JOYY Inc.

Ladies and gentlemen, thank you for standing by and welcome to Julie Inc.' 's first quarter 2025 earnings call. At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question and answer session. I'd now like to turn the conference over to your host today, Jane See, the Company's Senior Manager of Investor Relations. Please go ahead, Jane.

Thank you, Operator. Hello, everyone. Welcome to Joy's first quarter 2025 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 would like to remind you that we may make forward-looking statements, which are inherently subject to risk uncertainties that may cause actual results 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 the 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 2025 earnings call. 2025 makes a key milestone for both Joy and for me personally. Joy has just celebrated its 20th anniversary, growing into a global technology leader with a sizable, engaged user base worldwide. We diversified Joy's strategy, ensuring clear results, as non-live streaming revenue continues to expand rapidly, affirming the strength of our business model. As 2025 makes my first complete fiscal year as CEO, I'm excited to outline our media to long-term strategic vision and operational roadmap as we advance into our next decade of growth. First, looking at our quarterly performance. We recorded total revenue of $494 million in the first quarter of 2025. Our non-let streaming revenue reached $123 million. A year-over-year increase of 25.3%, with non-let streaming revenue accounting for 25% of the group's total revenue for the first time. In the fourth quarter, we achieved a non-GAAP operating profit of $31 million, a year-over-year increase of pro-costing metering 25%. Meanwhile, we maintained strong operating cash flow, which reached $58 million. During the fourth quarter, we distributed approximately $49.1 million in dividends to shareholders. On top of that, we repurchased approximately $22.5 million worth of our shares as of May 23, reinforcing our commitment to returning value to our shareholders. In the past, we focused on expanding the global reach and the influence of our user community, leveraging our diverse portfolio of products, spanning live streaming, short videos, instant messaging, and more. We have successfully monetized our global user base through live streaming and delivered consistent profitability, which demonstrates our industry insight, operational, agility, and strong execution. Over the past two years, we have stepped up our innovation to develop new revenue streams, achieving significant progress toward our growth objectives of cultivating a multi-faceted ecosystem. Since 2024, our global programmatic advertising platform, BiggerAce, has achieved remarkable growth. Capitalizing on our sensible global user base of approximately 260 million users, present military, young and middle-aged Internet users, with promoting purchasing power, we have attracted a growing number of advertisers. Google Ads has further expanded its traffic pool by integrating premium publisher traffic with our first-party traffic, consistently delivering strong, memorable results for the advertisers. This success has fueled the rapid expansion of our advertising revenue, reinforcing our confidence to further diversify and expanding our ecosystem. Looking at the full picture of our non-live streaming businesses, we believe that our advertising platform and smart commerce SaaS platform are also strategically complementary, driving synergy across an ecosystem as bigger aids expand its traffic pool and enhances its data-driven testing capabilities. It will empower merchants to scale its market presence through pieces and efficient customer targeting. This integrated approach generates significant value across our ecosystem and created a virtual circle of growth for both bigger A's and our smart commerce platform. Looking forward, we anticipate our non-live streaming businesses, including our advertising and smart commerce platform, will emerge as Joy's second growth entry. Our initial accomplishments in these areas have been encouraging, and I'm confident that this multi-agent approach will establish a sustainable long-term growth roadmap for Joy that will deliver major lasting value and enhanced returns for our shareholders. Next, let me share with you our latest business update and operational strategies. First, our live streaming business. In the fourth quarter, the group's live streaming revenue was $371 million, with Beagle contributing $352 million, in line with our expectations. At present, we observe distinct regional divergence in online entertainment spending. Specially, users in developed markets have shown red lines, while those