maintained a strong growth trend in domestic and foreign businesses and established a good foundation for long-term development. In the face of the future, we will continue to carry out global strategies and strategies further promote the development of domestic business, and further release the commercialization ability of the audio and video community through effective operation strategies. In addition, we will also expand the broadcast business, explore diversified audio and video application scenarios, and bring innovative broadcast experiences to a wider audience. In the overseas market, we will continue to optimize audio and social products to provide better social experiences for users. At the same time, we will also gradually explore overseas different regions and markets to provide more possibilities for the long-term development of globalization. On the other hand, we will insist on promoting the words of the core technology and continue to build a more competitive audio and video ecosystem to achieve long-term sustainable growth.
spk03: In summary, we are pleased to see that Li Zhi's global business continues to experience strong growth in the second quarter of this year, laying a solid foundation for our long-term growth. Going forward, we will remain steadfast in our commitment to globalization strategy, further promoting the development of our domestic business and unleashing the commercialization potential through effective operating strategies. We will further advance our forecast business development and explore diverse audio applicable usage scenarios, bringing innovative podcast experiences to a broader user base. In overseas market, we will continue optimizing our audio social products, providing an even better social networking experience to our users. Meanwhile, we will progressively explore various overseas markets and create more possibilities for the long-term development of our global business. Furthermore, we are committed to building a more competitive audio ecosystem to achieve sustainable long-term growth as we continue to advance our in-house core technology capabilities.
spk06: 谢谢大家,下面请我们的CEO李泽龙先生为大家介绍各业务线的具体发展的情况。
spk03: Thanks to everyone with that, I will now turn the call over to our COO, Mr. Zerlong Li, who will discuss our business development in more detail.
spk05: 大家好,感谢大家参加今天的会议。 如之前Marco所提到的,今年第二季度我们实现了强劲的业绩增长。 各项财务和运营数据都取得了不错的成绩。 我很高兴能为
spk03: Hello everyone and thank you for joining us today. As Marco discussed in the second quarter, we maintain strong growth momentum with a solid set of financial and operating results. I am happy to share with you a bit more on our operating achievements.
spk05: thanks to our continuous efforts to optimize audio and video entertainment products and broadcast audio creation tools, we have effectively improved the user experience and further promoted the user's active and continuous audio content creation. In the second quarter, the number of interactive users on the platform has reached 3.4 billion. By the end of June, the total number of audio content accumulated on the platform reached 2.9317, However, in audio and video entertainment, through effective operation strategy, we encourage content creators to participate in the creation of audio and video entertainment, thereby attracting more users to join and implement audio and video interaction, and further release the commercialization potential of audio and video entertainment business. Specifically, it reflects the increase in the penetration rate of audio and video entertainment users, thereby leading to the transformation of paid users. On the other hand, we combine the precise user positioning We continue to create standard products that are deeply connected to the interests and hobbies of young users. At the same time, we have strengthened the construction of a content system for audio and video entertainment products with high commercialization capabilities. For example, 20 yuan interaction, emotional accompaniment, and so on. This has significantly improved the availability of users, and further enhanced our commercialization capabilities in audio and video entertainment.
spk03: First, in terms of our audio community on LeechApp, our persistent efforts in optimizing audio entertainment products and audio creation tools improved overall user experiences, increased user-activeness, and stimulated user engagement in audio content creation. During the second quarter, users' monthly average total interactions on the platform reached 3.4 billion As of June 30, cumulative pieces of audio content uploaded to our platform reached 293 million. In the audio entertainment division, we conducted various operational campaigns to encourage content creators to participate in audio entertainment creation, which in turn attracted more users to join real-time audio interactions. These have further unleashed our audio entertainment business commercialization potential. reflected by our growing audio entertainment user penetration rate, which drives the paying user conversion. On the other hand, based on our effective user positioning, we continue to develop market-leading content categories, catering to the younger generation. Through a strengthened content ecosystem and content operation strategy towards higher commercialization potential, such as ACG-centric interplay sessions and emotion of company programs, we have effectively increased the user willingness to pay and further enhanced our commercialization capability in audio and entertainment division.
