JOYY Inc.

Ladies and gentlemen, thank you for standing by and welcome to Joy, Inc.' 's fourth quarter 2024 earnings call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. I would now like to hand 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 2024 earnings conference call. Joining us today are Ms. Ting Lee, Chairperson and CEO of Joy, and Mr. Alex Liu, the Vice President of Finance. For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A session. The financial results and webcasts of this conference call are available at ir.joy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I'd like to remind you that we may make forward-looking statements, which are inherently subject to risk uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risk uncertainties, please refer to our latest annual report on Form 20F and other documents filed with the SEC. We will also discuss certain non-GAAP financial measures. They are included as additional clarifying items to aid investors in further understanding the company's performance and the impact that these items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. you may find a reconciliation of differences between GAAP and non-GAAP financial measures in our earnings release. 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 chairperson and CEO, Ms. Ting Li. Please go ahead, Ms.

Li. Hello, everyone. I'm Li Ting. Welcome to our fourth quarter 2024 earnings call. As we recently announced on February 25, 2025, we successfully completed the sale of our live streaming business for Mainland China Wi-Fi Live. I believe the full closing of this transaction makes the beginning of a new chapter for Joy's corporate development. As the fourth step, we are excited to announce that, effective from March 34th, our NASDAQ ticker symbol will be changed from YY to Joy. This aligns with our strategic vision and our globalization strategy entering into the new era. Over the past few years, Joy's position as a global technology company has solidly failed thanks to our global growth strategy. We have focused our resources and attention on markets across the world, with an emphasis on developed countries that demonstrate higher monetization efficiency and ROI. This strategic approach has yielded strong results. In 2024, our global market revenue, excluding mainland China, accounted for 89.6% of our total revenue. Notably, developed countries saw a year-over-year revenue increase of 24.6%, boosting their share of the group's revenue to 53.9%. Moving forward, we will continue to deepen our penetration in key markets to build on this success. Improved global infrastructure, a diversified product portfolio, and localized operations will build our brand influence and reinforce our status as a global technology company. As we drive our development operational efficiency, will remain a key forecast. We will pursue a balance between growth and efficiency, driving high-quality top-line growth while maintaining profitability and a positive cash flow. AI remains a key component of our strategy. The rapid advancement of AI has brought both transformative changes and new opportunities. With our accumulated proprietary data and in-house algorithm team, we are well positioned to capitalize on these new trends. AI will empower our business by enhancing product development. optimizing data analysis, and improving our customer service. These advancements will directly improve both our operational efficiency and our users' experience, taking our global operations to new heights. As AI usage rapidly increases, we also recognize that people will seek more emotional, interpersonal connections. Providing users with meaningful connections and they can truly value will be essential to long-term success for social media platforms in the AI age. This notion will inform our long-term strategic direction. Empowered by AI, we can build more comprehensive user profiles, which will ultimately improve content recommendation and matching among our users. We will continue to drive product optimization and operational innovation, leveraging AI in combination with the personal touch of talented creators on our platform to provide users with emotionally resonant connections and interactive experiences. As we begin this important new chapter, we also want to reform that as a leading global technology company, Joy will hold itself to higher standard of responsibility towards our users and community. As a guardian of global community of 263.1 million users, we remain committed to strictly adhere to all regulatory requirements while integrating social responsibility and sustainability into our global operations. we will continue to update our community guidelines and enhance our technological capabilities to create a safe platform for our users. While actively collaborating with industry partners to promote industry standards that support sustainable, responsible growth, Now let's review our overall performance for the fourth quarter and the full year. In the fourth quarter, our group revenue reached $549.4 million, achieving a non-GAAP net profit of $96.1 million, up 57.1% quarter-over-quarter. Our core business segment, Bigel, achieved revenues to $480 million. Bigel's non-GAAP operating profit reached $81 million, up 11.2% quarter over quarter. For the full year 2024, our group revenue was $2.24 billion. The Bigel segment achieved revenues of $1.99 billion, a year-over-year increase of 3.3%. Thanks to strong operational execution throughout 2024, we made progress across multiple core objectives. We constantly enhanced our localized operations worldwide. delivering steady growth and group profitability. For the full year 2024, the group achieved a non-GAAP operating profit of $136 million, a year-over-year increase of 4.2%, and a non-GAAP net profit of $298.5 million, a year-over-year increase of 2%, The Beagle segment for a year operating profit reached $286.3 million. Exceeding our previous expectations, Beagle's non-GAAP net profit reached $314.6 million. A year-over-year increase of 4.2%. This profit growth was achieved despite significant adjustments to our audio live streaming products in non-com markets in 2024, which had a dozen million negative impact on our bottom line. The upward trend in our operating profit in spite of these adjustments indicated that our core business profitability has improved substantially. Meanwhile, the group's non-life-dreaming revenue made high growth throughout the year. This primarily included Big O's advertising and all other segments' SaaS revenue. For the fall year 2024, the group's non-life-dreaming revenue increased 55.9% year-over-year to $449.8 million, according for 20.1% of total group revenue, an increase of 7.4% compared to 2023. In 2025, we expect that the group's non-livestreaming revenue will maintain double-digit growth with its proportion of group revenue increasing indefinitely. We expect this will provide momentum for the recovery of our revenue growth at the group level. Meanwhile, we expect the economic of our