JOYY Inc.

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

Thank you, operator. Hello, everyone. Welcome to Joy's fourth quarter and four-year 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 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 refer you to our safe harbor statement in our earnings press release, which applies to this call as well, 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 Shillingly. Please go ahead.

Hello, everyone. Welcome to our first quarter of 2021 earnings call. Let me start the call with an overview of our first quarter results. We grew our total revenues by 16.8% year-over-year to $663.7 million. Specifically, Beagle's revenue increased by 30.2% year-over-year to $576.1 million. Meanwhile, we further improved our non-GAAP profitability at the group level when excluding YY Live as We earned a non-GAAP net profit for $98.3 million and improved our non-GAAP net margin to 40.8%. Beagle's non-GAAP net profit expanded to $103.5 million while its non-GAAP net margin improved to 18% from 8.7% in the previous quarter. As a result, for the full year of 2021, we generated $2.62 billion in total revenue and an increase of 36.5% from 2020. Notably, we grow Bigelow's full-year 2021 revenues by 34.1% to $2.32 billion at the group level. Our global business reached another major milestone As we attended full-year non-GAAP profitability for the first time, we excluded YY Live, having booked $108.9 million in non-GAAP net profit with a 4.2% non-GAAP net margin. This was mainly attributed to Beagle's strong financial performance as it's turned profitable for the full year for the first time by generating $182 million in non-GAAP net profit with a corresponding non-GAAP net margin of 7.8%. Look back 2021 as a year marked by growth, strategic adaptation, and breakthroughs. On the growth front in 2021, we continued to expand our revenue, driven by our enhanced monetization capabilities across multiple social entertainment products. Consequently, for the full year of 2021, Bigelive's revenue grew by 31.3%, Leite's revenue grew by 97.8%, and Harvard's revenue grew by 54.6%, all contributing to the 36.5% top line growth at the group level. On the strategic adaptation front, we proactively implemented some strategic in early 2021 because we value the long-term growth health, and sustainability of our products. We made certain adjustments to Nike and Hargo's marketing strategies and priorities investment in their content and social ecosystems, which we believe are fundamental to the user experience and the long-term compatibility competitiveness of our products. After a few quarters of executing those adjustments under a more prudent marketing strategy, we are pleased to report a significant improvement in the monetization efficiency, financial, and operational healthiness of these products. As a result, we substantially narrowed their operating losses, even though their MAUs experienced fuel short-term fluctuations. The combination of the increased monetization of the aforementioned products, our proactive adjustment in marketing strategies, the growing synergy among our products, and our enhanced operation efficiency across the board had led us to an important breakthrough, enabling us to achieve full-year profitability for our global business for the first time since the deconsolidation of YY Live. Our healthy cash flows demonstrate that we have entered into a new phase of sustainable development. Following a positive operating cash flow of $177.6 million in the third quarter. We generated another positive operating cash flow of $150.2 million in the fourth quarter. Looking back, we continue to achieve innovative breakthroughs as evidenced by our proven track record of incubating developing and monetization of our products. With our existing global market presence, healthy cash flows, and sustainable growth momentum, we are confident in our future prospect as we continue to reinvent ourselves, explore the global market, increase our global market share, and capture future growth opportunities in the social entertainment industry. Next, let me share greater details of the progress we made in each of our product lines during the first quarter. Let's start with BeagleLive. Our efforts in cultivating a diversified global content ecosystem have been fruitful in expanding our product reach as Big O Life's MAU grew by 11.9% year-over-year to 32.2 million in the first quarter. macroeconomic uncertainties, challenges posed by the resurgence of COVID-19, and some desperate depreciation of certain currencies against the U.S. dollar that partially offset our growth momentum. Our business demonstrated super resilience on a year-over-year basis, BeagleLive's live streaming revenue and paying users increased by 12.5% and 10.3%, respectively, in