spk05: In terms of globalized business, as a voice social platform for young people, TIA persists on the interest and hobby of young people to continuously optimize the product form to meet the diverse social needs of users. In March this year, we newly launched a group function on TIA, with the second quarter's operation strategy, we saw more and more users gathering in the same user groups with the same interests and interests on TIA. Through real-time voice interaction and communication, active groups on TIA have also significantly improved. In addition, we have introduced new small game play styles in real-time voice interaction rooms, such as Ludo and Sweet Cuts. At the same time, the theme of the game We have added the game sharing function to promote effective interaction and interaction among users to meet the wider needs of users. Continuous product optimization effectively improves user experience and user participation. The number of friends invited by users is also increasing. Since the end of June, the number of user friends has increased by 1.2 times as much as in the first few months. In the future,
spk03: 我们也将继续坚定执行全球化战略,相信声音音社交业务的发展能够为我们带来更大的增长空间。 In terms of our global business, as an audio-social platform targeting younger generations, TIA keeps focused on optimizing product features to meet various social needs of users based on younger generations' interests and hobbies. In March 2021, we launched Kia's group function, which helps users with common interests be connected, enjoy real-time audio interactions, and become friends on our platform. The number of active groups on the platform has significantly increased. In addition, we introduced minigames such as Ludo and Sweet Crush into live chat rooms and launched a game-sharing function in conjunction with the theme of gaming. aimed at promoting effective communication and interaction among users and meet more user demands. Our continuous efforts in product optimization effectively improved user experience and user engagement, and we are gaining a growing number of new users from spontaneous invitations from friends on TIA. As of June 30th, the number of TIA-based user friendship connections increased by 120% from this March. Looking ahead, we will remain committed to executing our globalization strategy as we believe that the development of audio-based social networking business is able to bring more growth potential for the overall business.
spk05: In terms of blogging business expansion, we strive to highlight our competitive advantages through blogging form and content innovation, including the launch of a series of blogging and live broadcast projects, to attract more users to participate in listening and interaction. For example, in June this year, we cooperated with Anaya Theater Festival to launch a special program of Honeo Radio to create the first 300-hour live radio program in China's online audio industry. Honeo Radio recorded the interaction, sound recording, external connection, and other forms in all directions, including interaction and interaction with 300 theater enthusiasts and entrepreneurs. We invited many famous guests to talk about the core theme of technology.
spk03: In terms of the development of our podcast business, we are committed to differentiating our competitive advantages through innovation of features and podcast content, including a series of live streaming podcast programs to increase user activity and interaction. For example, in June, in collaboration with the Araya Theatre Festival, we launched the Migratory Birds live radio project, which featured a 300-hour non-stop audio live streaming for the first time in China's online audio industry. Built on a mix of live streaming dialogues, voice recordings, and outbound styling interactions, this pioneering live streaming session comprehensively showcased the communication and theater creation activities of 300 theatre lovers and practitioners. These events spotlighted our horizon-broadening approach to merge live streaming features into podcasts. Additionally, we leveraged this prestigious session to create highlight edition and inclusive podcast sessions available on our platform. During the second quarter, we also hosted the Voices of Technology and Science Week online forum. China's first live streaming podcast forum themed on science and technology. This event featured a number of renowned speakers discussing a variety of trending topics through live streaming podcasts, greatly stimulating interactions among podcast listeners.
spk05: we have established cooperation with more leading car manufacturers and car network platforms, including Weimart Car, Ideal Car, Tencent Car Storage Small Scenic, and BoTai Car Network, etc. We aim to involve more car intermediaries in Leeds Book, and continue to bring a diversified audio experience to a wider audience. At the same time, we are also continuously optimizing the product form for car storage scenarios, including the vehicle mode that can be used to push out mobile devices. By recommending and distributing the content of AI-enabled, users can listen to personalized broadcast content with one click, which enriches the user's listening experience in diversified scenarios. I believe that our vehicle audio products and mobile products can be used for each other. By turning on the application that broadcasts in multiple scenarios and multiple scenarios,
spk03: In addition to our innovations in podcast content and podcast features, we have also formed more strategic collaborations to increase the popularity and availability of podcasts through multiple terminals. Recently, in cooperation with more leading automakers and internet of vehicle platforms, including WM Moto, V-Auto, Tencent vScenario, and Patio IOV platform. We worked to make each podcast accessible in more vehicles, providing a diverse audio experience to a broader user base. At the same time, we continuously optimize our product features to ensure a better in-car listening experience. We introduced the Car Mode for mobile app, enabling users to enjoy personalized podcast content. supported by AI-powered content recommendation distribution mechanism with only one click. We believe that our in-car audio solutions and mobile apps can build synergies, encompassing podcast content across multiple devices, spanning a variety of usage scenarios to bring podcast offerings to a wider range of users and further enhance the influence of podcasts in the industry.