non-livestreaming business to be meaningfully improved, given enhanced monetization and disciplined spending in 2025. As we set the stage for ongoing growth, shareholders' returns remain a high priority for management. In 2024, we repurchased for a total of $309.2 million, representing 15.1% of our total outstanding shares as of the end last year. As of December 31, 2024, our net cash position stood at $3.3 billion. We believe the current market valuation significantly undervalues our company, especially when considering our profitable live streaming business and rapidly growing non-live streaming business. We are happy to announce that our board has approved a quarterly cash dividend program for the following three years. The aggregate amount of the cash dividend is expected to about $600 million, consisting of about $200 million per year. Additionally, our Board has approved additional share repurchase programs, under which we may repurchase up to $300 million of our share until December 2027. This program replaces our previous share repurchase program which would expire in November this year. We remain formally committed to unlocking shareholder value through our consistent capital return initiative. Next, let me share more specific progress across our product line. Let's begin with BeagleLive. In line with our goal of providing meaningful personal experiences to our users, we continued to focus on cultivating a safe, high-quality, and diverse content ecosystem on BeagleLive. In the fourth quarter, we updated Big O Life's community guidelines and comprehensively enhanced its community safety technological capabilities. We introduced our exclusive multi-model content, multi-region model, which was fine-tuned with our scenario's special fixed data and leveraged third-party light models to further strengthen our content moderation capabilities. On the product filter front, we refined user verification processes and stratification motion system to direct traffic towards high quality, verified user content at the same time. We exercised a stricter measurement of user generated content to ensure our users would have safe, high quality experiences. In addition, we formed partnerships with multiple industry players and worked with relevant authorities to jointly prevent and punish any potential malicious use of platform. We remain committed to constantly improving our safety features to ensure secure experience for our users. On the content front, Beagle Live continued to deliver the level of quality users have come to expect. The annual Beagle Awards Gala was held at Marina Bay Sands Theatre in Singapore. Over 1,000 guests from around the world attended in person, and nearly 500,000 viewers tuned in via livestream. The event honored over 200 outstanding content creators and families for their contributions to BeagleLive's vibrant user community, and filtered performances from 35 global active across various genres. The Beagle Award Gala has become a core tradition for the platform and has helped countless talented creators expand their influence and reach the global stage. In addition to the main global venue, Beagle Live also held regional galas in Dubai, Thailand, and Elwell. In 2025, BigoLife will expand its community initiatives through creator partnerships focused on diversity, philosophy, education, and more. We remain dedicated to building value for the platform's creator base and helping our global creators grow. During the quarter, we utilized our proprietary AI model to analyze ultra-long user behavior sequences and refined our content recommendations on BeagleLive. This improvement, together with our continuous efforts to expand BeagleLive's high-quality content offering and optimize its live streaming room viewer filters drove a 2.1% sequential increase in average viewing time per user during the fourth quarter. By strategically directing traffic to mid-tier hosts and optimizing live streaming tools such as beauty and body filters, BeagleLive achieved a 1.2% increase in host next day retention and a 2.9% increase in average live stream time per host, both quarter over quarter. Next, let's look at LIKEY. LIKEY remains focused on two call markets, the Middle East and Europe. In the fourth quarter, LIKE's DAOs in core European countries increased by 4.4% quarter-over-quarter. Driven by growth in paying owners, LIKEN's live streaming revenue grew 2.2% sequentially. In 2024, LIKEN recorded its second consecutive profitable year. We continued to elevate Leike's content and community engagement in its core markets. In January, Leike partnered with the globally popular game Junsheng Impact to deepen its penetration among Gen Z users. The campaign featured Junsheng-themed short video and live streaming content with special and a co-branded offline event in Europe. During the campaign, the initiative generated over 5.7 million viewers, and the offline event attracted 11,000 participants, even programming several popular creators with millions of following to join Nike. Beyond these targeted operational activities, likely increased support for quality creators, driving a 13% quarter-over-quarter increase in viewing time spent on short videos. The proportion of content creators as a percentage of daily active users grew steadily compared to the third quarter. indicating healthy levels of engagement. Last quarter, we mentioned that we have redirected some of LightE's operational resources, including personnel and traffic, to a new product to unlock our monetization potential in LightE's core market. We are pleased to report that the new product has launched smoothly and is currently generating small-scale revenues. We look forward to building the scale of this new product over the next few quarters, at which time we will share more updates. Finally, on HAGO, in the fourth quarter, driven by its blockbuster year, and operational event. HaGo's quarterly live streaming revenue achieved quarter-over-quarter growth. In the fourth quarter, HaGo's cash flow remained positive, achieving its goal of positive cash flow for the second consecutive year. HaGo's user engagement further improved during the fourth quarter as well. Average time spent in channels increased by 8.6% quarter over quarter to 108.2 minutes. The product's next-day retention rate also continued to improve. In 2024, we made substantial progress in improving operational efficiency and diversifying our revenue stream. Looking ahead, we remain deeply committed to driving diversified growth across our global operations and solidifying our position as a leading global technology company. Through AI-driven innovation, we are comprehensively enhancing our operational efficiency and cultivating meaningful experiences for our users. We will continue to prioritize platform safety and integrate social responsibility into our global operations. Based on our solid operational execution, we remain confident in driving sustainable growth in our global business and creating long-term value for our shareholders. Thank you. Thank you.

