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spk05: Good day and good evening, and thank you for standing by. Welcome to HUYA's fourth quarter and fiscal year 2023 earnings webinar. I am Hanyu Liu from HUYA's Investor Relations. At this time, all participants are in lesson-only mode. Please be advised that today's webinar is being recorded. 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 Iowa website in a few hours. Participants of management on today's call will be Mr. Junhong Huang, Huya's Acting Co-CEO and Senior Vice President, and Ms. Ashley Wu, Acting Co-CEO and 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 know that WHOIA's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. HUYA's press release contains the reconciliation of the unaudited non-GAAP measures to the unaudited, most directly comparable GAAP measures. With that, I am pleased to turn the call over to our Acting Co-CEO and ASVP, Mr. Huang. Please go ahead.
spk00: Hello, everyone. Thank you for joining our earning conference. Today, I'd like to share an overview of our recent performance and business development and technology offerings and overseeing initiatives as well as our corporate social responsibility efforts. 2023 marked a year of transformation for Huya. We launched a strategic plan to transition our commercialization focus toward game-related services and expand our presence in the game industry. I'm pleased to report that we have made great strides in this area while also strengthening our core capabilities to maintain our leadership and competitiveness in the game live streaming industry. Against the backdrop of challenging macro and industry environment and this proactive business adjustment, we experienced revenue decline this year. However, we achieved a turnaround on the margin side, posting a non-GAAP net income of RMB $119 million for the full year as we continue to optimize cost and improve operational efficiency. We also kept our user community engaged through our extensive content and service offerings, with Huya Life's average mobile MAUS holding steady year over year at 84.1 million for full year 2023. Next, a brief update on our strategic transformation. Our main goal for 2023 was to build the business infrastructure required to support our new game-related service and to establish cooperation with related game studios. We have largely completed kit list work, including upgrading the game center module, developing and integrating the in-game item mode function, and optimizing account binding with related games. We have also begun cooperating with various major game titles to provide distribution and promotion service, as well as in-game virtual item sale service on our platform. Although revenues from game-related service was modest in 2023 as we were in preparatory phase, we saw encouraging sign of growth in the fourth quarter and expect that trend to strengthen in 2024. We are confident that game-related service will continue to scale as we add newly launched and existing titles and ramp up public participation from our broadcasters. Revenues from our advertising and other segments increased 41% quarter-over-quarter and 29% year-over-year in the fourth quarter, primarily driven by game-related service contribution. Our recent efforts in the promotion and distribution of an early-awaited new game, DreamStar, clearly demonstrate our game-related service capabilities as well as this business's vast potential. We conducted a comprehensive promotional campaign loaded with innovative features, resulting in industry-leading levels in terms of promotional performance and the number of reservations and downloads through our channel during the game's launch period. Specifically, we invited popular broadcasters on our platform to stream their gameplay and rewarded live stream viewers with visual Gym Star gift packs through our unique interactive gift drop feature. We also created a Gym Star pre-order and download area in our game center and provided broadcasters with commission-generating reservation links to place on their channels incentivizing their participation while boosting user pre-orders. Meanwhile, users who downloaded the game through our platform received inclusive in-game props and other gifts provided by both DreamStar and Huya. In addition, we held cross-platform entertainment competition, incentivized the creation of gameplay-delivered videos and organized activities for broadcasters to design inclusive game maps, all of which effectively expanded this new game's reach on our platform. As a live streaming platform primarily serving the game vertical, OUYA provides a more professional, more feature-rich game streaming experience than non-dedicated platforms. We are committed to further differentiating our super real game live streaming platform and continue to drive progress through tech innovation. For instance, we currently leveraging deep game data and our proprietary large language model chain on data from our platform streaming contents. and 270 million bullet chats to enhance the traditional live streaming viewing mode with real-time analysis and interaction based on game content and events. This immersive upgrade makes game live streaming content more professional and entertaining, boosting engagement across the board. For example, in our content, current Honor of Kings live streams Our AI tech can help streamer dynamically generate customized commentary based on real-time information, such as game battle status and weapon used. In addition, viewers can use our AI intelligent editing function to instantly capture and replay blockcasters' best moves, increasing users' sense of participation. Turning now to our overseas expansion, we view our overseas