HUYA Inc.

Hello, ladies and gentlemen. Thank you for standing by for the first quarter 2022 earnings conference call for Huya Inc. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I will now turn the call over to Ms. Har Ulu, Company Investor Relations. Please go ahead.

Hello, everyone, and welcome to Huya's first quarter 2022 earnings Earnings Conference Call. The company's financial and operational results were issued earlier today and are posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours. Participants on today's call will be Mr. Rongjie Dong, Chief Executive Officer of HUYA, and Ms. Ashley Wu, Vice President of Finance. Management will begin with prepared remarks and the call will conclude with a Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required on the applicable law. Please also note that WHO-YA's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. WHO-YA's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. I will now turn the call over to our CEO, Mr. Rongjie Dong. Please go ahead.

Hello, everyone. Thank you for joining our conference call today. Despite macro challenges that continue to impose near-term pressure on us and the entire industry, we delivered healthy user growth and outstanding financial performance in the first quarter of 2022. Total net revenues were 4.46 billion RMB and the non-GAAP net income reached approximately 47 million RMB for the first quarter. In line with our expectations against the backdrop of the involving market environment, first, Let me give you some color on our user metrics. Our user base sustained its expansion trend with Huya Labs mobile MLs, increasing by 8.5% year-over-year to 81.9 million in the first quarter. The growth was mainly driven by the strong performance of esports tournaments this quarter, as well as our enhanced cooperation with game studios. Meanwhile, our user engagement level also improved as we remained diligent in our efforts to provide quality content and optimize user experience through product innovations. Specifically, in the first quarter, users' time spent on our platform recorded double-digit growth on both a year-over-year and a quarter-over-quarter basis. In addition, Huya Life Apps' next month user retention rate remained stable at above 70%. Now I would like to provide more details about our cooperation with game studios and our recent advancements in product innovation. Our interactive feature, Gift Droppers, has emerged as a very popular way to connect game streaming viewers. directly with their game players. By participating in this task type activity, users can claim virtual rewards from both game studios and our platform once they complete specific combinations of tasks, such as viewing game streaming for a certain period of time. and sending certain bullet chats. We introduced the feature during a live broadcast of Peacekeeper Elite last year and have now added it to over 20 game titles such as Honor of Kings, LOL Wild Rift, Call of Duty Mobile, and Genshin Impact. as we continue to deepen our relationships with a variety of game studios. Excitingly, more than 10 million users on our platform engaged with this interactive feature during the first quarter. In addition to improving user interaction metrics on our platform, More game operation teams have noted that the feature encourages trained players to return to games, bolstering user activation rates. In another effort to expand our in-depth cooperation with game titles, we joined forces with Crossfire Mobile's game studio to design and launch an event membership during the tournament period of our self-produced Huya CFM Championship London Cup Huya CFM Guanjin London Bay by connecting their CFM game ID with their Huya account, users secured a free membership which allowed them to complete gameplay and tournament related tasks to unlock an array of privileges on both the game operators and Huya's platforms. This initiative helped increased Huya's exposure within the gaming community and also promoted gamers' activity level. In addition, all long-term cup matches were live broadcasted on Huya's platform and were also made available on the CFM in-game tournament streaming channel, including this self-produced events, popularity, and reflecting our continuous efforts to connect Huya's live streaming content with the Tencent ecosystem. Building on this event's success, we will forge ahead with additional endeavors in this area going forward. We are also looking beyond the world of gaming to innovate more interactive live streaming features. For example, at our January annual gala event, Huya Boom Night, we debated an extraordinary music movement, Fei Fan Ying Dong, an online real-time interactive game musical gameplay feature designed to make the events broadcast distinctive and captivating. This new feature leveraged our in-house developed audio and beta detention technologies to engross users in the musical experience with a fun, simple game. Clicking bubbles on the screen along with the musical rhythm. Users were scored based on data accuracy, allowing them to compete with other viewers while watching artists' livestreamed stage performance. Merging live musical performances and interactive activities This new feature created a truly immersive viewing experience, bringing the unique feeling of live performance to users' fingertips and broadening the boundary between reality and virtual reality. Before I conclude, I would like to provide some updates on our recent strategic initiatives in our overseas business. Given the rapidly changing business environment, both domestically and internationally, we have strategically implemented some adjustments and refinements with respect to NEMO TV's operations, concentrating our resources on future key geographic regions. While these other adjustments could result in short-term contractions in overseas, user expression and revenue growth as we downside our overseas in certain areas. We expect to improve the overall efficiency of our international business by directing resources to regional markets with greater potential for profitable business growth at a low cost. We believe this more focused approach will benefit our overseas operations in the long term. In summary, the persistent macroeconomic and regulatory headwinds, along with the impact of the ongoing COVID-19 resurgence in China could still create some challenges as we move ahead. We are confident in our strategy and will continue to focus on harnessing the strength of our business fundamentals to further improve operational efficiency as we embrace the regulatory changes. We will continue to work closely with authorities and directly comply with the government's guidelines and rules by leveraging our operational and technological expertise, spanning eight years in the game live streaming market. We also believe that the restructuring will not impact the core needs of our users and that we are capable of continually innovating compliant products and features to offer users more choices and better experiences in the world of live broadcasting. As our high-quality content portfolio and technology and product advancements solidify our leadership in the game live streaming market, we will remain committed to serving our growing user base and creating more value for our broadcasters, business partners, and all other stakeholders. With that overview, I will now turn the call over to our VP of Financial, Ashley Wu. to share more details on our operating metrics and financial assessment. Ashley, please go ahead.