Next, we will now turn the call over to Mr. Alex Liu, the Vice President of Finance, to provide our financial updates.

Thanks, Miss Li. Hello, everyone. I will now provide a recap of some key financial highlights for the fourth quarter. Our total net revenues were $549.4 million in the fourth quarter, compared with $569.8 million in the same period last year. Revenues from legal segment were $480 million. In particular, gross non-live streaming revenues were $127 million. up by 51.9% year-over-year, primarily due to the increase of Beagle's advertising revenues. Geographically speaking, as we prioritized to allocate our operational resources towards developed countries and the acquisition of premium users, there's greater monetizing potential. Other group revenues from developed countries and regions was up by 13.7% year-over-year, while revenues from the Middle East sustained a sequential growth of 0.7%. Cost of revenues for the quarter decreased by 6.2% year-over-year to $345.7 million. Beagle's cost of revenues was $304.9 million, which was down by 1.3% year-over-year, driving buyer $5.5 million decrease in payment handling costs. Our other cost of revenues was $40.8 million, down by 31.4% year-over-year, consistent with its revenue trend. Gross profit was $203.8 million in the quarter, with a gross margin of 37.1%. Legal gross profit was $175 million, with a gross margin of 36.5%. Legal gross margin was lower year over year and quarter over quarter due to a shift in our revenue mix. which saw an increased contribution from our lower-margin all-days network advertising revenues. Our group's operating expenses for the quarter was $633.5 million, compared with $199.4 million in the same period of 2023. Among the operating expenses, we recorded non-cast Goodwill impairment chart of 454.9 million. The impairment was primarily attributable to Goodwill associated with our prior acquisitions, mainly driving by lower, managing by lower valuation amid current market conditions. Shares and marketing expenses decreased to 67 million from 92.3 million in the same period of 2023, primarily due to our reduced spending on user acquisition through advertising. General and administrative expenses increased to 44 million from 34.6 million in the same period of 2023, primarily due to increase in expected credit loss of receivables. FIGO's total operating expenses for the quarter were $105.7 million, decreased from $131.3 million in the same period of 2023, primarily due to decreased issues and marketing expenses. Our disciplined execution has driven enhanced operational efficiency at both the group and the ego segment. Our group's non-GAAP operating income for the quarter was $46.4 million in this quarter, up by 66.2% from $27.9 million year-over-year. Ego's non-GAAP operating income was $81 million up by 21% from 67 million year-over-year. Non-GAAP net income attributable to controlling interest of Joy in the quarter was 96.1 million, up by 49.7% from 64.2 million in the same period of 2023. The group's non-GAAP net income margin was 17.5 percent in the quarter, compared to 11.3 percent in the same period of 2023. FIGO's non-GAAP net income was 98.4 million, up by 55 percent from 63.5 million in the same period of 2023. FIGO's non-GAAP net margin was 20.5 percent in the quarter, compared with 12.9% in the same period last year. For the fourth quarter of 2024, we book net cash inflows from operating activities of 110.5 million. Our balance sheet remains healthy with a strong net cash producing of 3.3 billion. as of December 31st of 2024. Now, I would like to briefly walk through the four-year financial highlights. Our total net revenues for the four years were 2,237.8 million compared to 2,267.9 million in 2023. Biggest revenues for the full year were $1,988.3 million, up from $1,924.3 million in 2023. Our non-GAAP net income attributable to controlling interest and common shareholders of Joy for the full year of 2024 was $298.5 million. up by 2% from 292.5 million in 2023. Non-GAAP net income margin for the full year of 2024 was 13.3%, up from 12.9% in 2023. Notably, Bigelow's non-GAAP net income expanded to 314.6 million in 2024. up by 4.2% from $302 million in 2023, with its non-gas net income margin slightly improved to 15.8%. Importantly, shareholder