spk05: Going forward, we remain committed to our mission and to driving the development of our worldwide business to build Leech into a leading global audio platform through our continuous efforts on audio innovation and technology advancement. Thanks, everyone.
spk03: With that, I will now take the call over to our acting CFO, Ms. Chen Fanglu, who will discuss our financial results in more detail. Okay, thank you, Zilong.
spk02: Hello, everyone. I will now provide a brief overview of our financial results for the second quarter of 2021. As we move forward with our expansion strategy, our operational and financial performance for the second quarter continues to demonstrate our strong growth trajectory and strengthen our commercialization capabilities. We are also pleased to see growth margins expansion of 400 basis points year-over-year alongside our strong top-line growth during the quarter. Looking ahead, We will remain focused on our globalization strategy and improving our operational and technological capabilities to foster our global audio ecosystem and deliver long-term sustainable growth. In the second quarter, our total net revenue will be RMB 559.3 million, representing an increase of 59% from RMB 315.9 million in the second quarter of 2020. mainly attributable to our growing user base and increase in the average spending of paid users in our audio entertainment products. And our cost of revenue was RMB 400.5 million in the second quarter of 2021, representing an increase of 51% for RMB 265.2 million in the second quarter of 2020. The year-over-year increase was mainly due to our increase in revenue-sharing fees to our content creators, payment handling costs, and bandwidth costs, which were generally in line with our gross business growth. Our gross profit was RMB 158.8 million in the second quarter of 2021, representing an increase of 85% from RMB 85.7 million in the second quarter of 2020. Long gap gross profit was under $161.9 million in the second quarter of 2021, representing an increase of 79% year-over-year. Our gross margin for the second quarter of 2021 increased to 28% from 24% in the second quarter of 2020. Long gap gross margin for the second quarter of 2021 grew to 29% from 26% in the second quarter of 2020. Operating expenses increased by 72% year-over-year to RMB 111.3 million in the second quarter of 2021. Research and development expenses were RMB 60.9 million in the second quarter of 2021, representing a year-over-year increase of 11%, primarily due to the increase of salary and welfare benefits expenses related to an increase in the number of our research and development staff. Selling and marketing expenses will only be $106.3 million in the second quarter of 2021, representing a year-over-year increase of 241%, primarily due to our increased investment in branding and marketing for our products and branding. General and administrative expenses will only be $23.1 million in the second quarter of 2021, representing a year-over-year decrease of 7%. The decrease was mainly due to the decrease in other professional service fee, partially offset by the higher salary and welfare benefits expenses. Operating loss was RMB 31.6 million in the second quarter of 2021, up by 26% from RMB 25 million in the second quarter of 2020. And long gap operating loss was RMB 21.7 million in the second quarter of 2021, compared to RMB 11.2 million in the second quarter of 2020. Land loss was RMB 29 million in the second quarter of 2021, up by 32% from RMB 22 million in the second quarter of 2020. And land gap land loss was RMB 19.2 million, compared to RMB 8.2 million in the second quarter of 2020. Basic and diluted land loss per ADS were RMB 0.58 in the second quarter of 2021, compared to RMB 0.48 in the second quarter of 2020. and long-gap basin and diluted land loss per ADS were RMB 0.38 in the second quarter of 2021, compared to RMB 0.18 per ADS in the second quarter of 2020. As of June 30, 2021, we have cash-on-cash equivalents, restricted cash, as well as short-term investments of RMB $404.7 million. Now this concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead.
spk07: Thank you. Ladies and gentlemen, we'll now begin that question and answer session. Just again, if you need to ask a question, just please press star 1 on your telephone and wait for your name to be announced. And for the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English. And for the sake of clarity and order, please only ask one question at a time. Management will respond, and then feel free to follow up with your next question. But we have a question on the queue. So I'll first go to Vincent Yu from Needon and Company. So please ask your question, Vincent.