the first quarter. As we continue to make headway with BeagleLive's growth trajectory in multiple geographic regions. In particular, revenues and paying users from Europe increased by 42.2% and 40.7% respectively, while revenues and paying users from Southeast Asia and other emerging markets increased by 16.6% and 24.4% respectively. In the first quarter, we made additional progress in diversifying our content ecosystem, enriching our localized content offerings, increasing our supply of premium content and improving user engagement. In December 2021 and January 2022, we hosted a series of online events in multiple regions across the globe, such as Europe and the Middle East. Those events featured many popular regional artists, musicians, singers, and dancers, in addition to the region's top live streamers. To provide users with a refreshing and immersive social experience, we launched an innovative product features in the first quarter, incorporating computer vision, virtual reality, augmented reality, and many other cutting-edge technologies. In December, we introduced a brand-new feature called Virtual Live, which enables users to create customers' 3D digital avatars. as their virtual representations and that mirror their live body movements and facial expressions via camera when streaming on BeagleLive. We plan to upgrade the virtual live feature continuously in the future to increase our user personalization, boosting user interactions, and enhance user engagement. Beyond that, we also introduced into BeagleLive a virtual background feature for single user live streaming rooms and implemented a tiered system for granting special user privileges in multi-user live streaming rooms. All these technology innovations have produced encouraging results as an average and cumulative duration of live streaming sessions increased year-over-year by 12.1% and 8.3% respectively in the first quarter. To enhance our brand influence, we continue to organize signature events by leveraging the extensive localized operational experience of our international talent For example, in January this year, we hosted the Beagle Live annual gala, inviting around 100 streamers from a variety of cultural backgrounds to perform through video feeds in front of their global fans during the annual gala through the grand debauch of our recently launched virtual live 3D avatar feature in collaboration with toys. A Thai singer Beagle Live delivered a brand new video experience through seamless integration of physical and virtual realities. As is the tradition for this annual event, we selected BeagleLive's most influential streamers of the year and featured them on advertisement billing boards at famous landmarks around the world, including Times Square in New York and many more. Going forward, BeagleLive will continue executing its globalization strategy to enhance its leadership position in the social and entertainment live streaming industry across the world. It will continue to focus on key regions like North America, Europe, and the Middle East, and the East Pacific, while accelerating investments in emerging markets. BeagleLive will also continue to localize, diversify its social content ecosystem with a focus on content categories such as music, dance, comedy, games, and e-commerce, and further increase the proportion of its premium content to elevate user expansion and engagement. Meanwhile, through content products, innovation, and localized operations, Big Online will seek to construct interest-based online communities to help users establish small, fulfilling social connections on the platform. We believe that diversified content and positive social relationships on the platform will further enrich our users' social entertainment experience, attract more users to our community, cultivate their spending habits, and ultimately drive Big O Live's monetization growth. Next, let me share some recent updates on Leakey. As discussed on our previous earning course, we have been fine-tuned Leakey marketing strategy since the first quarter of 2021 and prioritizing our investment in our content and the social ecosystem. Also, like its overall, MAU experienced some short-term influx tuitions as a result and reached 67 million. The downward trend moderated further during the first quarter, especially in the Gulf states in the Middle East region. Lack of live streaming revenue continued to grow during the first quarter, increasing by 26.5% year-over-year. Its revenue from the Middle East increased by 59.1% year-over-year. with a focus on identifying and cultivating talented content creators where its comprehensive creator support program likely continues its efforts in fostering a friendly and vibrant content creation community motivated by a series of incentive programs. The number of certified