return continued to be an important component of our capital allocation strategy. In the full year of 2024, we have retained an aggregate amount of $309.2 million to our shareholders through share buyback, which altogether represents 103.6% of our non-GAAP net income. We remain confident in our company's long-term growth prospects and believe that our share price has been treating substantially below its intrinsic value. Accordingly, our Board of Directors approved quarterly dividend policy for the next three years, commenting indirectly. Under this policy, the total cash dividend amount expected to be paid will be approximately $600 million. and quarterly dividends will be set at a fixed amount of approximately $50 million. It seems $0.93 per ADS in each fiscal quarter. Additionally, our board has approved an additional share repurchase program in which we may repurchase up to 300 million of our shares until December 2027. This program replaces our previous share repurchase program, which would expire in November this year. Going forward, we remain firmly committed to unlocking shareholder value through our capital return initiatives. Turning now to our business outlook, At group level, we expected our net revenues for the first quarter of 2025 to be between $482 million and $490 million. Our guidance accounts for seasonality fluctuations and reflects our preliminary views on the current market of regional conditions. and business adjustment decisions. These are subject to changes. In closing, with you behind us, we are ready to turn to a new chapter for Joy. Looking forward, we will remain dedicated to our strategic priorities, building our influence as a global technology company. exploring diverse groups and actively driving operational efficiency at all levels. We are well-prepared to deliver sustainable, profitable growth and create long-term value for our shareholders. 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 star 2. 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.

Thank you for your question. 我这边的问题是管理层能否分享一下2025年的用户以及营收的趋势? Let me translate myself. My question is about the user and the revenue trend in 2025.

Okay, 那我来回答这个问题。 关于第四季度的表现呢,我还想补充几点。 四季度我们可以看到, The income of Joy Group's non-live broadcasts has maintained a high rate of growth. At the same time, the income of live broadcasts has declined. There are two main reasons. The first reason is that we mentioned the demand based on the regulation last quarter. 我们主动在Q3末对Beagle板块的非核心语音直播产品的玩法做了主动的调整。 那四季度是玩法调整落地后第一个完整季度。 The second point is that some of the products in December, such as BeagleLive, have had short-term discounts on the platform, which has caused the Q4 revenue to fluctuate. However, it is worth mentioning that despite the event outside the expectation of short-term discounts, the effect of the year-end discount activity is still better than expected in our view, making our overall revenue still roughly within the income guidance forecast provided in the previous quarter. This also reflects the resilience of our core user group and the resilience of our business.

Thank you for your question. This is Li Ting. I will take your question. First of all, I'd like to add a few more colors regarding our performance in Q4. In Q4, the group's non-live streaming revenues continued to grow substantially, both year over year and quarter over quarter, while our live streaming revenue experienced a decline. The reason behind the decline was primarily due to two factors. First, we've mentioned this in our last quarter as well, that we made certain adjustments to interactive features of Beagle's non-core audio live streaming product in late 2.3 to enhance compliance, and 2.4 is the first full quarter reflecting those adjustments. And secondly, BeagleLive experienced an unexpected temporary removal from platforms in 2.4, and that has caused additional short-term fluctuation in its live streaming revenue. However, despite the disruption of that temporary event, our annual gala, which we believe has delivered stronger than expected results, and that is why we're still able to deliver revenue within our previously given guidance. I think that it reflects the stickiness of our core paying user group and also the resilience of our global business.