initiatives as strategically important, providing revenue diversification while supporting our overall growth as we capitalize on opportunities arising from the overseas activities of Chinese game companies. In December 2023, We acquire a 100% equity interest in a global mobile application service provider. In line with our strategic transformation, this acquisition is intended to enhance our game promotion and distribution capabilities in international markets. It will also create synergies with our overseas game live streaming platforms, Nemo TV. empowering better utilization of localized results and improving efficiency. Lastly, as a part of our corporate social responsibility efforts, we continue to expand our portfolio of content with positive social impact through our live streaming plus model, connecting online interactions and offline activities. In 2023, more than 4,600 broadcasters contributed a total of over 50,000 streaming hours of positive social impact content to our platform, covering areas such as cybersecurity education, minor protection, and rural revitalization to complement our game and entertainment programming. We leverage our innovative technology and brand awareness to increase this content's influence, enhancing our platform's healthy atmosphere. Going forward, Huya will remain committed to upholding its corporate social responsibility and contributing to the healthy development of the live streaming industry. Looking ahead to 2024, we face a rapidly changing market market conditions and that present both challenges and opportunities, we will continue to solidify our core live streaming business and actively promote the development of game-related service to expand our business and revenue streams. As we steadily implement our strategic transformation plan, we remain confident in our future business prospects. With that, I will now turn the call over to our Acting Co-CEO and VP of Finance, Ashley Wu, to share more details on our results. Ashley, please go ahead.
spk03: Thank you, Vincent, and hello, everyone. I'll provide some updates on our operating metrics and financials. Overall, we maintain a stable user base in the fourth quarter. We continue to engage users in rich game and esports content during the period, particularly some major esports tournaments, while upgrading interactive features to enhance the viewing experience. OER Live Mobile MAUs for the fourth quarter of 2023 was 85.5 million, compared with the same period last year. and slightly lower compared with the summer season's higher base. On the other hand, as we developed more innovative game-related services, more users started to pay for these new services in the fourth quarter, driving a slight sequential increase in Huya Life's paying users for the fourth quarter to 4.3 million, despite a decrease in live streaming products and services paying users. Turning to our professional content enrichment, on the licensed content front, we broadcasted over 70 third-party professional esports tournaments in the fourth quarter of 2023, with a total viewership of over 360 million. As we have become more selective In licensing tournaments, we will continue to improve the ROI and content utilization efficiency of these events by enhancing event experience and related operational activities. A variety of year-end events, including the LOL Worlds, the Honor of Kings International Championship, and Challenging Cups, the Crossfire CFS Grand Finals, and the PUBG Mobile Global Championship attracted raw user attention. The Valorant China Evolution Series also gained traction on our platform as Valorant's esports events continued to develop. Notably, our coverage of this year's LOL Worlds 2023 one of the most influential esports events in the world, demonstrated our vast content enhancement capabilities. We once again maintain our leading market share of this event's viewership, with several of its key viewing metrics on our platform, improving compared to the previous edition. Oya has broadcasted this event for six consecutive years, gradually increasing our users' awareness of the brand and cultivating a strong habit of watching it on Huya's platform among the professional esports audience. To provide best-in-class broadcast quality, this year, we continue to focus on upgrading users' viewing and interactive experiences, introducing enhanced features such as 120 FPS high frame rate video quality, an AI camera for taking live scene photos, and our game watching assistant. In addition, we boosted user attention and engagement through a combination of online and offline operational activities and our self-produced commentary programs. such as Huxiang S13. In terms of self-produced content, we broadcasted nearly 30 self-organized esports tournaments and entertainment PGC shows in the fourth quarter, with a total viewership of approximately 120 million. Among these events, League of Legends Huya platform Qualifier for Demo Sale Cup and Peacekeeper Elite MNC Challenge Match were quite popular. For our in-house developed IPs, we will focus on producing their feature content and expanding its reach through cross-platform and cross-category collaborations. In December, we hosted the first event in our Village Game Series, the Lianghe Village Game for Honor of Kings in Lianghe County, Yunnan Province. The Village Game Series represents our first foray into building a rural esports tournament brand. With county government support, this event attracted massive attention among local communities, bringing together people of all ages, and more than 300 teams to compete. Our event integrated esports with traditional cultural activities, successfully expanding the influence of esports content among local audience, while