creators likely increased by 22%, consequently, in the first quarter. The number of certified creators for the gaming category, which are widely popular among general Z users, 73%, consequently. And the average quantity of premium gaming content produced per day increased by 97%, consequently. As part of our effort to cultivate and support creators, Leakey rolled out a series of upgrades of its product features during the first quarter. Leakey expanded the implementation of Super Like feature to a broader user base, leading Super Like to become a unique icon for users to publicly endorse their favorite creators and support premium content. certified creatures receive nearly six times more incentives through the SuperLAC feature in December than September. In addition, we introduced another field feature called SuperFollow to enable creatures to publish exclusive content for their super followers by earning monthly subscription fee on Likey. All these new features provide more diverse monetization channels to creators, enrich their interactions with fans and incentive them to produce more individualized and high-quality content. In 2022, we will continue to invest more resources in identifying and nurturing talented creators. We will provide these creators across various content vertical with abundant user traffic support, sufficient content creation tools, professional support for our localized operation teams, and diverse monetization methods to pave a path for their long-term personal growth and career development. We believe a vibrant content community and likely interactions between creators and fans are fundamental to sustaining Likey's monetization growth and reversing Likey's user downward trend in the future. In addition to monetization via live streaming, we are also steadily steering the growth of Leakey's brand advertising business and further diversifying its revenue stream. Going forward, we are confident that Leakey will be able to maintain its top-line growth trajectory, further narrow its operation loss, and gradually resuming user expansion over a long period of time. Last on HAGO, during the first quarter, HAGO continued its monetization growth momentum as its live streaming revenue and paying users increased by 32.1% and 33.9% year-over-year, respectively, mainly driven by the Optimizing of several fan engagement features and the launch of a new couple features in dating themed live streaming rooms. We also upgrade the Hargo's products to better satisfy the user demand for multiple players' social interactions. Considering the difference in user life circles and user regions, we implement an updated recommendation algorithm for users to easily locate their favorite live streaming rooms. As a result, in the first quarter, the penetration rates for Hargo's feature channels increased by 2.2%. sequentially. In 2022, HAGO will continue to provide users with a better multiplayer interactive entertainment experience by optimizing its product features, enhancing user matching capabilities, and diversifying user interactions to culture and interest-based social entertainment community. We believe that we will continue to drive Hargo's monetization growth, further narrow its operation loss, and make further progress on its path toward breakeven in 2022. In summary, 2021 was a fruitful year for Joy. The enhanced monetization capability across multi-products help us achieve full-year revenue growth of 36.5%. The combination of our increased monetization for the aforementioned products, proactive adjustment in marketing strategies, better synergy among multiple products and enhanced operation efficiency across the board led us to full-year profitability, not only for Beagle, but also for the whole group. On capital return front, for the full year, our board directors have authorized additional share purchase program for of $1.2 billion as of December 31, 2021, we have bounced back a cumulative $393 million of our shares. $236 million of which was out of the $1.2 billion newly added purchase plan. Additionally, we have paid out a total of $160 million in dividends. These efforts are to demonstrate our confidence in the company's long-term growth perspectives and to reward our shareholders for their long-term support of the company. Looking ahead, we will continue to localize our diversified global social entertainment ecosystem, expand our market reach, and fortify our leadership position in core geographic regions. As an innovator and a pioneer, we remain committed to our vision of bridging communications among people from around the globe and bring them joyful and youthful experiences. This concludes my prepared remarks. I will now turn the call to our General Manager of Finance. Alex Liu for a more detailed explanation of our financial results.