Yes. Regarding 2025, I would like to take a look at it again here. Because the Lunar New Year and the Lunar New Year in 2025 coincidentally appear in Q1, so we expect that in the first quarter, there will be a more obvious seasonal impact than in the previous year. In addition, the Biggolab product was added, and in January, the price of the dual platform was restored. So it takes some time to gradually restore the rhythm of normal placement and operation activities. This is a certain post-pandemic impact, but it does not affect the health of our business itself. So currently, our Q1 income guidance assessment has actually included the above two factors. Looking back at 2024, we have promoted content cost policy, investment policy, and a series of adjustments such as non-core market voice live play. Looking ahead to the first quarter of 2025,

we do expect a stronger than usual negative seasonality impact due to the coinciding Lunar New Year and Ramadan. With BeagleLife fully back on both platforms in January, we also expect BeagleLife to take certain time to resume its normal pace of use acquisition and operational events during the quarter. And therefore, there will be a lagging impact on its monetization which we do not believe is going to affect the long-term sustainable growth of that product. And our current revenue guidance has considered the potential impact from the above-mentioned factors. In 2024, we know that we have implemented a number of adjustments to our operations, including our optimization over content cost, optimization of user acquisition, strategies, as well as the mentioned adjustment to non-core audio live streaming. And the unexpected temporary incident drove us to accelerate the update of our previously planned global community guidelines and safety capabilities, enabling us to align and upgrade our community guideline and safety requirements across different global regions ahead of our schedule. We believe that this all together has provided our business with a more efficient and healthier foundation to start for the year 25.

2025,对于 Bigelow板块来说,我们会继续把运营的资源集中到发达国家和优质付费用户的获取上。 我们期待Bigelow的付费用户和UP值都有机会在二季度开始逐步恢复环比增长。 对于Biggle的非直播收入, 我们预期将持续保持两位数的同比增长, 贡献比例将进一步提升。 不过考虑到高基数的影响, 我们预期非核心语音产品的调整, 仍然将给Biggle 2025前三个季度的收入增速带来同比的压力, 但这是暂时的。 对于All Other板块, 我们预期板块的非直播收入仍然将保持两位数的同比增长, 全年的板块收入将迎来全面复苏。 Regarding the size of the users, there have been some fluctuations in our global MAU in the past few seasons. The same is mainly because we continue to optimize the investment strategy of the products, and the budget and operating resources of the investment are clear to core developed countries and high-quality users. In contrast, it is mainly due to the short-term price drop of the products and the fluctuation of the rhythm of the investment and acquisition. We expect that with the gradual optimization of the user structure, Biggolabs MAU will have the opportunity in the second half of the year to start to gain a slow recovery and growth.

Looking ahead for the full year of 25, for B2 segments, we will continue to concentrate our operational resources on developed countries and premium users with greater monetization potential. We expect the paying users and our pool of legal will gradually return to sequential growth in Q2. And additionally, we anticipate that the non-live streaming revenue will continue to maintain a strong growth momentum, likely double digits year over year. However, our adjustment to the non-core audio live streaming product might still exert a negative impact on Beagle's overall top line growth, especially when compared with the high bids during the first three quarters of 2024. For all other segments, we expect its non-live streaming revenue continue to grow and continue to grow by double digits and drive a top-line recovery of the whole segment. Regarding our MAU outlook, we understood that BeagleLife experienced some fluctuation for its MAU over the past several quarters. The year-over-year decline was primarily due to our recurrent strategy of optimizing our advertising spend and operational resources towards developed countries and premium users. And, sequentially speaking, the QOQ decline was primarily due to the short-term disruption of new user acquisition during the temporary suspension period. However, we expect that with the optimization of BeagleLive's user base gradually takes effect, its MAU will likely return to sequential growth in the second half of the year. Next question, please.

Thank you. Your next question comes from Yuan Zhang with China Renaissance. Please go ahead.

Okay, thank you. This is my question. Thank you for your question. My question is about our outlook on 2025 experience and profitability trend. Thank you.