also promoting the local culture. Honor of Kings, named this Lianghe Village Games, is best authorized esports tournament in 2023, a powerful testament to our tournament and brand building capabilities. Let's move on to our Q4 financial details. First, I would like to point out that because our December acquisition of the mobile application service provider is a business combination under common control, we have consolidated the financials of the acquired business on a retrospective basis from the first quarter of 2022. Therefore, on this call and in the earnings release, we have included its results in our fourth quarter and full year 2023 figures and retrospectively adjusted the financials from the comparable period of 2022 to reflect the changes. Our total net revenues were RMB 1.53 billion for Q4 compared with RMB 2.12 billion for the same period last year. Livestreaming revenues were RMB 1.34 billion for Q4 compared with RMB 1.98 billion for the same period last year, primarily due to the soft micro and industry environment and our proactive business adjustments to support our strategic transformation and prudent operations. Advertising and other revenues were RMB 186 million for Q4, compared with RMB 144 million for the same period last year, primarily due to increased revenues from game advertising and distribution services. Cost of revenues decreased by 37% year-over-year to RMB 1.51 billion for Q4, primarily due to decreased revenue sharing fees and content costs, as well as bandwidth costs. Revenue sharing fees and content costs decreased by 39% year-over-year to RMB $1.32 billion for Q4, primarily due to the decrease in revenue sharing fees associated with the decline in live streaming revenues, as well as lower costs related to eSport content and content creators. I'd also like to point out that our content spending for Q4, while meaningfully lower year over year as a result of our cost optimization efforts, was still higher than in Q3. This was primarily due to the cost related to some large events particularly the content costs before LOL was 2023. Bandwidth costs decreased by 19% year-over-year to RMB 82 million for Q4. This was primarily due to improved bandwidth cost management, favorable pricing terms, and continued technology enhancement efforts. Cross-profit was RMB 15 million and gross margin was 1% for Q4. Excluding share-based compensation expenses, non-GAAP gross profit was RMB 15 million and non-GAAP gross margin was 1% for Q4. Research and development expenses decreased by 6% year-over-year to RMB 137 million for Q4, primarily due to decreased share-based compensation expenses. Sales and marketing expenses decreased by 11% year-over-year to RMB 113 million for Q4, primarily due to decreased personnel-related expenses. General and administrative expenses, increased by 18% year-over-year to RMB 100 million for Q4, primarily due to provisions and increased professional service fees, partially offset by decreased share-based compensation expenses. Other income was RMB 13 million for Q4, compared with RMB 44 million for the same period last year, primarily due to lower indirect tax refunds and government subsidies. As a result, operating loss was RMB $322 million for Q4, compared with RMB $581 million for the same period last year. Interest and short-term investments income was RMB $129 million for Q4, compared with RMB $102 million for the same period last year, primarily due to increased interest rates and improved management of deposit products. Net loss attributable to Huya Inc. was RMB and $75 million for Q4, compared with RMB $563 million for the same period last year. Excluding the share-based compensation expenses, impairment loss of goodwill and investments, and amortization of intangible assets from business company acquisitions, lack of income taxes, non-GAAP net loss attributable to Huya Inc. was RMB 190 million for Q4, compared with RMB 439 million for the same period last year. Non-GAAP net loss margin was 12.4% for Q4. Diluted net loss per ADS was RMB 1.14 for Q4. Non-GAAP-dinoted net loss per ADS was RMB 0.79 for Q4. As of December 31, 2023, the company had cash and cash equivalents, short-term deposits and long-term deposits of RMB 9.9 billion, compared with RMB 10.7 billion as of September 30, Moving on to our full year 2023 results. Total net revenues were approximately RMB 7 billion for 2023, compared with RMB 9.26 billion for the prior period. Livestreaming revenues were RMB 6.45 billion for 2023, compared with RMB 8.2 billion for the prior period. Advertising and other revenues were RMB 544 million for 2023, compared with RMB 1.07 billion for the prior year. Nevertheless, we achieved a meaningful year-over-year profitability improvement across the board Non-GAAP gross profit was RMB 831 million, and non-GAAP gross margin was 11.9% for 2023. Non-GAAP net income attributable to Hoya Inc. was RMB 119 million, and non-GAAP net margin was 1.7% for 2023. Non-GAAP-diluted net income per 8 years was RMB 0.48 for 2023. For additional details on our full-year 2023 financial results, I encourage listeners to refer to our earnings press release issued earlier today. Finally, let me provide an update on our capital allocation Under our up to US dollar 100 million share with purchase program that began in August 2023, we have repurchased 9.2 million ADS with a total aggregated consideration of US dollar 28.8 million as of the end of 2023. In addition, I'm pleased to announce the declaration of a special cash dividend totaling approximately US dollar 150 million for our shareholders. We will remain committed to enhancing shareholder returns and creating long-term shareholder value. With that, I would now like to open the call to your questions.