in emerging economics and long-tail paying users have reduced spending due to economic headwind. To address sanctions, we've adopted prudent strategies and efficient operational resource allocation. First, we are continuously optimizing our user acquisition strategy by prioritizing advertising spent on higher-quality paying users in call markets. Second, we are fraternizing our renew-sharing machines, particularly by underperforming agencies and channels that fail to deliver positive ROI. And third, we continue to strengthen our community content safety measures while improving content operations to boost user engagement. These strategic changes have already brought constructive results. While lab stream revenue has fluctuated comparatively, we have achieved a significant improvement in operating profit from our flagship product, Big Alive. Despite this transitional phase, we remain confident in the fundamental interactive value that live streaming can offer to users and its monetization sales potential. To re-accelerate growth, our strategy focuses on two actionable points. First, we will continue to optimize resource allocation based on ROI and improve traffic quality prioritizing user growth in core markets such as developed countries and the Middle East. Second, we will drive content, product features, and operational innovations to boost user engagement, improve paying users' experiences, and increase conversion rates. But better identifying quality users and improving payment conversion. We expect a regurgence in high-quality paying users, stabilizing live streaming revenue, and driving renewed growth. Next, let's look at the performance of our core product across key markets. In the fourth quarter, live streaming revenue in developed countries continued to outperform. In particular, Big O Live's North American region saw Q1 MAU growth exceeding 7% year-over-year. At the same time, the number of paying users in the region increased by approximately 4% QOQ. Next, the Middle East region. Remedies in 2025 started earlier this year, with the entire month falling within the fourth quarter, which caused expected seasonal impacts. Even so, our products actively promoted a series of operational activities which drove regional user activity and helped boost our brand influence among our users. In the long run, the Middle East market continues to be one of our strategic priorities, given its strong monetization potential as demonstrated by top tier approved and users from Xfinity for interactive live streaming and high engagement. We have remained a leader in the market and we are committed to defending our penetration in the Middle East through our expanding device product portfolio. Looking at product improvements, our teams have made important product feature updates that are creating clear operational benefits. In the first quarter, BeagleLive launched an entirely redesigned VIP benefits system and improved its gifting experience, upgrading gift features for high-value units. These efforts delivered a 3% QoQ increase in approval among Big O Live's high-end user cohorts. LIPE also advanced its content strategy by building a more diverse and engaging content library. This led to impressive engagement metrics during the quarter. Videos viewed per user rose by 7% compared to the previous quarter, with overall video consumption time increasing by 10% over the same period. Our refined approach to top streamer management and development also produced a notable 3% QQ increase in Likey's average paying ratio during the quarter. In the fourth quarter, Beagle achieved approximately $18 million in advertising revenue, a year-over-year growth of about 27%. I would like to share my insights into the macro and industry changes in the advertising business and how we plan to establish our long-term competitive advantage in advertising in the current environment. As you see, we believe Joy's unique position to take advantage and current conditions of the advertising space to drive our long-term growth. First, the global macro landscape is highly dynamic, with major shifts taking place to advertising placement channels across key markets. Advertisers need placement strategies spanning both dynamic and international channels to maintain and grow their market share. This change actually favors organizations with our unique profile, specifically those with both strong localized operations and extensive global reach. As such, we believe Joy benefits clearly from these recent shifts in the advertising landscape. Our market insights, premium global traffic, and localized opposition have helped us build strong credibility with advertisers. This chart has allowed our bigger aid platform to grow