Hello, thank you for your question. My name is Alex. Let me answer it. In the fourth quarter, we steadily promoted the optimization of global operations. The promotion of the Group and two business blocks continued to increase the cost. We achieved a relatively obvious result. If we look at the Bigo block alone, the non-GAAP profit of the fourth quarter is 36.5%. Compared to the third quarter, it has dropped slightly, mainly because the income of the advertising platform in the fourth quarter has been temporarily increased. So the overall profit rate is significant. Bicoboncoin's operating profit has increased to 16.9%, which is 2.2% compared to last quarter. Nungad's operating profit has increased by 11.2%. This is mainly due to the short-term price drop of the product. In fact, the investment cost of advertising is significantly reduced. which led to a cut in sales and marketing costs. However, it is worth mentioning that even if we do not consider the cut in investment costs, the net profit margin of non-GAAP is slightly better than three quarters, which is also better than what we expected. If we look at the non-GAAP margin alone, the net profit margin of non-GAAP is also greatly improved. From 40% in three quarters to 41.8%, the margin has increased by 1.8%. Thank you for the question.

This is Alex. In the fourth quarter, our discipline execution has driven operational efficiency enhancement at both the group and the Beagle segment. Looking specifically at the Beagle segment in Q4, the non-GAAP gross margin was 36.5%, which was down two on two due to shifts in our revenue mix, which saw increased contribution from our lower margin audience network advertising revenue. The Beagle's operating margin increased to 16.9%, which is up 2.2 percentage points as compared to the last quarter, and its non-GAAP operating profit amount increased by 11.2% on QOQ. And the improvement was primarily due to decrease in our sales and marketing expenses, particularly our user acquisition spending, during the temporary suspension period. Excluding that impact, Beagle's non-GAAP OP was still up to OQ, which is better than our original expectation. Looking at the all other segments, its non-GAAP gross margin also saw substantial improvement during the quarter, rising from 40% in Q3 to 41.8% in Q4, which is up by 1.8 percentage points. And that was mainly benefiting from a QOQ acceleration in its monetization. The non-GAAP operating loss for the All Other segment was narrowed by 8.9% compared to the previous quarter to $34.6 million. And that was mainly due to effective control over our operating expenses and that a steady decline in R&D expenses, both in terms of absolute amount and also as a percentage of revenues.

In the first quarter of 2025, because business has entered a clear stage, we expect the non-GAAP operating profit of Beagle to fall back. However, the non-GAAP operating loss of the All Other version is expected to be further reduced in the first quarter. In the next year of 2025, we will continue to use ROI as a guide to continue to promote the optimization of various costs and operating costs of the Beagle version. Considering that we are We expect that the overall non-GAAP net profit margin of the 25-year BQ version will remain relatively stable and look forward to growth. As for the RR version, Looking ahead to the first quarter of 2025, for Beagle segment, due to the impact of seasonality,

we expect a decline in its non-GAAP operating profit when compared to Q4. For all other segments, we expect its non-GAAP operating loss to further narrow on a sequential basis during the quarter. For the full year of 2025, we'll continue to execute our ROI-oriented strategies, persistently optimizing our cost and operational expenses within the segment. Nonetheless, adjustments made to the non-core audio live streaming product in this segment may still have a negative impact on its profit, and the one-off user acquisition expense savings during the temporary suspension period in Q4 has made Beagle's non-GAAP OP for the full year of 24 quite a high base, considering those factors we expect the overall non-GAAP OP in terms of absolute amount for the Beagle segment to remain roughly stable with certain potential for growth for the full year of 2025. In terms of all other segments, we expect with improving monetization and disciplined spending, our R&D expenses as a percentage of revenue will continue to decline and we foresee a meaningful reduction and is operating in its non-GAAP operating loss in 25 compared to the last year. Overall speaking, at group level, we expect the group's non-GAAP operating profit will continue to show an improving trend in the year 25. Next question, please.

Thank you. Your next question comes from Brian Gong with Citi. Please go ahead.

Thank you, Manager, for accepting my question. I want to ask about the shareholder feedback. I saw that the company just announced the new stock market and repurchase plan. Can you share with us your thoughts on the new shareholder feedback plan? Thank you. I will translate myself. Thanks, Maxime, for taking my question. A very quick question on shareholder return plan. We just announced the new plan including dividends and the share repurchase program. Can management elaborate a little bit more on our rationale and this new shareholder return plan? Thank you.