spk05: Thanks, Ashley. And hello, everyone. If you are dialing in by phone, please press five to ask a question, then press six to unmute yourself. If you're accessing the call from the Tencent meeting or both meeting applications, please click the raise hand button at the bottom left. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Today's first question comes from Lei Zhang from Bank of America Securities. Lei, your line is open. Please go ahead.
spk01: Hi, 管理层晚上好,谢谢接受我的提问,然后也恭喜发了这个special David. 然后我的问题主要是关于2024年的Auslook的, 可以请管理层分享一下我们怎么看24年用户跟收入的趋势, 还有我们这个新业务对整体的这个24年的一个影响。 谢谢,我自己翻译一下。 Thanks management for taking my question and congrats on the a launch of special dividend and my question is mainly about 2024 outlook in terms of user and the revenue and can you give us more color on the impact from your new business thank you
spk00: OK, let me answer Zhang's question first. In terms of users, in the fourth quarter of 2023 and the year-end live broadcast of Huya, MAU, we have maintained a stable state in the early stage. On the one hand, we have reduced the investment in marketing and channel promotion, and have carefully selected the content of the e-sports competition. In the first half of 2023, it will also be affected by the negative effects of offline activities. On the other hand, we will continue to improve the operational capability and the efficiency of the high-quality content of eSports. At the same time, we will upgrade the interactive function to improve the overall experience of viewing and to improve the overall participation of users. Therefore, we have maintained the stability of the entire user group.
spk04: Vincent taking the question first. On the user front, Ahuya Live Mobile MAUs in Q4 and for the full year 2023 were generally flat compared to prior periods. On one hand, we lowered our marketing and channel promotion spending and were more selective with our esports content offering. The first half of 2023 was also negatively impacted to some extent by the increase in offline activities from our users. On the other hand, we continue to enhance our operational capabilities around esports events and improve the efficiency of utilizing quality content, while also upgrading interactive features to improve viewing experience and user engagement levels. As a result, we were able to maintain an overall stable user case.
spk00: In 2024, we will continue to consolidate the core user group of Huya, which will carry out better operations for existing users and attract more high-quality game players. At the same time, we will also attract users to pay through richer game-related services. For example, Q4 users pay for game props and drive the overall payment. The total amount of users is called Q3, which is growing. This shows that we are making progress in this regard.
spk04: For 2024, we'll continue to solidify Huya's core user base, better operate our existing users, and also reach more high-quality gamers. At the same time, we will aim to attract more paying users through enriched game-related services. For example, user payments for in-game virtual items in Q4 drove an increase in total paying users compared to Q3. indicating some initial success in this area.
spk03: In the first quarter, due to the influence of traditional live broadcasts, the live broadcast income will experience some seasonal fluctuations. At present, we see that the live broadcast income trend will start to stabilize, and we hope that the following quarter can gradually return to a stable state.
spk04: Answer from Ashley. In terms of live streaming revenues, we saw a neat decline in Q4 due to the four-quarter impact from business adjustment driven by stress. transition and shifts in internal resources allocation, as well as from the continued weak industry environment. For the year 2024, live streaming revenues will experience some seasonal fluctuations in Q1 due to the low traditional low season. Currently, we are seeing live streaming revenue trends starting to stabilize, and we hope that they can gradually recover to a steady state in the subsequent quarters.
