Yalla Group Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by for YALA Group Limited's first quarter 2022 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 I will turn the call over to your speaker host today, Ms. Carrie Goh, IR Director for the company. Please go ahead, ma'am.

Hello, everyone, and welcome to YALA's first quarter 2022 earnings conference call. We released our earnings earlier today, and the release is now available on our IR website as well as on Newswell 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 Securities 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 a discussion of unaudited GAAP financial information as well as unaudited non-GAAP 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. Sivis 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 Q&A 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 first quarter 2022 earnings conference call. We are pleased to have started 2022 on a strong note, with our revenue reaching an all-time high of $72.3 million, exceeding the higher end of our guidance. This excellent performance, notwithstanding, 2022 is still undoubtedly shaping up to a year full of challenges. Looking at the medical environment variables, such as geopolitical friction among countries, as well as Pandemic resurgence in various regions are creating fluctuation and ongoing turbulence. Yella is closely monitoring the medical situation and will adjust our company strategy appropriately for this year. Instead of merely pursuing high user-based growth, we will increase our focus on improving return on investment. with respect to our user-based expansion. To that end, we are currently testing and effectively adjusting our sales and marketing strategy based on our observations of market dynamics. During the first quarter, we were able to deliver solid top-line growth while optimizing the pace of user growth. Thus, sales and marketing expenses as a percentage of our total revenues have decreased compared with the previous quarter. We are encouraged by this progress and aim to further improve our sales and marketing efficiency going forward. In 2022, we will continue to expand our services and stretch the boundaries of our business, launching innovative social networking and entertainment products to fulfill MENA users' evolving needs and grow our immersive online ecosystem to deliver more memorable experiences to more users while creating future revenue streams for our company. Now let's take a closer look at our new product updates. As a leading player in the online social networking and entertainment industry, Yala strives to expand its ecosystem and broaden the scope of its product and service offerings to meet MENA users' unique needs. We are happy to share with you that, facilitated by Yala Game Limited, we will soon launch the beta version of our first hardcore mobile game. This is a milestone for Yala Group. Beyond that, As an important part of our group's strategy, we are also actively looking for diverse investment opportunities to continue to flexibly and efficiently broaden Yella's ecosystem. We look forward to sharing more updates with you, our investors, on potential opportunities in the near future. We are also excited to share with you that we recently launched YellaChat version 1.0 and have rolled out several important features with this iteration. First of all, as we have shared previously, a crucial step in building the Yala ecosystem among our user communities is to build a unified logging system with Yalachat, which will allow users to log into any product within the Yala group using their Yalachat ID. We have already started marketing this upgrade with Yella, including intensives such as free coins and special gifts to encourage users to log into Yella Live with their Yella Chat ID. We expect this enhancement to motivate an increasing number of Yella users to register for Yella Chat accounts and take advantage of the United Login system. We see this as an important step to boost product synergies and increase users' loyalty and stickiness to Yala Group's products. In addition, in order to encourage users to further engage with Yala Chat, we have introduced a casual social game pop-up within Yala Chat, bringing users new opportunity to share exciting gaming moments and compete with their friends. We believe social games are a good catalyst to increase social interactions while simultaneously promoting Yellowchat to a broader range of users. On top of that, we have also implemented our moments function, which will allow users to make a record of and share their memorable moments with their friends on Yellowchat 1.0 and added more emoji packages designed for Arctic users. We will continue to welcome user feedback, roll out more localized functions, and work on perfecting the details with upcoming iterations of Yellowchat. As we reported last quarter, WAHA, the first-ever social metaverse designed for the MENA region, It plays a critical role in Yala's efforts to expand the boundaries of existing online social networking products and represents an important step forward in Yala Group's metaverse application exploration. After Vaha's launch last quarter, our team focused intently on feedback collection and rolled out another iteration at the beginning of May In the latest iteration, we introduced a new 3D social scene with more interactive features for our users to enjoy in the virtual world, as well as additional options for users to build their Waha avatar. We firmly believe that the metaverse holds tremendous potential for our business. We are closely monitoring industry trends as we explore new possibilities and create unique and more interactive social experiences for our MENA users. Before I conclude, I have one more important update. It is my pleasure to introduce YALA Group's inaugural environmental, social, and governance report, showcasing our performance across economic, social, governance, and environmental practices for 2021. We sought to identify initiatives that enable sustainable development, not only for our company and our employees, but also for the community, the society, and our environment. We are proud to share our progress and future goals with you via our first ANC report, which which is now available download on our IR and company website. We believe that our status as the leading voice centric social networking and entertainment platform in MENA comes with the responsibility to create significant socioeconomic value. This is manifested not only by maintaining robust financial performance but also by providing MENA's people with better access to a digital life while generating value by supporting the region's growth and development goals. As a company deeply rooted in MENA, we have witnessed exceptional achievements in the digital transformation of this region and remain profoundly inspired by the UAE government's unwavering commitment to a sustainable economy. Over the past year, we have continued to make considerable progress in our efforts to align with UAE's visionary 50-year economic plan and the country's economic strategy, prioritizing digitalization and environmental responsibility. As we look back on another successful year, We are happy to take this opportunity to renew our invitation to all stakeholders to continue to engage with us in our open and ongoing sustainability conversation. We welcome all feedback. In closing, I would love to reiterate that our vision is to build the most popular destination for online social networking and entertainment activities in MENA, a vision we hope to realize within the next 10 years. We realize organizational values, multicultural understanding, user-first, simple, and targeted, have guided our team to prioritize our users, embrace diversity, and operate with a simple, pragmatic, pioneering, and enterprising approach as we collaborate Adhering to these principles has been the driver of our past achievements and will ensure that we remain dedicated as we work to achieve our vision. Looking ahead, we will continue to closely observe MENA's local culture trend and consistently expand YALA's ecosystem with diverse products and services tailored to local users' involving needs. Now I will turn this over to our president, Mr. Saifi Ismail, for a closer look at our recent development.