Thanks, David. Hello, everyone. As Joyce's finance general manager, I'll talk about the financial results. Since a majority of our revenues and expenses are now denominated in USD, starting from January 1, 2021, We have changed our reporting currency from RMB to USD to better illustrate our operational results. Please note that the financial information and non-GAAP financial information disclosed in our earnings press release is presented on a continuing operations basis unless advice is specifically stated. As the seal of VavaLife was substantially completed on February 8, 2021, with certain customary matters to be completed in the near future, the historical financial results of VavaLife are reflected in the company's consolidated financial statements as discontinued operations accordingly, starting from the first quarter of 2020. During the fourth quarter of 2021, despite the recent volatility in the macro environment and increased uncertainty due to COVID-19 and some depreciation of certain currencies against the U.S. dollar that possibly offset our growth momentum, our business growth remains resilient. Our total revenues for the first quarter increased by 16.8% year-over-year to USD $663.7 million, from USD $568.2 million in the same period of 2020. Primarily attributable to the enhanced monetizing capabilities across multiple products, including BeagleLive, Lucky, and Huggle. In particular, our live streaming revenues for the first quarter increased by 15% year-over-year to USD 620.9 million. And other revenues in the first quarter increased by 50.3% to USD 42.8 million. Cost of revenues for the first quarter increased by 9.6% year-over-year to USD $440.2 million. Revenue sharing fees and content costs increased to USD $297.3 million in the first quarter, from USD $254.2 million in the same period of 2020. which was in line with the increase in live streaming revenues. Bandwidth costs decreased to USD 20.6 million from USD 27 million in the same period of 2020, primarily due to the company's improved efficiency in bandwidth usage, partially offset by the increased bandwidth usage as a result of continued user-based extension of Google Live. Gross profit increased by 34.2% year-over-year to USD 223.5 million. Gross margin in the first quarter of 2021 improved to 33.7% from 29.3% in the same period of 2020. Operating expenses for the first quarter decreased to USD 168.2 million from USD 251.6 million in the same period of 2020. Among the operating expenses, sales and marketing expenses decreased to USD 113.6 million from USD 146.4 million due to disciplined spending on user acquisition via advertisements for certain products, including Leica and Hargo. Through the combination of improved synergy among multiple products, enhanced operating leverage, and a prudent marketing strategy, we continued to achieve a steady expansion in profitability for both vehicle segment and for the entire group. Our gap operating income for the first quarter was USD 60.6 million, compared to operating loss of USD 83.8 million in the same period of 2020. Operating income margin for the first quarter was 9.1%, compared to operating loss margin of 14.7% in the same period of 2020. Our non-GAAP operating income for the first quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions, as well as impairment of goodwill and investments, and gain on disposal of subsidies and business, was USD 83.5 million in this quarter, compared to non-GAAP operating loss of USD 33.2 million in the same period of 2020. Our non-GAAP operating income margin for the fourth quarter was 12.6%, compared to non-GAAP operating loss margin of 5.8% in the prior year period. GAAP net income from continuing operations Attributable to controlling interest of Joy in the fourth quarter of 2021 was USD 73.2 million compared to net loss of USD 118.9 million in the same period of 2020. Net income margin was 11% in the fourth quarter of 2021 compared to net loss margin of 20.9% in the corresponding period of 2020. At the group level, we continued to achieve a positive non-GAAP net income from continuing operations attributable to controlling interest of joy in the first quarter, with a non-GAAP net income of USD 98.3 million compared to non-GAAP net loss of USD 22.4 million in the same period of 2020. The group's non-GAAP net income margin was 14.8% in the first quarter of 2021, compared to non-GAAP net loss margin of 3.9% in the same period of 2020. Notably, Beagle also continued to achieve a positive non-GAAP net income, as its non-GAAP net income expanded to $103.5 million in the first quarter with non-GAAP net income margin improved to 18% from non-GAAP net loss margin of 0.4% in the prior year period. Now, turning to our results for the fall year of 2021, our total net revenues increased by 36.5% year-over-year to USD 2.62 billion. Our net loss Attributable to controlling interest of Joy for the four year of 2021 was USD 115.9 million compared to USD 18.7 million in 2020. We have attained the first four year non-GAAP profitability at a group level since we deconsolidated Wawa Live. Our non-GAAP net income, attributable to controlling interest and common shareholders of Joy for the full year of 2021 was USD 108.9 million. Compared to non-GAAP net loss of USD 164 million in 2020, non-GAAP net income margin for the full year of 2021 was 4.2 million. percent compared to non-GAAP net loss margin of 8.6% in 2020. In addition, in accordance with our quarterly dividend plan approved on August 11, 2020 and on November 16, 2020, we will be distributing a dividend of USD 0.51 per ADS for the first quarter of 2021, which is expected to be paid on April 29, 2022, to shareholders of record as of the close of business on April 14, 2022. Next, an update on our execution of the share repurchase program. In September and November 2021, our board of directors had authorized additional share repurchase plans, and which the company may repurchase up to USD 1.2 billion of its shares in total. As of December 31, 2021, the company had repurchased approximately USD 235.7 million of its shares under these programs. This means that for the full year of 2021, we have brought back a cumulative USD 393 million of our shares. These efforts demonstrate our confidence in the company's long-term growth prospects and our sincerity to reward our shareholders for their long-term support of the company. We will continue to actively utilize share repurchase to create value for our shareholders. Going forward, we will continue to further expand our global market reach, cultivate our highly engaged user community, and enhance our high-quality content offerings. Beginning in the second quarter of 2021, we have anticipated some negative impacts on users' online social entertainment activities. from the gradual lift of pandemic-related lockdowns in certain countries. We expect our net revenues for the first quarter of 2022 to be between USD 601 million and USD 616 million, excluding the revenue contribution from Wawa Life in the same period of last year. We currently have limited visibility surrounding the COVID-19 epidemic's long-term impacts and geopolitical uncertainties on our business and the market in which we operate. Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions which are subject to change. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. For the convenience of everyone on the call, please ask one question at a time. If you wish to ask more questions, please rejoin the queue. Also, when asking a question, please state your question in Chinese first, then immediately repeat your question in English. Thank you. Our first question comes from Alex Poon at Morgan Stanley. Please go ahead.