spk03: 那在广告和其他收入方面, 尽管游戏相关服务业务还处于初期的阶段, 那广告和其他收入在Q4也取得了显著增长, 环比增长41%,同比增长29%, 尤其是受到广告、游戏广告和分发收入的拉动。 在2024年,随着我们为更多游戏提供更多分发、 推广和道具销售的服务, On the advertising and other revenues, despite the game-related services business still being at an early stage, we achieved significant growth of 41% quarter-over-quarter and 29% year-over-year in Q4.
spk04: particularly driven by game advertising and distribution revenues. In the coming year, as we offer more distribution, promotion, and virtual item sales services to more games, coupled with more broadcasters joining our platform, we're confident that advertising and other revenues can achieve faster growth. Thank you.
spk05: And our next question comes from Yiwen Zhang from China Renaissance. Yiwen, please go ahead.
spk07: Thank you for your question. My question is regarding our content strategy in 2024. So under current market dynamics, how would the company plan to maintain competitive edge? Thank you.
spk00: The content strategy is still relatively stable, but in the current fast-changing market environment and competitive pattern, we will continue to optimize the strategy and make dynamic adjustments. The content of the live broadcast is an important component of the Huya platform content. We will continue to build an influential live broadcast ecosystem and work with game manufacturers to improve the source and ability of commercialization of live broadcasts, strengthen the platform's attraction to live broadcasts, At the same time, we are actively exploring the application of AIGC. We provide the tools based on AI technology to help reduce the opening threshold of the anchor, improve the efficiency and quality of content production,
spk04: Our overall content strategy remains relatively stable currently. We will continue to optimize and dynamically adjust it given the rapid changing market environment and competitive landscape. Broadcaster content is an important component to our offerings and will continue building an ecosystem of influential broadcasters working with game publishers to enhance broadcasters' commercialization opportunities and capabilities. and strengthening our platform's appeal to the broadcasters. At the same time, we are actively exploring the application of AIGC and the AI-powered tools we provide can help lower the entry barriers for broadcasting while improving the content production efficiency and quality.
spk00: OK, in terms of professional content, Huya has a comprehensive copyright market and a mature trading system that can bring more high-quality e-sports content to users. Specifically, we pay more attention to the situation of the market RY. In 2024, we will continue to cover various mainstream e-sports markets, including LPL, KPL, PL, etc., At the same time, it will strengthen the professional operation capability of SICE and focus on the creation of extended content. The user experience in the large e-sports SICE live broadcast is critical. Buya not only has the best audio and video technology in the industry, but also continues to upgrade. For example, in the Hero Alliance S13, we added the top 120 FPS high frame rate image quality function in the live broadcast industry.
spk04: For professional content, Huya has a comprehensive portfolio of licensed esports events and a mature system of self-produced tournaments, enabling us to bring more high-quality esports content to users. Especially with an increased focus on ROI for the events in 2024, we'll continue to cover major mainstream esports tournaments, including LPL, KPL, PEL, and others. We will also strengthen our professional event operations capabilities while emphasizing on the creation of derivative content. User experience during large sports events broadcast is crucial, and not only does Huya possess industry-leading audio-video technologies, but we are also continuously iterating and upgrading them. For example, for the League of Legends S13 tournaments, we introduced an industry-leading 120fps high frame rate video quality feature for the livestream.
spk00: 虎牙的置办赛事也是专业内容的重要组成部分。 我们将继续巩固虎牙的自由IP矩阵, 提升置办赛事和活动的影响力,打造有特色的自制内容。 It is worth mentioning that with the support of the government, we will combine e-sports and rural culture, and assist the whole nation in the promotion of e-sports through the rural e-sports competition held by Huya. The Lianghe Village, which was held last December, Tune Game is the first match of our Tune Game series. The competition has gained the attention and enthusiasm of the local community. At the same time, this competition has also received the title of the best king in 2023, officially granted by the Prince of Glory. This also proves the high quality and professionalism of Huya.
