JOYY Inc.

And the conference over to your host today, Jane Shear, the company's Senior Manager of Investor Relations. Please go ahead, Jane.

Thank you, Operator. Hello, everyone. Welcome to Joy's fourth quarter 2022 earnings conference call. Joining us today are Mr. David Shillingly and CEO of Joy, Ms. Ting Li, 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 would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties, that may cause actual results to differ in expectations. For detailed discussions of the risks and uncertainties, please refer to our latest annual report on Form 20F and other documents filed with the FCC. 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 Schillingly. Please go ahead, sir.

Hello, everyone. Welcome to our first quarter 2022 earnings call. Let me start with an overview of our fourth quarter and results. In the fourth quarter, we recorded $504.9 million in revenues, including $476.5 million of revenue from Beagle, and generated $50 million in non-GAAP net profit include 57.7 million in non-GAAP net profit from Beagle. For the full year of 2022, we achieved 2.4 billion in revenues at the group level, about a billion of which come from Beagle. We further improved our non-GAAP profitability at the group level as we earned a non-GAAP net profit of $199.3 million with a non-GAAP net margin of 8.3%. The Spiegel segment recorded $288 million in non-GAAP net profits with a non-GAAP net margin of 14.4%. 2022 marked a year of uncertainty of multinational companies. As we continue to be impacted by our economy headwinds, the combination of post-COVID normalization, high inflation, and the strong U.S. dollar created a downward pressure on our users' online entertainment spending and top-line growth. Despite these short-term challenges, we've taken actions to focus on the cultivation of our user community, improve content quality, deepen engagement on our various products, and pursue sustainable high-quality growth by centering on the factors that we could control and by our strong execution capabilities, our efforts yield significant results. First, we continued our path to sustainable profitability by generating 199.3 million in non-GAAP net profit at the group level of 2022. Thanks to our continuous cost optimization efforts and improved operational efficiency, this represents 83% year-over-year growth in our non-GAAP net profits and the second consecutive year of positive non-GAAP net profits at the group level since our the consolation of YY Live. Second, we witnessed an accelerating in user growth of BeagleLive, as its MAU grew by 40.3% year-over-year in the first quarter of 2022, up from 11.9% in the same year last year. Such acceleration was noteworthy, as it was achieved against the backdrop of post-COVID normalization and during a period of more disciplined marketing spending. In highlights of bigger lives improved user acquisition capabilities. which are driven by our continuous cultivation of its content offerings and social experience. Heading into 2023, visibility of the global macroelement remains limited, and it's possible that micro-Halloween may linger for another one or two quarters. However, this short-term valid utilities will not reverse the secure trends of using pivoting and increasing amount of their time and their spending from offline to online. As we remain committed to enrich our users' lives and facilitating their online activities through our products and services, We see a market with massive growth potential. As such, we need to strike a strategic balance between navigating short-term micro uncertainties and actively pursuing long-term growth. In the current micro uncertainties, we will remain We will retain our focus on the quality and profitability of our entertainment business in the near term. This means we will continue to do better with less. We will maintain discipline in our marketing spending, further refine our localized operations in order to further improve our content and social experience. and ultimately boost our product's organic growth. Our amazing efforts will continue as we strive to maintain steady, high-quality growth of both our social industry and its operating cash flow. In the meantime, we will continue to prioritize our resources and investments into high potential business that align with our long-term strategies and which will shape our core capabilities. We are confident that we can remain self-sufficient in our cash flows, reinforce our strong financial position, and act swiftly to size long-term growth opportunities as they raise. Now, let's take a closer look at our products. We will start with BeagleLine. In the first quarter, BeagleLine sustained its strong user growth trajectory thanks to effective notions and increased user acquisition efficiency. During the quarter, Bigelow Live's MAU increased by 18.3% year-over-year to 36.8 million. Notably, MAUs in Southeast Asia and other emerging markets increased by 21.6% year-over-year. During the 2022 World Cup, BeagleLives rolled out a one-month match designed to better engage the football players and fans around the globe. The program highlights BeagleLives' diverse localized content and resonates with local communities. In November, Beagle Live invited well-known professional footballers such as England's Kieran Trapper and Northland's Wesley Snager to join its live interviews. A group of local football creators were selected by Beagle Live as World Cup ambassadors to host live community commentary sessions. We also established discussion groups and chat rooms which support up to 500 concurrent speakers who encourage to create and share original content. These efforts successfully hosted an engaging community experience on Beagle Live during the World Cup. In addition to connecting users, we remained fully dedicated to create value for our creators. In January, we hosted our first annual flagship event, the Beagle Awards Gala 2023 at Singapore's historical Capital Theatre. During the event, Big O' Life honored over 270 Big O' Life creators and about 100 Big O' Life families for their contribution to the community in the past year. The gala also featured activity performance from top talents from across the globe. with approximately 4 million viewers into the world. Further boosting our creatures' exposure on a worldwide stage, we will continue to recognize and reward the contribution of our creatures in making our platform what it is today, and the bigger award was just one season of our efforts to incubate talent, building communities, and