What is the growth trend of the management for 2022? What is the growth trend of the management for 2022? What is the growth trend of the management for 2022? What is the growth trend of the management for 2022? What is the growth trend of the management for 2022? What is the growth trend of the management for 2022? Thanks management for taking my question. My first question is related to our revenue growth outlook in 2022. How are the major countries' performance doing and what's the outlook for 2022? And my second question is regarding our margins. Margin in the last few quarters have been on an uptrend. And from here onwards, any cost savings we can continue to do. And for the YY Core segment, when can we see a break-even point? Thank you very much.

Okay, thank you for your question. I think the first thing is that because the world is still in the era of the pandemic, our public health environment is very complicated. On the one hand, a part of the region has been removed from lockdown, and this has had an impact on users' online social activities. On the other hand, some countries and regions, due to the recurrence of the epidemic, and the uncertainty of economic growth, and the pressure of inflation in many places, so the entire payment capacity of users has also fluctuated. Although the global environment we are facing now is quite complicated, we have achieved 36.5% revenue growth throughout the year. This means that our global multi-market balanced development strategy and diversified social ecology strategy are still quite effective. This also proves that our business is relatively resilient in the global scope. I think looking forward to 2022, I think we will still firmly walk on a globalized, multi-market, balanced development, plus a strategy of diversification of products. We believe that in many key areas, including Europe, North America, the Middle East, the East Pacific and Southeast Asia and other large areas, and the growth and transformation of multi-product lines, including BeagleLive, Likey, Hargo, and other products, we will maintain a relatively stable growth. I think it's worth reminding that the current QE trend in 2022 actually reflects a certain season volatility. We expect business to grow gradually in the second half of 2022. Yes, in terms of key areas, the fourth quarter of Europe and the Pacific, including Japan, South Korea, and Australia, the growth trend in Southeast Asia is actually relatively good. Thank you, Alex, for your question.

As the world enters the post-pandemic area, the market environment that we encounter has become of increased uncertainty and volatility. On the one hand, you see that with multiple countries gradually lifting lockdown bans, there has been negative impact on users' online social entertainment activity. And on the other hand, the resurgence of COVID-19 in certain areas posed increased uncertainty on the potential economic growth. And together with the ongoing high inflation pressure across multiple regions, we do see weakened consumer confidence and capacity, which have negative impact on users' paying behavior. Despite the above-compact macro environment, we have achieved a 36.5% revenue growth for the year 2021, which indicates that our diversified globalization strategy, which focuses on various numbers of different regions across the world, and our diversified growth engines empowered by multiple social entertainment products are effective. enabling our global business to have greater resilience. So looking forward to 2022, we will continue to execute the above-mentioned strategy. We expect to have a resilient and steady top-line growth driven by multiple key regions, including Europe, North America, Middle East, East Pacific, and Southeast Asia, and also by monetization growth across multiple products, including BeagleLife, like Keyhuggle and other products. But we'd like to remind you that the current outlook for our first quarter 2022 do reflect some fluctuations related to seasonality of our business. So we expect our business growth to accelerate gradually in the second half of 2022. So in terms of the latest growth trends for the key regions, we do see promising trends In Europe, East Pacific, including countries like Japan, South Korea, Australia, New Zealand, and also the Southeast Asia region, to be good in Q4. In 2022, we expect our business to continue to be diversified among the above-mentioned regions. Thank you.

Alex, hello. I would like to answer the second question you asked. As David mentioned in the presentation, in 2021, Bigo Segment achieved 7.8% non-GAAP operating power throughout the year. Groups achieved 4.2% non-GAAP operating power throughout the year. This proves that our global business's operating power has officially entered a stage of sustainable growth. In 2022, we hope to balance profits and growth. This means that on the one hand, we will seize the opportunity to continue investing in the global market and continue to improve the impact and strategy of products. On the other hand, we will continue to maintain profit and steadily improve the profit level of our business. Regarding BeagleSegment, we expect that the profit level of BeagleSegment in 2022 will have a chance to further improve at the level of 2021. This is mainly because BeagleLive continues to maintain a relatively stable profit level, while other product lines, such as Leaky, are continuing to shrink. In terms of the specific rate, we expect that with the growth of multiple product lines, the growth of transformation, and the improvement of overall operating efficiency, various rates will have a further drop in opportunity. Regarding the other business models of the group, Thank you, and this is Alex Liu. I will take your second question. As David just mentioned, we proved the profitability of our global business by achieving a 7.8% non-GAAP net profit