spk04: Huya's self-produced tournaments are also an important part of our professional content offerings, and we'll continue solidifying our own IP metrics and enhancing the influence of our own tournaments and events to create distinctive preparatory content. It is worth mentioning that we combine esports with rural culture and with government support, promote esports for all through Huya's self-produced rural esports events. The Lianghe Village Game events held in December last year was the first stop of our Village Game series, garnering attention and enthusiastic participation from local residents. This tournament was also awarded the Honor of King Best Authorized Esports Tournament in 2023 by The Game officially, attesting to the high quality and professionalism of Huya's tournaments.
spk00: Huya is a game-oriented content streaming platform. For many years, it has cultivated the brand and knowledge of games. The platform gathers high-quality gaming users to form a community of professional gaming content. Therefore, Huya can also provide a game live experience that is richer in platform functions compared to non-games, and we are also determined to bring a more differentiated experience through technological product upgrades. For example, by cooperating with game manufacturers and tiger teeth to open up the depth of the game data, and the tiger-toothed language language model based on a large number of barcode data, we can upgrade the traditional live broadcast mode to a more immersive game-based actual commentary and interaction mode based on the game content, making the game live broadcast content more professional and interesting.
spk04: As a live streaming platform primarily serving the game at the gaming vertical, Huya gathered high-quality game users and cultivated strong brand awareness through our community by providing a more professional, more feature-rich game streaming platform. experiences than non-dedicated platforms. We are committed to further differentiating our superior game live streaming platform and continue to drive progress through tech innovation. For instance, we're currently leveraging deep game data and our preparatory large language model, LLM, trend on data from our platform streaming content and bullet chats. to enhance the traditional live streaming viewing mode with real-time analysis and interaction based on game content advance. This immersive upgrade makes game streaming content more professional and more entertaining.
spk00: In an overall more open environment, these collaborations will bring more opportunities for development and strengthen competitiveness for Huya. This not only includes our collaboration with Tencent, PCG, and other departments including QQ browser and Tencent Video and other products, as well as the close cooperation with the IEG department. It also includes cooperation with other live broadcasts and video platforms for content and operation. For example, in February of this year, we organized a full-fledged e-sports event in the new village, and linked the other three main live platforms to get a good response. From the participant's point of view, it not only helps our content to reach a wider audience, but also brings more content to the existing users, which will also help to increase the size and influence of the Huya platform.
spk04: In addition to the above, strengthening collaborations with various platforms and products is an important strategy for us in 2024. In an overall more open environment, these collaborations will bring more development opportunities and enhance Huya's competitiveness. This includes not only deepening interconnectivity and cooperations with Tencent's PCG products such as QQ and Tencent Video, as well as close collaborations with the IEG business units, but also content and operational partnerships with other live streaming and video platforms. For example, in February this year, we hosted a New Year esports all-star event that was co-streamed across three other major live streaming platforms with good reception. In the long run, this will not only help our content reach a wider user base and bring more enriched offerings to existing users, but will also contribute to enhancing Huya's scale and influence. Thank you.
spk05: And our next question comes from Richie Sun from HSBC. Richie, please go ahead.
spk06: 好的,谢谢Richard的提问。 那我来回答一下这个问题。
spk03: 我们在2023年持续进行降本增效,并且致力于优化成本和费用的支出,提升运营效率。 那在2023年第四季度出现亏损,主要是受到内容成本的季节性影响。 因为有一些成本较高的大型赛事,比如S13在Q4的发生。 to 7.1%, up to 11.7%. At the same time, our sales, development, and management costs have all been reduced. The total operating costs have also dropped by 13.9%. Therefore, the operating losses of Huya in 2023 have been reduced, and the operating losses of Huya in 2023 have been reduced to 1.2 billion yuan.
spk04: We continued our cost optimization and efficiency enhancement efforts in 2023 to better manage our costs and expenses and improve operational efficiency. The loss in Q4 2023 was mainly due to the seasonal impact of content costs as some larger and more costly tournaments like S13 took place in Q4. However, driven by declines in events and broadcaster costs as well as bandwidth costs compared to the same period in 2022, we saw a significant improvement in gross margin profits for Q4, with overall losses also narrowing year over year. For the full year, despite our revenue decline, revenue share and content costs decreased by 29% year-over-year, bandwidth costs decreased by 33%, and gross margin improved from 7.1% in 2022 to 11.7% in 2023. Meanwhile, we achieved cost savings across all three operating expenses items, i.e. sales, R&D, and G&A, with total OPEX down by 13.1% year-over-year. As a result, Huya's operating cost loss narrowed in 2023, where we achieved non-GAAP net profitability of approximately RMB $120 million.