promote in and in diversity on our platform. In the first quarter, Big Blue Line conducted a comprehensive upgrade of its live streaming tools and room. and introduced a number of new interactive features. This improved the effectiveness of live session recommendation and the user go-live experience. On a sequential basis, the number of live streamers on WeGoLive increased by 3.3%, and the average during per live session increased by 4.5% in the first quarter. Turning to BeagleLive's monetization, during the first quarter, monetization continued to be negatively impacted by microhigh winds. In the Middle East, we were also negatively impacted as user spending was diverted to offline entertainment activities during the World Cup. Nervously, the number of global paying users was stabilized, and the number of paying users in Europe and North America have assumed sequential growth for two consecutive quarters. Looking aside, 2023, we aim to further improve BeagleLive's penetration rate and expand its services in multiple regions around the world, including Europe, America, and the Middle East, the Eastern Pacific, and Southeast Asia. Improvement in user acquisition efficiency and user engagement will remain our priority as we continue to innovate BeagleLive's content and user interaction via product innovation and innovative local operations. Furthermore, BeagleLive will advance its efforts to boost paying users and monetization growth by optimizing users' paying experience in live streaming sessions and broadcasts. Next, let's turn to Leike. Following a year of proactive optimization, Leike's operation loss in 2022 was in line with our expectation, narrowing by 83% year-over-year. More importantly, Leike hit another milestone by achieving brief even in the second half of 2022. Following the initial launch of its Loop feature, Likey has expanded its efforts to collaborate with companies from a variety of industry verticals. In order to further cultivate its interest-based communities, take the gaming community as an example, which is one of the largest interest groups on Likey. with various popular games include Compass, Loz Mobile, and PUBG Mobile to offer gamers, game lovers a shared space to interact with each other. In December 2022, Nike become a official streaming partners of the Game Awards 2022, an annual awards ceremony honoring achievements in the video game industry. Millions of viewers from all over the world watched the event live and interacted with each other on Lackey's platform. Boosted by Loop and the Likert's refined content offerings, we saw an increase in user interaction quality and units on Likert. In the fourth quarter, Likert's average user time spent rose by 70.4% and 30-day user retention improved by 6.3% over the previous quarter. Looking ahead, as we enter into 2023, we intend to further enhance lightest monetization efficiency by diversified monetization models and achieve constant profitability. We will continue to prioritize creator support. facilitate social interactions among our users and further refine our local centered on interest-based communities. As we gradually improve Likert's operation cash flow, organic growth capabilities, and user signals, we believe Likert's user base will gradually stabilized and user growth will resume in certain regions over time. Next, on Hargo. During the first quarter, Hargo's operation loss narrowed substantially over the previous quarter. In product status, we mentioned in Hargo's positioning upgrade about a year ago, substantially Hago has transitioned away from being an interactive platform primarily focused on casual games. Now, it is a multi-user social platform where users can enjoy engaging interactions with a much more diverse range of groups. Following the upgrade, our user socializing patterns on HaGo become clear. First, users feel apprehensive by participating in multiplayer casual games. Then, after a few rounds of games, some users may choose to engage further by joining one of HaGo's social channels. such as video and audio multiplayer chat rooms, and a hub of space where they can interact with each other using customized 3D avatars. When the level of interaction reaches a certain level, users may choose to join the same group of families as their like-minded friends. engage with each other on a much more frequent basis. Toggle has enhanced its monetization efficiency throughout the process by developing a variety of monetization features, such as pay-to-play games, advertisements, live streaming, and virtual items. During the fourth quarter, we optimized our recommendation algorithm to help our users locate social rooms. This initiative drove sequential increase in the social channels next day user retention rate by 1.5% and user time spent by 5.3%. We also We also introduced a new 3D time screen and launched a series of optimizations in a beginner's guide to hardware space. As a result, new user time spent on hardware space improved by 6.5%, and revenues from virtual items increased by 13.4%. over the previous quarter. In 2023, in alignment with our strategy of LIFE, we intend to further enhance HAGO's monetization efficiency. While maintaining our efforts to achieve consistent profitability at the product level, HAGO will optimize its filters throughout its users' socializing patterns and better facilitate user interactions. Such as, we expect to further improve HAGO's user retention and organic growth capabilities, which are crucial to gradual stabilization and eventual recovery of user growth over time. Finally, some updates on capital returns. During the fourth quarter, we bounced back an additional 31 points of our shares. In the full year of 2022, we have repurchased a total of 138.1 million of shares and paid cash dividends in an aggregate amount of $145.9 million. We are confident in our long-term prospects and will continue to actively utilize the remaining share purchase program to reward the long-term support of our shareholders. To conclude, effective strategy planning and strong execution goals are our solid performance in 2020 despite certain micro-events. Looking ahead, we remain committed to enrich our users' lives and facilities and improving their online activities through our diverse range of innovative products and services. With our resilient business model, strong financial position, and sharpened focus on building our core capabilities, we are well positioned to weather short-term macro headwinds while raising long-term growth opportunities and creating lasting value for shareholders?

