Yalla Group Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by for YALA Group's limited first quarter 2025 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 would like to turn the call over to your speaker host today, Ms. Keri Gow, Investor Relations Director of the company. Please go ahead, ma'am.

Hello, everyone, and welcome to YALA's first quarter 2025 earnings conference call. We issued our earnings press release earlier today, and it is now available on our IR website as well as on newsreel outlets. 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 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. Saeed Ismail, the Communist 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. Mr. Jeff Xu, our chief operating officer, will join the QA section. With that said, I'd now like to turn the call over to our chairman and chief executive officer, Mr. Tao Yang. Please go ahead, sir.

Thank you. Thank you, everyone, for joining our first quarter 2025 earnings conference call. We kicked off 2025 with a strong first quarter. Even with the impact of Ramadan, which fell entirely within the first quarter this year, our Q1 revenue still reached $84 million USD, up 6.5% year-over-year, and beating the upper end of our guidance. Our persistent efforts to deliver quality growth and enhance our overall efficiency are also yielding In Q1, our net margin improved substantially year-over-year from 39.5 to 43.4 percent. Our robot's quarterly performance benefited from our effective growth strategy and efforts to enhance our flagship application's gamification and optimize user acquisition. And this initiative ultimately delivered a better experience for our users, boosting Yela's and Yela Ludo's users' willingness to pay and stay. In recent months, shifting international economic policies have sharply impacted the global macro economy. Against this fast-evolving backdrop, the MENA region, Yela's core strategic market, has maintained remarkable stability and immense potential upside. Historically, the Middle East served as a vital crossroads for cultural exchange and trade between East and West. Today, it is a thriving hub for digital services, thanks to its vibrant young demographics and high internet penetration. Technology is actively embraced across the region, making MENA a prime incubator for tech development and AI innovation. To capitalize on these opportunities, Yela, as MENA's largest destination for online social networking and entertainment activities, remains deeply committed to R&D and AI deployment. During the first quarter, we leveraged extensive localized materials from our products in the Middle East to train our self-developed AI content moderation model to support recognition of both images and text. In Arabic, as well as several MENA's regional dialects, we are especially proud that our Proprietary platforms' recognition speed and accuracy now lead the MENA region. We also integrated our moderation platform into our flagship products during the quarter, a win-win in terms of technological advancement and cost efficiency. Beyond moderation, we extended AI applications to use their profile management Our data integration and systematic tag management tools bring us deeper insights into user activity, spending patterns, and other behaviors, further optimizing our customer acquisition efficiency. Moving to our gaming business, amid global economic volatility, MENA's young population enhanced digital infrastructure and visionary government support for the culture and entertainment industries, generating unique growth momentum for the gaming sector. With a robust product pipeline spanning casual and medical games, we have matched the three titles slated for official release in Q3. We just completed one round of product testing, and the team is working to further improve various details before this title's launch. We may test the water in a few additional regions outside MENA with this game. Moving forward, we will continue to build our product matrix with a steady and disciplined approach and collaborate with industry partners to foster the growth and prosperity of Mina's gaming ecosystem. Before I turn the call over to Saifi, an update on our shareholder return program. We mentioned last quarter that we would accelerate our share repurchases this year, targeting at least double the amount of last year's buyback, or a minimum of USD 28 million. As of May 16, 2025, Yala had repurchased over 4.2 million ADRs, or Class A honorary shares, in 2025, totally 27.4 million. bringing us close to fulfilling our commitment made this March. In line with our commitment to sustained shareholder returns, we have decided to raise this year's buyback target by an additional $22 million USD on top of the previously outlined $28 million, bringing our total planned share repurchases to $50 million USD for 2025. we will provide another progress update next quarter and discuss whether to increase the buyback scale even further. Moreover, the company has decided to cancel all shares repurchased this year as part of our commitment to generating sustained benefits for our shareholders. In summary, Yala Group definitely capitalized on diverse opportunities during the first quarter amid a complex global landscape, achieving breakthroughs in both R&D and product offerings. Harnessing Mina's vast potential and tech-forward assets, we continued to deepen our technological capabilities using AI innovation to drive efficiency improvements and optimize user experience while further strengthening our localized advantage. We remain committed to amplifying YALA Group's role in the Middle East digital transformation, creating value for all of our stakeholders. Now I will turn this call over to our president, Mr. Saifi Ismail, for a closer look at our recent developments.