Yalla Group Limited

Good morning and good evening. Ladies and gentlemen, thank you for standing by for Yala Group Limited's fourth quarter and full year 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 section. Today's conference call is being recorded. Now I'll turn the call over to the speaker host today, Ms. Kerry Gao, IR Director of the company. Please go ahead.

Hello, everyone, and welcome to YALA's fourth quarter and four-year 2022 earnings conference call. We released our earnings earlier today, and the release is now available on our IR website, as well as our news 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 annual report 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 latest achievements and growth strategies. He will be followed by Mr. Saif Ismail, the company's president, who will briefly review our recent business developments. Mrs. Karen Hu, our chief financial officer, then will provide additional details on the company's financial results and discuss our financial outlook. Following management's prepared remarks, we will open 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, everyone, for joining our conference call. 2022 was a challenging year. In light of the microeconomic headwind, IEALA firmly executed its core strategy while capably adjusting to the market dynamics and made good progress overall. Encouragingly, we delivered year-over-year growth in revenue, underscoring the effectiveness of our quality growth strategy. We also continued to improve efficiency while maintaining the stable development of our two flagship applications, Yala and Yala Ludo. At the same time, we continued to invest in new products to explore and tap opportunities in MENA region's digital market, setting the stage for even better performance in 2023. In Q4, our revenue was 75.1 million USD. reaching the upper end of the guidance we provided. Although we did witness a slight downward impact on user activity, primarily due to the 2022 FIFA World Cup in Qatar, which diverted our users' attention to some degree. The event's influence on our results, which should prove to be a one-time effect, was consistent with our expectations. Nevertheless, the success of the FIFA World Cup in Qatar introduced a modern and open MENA with great energy and strength to a global audience. We are seeing increasing attention and interest in the opportunities related to MENA's digital transformation from enterprises and investors worldwide. I'd like to share some new research from Frost and Sullivan. In their recent research report, titled Online Social Networking and the Gaming Industry Independent Market Research, Yela has been recognized as the largest media-based online social networking and gaming company in terms of revenue in 2022. While our social networking products are already well known throughout the region, we are thrilled to see our game actually gaining traction over the past few years. This is yet another testament to our strong brand awareness and reputation, robust technical capabilities, and deep understanding of local culture. We believe that as the number one MENA-based online social networking and gaming company, we are uniquely positioned to capitalize on MENA's strong digitalization chance over the next five years, unleashing massive growth potential across the other groups' businesses. Now let's take a look at some recent development of Yala Games, our subsidiary formed to explore the mid-core and high-core game business. Leveraging our industry-leading experience in online social networking and gaming in MENA, we recently launched our first internal game studio, making an important step for Yala Group to begin in-house development of high-core games. Going forward, The game development and game distribution business will constitute key strategic pillars for Yellow Game. In addition to collaborating with outstanding content providers on game distribution, in future, It's also possible for us to gradually establish more internal game studios to build up our capabilities in the research and development of medical and hardcore games across a broad range of genres. More specifically, we have finished the first round of beta testing on both March Kingdom and our RPG game. The first two hardcore games titled we will distribute in media. And we have been working on product requirements to better address user feedback and improve user experience. We will soon start the second round of testing and we'll keep you posted on our plans for both games' official launch. Turning now to Yellowchat, we're happy to share with you that we launched the official promotion on Yellowchat for the first time in November 2022. In addition to acquiring traffic from general channels, we launched campaigns in our Yellow community to encourage users of our other apps to try out Yellowchat. After two months of testing, we are seeing encouraging results, meeting our expectations for Yellowchat's first stage of development. Notably, the certain localized functions like the SN feature gained great traction among users. We believe this first stage attempt clearly demonstrates the potential of our Mina-based IAM product. At the same time, we would like to reiterate that building IAM product is never easy and we will continue to explore ways to better serve local users' needs in IAM product. we believe Yellowchat will play an important role in our long-term growth roadmap. Elevating our value proposition, we will continue to refine the product by catering to MENA users' preferences and conduct further promotional campaigns in an efficient way. In short, the MENA region is developing rapidly. We are pleased to see more and more industry professionals and investors from around the world, beginning to show interest in Mina, making an acceleration of the region's development possible. Meanwhile, Mina is also embracing opportunities of collaboration from all over the world. As the number one Mina-based online social networking and gaming company, we are strongly committed to this market. and have developed a deep understanding of its unique advantages and user needs. We continue to steadily expand our investments in research and development to explore new products and , while also preparing to seize opportunities arising from the region's digital transformation. We will closely monitor market trends and upcoming prospects and continue to leverage our deep local insights and broaden our business horizons. Once again, our vision is to be the most popular destination for online social networking and entertainment in MENA, and we remain steadfast in our pursuit of this goal. Now I will turn this call over to our president, Mr. Saifi Ismail, for a closer look at our recent development.