spk04: Thank you. Thank you, Vincent, for taking my question. And congrats for the strong quarter results. I have three questions. The first question is I think one in terms of like on the regulation side. So have we been communicating with regulators on the rollout of regulation on the overall streaming industry. Can management give us a sense of company expectation and the impact on Liji's operational results? The second question is on the apps themselves. So can management share with us how big is the user base who use Liji or use Liji Podcast app in the car and the overall size of Liji Podcast app? The third question is, does the company see any material change in user behavior for TRF as the economy continues to reopen and it's like the streaming hours have been changed or decreased or increased or maintained? Can we get any sense? So I will translate for myself into Mandarin. Thank you for your question. I have three questions. I will quickly talk about it. The first question is related to supervision. Is the company and the supervision agency communicating with the whole live broadcast industry through comprehensive supervision measures? Can you share with us the company's expectations and the current impact on our operation results? The second question is about whether you can share with us Thank you. First of all,
spk06: Let me answer the question about supervision. The next two questions are about management. Let's have Mr. Li answer first. The first question is about supervision. In fact, in the past two years, the supervision agencies have always paid more attention to the supervision of the Internet entertainment industry, including the live broadcast industry. First of all, the strengthening of supervision in the short term I will translate for Marco. So Marco will answer the first question and our COO, Mr. Zaloni, will answer the other two questions.
spk03: So Marco's answer is that for recent years, the regulatory authorities have always attacked great importance to regulating the online entertainment industry, including the live streaming industry. Title regulations may have some impacts and put pressures on some companies' business in the short term. But we do believe that some of the regulatory policies can standardize relative business operations, which is good for the long-term sustainable development of the entire industry.
spk06: As an online audio and video company, we always pay attention to the regularity of our business. We have also been actively communicating with the regulatory agencies. In fact, in the past few months, including some similar problems and solutions. On the other hand, we are also actively implementing some self-inspection measures to ensure that our business is in line with the current relevant regulations through internal harmonization and data security departments.
spk03: As an online audio company, we have always prioritized regulatory compliance and have been proactively and effectively communicating with regulators to have an accurate understanding of the relevant guidelines and requirements. In the last few quarters, we also have reported some information and we have come up with some solutions regarding to the regulatory policies. Meanwhile, we are earnestly conducting self-examinations of our internal compliance and data security measures to ensure that our business operations comply with the regulations.
spk06: As an example, we have a very long experience in the audiovisual industry. Currently, we have some relatively perfect mechanisms to meet the requirements of this supervision.
spk03: Based on our years of experiences in the industry, I think we have already have a relatively sound mechanism to meet the regulatory requirements. In the long term, the online audio industry still has tremendous growth potential. And LiZhi is committed to promoting stable and healthy development.
spk05: Hello everyone. Let me answer the second question and the third question. In terms of the layout of the vehicle audio system, we are now working hard to cooperate with more leading car companies. By incorporating more vehicle endpoints into LiZhi's vehicle endpoints, we have reached a wider audience of users. In terms of cooperation on the vehicle side, our current progress is still very significant. Leasebook has been continuously launched on more vehicle systems. Until recently, there have been 14 companies cooperating on the vehicle side. In addition to some of the cooperating companies mentioned earlier, our vehicle audio products also launched Benz, Audi and other vehicle systems through the car network platform.
spk03: I will translate for Mr. Zilong Li for the second and third questions. So for the second question, in terms of our in-car audio strategy, we are actually working to expand collaborations with a wider range of leading companies to make our in-car audio products accessible in more vehicles and reach a broader user base. We have made a significant progress recently in our cooperation with auto companies and have launched more in-car audio operating systems. As of now, we have established collaborations with a total of 14 automakers. Besides those companies we have mentioned earlier, our in-car audio products have also been launched on bands and all these in-car audio operating systems through the IOV platform.
spk05: The live broadcast has been online for more than half a year. The performance is still very good. Through our broadcast innovation, such as broadcast live broadcasts and exclusive programs, we have effectively improved the user's usage time. In the second quarter of this year, the usage time of each user in Japan increased by about 10 minutes in the last quarter. This also shows that our
spk03: Li Zhi podcast has been operating for over half a year and now has performed well. Through our podcast innovations like live streaming podcast and inclusive podcast episodes, we have effectively improved the average user time spent on Li Zhi podcast. In the second quarter of 2021, the average daily time spent per user on LeechPod has increased by around 10 minutes compared with the previous quarter, which also shows the effectiveness of our operational strategies and the improved user stickiness.
spk05: In the future, we will continue to promote the development of LeechPod and car audio products. Through the introduction of more car intermediaries, In the future, we will continue to boost the development of Leeds Podcast and our in-car audio business and increase the popularity of Leeds Podcast.