Thank you for your question. I'm Alex. Let me answer it. Looking back at 2024, our share return is very positive. In the past 20 years, our total return on investment has reached $3.09 billion, which is a total of 921 million shares of ADS. At the end of last year, our total share was up to 15.1%. Looking back at the past 20 years, we have invested a total of $16.84 billion in share returns. This is a very large number, especially compared to our current market size. In the future, we will continue to use shareholder feedback as one of the key strategic points. Just now, the board of directors announced a new shareholder feedback plan. In the next three years, we will add 600 million dollars of bonus, 300 million dollars of rebate, and a total of 900 million dollars of cash. At present, we are worth about 35%. This is a very competitive level in the entire industry. We hope that through clear, continuous, and quantitative shareholder feedback promises, we can show everyone the sincerity and confidence of our shareholder feedback. Of course, the company will also consider other shareholder return opportunities in combination with business development and market conditions. So, in the long term, the creation of shareholder value needs to be under double control. Both the sustainable growth of the company's main business cash flow and the stable shareholder return are needed. We have confidence in the shareholder return, which can maintain competitive competitiveness at the same time as the diversified growth of global business revenue and business profits. Thank you.

Thank you, Brian, for your question. This is Alex. In the year 2024, we continue to be very active in shareholder return. During the year, we bought back a total number of 9.21 million ADS for a total of 309 million US dollar, accounting for an impressive 15.1% of our total shares outstanding as of the end of last year. Between 2020 and 2024, we have in total return 1.684 billion U.S. dollars to our shareholders. This is a very sizable amount, especially when compared to our current market cap. Looking ahead, we will continue to consider shareholder returns as an important component of our capital allocation. And the Board of Directors has just approved an additional 600 million dividend policy and a $300 million buyback program for the following three years, totaling $900 million, and that represents approximately 35% of our current market cap, which we believe represents a relatively competitive level within the industry. Through our well-communicated, consistent, quantified, and sustainable shareholder commitment, we would like to demonstrate our determination in persistent sustainable shareholder return and our confidence in the long-term prospects of the company. On top of that, we also from time to time consider other shareholder options subject to ongoing operational updates and also market conditions. In the long term, we need both growth in the company's core business and also stable shareholder return. in order to create a sustainable value for our shareholders. We remain confident in our ability to continuously drive ongoing diversified growth, especially profit growth in our global operations while maintaining a competitive and sustainable shareholder return. Thank you. Maybe one last question, please.

Thank you. Your next question comes from Rafael Chen with BOCI Research. Please go ahead.

Good morning. Thank you for accepting my question. I would like to ask about the company's new business, especially advertising business, in the future. I will translate myself. Thank you for taking my question. Could management elaborate more on the strategic priority and positioning for new initiatives? For example, our advertising business in the future. Cheers.

OK, thank you for your question. Let me answer it. In the fourth quarter, Bigo's advertising revenue has maintained a high-speed growth. The overall advertising revenue of Bigo's version has now increased by 16.6%. Among them, the advertising platform's revenue has maintained the same high-speed growth. The new customers are mainly from developed European and American countries. Looking forward to 2025, with the expansion of the three-party cooperation flow and the demand and expansion of new customers in the new market, we expect the advertising platform business to maintain a relatively strong two-digit growth. The operating profit and profit rate should be improved at the same rate. At the same time, here I would like to once again declare the use of new business funds. Thank you. This is Li Ting. In the fourth quarter, Beagle's advertising revenue maintains robust growth

which significantly increased its contribution to the segment's total revenue, now reaching 16.6%. Specifically, revenues from our advertising platform Beagle Audience Network continue to show a strong momentum, primarily driven by North America and European markets. Looking ahead to 2025, we expect Beagle Audience Network to continue its strong growth momentum double-digit year-over-year, driven by a number of factors, including expansion of its network's DAU pool, expansion of advertiser base, and exploring into new verticals. We also expect its operating profit and OP margin trend to improve during the year as compared to 2024. With regards to our cash usage for our new initiatives, We'd like to clarify that we have set a consistent goal for each business unit, which is to enhance monetization efficiency, continuously optimizing their cost structure, and aiming a positive cash flow and break-even as soon as possible. We expect that both the Beagle audience networks and our SaaS business under all other segments to show significant improvement in their operating cash flows. in 2025. So that was the last question and thank you so much for joining our call. We look forward to speaking with everyone next quarter.

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