quickly. which has increased both our managed traffic volume and overall platform scale. Second, in this evolving landscape, advertisers now demand better returns from their placements, along with clearer measurement and proof of placement impact. Specifically, they want to directly connect their ad cost to revenue and profit growth. This means that more than ever before, platform must find and engage specific audience segments and efficiency turn these interactions into mirrorable new customers. Joy is unique positioned to meet these changing needs with our large user base of 260 million people worldwide. Our users include the key target groups for many important advertising categories, and we understand their behaviors and preferences deeply. This creates an advertising system with detailed user profiles that helps advertisers consistently reach their most valuable customers. Third, we are leveraging AI to transform our advertising strategy. The rapid advancement of AI technologies and Infrastructure has greatly enhanced Joy's capabilities, enabling us to capitalize on our diverse applications, scenarios, and proprietary data assets. Beagle 8 uses our extensive global audience and years of quality data to build its own virtual model. integrating cutting-edge generative AI technologies. This has helped us build an intelligent end-to-end advertising platform that covers user insights, creative development, precise packaging, and real-time optimization. Our AI usage improves ad performance and ad returns, while creating better revenue opportunities for our publisher partners. This success attracts both more advertisers spending and more publisher traffic, helping the Big O 8 platform grow quickly. Fourth, our advertising business enjoys significant economic advantages. thanks to our established global operational team, R&D capabilities, and our network infrastructure. In particular, bandwidth and network-related expenses, a key component of operating cost and advertising platform, are optimized through our global network infrastructure originally, but built for our social and entertainment products. This allows bigger ads to enjoy significant cost savings. As our advertising business scales, our server cost per unit decrease cause the company steadily enhance overall operational efficiency. In summary, our advertising business has delivered a consistently strong growth in the past quarter and continues to be profitable to the company. This success comes from our local operations, our advertisers and user base, our industry-leading algorithms, and our global network infrastructure. Given this province strength and our growing market position, we are confident our advertising business will continue to contribute to growth in our revenue and profitability over the long term. Now, moving to our thoughts on capital allocation. With the preliminary, progress that we made divisible our businesses. We are actively monitoring our business development and resources and carefully assessing long-term capital allocation opportunities to support our non-leg-streaming businesses. In short term, we expect prudently expand the hand-calls and marketing resources to support our advertising business while maintaining healthy profit margins. In the medium to long term, once our non-live streaming business reaches a certain scale, investment in infrastructure upgrades, technology development, talent in bank expansion, and marketing efforts are all potentially high return capital allocation options. We aim to extend our competitive advantages through efficient capital use. On shareholder returns, Joy has established a consistent track record of delivery returns to our investors. Looking forward with our live streaming business, stabilizing under the rising revenue and profit from advertising and other emerging businesses, we expect the company's consolidated operating profit to continue to improve, and our shareholders to benefit from our long-term profitable growth. We remain deeply committed to disciplined capital allocation and balanced strategic reinvestment with competitive shareholders' return. In short, we are currently experiencing a strategic transition in joint business structure and reshaping our resource allocation, focusing on high-quality organic growth with the rapid advancement in our non-live streaming businesses. We expect 2025 will be a year of implementation and validation of our multi-growth energy strategy. I'm confident that our focus on value-adaptive organic growth will drive expanding business and financial benefits, ultimately creating lasting values for our shareholders. I will now turn the call over to Mr. Aslu, the Vice President of Finance, to provide our financial updates.

