Yalla Group Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yellow Group Limited's first quarter 2023 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, Mr. Logan Yeh, Investor Relations Manager of the company. Please go ahead.

Hello everyone and welcome to YALA's first quarter 2023 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 this and other risks and uncertainties is included in our earnings release and our annual report field 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 including a discussion of unnoticed gap financial information as well as unnoticed non-gap financial measures. YALA's press release contains a reconciliation of the unnoticed non-gap measures to the unnoticed most directly comparable gap 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 strategy. He will be followed by Mr. Saifi Ismail, the company's president, who will briefly review our recent business 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 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 first quarter 2023 Earnings Conference Call. We kicked off 2023 with a solid status of operational and financial results. in the first quarter, even with the impact from Lambda, which started a little earlier than usual this year on March 23rd. Our Q1 revenue still reached 73.5 million USD, falling to the upper end of our guidance, and once again, demonstrating the remarkable strength of our flagship applications, Yala and Yala Luda. Our businesses continue to exhibit formidable stability and vitality thanks to our consistent efforts to build out our community and product portfolio over the past seven years. With our solid fundamentals and robust cash position, Yella is also able to continuously invest in new products and verticals to explore and tap digital opportunities across the MENA region. 2023 has ushered in a fresh economic start among the territories around the globe, with new dynamics and goals influencing investment worldwide. As a raging wave of digitalization, the Middle East is receiving increasing attention from the global technology and investment communities. Meanwhile, countries throughout MENA are also working to showcase the region's vibrant energy and commitment to advancing the new era of development. MENA has long been renowned for its copious nature resources. As a result, traditional industries have long been recognized as the economic backbone of the region. Recently, we have seen a significant shift in this dynamic, as numerous countries across MENA have prioritized digital transformation as one of their most important national development strategies, allocating capital and resources to support digital fields, including gaming and media, among others. As MENA's largest online social networking and gaming company, has been proactively preparing to seize this emerging opportunity. To that end, we have identified two growth engines for Yella Group's development in 2023. First, we will continue to invest in R&D and our self-developed products, building on our well-established user base and product popularity to amplify our value proposition among MENA markets. We will explore collaboration with global internet companies that are interested in Mina's emerging opportunities. By leveraging our deep local know-how and extensive operating capabilities, we are confident we can capitalize on global investment and achieve mutually beneficial collaboration. Now I'd like to share some important updates on Yala Games' recent developments. As we have mentioned previously, we established Yellow Game as a subsidiary to explore the mid-core and high-core games business in Mina. We are thrilled to announce that Yellow Game has officially launched its first high-core mobile game, a massively multiplayer online role-playing game, or MMORPG, entitled Age of Legends. Age of Legends is a self-developed game for which our team built a magical world and virtual characters rooted in Arabic culture and fairytales. Its landscape features oasis, snow fields, deserts, and goldies for users to explore. Leveraging our extensive experience in the middle market, we will also consistently roll out in-game activities tailored to local holidays and other special events. to provide additional localized experiences to our users. We launched Age of Legends at the beginning of May in Turkey with downloads available where Google Play for the first page. The game will also be distributed to additional regions and be made available where the App Store in the near future. We will continue to monitor Age of Legends operating and its financial performance, and we will look forward to sharing more details with you on our next earnings call. Turning to our casual game portfolio, which includes Yella Patches, 101 OK Yella, and Yella Blut, we continue to hone and upgrade our casual game products during the first quarter, rolling out new types of rankings and VIP privileges to improve communication. and provide more meaningful, entertaining experiences. We also continuously create and introduce themed events tailored to MENA's local culture, which improve users' engagement and retention. Thanks to these persistent endeavors, our casual games delivered outstanding performances in Q1. Both purchase and 101 of KELX's quarterly revenue were around $1 million a season. exemplifying our casual game portfolio's monetization capabilities. We will continue to enhance these products and seek creative ways to increase their penetration in different countries across MENA. To sum up, as the MENA region grows rapidly, countries throughout the region are showing their digital ambitions and striving to address opportunities and challenges on their digital transformation journey. As this transformation gathers momentum, we are pleased to see Nina attracting investor interest, not only because of its abundant capital and natural resources, but also due to its unique local market and digital era businesses with great potential. With an increasing inflow of global talent capital, technology, and brilliant ideas into MENA. We anticipate an acceleration of the region's development over the next five years. As a number one MENA-based online social networking and gaming company, we're fully dedicated to this market and present a holistic understanding of its culture, people, and distinct distinctive advantages, which will empower us to seize opportunities arising from the region's digital transformation. We will embrace the channel of development, deepening our investment in research and development to enhance our expertise. in technology and explore new products and workflows while working with partners around the globe to participate in the local digital transformation. Once again, our vision is to build the most popular destination for online social networking and entertainment in China, and we are determined 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 developments.