spk03: by integrating into more in-car systems. We will also continue to enrich Leeds Podcast's content offerings to deliver more interesting content, meet users' demands with innovative podcast features, and improve users' thickness. 但现阶段,车载音频这一端及励志播客的用户规模在我们整体用户规模中占比还比较小。 我们将在该部分业务达到一定占比规模的时候,我们对外披露具体的数据。 But at this moment, the user base for the in-car audio scenario and of the lead podcast is relatively small compared to our overall user base. We will share more data when the business grows to a certain scale. 然后在疫情期间呢,虽然现在很多社交活动陆续恢复常态,
spk05: The third question is about the user behavior for the TIA app. Although most social activities are gradually returning to normalcy,
spk03: but we are still seeing a lot of lasting changes in people's lifestyles brought by the COVID-19 pandemic. For example, online entertainment and online social networking are gaining widespread popularity, and TIA maintained its strong growth momentum in the second quarter.
spk05: As we continue to optimize our product functions, TIA's user activity is also continuing to increase, reflecting the growth in the number of active rooms,
spk03: As we continue to optimize TIA's product features, TIA's user-activeness continues to increase, reflected by an increase in the number of active chat rooms and the number of user-friendship connections. Also, the user time spent on TIA also improved compared to the previous quarter.
spk05: From a long-term perspective,
spk03: We believe the online social networking is becoming a trend in the way people socialize. The integration of audio into social networking activities provides users a differentiated form of social networking from an innovative perspective and satisfying more of their social networking needs. Going forward, we will continue to optimize TIA's product features, connecting more users through voices. This concludes the answers for Needham's questions.
spk06: Thank you. 非常感谢。 Thank you.
spk07: The next question comes from the line of Vicky Wei from Citi. So please ask your question, Vicky.
spk01: So good morning, management. Thanks for taking my questions and congrats on the solid quarter. So when management shares some color about revenue sharing ratio, which holds as industry peers continue to invest in audio live streaming. Thank you.
spk02: Okay, let me answer Vicky's question. First of all, in terms of the proportion of the whole division, our division policy for content creators is relatively diversified. We will make a dynamic adjustment according to our different business blocks, including the stages of our different businesses. In the second quarter of this year, we have achieved a relatively strong growth in terms of revenue. At the same time, we are also gradually adjusting and optimizing our overall share structure. From the second data, the overall share of the content creators of our entire platform is about 65% of our revenue. Compared to the same period last year, this data has dropped by about 4%. This has allowed us to achieve an effective improvement in the overall interest rate level. From the perspective of future development, we still hope to be able to provide comprehensive support to content creators, including the way to balance the relationship between our anchorage and platform revenue. In terms of creators, we will support them through traffic and other creators' support, as well as develop some effective incentive policies. We will also use AI to provide some content recommendations and strategies to help creators achieve better growth on our platform, which will also enable them to gain more fans and attention. In this way, we can improve the comprehensive strength of our creators. In addition, we will continue to strive to strengthen the activity of our users, including the transformation of paid users, and to mobilize the paid wishes of our users to improve our overall revenue level. We believe that when the revenue level of the entire platform maintains the ideal growth and scale, our content creators on the platform can get more income from our growth. At the same time, our division structure also has a space for continuous optimization. Actually, we have diverse revenue-sharing policies. for content creators across different business divisions at different stages. In the second quarter of this year, we achieved strong revenue growth while we are also progressively adjusting our revenue sharing structure. In this quarter, our overall revenue sharing for content creators on our platform accounted around 65% of total revenue, representing a decline of about 4 percentage points year-over-year. which also effectively improved our gross margin. Looking ahead, we will implement a comprehensive set of measures to cultivate our content creators and keep a balance between the income growth of content creators and improvement of our profit margin by driving the top-line growth. For the content creators, we will adopt various operational strategies including traffic and creation support attractive incentive policies, and AI-driven content recommendations, among others, to enable content creators to attract more followers in wider popularity and increase their success on our platform. On the user side, we will continue to focus on improving user engagement, promoting paying user conversion, and increase users' willingness to pay to increase our overall revenue. I believe with our platform remains a good growth momentum and our creators will experience a corresponding increase in income. Subsequently, this will allow us to further refine our revenue sharing structure. In addition, we will continue to innovate new business model and explore more overseas markets with growth potential to create new opportunities for our long-term and sustainable growth with higher profitability.
spk01: Thank you.
spk07: There are no further questions now, so I'd like to turn the call back over to the company for closing remarks.
spk03: Thank you once again for joining us today. If you have further questions, please feel free to contact VHS Investor Relations through the contact Contact information provided on our website at ir.ligi.fm or the Pianta Group Investor Relations. Thank you.
spk07: Ladies and gentlemen, that does conclude today's call. Thank you again for participating. You may now all disconnect.
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