Thanks, Mishti. Hello, everyone. Please note that the financial information mentioned during this conference call is presented on a continuing basis, unless advice specifically stated. In the first quarter of 2025, we recorded total net revenues of $494.4 million, delivering the higher end of our previous guidance. Our non-GAAP operating profit was $31 million, also exceeding market expectations. Building on MSD's inspiring presentation of our strategy, we have made significant strides in diversifying our revenue streams and fostering a dynamic multi-faceted ecosystem. I will now dive deeper into our financial performance for the first quarter. Our live streaming revenues were $361.3 million for the first quarter, $351.6 million of which was from vehicle segment. In line with our expectations, In the past few quarters, we have been continuously optimizing our user acquisition strategy by prioritizing advertising spend on high-quality paying users in call markets and simultaneously adjusting our revenue sharing mechanism by streamlining and performing agencies and channels that fail to deliver positive ROI This, together with the impact of big salinality, has led to short-term fluctuations of our live streaming revenue and user metrics. Our prudent and efficient operational resource allocation has yielded positive measurable results. The percentage of total live streaming renewals from developed countries have increased by 2.8 percentage points year-over-year to 47.4%. The operating margin of our flagship product, Be Good Live, has also been substantially improved year-over-year. Our non-live streaming renewal were 123 million during the first quarter, contributing 24.9% of our total group revenues, up from only 17.4% contribution in the same period last year. This remains a strategic transition in our revenue mix. In particular, Beagle's non-live streaming revenues primarily Advertising revenues increased by 27.3% year-over-year to 80.3 million. As Missy mentioned earlier, due to our high-quality first-party global user traffic, technology, and network infrastructure, as well as AI capabilities, Beagle Edge has emerged as a competitive programmatic advertising platform and attracted a meaningful base of global advertisers and publisher traffic. As we are currently accumulating in skill and enhancing our algorithm, we expect to further improve campaign performance and ROI for our advertisers, which in turn will drive our accelerating growth in our advertisers' base and publisher traffic pool. At present, Beagle Edge has made a positive contribution to our bottom line. We expect it to be increasingly meaningful and eventually become another growth engine for our profit over time. Our other segment, Non-Live Streaming Renewals, was $43.2 million, increasing by 21.6% year-over-year. Growth's gross profit was $178.6 million in the quarter, with a gross margin of 36.9%, while Beagle's gross margin was relatively stable. All other segments' gross margin was substantially up by 9.8 percentage points year-over-year to 41.7% due to segments' enhanced monetization, particularly gross in non-live streaming revenues. Our gross operating expenses for the quarter were $167.2 million. compared with 195.4 million in the same period of 2024. The decline in our operating expenses was in line with our current operating strategies across both live streaming and non-live streaming business. For our live streaming business, we have continuously optimized our sales and marketing expenses. to enhance ROI for our non-lab streaming business. While it has seen robust revenue growth, we have maintained prudent and disciplined spending with operating expenses rising at a slower rate than revenue. Our disciplined execution has slightly enhanced operational efficiency. And the group's non-GAAP operating income for the quarter was $31 million in this quarter, up by 24.9% from $24.8 million year-over-year. Non-GAAP net income attributable to controlling interest of Joy in the quarter was $63.2 million. The group's non-GAAP net income margin was 12.8% in the quarter. Our non-GAAP net income was lower this year primarily due to lower interest income due to a decrease in our cash balance as we fully repaid our CB in June last year and a lower interest rate. For the first quarter of 2025, we booked net cash inflows from operating activities of 58 million. our balance sheet remains healthy with a strong net cash producing of 3.4 billion as of March 31st, 2025. Now, moving to capital allocation. Shareholder return continued to be an important component of our capital allocation strategy. We have retained 49.1 million to our shareholders through dividends during the first quarter and repurchased 22.5 million worth of our shares during the year as of May 23, 2025. Going forward, we remain firmly committed to unlocking shareholder value through our capital return initiatives. Turning now to our business outlook. At the group level, we expect our net revenues for the second quarter of 2025 to be between $499 million and $590 million. Our guidance accounts for seasonality fluctuations and reflects our preliminary views on the current market. Operational conditions and business adjustment decisions. which are subject to changes. In conclusion, the rapid growth of Beagle Edge and other non-live streaming business has driven substantial progress in building a dynamic global multi-faceted ecosystem. As we strategically realign our resource allocation, to prioritize high-quality organic growth and operational efficiency. We remain confident in our ability to deliver sustainable, profitable growth and 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.