No. Alex, yeah.

Thanks, David.

No, I'll hand over to Alex.

Thanks, David. Hello, everyone. Now let me go through the details of our financial results. Please note that the financial information and the non-GAAP financial information disclosed in our earnings press release is presented on a pricing basis, unless otherwise specifically stated. Our total net revenues for the quarter was US dollar $604.9 million. compared to US$663.7 million in the same period of 2021, primarily due to macroeconomic uncertainties and unfavorable exchange rates, which negatively affect paying users' sentiment. During the quarter, we have continued to optimize the cost structure and enhanced operating efficiency at the and on multiple product fronts. Cost of revenues for the quarter decreased to just $392.6 million, among which and the company costs decreased to just $247.5 million. Gross profit was $212.3 million in the quarter, with our gross margin improved to 5.1% from 33.7% in the same period of 2021. Primarily due to optimization of revenue sharing cost and other operational costs, Other operating expenses for the quarter were US dollar $231.2 million, increased from US dollar $162 million in the same period of 2021. Among the operating expenses, sales and marketing expenses decreased to US dollar $102 million from US dollar $112.2 million. due to disciplined spending on user acquisition. R&D expenses increased to U.S. dollar 73.6 million from U.S. dollar 29.3 million in the corresponding period of 2021, primarily due to increased R&D personal related expenses of ego and absent consolidation of supply. Our gap operating loss for the quarter was just $14.2 million, compared to operating income, just $60.6 million period of 2021. Our non-gap operating income for the quarter, which excludes SPC expenses, amortization of intangible assets from business, as well as impairment of goodwill and investments. And again, on the overall of subsidiaries and business, was US dollar 0.8 million in this quarter, compared to US dollar 83.5 million in the same period of 2021. Our non-GAAP operating income margin for the quarter was 4.6%, compared to 12.6% in the prior year period. Gas net loss from continuing operations attributable to controlling interest of joint in the quarter was US dollar $377.5 million compared to net income of US dollar $73.2 million in the same period of 2021. primarily due to an impairment loss of US dollar $417.2 million from an active measure investment recurring the quarter. The impairment loss is excluded from our non-GAAP calculations as it's not reflected of the underlying trend in our current operating performance. Non-GAAP net income from continuing operations attributable to controlling interest of joint in the quarter was US$50 million, $98.3 million in the same period of 2021. The group's non-GAAP net income margin was 8.3% in the quarter, compared to 14.8% in the same period of 2021. Together with our improving profitability, we have maintained a strong operating cash flow as well. For the first quarter of 2022, we booked net cash inflows from operating activities of US$75.6 million. We remain a healthy balance sheet with a strong cash provision of U.S. dollar 4.29 billion as of December 31 of 2022. Now, I would like to briefly walk through the four-year financial highlights. Our total net revenues for the four-year were U.S. dollar 2,411.5 million compared to U.S. dollar 2,619.1 million in 2021. We have sustained our path to sustainable profitability at the group level for the second consecutive year. Our non-GAAP net income, attributable to Controlled Interest and Common Shareholders of Joy for the fall year of 2022, was $199.3 million. up by 83% from U.S. dollar, $108.9 million in 2021. Non-GAAP net income margin for the fall year of 2022 was 8.3%, up from 4.2% in 2020. Notably, Vigo's non-GAAP net income expanded to $288 million in 2022, with its non-GAAP net income margin improved to 14.4% from 7.8% in the prior year. Importantly, we have continued to enhance returns to shareholders through dividends and share repurchase. In the full year of 2020, we have in total repurchased approximately US dollar $108.1 million of our shares and paid cash dividends in an aggregate amount of U.S. dollar, 145.9 million, which altogether represents 142.5 percent of our non-GAAP net income. As of the end of 2022, we still have around U.S. dollar 800 million and utilized quarter for 2021 share repurchase program. Given our current cash pricing, we will continue to balance between keeping sufficient cash to invest in building our longer and enhancing return for our shareholders. For our business outlook, We expect our net revenues for the first quarter of 2023 to be between US dollar $152 million and US dollar $570 million. Let me wrap up with some final thoughts. In 2022, despite the fact that global macro revenue growth, by taking decisive actions to focus on high-quality growth. We have successfully enhanced our operational efficiency and resilience of our business, as well as the execution capabilities of our team. As we head into 2023, given the low visibility around the global macro, We will remain adapted to the macro environment and prioritize our investment in building our core capabilities. We remain confident in the long-term potentials of our global business, and we will actively pursue long-term growth opportunities and generate sustainable shareholder value. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press... If you're on a speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. Your first question comes from Thomas Chong with Jefferies. Please go ahead.

