Yalla Group Limited

Hello, everyone, and welcome to Yela's fourth quarter and full year 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 know that the discussion today will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Integration Reform Act of 1995. Forward-looking statements involve inherent risks and incentives. 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 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 a 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. Tao 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. Saifiz Mayu, 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 financial results. and discuss our financial outlook. Following management's prepared remarks, we will open up the call to questions. Our Chief Operating Officer, Mr. Jeff Xu, will join the call for our QA session. 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 Fourth Quarter and Full Year 2021 Earnings Conference Call. 2021 marked an important year for Yala. Dedicated to our vision of fulfilling the involving online social networking and entertainment needs of Mina users, we increased the diversity of our business and services to new levels. We continued to expand with the area of development, investment, and collaboration initiatives, and build a thriving Yala ecosystem of seven products. as well as an exciting pipeline of new innovative products and features to provide our users with additional choices and a better experience while creating future revenue streams for our company. Before we turn to our business updates, I would first like to provide an update on the voluntary dismissal of the Securities Class Actions lawsuit YALA faced recently. This lawsuit was filed against YALA in the US in August 2021 based on assertions in short salary reports, refuted by the company, claiming that Yala had violated U.S. securities laws. The U.S. court ordered the plaintiffs and their attorneys to file an amended complaint, including the factual basis supporting their allegations. However, after several months of preparation time, the lead plaintiffs and their attorneys failed to file an amended complaint by deadline set by the court. Instead, they elected not to pursue this matter any further and voluntarily dismissed the lawsuit on January the 12th, 2022, agreeing to bear their own litigation costs. Once YALA agreed to the plaintiff's dismissal. The following day, the court approved it and terminated the lawsuit. Voluntary dismissal of this kind is rare in the industry. Throughout the process, Yella maintained that the lawsuit has no factual basis, and this has now been further validated by the plaintiff and their attorney's decision to dismiss the lawsuit after several months of investigation. Now let's take a closer look at some of our recent accomplishments. As a pioneer in MENA's online social networking and entertainment industry, we consistently seek to expand our ecosystem with investments that broaden our product range and meet our users' unique needs as we serve the MENA region. Last quarter, we announced the establishment of our holding subsidiary, Vialla Games. And we are happy to share that we have already made two investments in mid-core to high-core game projects. We have already identified two content providers with impressive teams that we will assist in localizing and distributing their games within the MENA region, leveraging our local know-how to bring exciting new content to our users. Empowered by our healthy cash flow and strong cash balance, we are also looking beyond gaming to find diverse investment opportunities to flexibility and efficiently broaden our ULS ecosystem. Our efforts to lead Mina's online social networking and entertainment industry do not stop at game distribution. We also strive to advance social networking products for the media market and have made good progress with our IM product, Yellowchat. We recently released Yellowchat version 0.3 with new functions, including group video chatting and images designed specifically for Arabic users. With plans to roll out more localized functions in the near future, We strongly believe that in the digital era, a dedicated IAM product with features tailored to MENA's local user preferences is a fundamental requirement. And we feel an overriding sense of responsibility to fulfill the critical need for MENA-based users. It's never easy to develop a successful IAM product, but it plays a significant role in our vision to fulfill the involving online social networking and entertainment needs of MENA users. We will continue to welcome user feedback and work on perfecting the details with upcoming iterations of Yellowchat. As we reported last quarter, beyond Yellowchat, we have been expanding the boundaries of existing online social networking products with our work on WAHA, the first ever social metaverse designed for the MENA region. WAHA, which means Oasis in Arabic, is an important step forward in Jalos Group's metaverse application explorations. And we are thrilled to share that we brought our metaverse to life even earlier than expected with WAHA's successful launch in both the App Store and Google Play on March the 10th. WAHA's interactive features provide users with greater freedom online as well as immersive online-merge-offline social experiences. In WAHA, users can interact virtually with their online friends in 3D's social sense while simultaneously enjoying real-life socialization through web chatting and gifting. We see massive development potential in the metaverse and we remain keen to continue exploring its possibilities to create accelerating interactive experiences for our Waha users. We also mentioned last quarter that we have officially kicked off our internal ESG program. As a responsible corporate citizen, YALA is committed to advancing ESG initiatives in the MENA region, and we believe a sustainable growth target is essential for YALA, our community, and for our shareholders. We have been communicating with internal and external stakeholders to gather feedback and refine our ESG guidelines, and we are happy to update you that we will release our first annual ESG report very soon. Additionally, I'm delighted to share with you that our President, Mr. Saifi Ismail, was named MENA's Leading Personality of the Year in the Digital and Human Discovery by Emirati Estarbaez Tasmarat, magazine's 2021 Middle East's Most Creative Business Leaders Award. Saifi was honored along with an illustrious group of 22 Middle East business leaders for his outstanding contributions to the digitalization of entertainment and social networking in the region. Congrats, Jackie. In conclusion, I would like to reiterate that our vision, and one that we feel passionate about, is to build the most popular destination for online social networking and entertainment activities in MENA. We hope to realize this vision within the next 10 years. For the past five years, we have been committed to promoting a healthy and orderly sector environment, and providing the people of MENA with better access to digital life. And our devotion to this goal remains unchanged. Looking ahead, we will continue to closely watch MENA's local cultural trends, and develop a yellow ecosystem with a host of products and services tailored to the needs of local users. We are well-positioned to capitalize potential growth opportunities in the MENA region and leverage our excellent localization capabilities to generate long-term sustainable returns for our shareholders. Now I will turn this call over to our president, Mr. Saifi Ismail, for a closer look at our recent development.