Thanks management for taking my question. I have two questions about the second half business outlook. Can management comment about the overall monetization trend in the second half, in particular for Beagle Life? And my second question is about cost optimization and the trend in operating expenses and the margin outlook in 2025. Thank you.

Okay, thank you for your question. I'm Vivi. I'll answer this question. First of all, I would like to explain a little bit. Starting from this quarter, you can find that our entire communication strategy is to communicate with you according to live and non-live income types, and not to classify the previous Bigo and All Other versions. Thank you, Thomas, for your question. This is Ting Li.

I will take your first question. First of all, you may notice that in our recent communications, we will be giving updates based on revenue types, live streaming and non-live streaming, rather than the previous Spiegel and all other segments. This is mainly because our live streaming and non-live streaming businesses are currently quite distinct in terms of growth, momentum, and phase of development. And updating by revenue type would make it easier for everyone to understand the trends and changes that is happening in our current business mix.

所以对于您的这个问题,我会尽量遵循刚才讲的这个分类结构来进行回答。 那首先是我们的直播业务。 总的来讲,我们的直播业务从去年三季度以来就进行了一系列的调整。 It includes the adjustment of non-core voice live broadcast products, the optimization of content separation mechanism, and the removal of negative ROI cooperation channels, as well as the upgrade of content security system, and so on. The scale of live broadcast revenue has indeed fluctuated. From the point of view of return, these adjustments have been basically completed. We expect live broadcast revenue to be stable from the second quarter and resume return growth. In the investment strategy, we will continue to clean up the budget for high-quality users in developed countries based on dynamic ROI. On the other hand, in terms of product functions and operations, we will focus on the design of different user layers to continue to optimize the payment play and user authority system, and increase the payment transfer rate. From the data of Biggolive in February to March, we have seen that some developed countries, such as North America's revenue, have restored positive growth month-to-month under the guidance of the growth of paid users. In terms of non-直播業務方面,目前我們 Biggolive板塊的廣告收入和All Other板塊的SAT收入都維持超過20%的同比增速。 So I will try to answer your question in line with the previous mentioned framework and category.

First, regarding our live streaming business, overall since the third quarter of last year, we have rolled out a series of adjustments including changes to the feature of our non-core audio live streaming product optimizing revenue sharing mechanism, phasing out negative ROI channels, and upgrading the content safety mechanisms and systems. As a result, our live streaming revenue has indeed experienced some fluctuations. From a QOQ perspective, we believe that these adjustments have largely been fully implemented. Therefore, we expect live streaming revenue to likely stabilize starting in the second quarter and resume a positive quarter-over-quarter growth. When you look at our user acquisition strategy for live streaming, we will continue to allocate or prioritize our budget towards high-quality users in developed countries based on real-time ROI. Simultaneously, we'll continue to optimize the design of pay features and user benefits systems tailored to different user segments to improve our paying conversion efficiency. We've seen some encouraging data from BeagleLive in February and March that the revenues in certain developed countries such as North American countries have already resumed to positive month-over-month growth driven by increase in the number of paying users. And looking at non-live streaming businesses, our advertising revenue from BGO segment and our SARS revenue from all other segments are both maintaining year-over-year exceeding 20% in Q1. As our non-live streaming businesses, particularly advertising, enters into its busier seasons in the second half of the year, we expect our revenue sequential growth for both non-live streaming businesses to accelerate in the following quotas.

Hey, Thomas. 你好,我是Alex。 对于您的第二个问题, 二五年下半年的利润趋势和运营费用的趋势, 我来回答一下。 First of all, let's review the performance of the first quarter. If you look at the Beagle version alone, the net profit rate of the first quarter is 35.5%, and the net profit rate is 13.3%, which is a big improvement compared to Q1 last year. Mainly because in terms of live broadcast business, we optimized the content distribution mechanism, and the customer strategy upgrade optimized the ROI, so the net profit rate and net profit rate of BeagleLive have been significantly improved. So if you look at the OAS version alone, the net profit rate of the first quarter of non-GAAP is also greatly improved. From 32.4% in the first quarter of 2024 to 42.1% in the first quarter of 2025, which is a 9.7% increase. This is mainly due to the growth of non-live income in the OAS version. Non-GAAP's net loss per quarter is NT$26.5 million, which is 23% lower than last quarter when it comes to business losses. This is mainly due to the fact that our non-live-streaming business expenses remain low, and the cost of each aspect is significantly reduced. In the second quarter of 2025, as the income of the Beagle version increases, we expect the net profit of the Beagle non-GAB will also increase. In the whole year of 2025, we expect the net profit of the Beagle non-GAB will remain stable and hope to achieve growth. And this is Alex.

