Yalla Group Limited

Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yellow Group Limited's second quarter 2025 earnings conference call. At this time, all participants are in 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 Gao, IR Director of the company. Please go ahead, ma'am.

Hello, everyone, and welcome to YALA's second 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 newswire 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 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 an audited 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. Saifi 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 Q&A section. 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 second quarter 2025 earnings conference call. We delivered another strong set of results in the second quarter of this year. Our total revenues close to 84.6 million USD. Once again, beating the high end of our guidance. We also made significant strides in improving our operational efficiency by optimizing user acquisition strategies and refining our internal processes. which contributed to a year-over-year expansion in our net margin to 43.2%. This impressive performance demonstrates our ability to increase user engagement across our ecosystem and achieve high-quality, efficient growth by anticipating and meeting the MENA's evolving social networking and entertainment needs. Throughout Yala's history, the company has been committed to the long-term development of MENA's local internet industry. We were one of the first to explore online entertainment in the region, and over the past 10 years, our team has grown from six people to over 800 employees, serving over 40 million MAUs across the MENA region. Our product strategy prioritizes creating products with the potential to reach a massive user base while also demonstrating a long-lasting cycle. We strive to develop sustainable business models for long-term growth, and we remain confident that our commitment and patience will pay off as it has over the last decade. This Q2 marks the 9th anniversary of Yala's launch. For Yala Ludo, one of our flagship products and Amina's leading casual game platform, we expect its life cycle to reach 10 to 15 years or even beyond. We continue to operate our products with great dedication, fostering a friendly, positive, and vibrant online community. Building on our core business strong fundamentals, We're also strategically expanding into new verticals to capitalize on Mina's digital transformation, leveraging our substantial user base, localized expertise, and strong user acquisition capabilities. We have broadened our business footprint with game distribution services. We hope to become an indispensable resource for leading global game content providers who are as excited as we are about the MENA market. We are primed to have good games of all kinds launching MENA efficiently and effectively. Furthermore, as our user scale grows, we are also exploring opportunities to expand into additional online local services to reach even more users across MENA. Moving on to our new gaming pipeline for this year, we have continued to strategically invest in micro and hardcore games with a robust product pipeline featuring multiple new titles scheduled for release in the coming two quarters. In the third quarter, we expect to release two Max 3 titles targeting distinct user segments. In the fourth quarter, we aim to release another self-developed roguelike game while also preparing for hardcore games distribution in collaboration with a leading game developer. We will continue to refine our gaming business strategy and plan to ramp up external partnerships and our games distribution capabilities going forward to more effectively diversify our product portfolios. This allows us to explore a broader range of game genes and offer users more diverse options while gaining deeper insight into market dynamics and a more precise understanding of user advertised in the MENA region. Technology is another key factor driving our growth. As part of our efforts to propel technology innovation and talent development, we initiated a new round of internship collaborations with Mohammed Bin Zayed University of Artificial Intelligence with a focus on AI application projects by integrating cutting-edge academic research insights with real-world industry practices. This partnership among industry, academia, and research institutions injected fresh ideas and intellectual resources into our ongoing technology innovation, while also deepening Yala's long-term commitment to advancing the development of Minas AI ecosystem. Before I turn the call over to Saifi, update on our shareholder repurchase plan. In the first quarter, we allocated an additional 22 million USD, bringing our total minimum commitment to 50 million USD for the full year. We continue to execute our share repurchase program, consistently enhancing our shareholder returns. In the first half of this year, we made encouraging progress. As of June 30th, 2025, the company had repurchased a total of more than 6.2 million ADS to a total of 41 million USD in this year, completing 82% of our 2025 minimum goal. We will continue with displaying the execution of the share repurchase program through the end of the year and expect to reach or potentially exceed our full year goal. We remain open to further scaling up our execution under the current share repurchase program. Furthermore, as we mentioned on our last call, the company has decided to cancel all shares repurchased this year. As of August 11th, 2025, the company had canceled more than 6.2 million ADS. We will consistently place shareholders' interest at the core of our capital allocation decisions and continuously refine our shareholder returns strategy to generate long-term value for our shareholders. Overall, Our second quarter performance, once again, affirmed Yella's strategic effectiveness and the media market's vast potential. We are steadily compounding our advantages in this compelling market where we've cultivated deep roots over many years. Going forward, Yella Group will continue to unlock monetization opportunities through a diversified gaming lineup while working alongside partners to foster a sustainable digital ecosystem. We are excited to have your support as we help propel MENA's transformation from a digital hotspot into a true global innovation center. Now I will turn this call over to our president, Mr. Safi Ismail, for a closer look at our recent developments.