for Beagle segment for the full year, and also a 4.2% non-GAAP net profit margin for the whole group in 2021. So this means that we have officially entered into a sustainable growth stage. In 2022, we want to balance growth and profit, and this means that on the one hand, we will seize the opportunity, continue to invest and explore the global market, and continue to increase the influence and market share of our products. And on the other hand, we expect to remain profitable and steadily improve the profitability level of our business. So specifically for Beagle's segment, on top of the non-GAAP net margin that we achieved in the year of 21, we expect to continue to steadily improve Beagle's non-GAAP profitability for the full year in the year 22. And this is based on the assumption that BeagleLive continues to maintain a relatively stable level of operating profitability, while the losses of other product lines, such as Leike, are continuing to narrow. In terms of the cost and expense margins, with the increased monetization across multiple products and the improvement of enhanced operational efficiency, we believe that cost savings could happen across various expense items. And for the other segment, we have successfully narrowed its full-year non-GAAP loss. by 35% in the year 21. In 22, as the monetization of HAGO and also other products continue to pick up, we expect that the non-GAAP net losses of this segment to be further narrowed in the year of 22. Thank you. Next question.

Our next question comes from Thomas Chong at Jefferies. Please go ahead.

Good morning. Thank you for accepting my question. I mainly have two questions. The first question is about the current changes in the competitive pattern of overseas markets. In addition, how should we understand the seasonality of different businesses? Can you share this idea? The second question is about the current progress of YY Life. In terms of approval, can you share the latest situation? If the approval has not come out yet, what solutions will the company have? Thanks, management, for taking my questions. My first question is about the competitive landscape in overseas market. How should we envision the changes in this year and how should we think about the seasonality? And my second question is about the wildlife transaction. Can management share about the progress as well as any contingency plan or any strategies that can be shared? Thank you.

Okay, thank you for your question. And then I think about the competitive pattern, I probably shared my point of view in these few seasons. That is to say, in 2021, we actually used a year to make the company lose and win, and then the business entered a positive cycle. And then in the current more complicated public environment, I think it allows our business to be more resilient, and then in our already global base and local operation capabilities, and then continue to get this competitive advantage. I think that Niu Kui Wei Ying mainly means that we have more time and space to think. We can use our long-term vision to develop and plan our business. I think the first thing is that in the global social and entertainment market, we think there is still a very large market space. We believe that with the surge of cash flow and the growth model of documents, We have a better opportunity to grasp the opportunity to grow and further improve the diversification and market competitiveness of our products. Then, regarding the factors of season, I think that because of the outbreak of the epidemic and the constant repetition, the seasonal rhythm of our long-term is actually a certain disturbance. Yes, according to the trend of the seasonal trend of our previous business, the first half of the year is generally the season. Thank you, Thomas. Regarding your first question on the competitive landscape, I've shared my views multiple times in our previous earnings calls as well.

So I've just mentioned that our global business turned profitable in the year 21, and we have officially entered into a sustainable growth stage. So this means that under the current complex, increasingly complex macro environment, this makes our business more resilient and allows us to gain additional competitive advantages on top of our already existing extensive global business presence and also our proven global localized operational capacity. So turning losses into profits means that we have more space and time to think and plan our business from a longer term development perspective. As we have said before, there is still a lot of potential for the global social entertainment market. We believe that with the support of our abundant cash flow, And also with our healthy growth model, we will be better positioned to seize market opportunity and further increase the market share and influence of our multiple products. And regarding our business seasonality, we have to admit that the outbreak and recurrence of the pandemic has actually disrupted the normal pattern from time to time. And according to our limited observation of our business trends in the past, the first half of the year is usually a lower season, and business growth usually accelerates in the second half of the year. The current outlook for our first quarter 2022 reflects such seasonality fluctuations, and we expect our business growth to accelerate gradually in the second half of 2022. 另外一个就是您问到的关于这个YY Live的这个交易的问题呢, And regarding your second question about the sale of YY Life, the deal is still ongoing, and if there is any update, further information will be disclosed when then acquired by applicable law. Thank you. Next question, please.