早上好,謝謝管理層介紹我的提問。 我有兩個問題。 第一個是關於BeagleLife的。 管理層的Q4如果是分區域的表現, Thanks, management, for taking my questions. I have two questions. The first question is about BeGo Live. Can you share about how the performance by geographies in Q4 and how should we think about the trend in 2023 among different geographies? And my second question is about 2023 revenue trend and when we should think about the infraction point. Thank you.

Thank you for your question. I think the global income of Q4 and BeagleLive is still affected by the global certainty. However, there are still some differences in the trend of each region. Among them, the growth of European, American, and Southeast Asia, which is benefited from our annual activities and the movement of the creators, has begun to recover. Europe has actually gained a two-digit growth. In the Middle East region, due to the launch of the World Cup, some of the local users' time and consumption went offline, resulting in some negative effects. After the World Cup ended, we saw the online consumption of the Middle East region start to recover. Looking back at the entire year of 2002, although there were uncertainties in the global market, there were still some markets that were in danger. year-on-year growth. For example, Australia, New Zealand, the Philippines, the UK, and Italy have all gained growth. Looking forward to 2023, we believe that the regional trend will follow the growth of the regional economy, and there will be some changes in the local market development stage. Overall, we are still We will continue to adhere to global military development. In the global market operation, it is beneficial to us to mobilize global resources and local resources to invest in a more efficient market. In order to achieve a higher ROI, we will continue to focus on Southeast Asia, the Middle East, and the Central Pacific. These are key markets.

Thank you, Thomas, for your question. So in Q4, we believe that real-life monetization was still negatively affected by the global macro uncertainties. Notice the different recovery trends by region. For example, it's seen Europe, North America, and Southeast Asia resume sequential growth, with Europe even recorded a double-digit growth queue-on-queue. We believe that was mainly due to our active operational year-end events in Q4, which promoted creator activity in the region. The Middle East region underperformed as the hosting of the World Cup diverted part of users' time spent time and spending offline during the period. But we saw paying activities in the region began to recover immediately after the event was concluded. So if we look back at the four-year performance across the different markets, some markets turned out to be more resilient against the macro headwinds and achieved positive year-over-year growth, such as Australia, New Zealand, the Philippines, the UK, Italy, et cetera. So if we look ahead for the year of 23, we believe that the recovery trends across different regions should be highly related to their economic growth and the level of development of our operations in the local region. Overall speaking, we intend to stick to our globalization strategy with a diversified exposure across the various. We will remain operational flexibility as we can flexibly prioritize, allocate resources globally and locally into markets that are more efficient to achieve a higher ROI. We will continue to focus on key markets such as Europe, America, Southeast Asia, the Middle East, and the Eastern Pacific region, and we will closely track market changes and remain flexible and adaptive in our operational strategy. Thank you.