I will take your second question. First, let's have a quick look at our Q1 performance. For the Beagle segment alone, our non-GAAP gross margin for Q1 for the Beagle segment was 35.5%, with a non-GAAP OP of 13.3%, both showing improvement compared to our Q1 level last year. This was primarily due to live streaming business, where we optimized our content cost mechanisms and also upgraded our user acquisition strategies to enhance ROI, leading to significant improvement in BeagleLife's gross margin and non-GAAP OP margins in Q1. For the all other segments, our non-GAAP gross margin also was substantially improved year over year, rising from 32.4% last year to 42.1% in Q1 this year. which was 9.7 percentage points, mainly driven by strong growth in our non-live streaming revenue in the segment. The non-GAAP operating loss for Q1 was $26.5 million, which, despite being in the off-season, was narrowed by 23% compared to the previous quarter, and this was primarily due to our disciplined spending in our non-live streaming businesses, with a noticeable QOQ decline in our operating expenses, together with the impact of certain seasonality fluctuations in certain expenses. Well, looking ahead to Q2, with Beagle segments revenue resuming to positive QOQ growth, we also anticipate Beagle's non-GAAP operating profit will also return the amount of Beagle's non-GAAP operating profit will also return to positive QOQ growth. For the full year of 25, excluding the impact of the adjustment that we made to the non-core audio live streaming product features in Beagle since Q3 last year, we expect Beagle's overall non-GAAP operating profit amount to remain stable with certain potential for growth in the full year And for all other segments, we expect that with improving monetization and disciplined spending, its R&D expenses, its percentage of total revenue, will continue to decline, and we foresee a meaningful reduction in its amount of non-GAAP operating loss in 2025 compared to the previous year. At group level, we do believe that our group's non-GAAP operating profit amount will show an improving trend for the full year of 25. Next question, please.

Your next question comes from with Goldman Sachs.

Thank you for the opportunity to ask this question. I would like to ask Guan Licheng, what is the current status of our new business and what is the advantage of our rapid development of advertising business and how do we look forward to the future development trend? I will translate it for you. Thanks, Madison, for the opportunity to ask the question and can mention and share more updates on any initiatives in the 2025. Also, can you give us more color on the underlying reasons behind vehicle advertising's accelerating growth and also the outlook for vehicle advertising? Thank you.

I'm Vivi. Thank you for your question. Let me answer this question. Big O.A. is an advertising business. It is divided into two parts, free advertising and three-way advertising. We think that the reason for its size in the rapid development is the following. The first point is based on the advertising team. The budget of the advertising team has a multi-channel, high-end advertising investment. There is such an objective need. Due to the anti-contradiction of the land-based friction, the market pattern of advertising platforms has changed, so the demand is actually more urgent. Second, from the perspective of traffic, the budget of advertisers has promoted the expansion of the entire publisher and the integration of integrated platforms, which has pushed the scale of traffic to grow rapidly. Third, from the perspective of the platform, the resources of the party traffic have accelerated the accumulation of data and the construction of user images. to ensure the efficiency and accuracy of the placement, and to promote the continuous training of the model in the application scene. We believe that the reasons for the profit of the entire B2S advertising business will be as follows. The first point is that from a data point of view, with the accumulation of data of more than 2.6 billion social traffic on one side, the quantity and particle density of our user data ensures the accuracy and efficiency of placement. The second point is that from a algorithmic point of view, Here, the whole control strategy can better control the rhythm of advertising investment, balance the budget consumption of advertisers and the revenue between platforms, and have their own application scenarios for algorithmic training and relaying. There will be a very good foundation here. Thirdly, infrastructure. This benefits the entire server architecture and other reasons. The investment and construction of the previous infrastructure, the good technology development, and the economic cost advantage that the group has developed over the years. So in general, it benefits the localization of the entire Joy Group, the resources of advertisers and free flow, the model and global network infrastructure sharing and other advantages. 我们的广告业务连续几个季度保持环比较快速的增速, 并且能够持续为Joy集团贡献正向的利润。 我们对广告业务长期的营收和利润的增长潜力充满信心。 Thank you, Lu Xin, for your question.