spk03: 2024年在成本方面,我们继续通过严格的ROI分析和优化成本投资策略,努力实现在赛事成本和主播相对固定的签约成本的进一步优化。游戏相关服务业务由于还在比较初期,它的毛利还在逐步趋向稳定的状态,不过毛利率还是会比直播馆板块会高一些的。
spk04: In 2024, in terms of costs, we'll continue to strive for further optimization of event costs and relatively fixed signing costs for broadcasters through a strict ROI analysis and optimized content investment strategy. As the game-related service business is still in its early stage, its gross profit margin is gradually stabilizing, but it will still be slightly higher than the live streaming segment. With the gradual growth of the game-related services business, which has a higher gross profit margin and the increase in its proportion of total revenue, we expect the overall gross profit margin to increase compared to 2023. In terms of operations, we will also continue to maintain prudent spending, especially in the sales expenses and labor costs. Based on our current plans, we are confident in achieving profitability in 2024 with profit indicators improving compared to 2023.
spk05: Thank you. Now we will take our last question today from Thomas Chong from Jefferies. Thomas, please go ahead.
spk02: 我感谢管理层接受我的提问。 我的问题是公司目前的资金情况和现金使用的策略。 我自己翻译一下。 Next management for taking my question. My question is about our capital situation and the strategy of cash usage. Thanks. 好的,谢谢Fiona的问题。 截止到2023年底,虎牙持有现金以及现金等家务和存款共计近14亿美元。
spk03: 那这个金额呢,较去年9月底发生了一些变动, 主要是在于年底的一个业务并购, 以及我们在股票回购上面的一些支出。 那从分布上来说,我们持有的超过一半的资金是境外的美元资金。 As of the end of 2023, Puya held nearly 1.4 billion US dollars in cash as equivalents and deposits. We expect that the profit and loss level in 2024 will have room for further improvement compared to 2023. We also expect to achieve a positive business cash flow throughout the year. Therefore, we will continue to have sufficient cash reserves to support the development of various businesses. At the same time, we will also carefully consider the potential investment opportunities of Huya Ecotourism, to strengthen the competitiveness of the company. In the case of having a healthy balance sheet and cash reserve, the board of directors and management of the company hope to use cash more effectively to strengthen the investor's return and pass on long-term development confidence.
spk04: As we mentioned earlier, we expect the profitability level in 2024 to have further room for improvement compared to the year before, and we also expect to achieve positive operating cash flow for the full year. Therefore, we'll continue to have sufficient cash reserves to well support the development of our business. At the same time, we will continue to carefully consider potential investment opportunities upstream and downstream of Huya's ecosystem to enhance the company's competitiveness. With a healthy balance sheet and cash reserves, the company's board of directors and management hope to use cash more efficiently, enhancing investor returns, and convey long-term development confidence.
spk03: In our $100 million return plan announced in August last year, by the end of December, we have already repurchased 2,880 million US dollars of Huya stocks. In the first quarter of this year, we will also actively continue to repurchase. We are also very happy to announce that this is the first time in Huya's history that we have sent shares to support our shareholders for long-term return. This time, the special cash share share amounted to about $1.5 billion. 每ADS或者普通股为0.66美元。 股息 未来我们也会持续探索提升资金使用效率和回馈股东的方式。
spk04: In the US$100 million repurchase plan we announced last August, as of the end of December, we have repurchased US$28.8 million worth of Huya stock, and we have continued to actively repurchase in the first quarter of this year. Today, we are also pleased to announce our first-ever dividend payout of $0.66 per ADS or per ordinary share, constituting a special cash dividend totaling at $150 million for our long-time supportive shareholders. In the future, we will continue to explore ways to improve the efficiency of capital utilization and return to our shareholders.
spk05: Thank you. Thank you once again for joining us today. If you have further questions, please feel free to contact Huya's Investor Relations through the contact information provided on our website or PS&T Financial Communications. This concludes today's call, and we look forward to speaking to you again next quarter. Thank you. Bye-bye.
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