Yalla Group Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by for YALA Groups Limited's second quarter 2021 earnings conference 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. Today's conference call is being recorded. Now we'll turn the call over to your speaker host today, Ms. Carrie Gao, IR Director of the company. Please go ahead, ma'am.

Thank you. Hello, everyone, and welcome to YALA's second quarter 2021 earnings conference call. We released our earnings earlier today, and the release is now available on our IR website as well as on Newswire services. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provision of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our earnings release and our registration statements filed with the SEC. YALA does not assume any obligation to update any forward-looking statements except as required by law. Please also note that YALA's earnings press release and this conference call include discussion of unaudited gap financial information as well as unaudited non-gap financial measures. Yala's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. Today, you will hear from Mr. Tal Yang, our Chairman and Chief Executive Officer, who will provide an overview of our recent achievements and growth strategies. He will be followed by Mr. Saifi Ismayil, the company's President, who will give a brief review of our recent developments. Mrs. Karen Hu, our Chief Financial Officer, will then provide additional details on the company's and discuss financial outlook. Following the management's prepared remarks, we will open up the call to questions. With that said, I would now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead, sir.

Thank you, Carrie, and thank you everyone for joining our 2021 Second Quarter Earnings Conference Call. The second quarter was another solid one for Yala. Yala Group's total revenue reached 66.6 million USD, representing a year-on-year growth of 110.3%. Despite some impact from the Ramadan holiday falling in the second quarter this year, we effectively grew our user community and advanced our monetization capabilities and initiatives. In the second quarter of 2021, we also maintained the robot's profitability. as demonstrated by our non-GAAP net margin of 48.2%. With strong execution of our effective marketing campaigns tailored to MENA's doco culture, monthly active users for our group increased 17.3 Q&Q to 22.1 million. We have also observed diverse impacts from the Ramadan holiday on different types of products. our social products, Yellow's paying users, steadily decreased from 1.2 million to 1.1 million, while our casual game products, Yellow Ludo, saw a 14.6 QMQ increase in paying users to 5.3 million, leading to a group paying user of 29%. Our new products have also been performing impressively. We are very happy to announce that we have officially launched 101OK Yala for Turkish users, which is already receiving positive feedback from the market and has recently reached number one in the board game category in terms of downloads in Turkey. Additionally, Yala Balut, a card game we designed for Saudi users, is also in the final stage of development. We look forward to sharing more updates about this with you next quarter. As for Yellowchat, since the launch of this better version in the first quarter, our team has been persistently working to refine and enhance the product based on user feedback. We expect to gradually improve the performance of the product system and roll out new design features and functions through iterations over the next several months. we are committed to perfecting specific features and customizing our products to cater to local users' desires and firmly believe our precise attention to detail will be fruitful. Besides these three new products designed for our main market mentioned above, Yellow Patches, a South American version of the Ludo app, was also officially launched and have already received very good feedback from our users. Leveraging our experience running Yala Ludo, we facilitated Yala patches development much more effectively and efficiently. We also added the in-game words chat function we have in Yala Ludo into Yala patches, a feature that is gaining popularity among our South American users and helps to build our community. As a result, Users' average daily time spent on Yala patches has already reached 80 minutes. And patches also reached number one in the board game category in terms of download numbers in eight countries, including Colombia, Venezuela, and Ecuador. Another important update we would like to share with you is that Yala initiated its internal ESG guidelines this year. and is also working on summarizing core values that we think will play an important role in steering our team's decision making. Yella has experienced exponential growth over the last five years, and this period has given us a clear picture of the sort of company Yella wants to be, and a vision for our core values on this journey. As the first UAE-based technology unicorn to be listed in the U.S., we have always felt a sense of responsibility to contribute to the broader development of the digital economy in MENA and to build a community with a shared future. YALA is honored to be participating as a partner in the UAE government's recently unveiled national program for coders. Our President Saifi We'll share more details of this program with you later. As a UAE-based company, Yala is deeply committed to respecting local users and local culture. At the same time, we also embrace diversity and proactively add global talents to our team. We have hired employees from more than 15 countries around the world. We learn from each other every day and prioritize fostering an efficient, innovative, friendly, and inclusive working environment. We believe our strong management capabilities and seamless collaboration across borders, as well as a deep sense of trust among teams, have led to Yala's robust growth. We are so proud of the fact that over the last five years, in lockstep with Yala's development as a company, We have also witnessed more and more young talents become experts equipped with deep knowledge of the MENA internet industry. We have gradually built a global team with strong expertise, passion, creativity, and diversity, and deep trust in our company. In 2020, Yala Group's employee turnover rate was only 14%, an incredible number in the internet industry. In conclusion, I would love to reaffirm our mission to build the most popular destination for online social networking and entertainment activities in MENA. As we continue to enrich and enhance the products we offer to better serve local users, we have established and proven our leadership in this field and are confident about the development of the digital economy in this region. Looking ahead, we will continue to closely watch trends in Mina's local culture and develop Yala's ecosystem with various products and services tailored to meet local users' needs. Now I will turn this call over to our president, Mr. Saifi Ismail, for a closer look at our recent development.