Yes, I think in such an environment, we need to control the risk of short-term. On the other hand, we also need to ensure that the operating resources of the company can be well prepared, and ensure that the operating strategy is flexible enough. When the same-sex economy recovers or the consumer's negative mood changes, we can seize the opportunity. According to the seasonal law of the previous year, Q1 is actually a period. Bigelow's revenue should have a chance to gradually stabilize in the second quarter and resume growth in the second half of the year. Other pieces should also resume growth in the second quarter. In general, we think that 2023 should be a year of gradual recovery, especially in the second half of the year. We will pay close attention to global environmental change and flexible adjustment of our strategy.

And to answer your second question, we believe that the visibility of the global macro environment remains limited and there has been news coming out recently as well. So we believe that it is possible that macro headwinds may affect us for another one or two quarters. Given the current uncertainties, we believe that we will need to control short-term risks and at the same time, Having certain degree of operational flexibility and making sure that we are fully prepared to swiftly take action and capture growth opportunities, especially when the macro or user paying sentiment takes a positive turn. And according to our previous seasonality experience, usually Q1 is a quieter season. with less marketing activities. And we believe BGO's top line should gradually stabilize in Q2 and resume sequential and year-over-year growth in the second half of the year. Similarly, we believe that the other segments should also resume sequential growth in Q2. So overall speaking, we believe that the year 23 should be a year of recovery in top line growth. especially in the second half, and we will continue to closely track the evolving market dynamics and flexibly adjust our operating strategies. Thank you. Next question, please.

Thank you. Your next question comes from Thomas Shen with NomeMirror. Please go ahead.

Thank you for accepting my question. I have two questions. First, I would like to ask about the next profit trend of the company's various business lines. I would like to ask about the overall outlook of the company's cost and profit in 2023. I will translate it myself. Thanks, management, for taking my question. I have two questions. The first one is, could you share the margin trends for our key segments, such as Beagle and the rest of business down the road? The second question is if I could mention and share more color on the expenses and the margins for the entire company in the year of 2023. Thank you.

Okay, thank you for your question. I'm Alex. Let me answer it. Looking back at 2002, our profits were not as good as expected. The non-GAAP operating profit rate increased by four points. from 2.8% to 6.8%. The non-GAAP operating profit rate of the Beagle version has increased by 5.8 points, from 8.6% to 14.4%. This is mainly due to the increase in overall operating efficiency of the group and the improvement of profit at multiple product line levels. If you look at the Beagle version alone, Beagle's profit has increased by 3.7 points, from 33.8% to 37.4%, including content, payment channels, and operating efficiency. In terms of product, BeagleLive's operating profit rate is generally stable. Lucky's loss size has narrowed down to 87%, The other products under the board are also the first time to turn losses into profits, and achieved a profit of a year. In the next two or three years, we will still pay attention to the quality of growth for the Beagle board. At the same time, we also hope that there will be enough flexibility in the operation strategy. When the payment is paid, we can seek a bigger and faster growth. Therefore, in the next two or three years, Thank you.

Thank you for your question. This is Alex. I will take your question on the profitability and margin outlook. So looking at the full year of 22, our profits were better than expected. The group achieved a non-GAAP operating margin of 6.8%, up by 4 percentage points. And BeagleSegment achieved a non-GAAP OP margin of 14.4%. up by 5.8 percentage points from 8.6% last year. So this was mainly attributed to our enhanced operating efficiency at group level and also improved profitability at almost all product levels. And if we take a closer look at Beagle's segment for the full year of 22, Beagle's segment's gross margin was improved by 3.7 percentage points from 33.8% to 37.4% last year. And we see cost optimization happen at multiple cost and expense items, including our accounting cost, payment channel expenses, and other operating expenses as well. And at product level, BeagleLife has maintained relatively stable when it comes to operating margin. Nike has continued to narrow its operating loss by 87% year-over-year. And other products under the Beagle segment also reversed its loss-making trend and began to make a profit in the full year. So looking forward to the year 23 for Beagle segment, we will still prioritize high-quality growth in the near term given the macro uncertainties. But at the same time, we will ensure sufficient operational flexibility when planning our resources allocations so as to swiftly take action and capture larger growth opportunities when user paying sentiment take a positive turn. Therefore, for the full year of 23, on a constant currency basis, we expect the non-GAAP operating profit margin for Beagle segment to remain roughly stable when compared to the level of 22, retaining certain resources for potential growth. And overall speaking, at group level, we intend to strike a strategic balance between navigating short-term uncertainties and actively pursue long-term growth. We expect to remain profitable and self-sufficient in our operating cash flow in the year 23. Thank you.