Our next question comes from Yuwen Zeng at China Renaissance. Please go ahead.

Good morning, Yuwen Zeng. I have two questions for you. The first one is about LIKEY. I would like to ask you about the pace of our investment in the second year. How do we look forward to LIKEY's transformation, including the loss? Do you have any expectations for the user trend for the second year? Thank you, Benjamin, for taking my question. So I have a couple of questions. Firstly, regarding liking, so what's our plan for the user acquisition phase this year? And additionally, what's our expectation on the liking monetization, loss controlling, and also user trend? Secondly, can you share more about the knowledge that you may be able to work at a target for this year? Thank you.

Okay, thank you for your question. Regarding Likey, I think it's like this. In 2021, we took the initiative to adjust Likey's investment strategy, and put the focus on the mining and cultivation of content creators. So Likey indeed underwent user-scale fluctuations. After several seasons of adjustment, we believe Likey has achieved several key results. In the whole year's live income, the annual growth was nearly 100%. The annual loss was greatly reduced, about 67%. So the growth model of the entire product has also entered a relatively healthy state. So in 2022, I think LIKEY will continue to focus on the exploration and training of content creators. The good atmosphere between active content interaction communities and users is the key to the continued growth of Likey and the future trend of turning user growth. In terms of transformation, we will continue to improve the penetration rate and transformation efficiency of live streaming in 2022 and continue to maintain stable transformation growth. In terms of investment, we will observe the performance of Likey in multiple core markets, mainly including the Middle East and Southeast Asian markets. Regarding your first question about LIKEY, as I just mentioned in the preparing marks in the year 2021, we took some proactive changes.

to adjust Leike's marketing strategy and focus on the identification and cultivation of content creators. As a result, although Leike's MAU did suffer some fluctuation, after several quarters of executing the marketing adjustment, Leike has also achieved several key results. In the past year, we see that Leike's live streaming revenue has increased by nearly 100%. and its operating loss for the full year was significantly narrowed by 67% compared to the year of 2020, meaning that the product's overall growth model has become much more healthier. So for 2022, we believe that Blackie will continue to invest more resources into identifying and nurturing the content creators. We believe that a vibrant content community and the lively interaction between the creators and the fans are fundamental to sustaining Leike's monetization growth and also reversing Leike's user downward trend in the future. And in terms of monetization, Leike will continue to increase the penetration rate of live streaming and improve its monetization efficiency in the year 22. So we expect Leike to maintain steady monetization growth in the year 22 in terms of its marketing strategy will continue to observe the performance of LIKEY in multiple core markets, including the Middle East and Southeast Asia, and its user engagement level retention and also content progress in these markets. At the right time, we might consider re-increasing investment on its user acquisition, but we still expect LIKEY's operating loss for the full year to be further narrowed, and we'll have the opportunity to be one step closer towards self-sustainability.

Likey's new super like, super follow, and other functions are still relatively small. The main contribution of this stage is the support of KOL. As mentioned earlier, the growth of advertising revenue and the increase in content ecosystem are closely related to the expansion of user size. We will prioritize the focus on the content and user experience of our products, and at the same time steadily promote diversified transformation solutions.

And regarding your second question about our non-live streaming revenue, our non-live streaming revenue in year 21 increased by 39% throughout the year, accounting for 5.4% of our total revenue, mainly from our advertising and also membership subscription revenues. So monetization contribution from the recently launched features such as LikeEase, SuperLike, and SuperFollow are still very, very small as their primary focus at this stage is still to provide additional support to our KOL pool. So as mentioned before in the previous quarters, the growth of our advertising revenue is closely related to our content pool and also the scale of our user base. So at this stage, we will prioritize the cultivation of our content pool and our product experience and also steadily advancing our diversified monetization plan. I believe that the newly introduced, the latest product features have demonstrated our efforts towards this direction. Thank you.

Thank you.

And that's the end of our Q&A.

Thank you, management. I'll hand back to you for closing comments.

So thank you for joining our call. We look forward to speaking with everyone next quarter. Thank you.