Hello, everyone. Thanks for joining us today. And thank you very much, Tao, too, for mentioning the Emirati Istismarat magazine's leading personality of the year award in the digital entertainment category. I'm most grateful to have received this recognition both for myself and on behalf of the entire Yalla group. It reflects our passion for digital entertainment and its impact on the region. The media entertainment and social networking market is undergoing a vast digital transformation. And Yalla is proud to be a driver of innovation and a source of creativity as we advance the development of the digital world in the region. We will continue to develop our immersive digital social and entertainment ecosystem and provide our users with even more memorable and cherished experiences. Now, let's take a look to our operations, as well as our product performances. Operationally, our growth momentum persisted throughout 2021 as we expanded our user community and advanced our monetization capabilities. We are pleased to report a solid fall year of 2021, with Yalla Group's total revenue increasing 102.4% year-over-year to reach 273.1 million U.S. dollars. Furthermore, 2021 was an important year for Yalla from a product perspective as we continued to roll out products tailored to MENA users' needs and diversify the services and businesses that Yalla covers. Our experienced marketing team implemented innovative, customized campaigns to promote products that resonate deeply with the local culture. As a result, in the fourth quarter, our monthly active users increased 8.1% quarter over quarter, reaching 28.1 million. Yellow groups weighing users also increased to 8.4 million as we have begun to launch more new products since the end of the last year. We are proactively working to improve our product launch efficiency to this end while increasing the budget We are also adjusting our sales and marketing strategies by focusing on key regions and groups, as well as exploring new customer acquisition channels, such as offline advertising, among others. We are also happy to share that our games, including Yalla Purchase, 101 OK Yalla, and the recently launched Yalla Balut are making impressive progress. In quarter four, Yellow Parchees was ranked within the top five in 10 countries in terms of the number of downloads under the board games category, and also ranked in the top 10 in terms of revenue under the board games category in Colombia, Spain, and Mexico, to name just a few. To advance our localization efforts, we rolled out the chatroom function in Yellow Parchees' latest version, enabling not only voice chatting, but also video chatting. to better suit South American users' social habits and preferences. We also hosted events to celebrate local holidays to encourage user engagement on the platform. Our Diadi Mortros event was a notable success, attracting participation by more than 40% of our monthly active users. 101 OK Yalla remains one of the most downloaded apps in the board game categories in Turkey. and was also ranked among the top 10 in terms of revenue in Turkey in the board game category for the first time in December 2021. 101OK Yalla receives excellent feedback from users, and we have seen user sickness improve consistently as both average daily time spent per active user and user willingness to pay continue to grow. Last but not least, in December 2021, we officially launched Ayala Balloon, a cloud game designed for Saudi users. Since its launch, Yellow Balloon has been recommended 13 times on the first page within the game category in the App Store. A powerful testament to our team's extensive experience and ability to develop highly desirable, enjoyable products well liked by our target user base. Next, another piece of good news. The Yalla Group was romantically featured in one of the Time magazine's most popular issues, the Person of the Year issue. A unique annual edition featuring the person, group, idea, or object that has done the most to influence key events during the year. As the first UAE internet unicorn to be listed in the United States, Yalla's first year as a public company has been filled with many achievements, as well as challenges. And we are proud to have caught the eye of this renowned publication. We will continue to build our visibility while communicating transparently and sincerely with our users, investors, the public, and all of our stakeholders to better convey our story and progression, as well as further strengthen and elevate Yella's brand across the MENA region. As we reiterate every quarter, Yalla aspires to become the number one online social networking and entertainment platform in the MENA region. This vision never changes. We will remain faithful to our core values of prioritizing our users, embracing diversity, and operating within a simple, pragmatic, pioneering, and enterprising approach as we work to achieve our goals. With that, I will now turn the call to our CFO, Karen, who will discuss our key financial and operational results.