Next question, please. Thank you. Your next question comes from Jasmine Wang with Credit Suisse. Please go ahead.

感谢管理层接受我的提问。 我的问题是关于直播付费的意愿。 我们看见Beagle Life和四季度付费用户数是有增加的, 但同时刚才管理层也讲到就是全球宏观的能见度还是有限的。 我们是如何展望2023年付费用户的数量活跃度以及ARPPU的趋势? 那我们什么时候能够看到ARPPU的这个拐点? 我翻译一下。 Thanks, management, for taking my question. My question is about user willingness. Management mentioned that global macro visibility remains limited. What is your view on the trend of paying user number, engagement, and ARPPU this year? Thank you.

Thank you. In the Q3 of 2022, the market is slowly stabilizing. Europe and the United States have had two consecutive seasons of growth. So we believe that the transformation has a sign of gradual stabilizing. From the stage of product development, the penetration rate and payment ratio of our product users are relatively low, and there is a considerable room for improvement. In 2023, we will focus on the growth of users and the transformation of paid users. Whether it is users, Hi, thank you for your question. This is David. I will take your question on the paying user and our full trend.

So based on our observations in the past few quarters, we've seen that global macroeconomic uncertainties have actively affected user-paying sentiment, as implied in the recent trend of our paying users and our pool. However, we did have observed that the number of paying users have gradually stabilized since Q3 in the year 22. and that the paying users in Europe and North America have resumed sequential growth for two consecutive quarters. We believe this could be an early sign of recovery for our monetization. If we look at the phase of development and also from a mid- to long-term perspective, we believe our user penetration rate and also the paying ratio of our products are still relatively low. with empty room for further improvement. So in the year 23, we will still focus on our user growth and also the conversion of paying users. We'll continue to cultivate our products and our user community and improve user satisfaction, which we believe are the fundamental driver for user, paying user, and also our pool growth in the long term. And we don't believe that the recent trends will change our long-term product strategy. Thank you. Next question, please.

Thank you. Your next question comes from Yi-Wen Zhang with China Renaissance. Please go ahead.

Good morning, Ms. Guan. Thank you for your question. I have a question. I would like to ask about the trend of our user growth in the next two or three years. So my question is regarding our, you know, our view of the user growth projection for 2023. What's our view on the like and how your user trend and monetization, you know, update? Thanks. 我没太听清楚,您能再稍微重复一下吗? 好的,我这边可能是想问一下公司对于二三年用户增长的一个趋势怎么看,是那个Lite跟Huggle那边的一个用户趋势跟一个便携的一个情况是怎么样的?

Oh, yes, we are now, in fact, in the previous stage, LiteKey and Hargo are mainly the main goals of ROI, the main goal of the entire business, that is, balance. So, like LiteKey, in the second half of last year, it has completed the break-even. Yes, I think this year, we will definitely work hard to promote the growth of users under the premise of no loss.

Thank you, Yuben. This is David. Regarding our outlook for Leike and HAGO, both products have prioritized and also considered break-even as a key operating priority in the year 22, and we've seen positive results come out from both products as well, especially with Leike achieving break-even in the second half of year 22. We believe that given that the product is now approaching break even, we believe that the product will be able to explore potential user recovery on the basis of consistent profitability.

Thank you. That's all the time we have for our question and answer session today. I'll now hand back to management for closing remarks.

Thank you so much for your time, and we look forward to seeing everyone next quarter. Thank you.

That does conclude our conference for today. Thank you for participating. You may now disconnect.