This is Ms. Li Ting. I will take your question. Why Vigo Ads can accelerate growth? First of all, when we talk about Vigo Ads, we refer to both its in-house first-party traffic and also the third-party traffic advertising revenue. And when we look at that, we look at it from both the advertiser's perspective, our traffic pool, and also the embedded advantage that we empower as a platform. First of all, let's look at advertiser's side. We believe that it's an answer to the growing advertiser's needs We've noticed that advertisers need to allocate their placement budgets across multiple channels, and they demand a high ROI for their ad investments. And factors such as geopolitical tensions and anti-monopoly measures have led to changes in the advertising market that cause advertisers to demand a further diversification over their placement channels. And second, because we have those existing relations with the advertisers, Such relation has driven publishers and aggregation platforms to join our network, leading to a platform growth, a rapid growth in our traffic pool of Beagle ads. And thirdly, because of those extensive user base and years of quality data and also our deep expertise and knowledge in user profiling, that was the foundation of effective and precise targeting and enabled us to deliver a positive ROI for advertisers. And as we continue to roll out a deeper training of our model, we expect our specific user scenario is going to improve our model, which is going to bring further improvement in our delivery results to the advertisers. And you also may notice that we mentioned that Beagle Ads in general as a whole has already begun to make a positive contribution in terms of operating profit. And we believe that the reason that we can achieve profitability at such a scale is due to a few reasons. First of all, it's always about ROI. Because of the fact that we have approximately 250 million first party user traffic together with third party traffic that is accumulating. and that we have the AI-empowered use targeting model enabled us to deliver a positive ROI for advertisers. And together with an in-house algorithm such as our pacing strategies, which can optimize our ad delivery to balance advertisers' goals, for example, they have a higher ROI goals, but we can balance it between their goal with our platform revenue. And that actually, as we continue to improve our medical model, we expect that our algorithm is going to help us efficiently balance our advertisers' needs and our own revenue growth. And thirdly, Beagle Ads obviously benefits from the group's prior investments in our global infrastructure, network infrastructure, and also our R&D infrastructure. And that enables Beagle Ads to enjoy strong economic advantages with lower cost per unit. So in summary, our advertising business has delivered consistently strong growth in the past quarters and continue to be profitable for the company. And this success actually comes from our localized operations, our existing advertisers and traffic pool, our industry-leading algorithm, and also our global network infrastructure. Given this proven strength in our growing market position, we are confident that our advertising business is going to contribute to long-term growth to our revenue and profitability. Next question, please.

Your next question comes from Rafael Chen with BOCI Research. Thank you for taking my question. Congrats on the solid quarter. Could management give us some insights about shareholder return policies and other capital return strategies? Thanks.

你好,谢谢你的提问。我是Alex。 我来回答一下关于股东回馈的问题。 首先,股东回馈依然是我们公司资本配置的重要的组成部分。 一季度我们持续推进股东回馈的执行,完成了分红是4910万美金。 Until May 23, the total amount of return on stock is RMB 22.5 million. The commitment continues to provide investors with competitive shareholder returns. In addition, as Mr. Ting just shared, we are also constantly reviewing the configuration of our current team and technical facilities. According to the development stage and development situation of the business, reasonable and cautious resource configuration is needed. As of now, the live broadcast business has a relatively stable cash flow. We are actively optimizing the resource configuration to improve ROI. As for non-live broadcast business, such as advertising and SaaS business, we are in the stage of accelerating development. In a short time, we will maintain the large trend of editing efficiency and carefully arrange the team expansion and market investment of SaaS and advertising business. Thank you, Raphael. This is Alex. I will take your question on capital allocation.

First of all, shareholder returns remain a key component of our capital allocation strategy. In the first quarter, we'll continue to execute our commitment to our shareholders, distributing 49.1 million in dividends and repurchasing 22.5 million worth of our shares as of May 23rd, consistently fulfilling our commitment to provide a competitive return to our shareholders. Additionally, as Ms. Lee just shared, we are also actively monitoring our business development and resources and carefully assessing long-term capital allocation opportunities based on the current stage and performance of our respective businesses. Currently speaking, the live streaming business maintained a relatively stable growth in cash flow and we are actively optimizing our resource allocation to improve its ROI. Meanwhile, for our non-live streaming businesses, such as advertising and SaaS, in a phase of accelerated growth, in the short term, we expect to prudently expand our headcounts and marketing resources to these non-live streaming businesses to support their growth while maintaining improving trends in their respective economics. In the long term, we will continue to enhance our competitive advantages through prudent and efficient resource allocation, we remain confident in our ability to drive, sustain, diversify growth in our global revenue and operating profit while maintaining competitive shareholder returns. Thank you. And that was the last question. Thank you so much for joining our call today.