Agora Inc (API) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Agora Fourth Quarter 2022 Financial Results. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，謝謝你的支持。歡迎閱讀 Agora 2022 年第四季度財務業績。 （操作員說明）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Fionna Chen. Please go ahead.

我現在想把會議交給今天的發言人 Fionna Chen。請繼續。

Thank you, operator. Good morning and good evening, everyone. Thank you for joining us today for Agora's Fourth Quarter 2022 and Full Fiscal Year Earnings Conference Call. Our earnings results press release, SEC filings and a replay of today's call can be found on our IR website at investor.agora.io.

謝謝你，運營商。大家早上好，晚上好。感謝您今天加入我們參加 Agora 2022 年第四季度和全財年收益電話會議。我們的收益結果新聞稿、SEC 文件和今天電話會議的重播可以在我們的 IR 網站 investor.agora.io 上找到。

Joining me today are Tony Zhao, our Founder, Chairman and CEO; Jingbo Wang, our CFO.

今天加入我的是我們的創始人、董事長兼首席執行官 Tony Zhao；我們的首席財務官王靜波。

Reconciliations between our GAAP and non-GAAP results can be found in our earnings press release.

我們的 GAAP 和非 GAAP 結果之間的調節可以在我們的收益新聞稿中找到。

During this call, we will make forward-looking statements about our future financial performance and other future events trends. These statements are only predictions that are based on what we believe today, and actual results may differ materially. These forward-looking statements are subject to risks uncertainties, assumptions and other factors that could affect our financial results and the performance of our business, which we discuss in detail with our filings with SEC, including today's earnings press release and the risk factors and other information contained in the final prospectus relating to our initial public offering. Agora undertakes no obligation to update any forward-looking statements we may make on today's call.

在此次電話會議中，我們將對我們未來的財務業績和其他未來事件趨勢做出前瞻性陳述。這些陳述只是基於我們今天所相信的預測，實際結果可能存在重大差異。這些前瞻性陳述受風險不確定性、假設和其他可能影響我們的財務業績和業務表現的因素的影響，我們在向美國證券交易委員會提交的文件中詳細討論了這些因素，包括今天的收益新聞稿和風險因素以及其他最終招股說明書中包含的有關我們首次公開募股的信息。 Agora 沒有義務更新我們在今天的電話會議上可能做出的任何前瞻性陳述。

With that, let me turn over to Tony. Tony?

有了這個，讓我轉向托尼。托尼？

Thanks, Fionna, and welcome, everyone, to our earnings call. Our revenue for the fourth quarter remained flat at $40 million compared with the same quarter last year. During this quarter, [37,000] new applications were registered on our platform. And our total number of registered applications exceeded 548,000. At the end of 2022, our number of active customers was 3,066, adding close to 400 compared to 1 year ago.

謝謝 Fionna，歡迎大家參加我們的財報電話會議。與去年同期相比，我們第四季度的收入持平於 4000 萬美元。本季度，我們的平台上註冊了 [37,000] 個新應用程序。我們的註冊申請總數超過 548,000。到2022年底，我們的活躍客戶數量為3,066，比一年前增加了近400。

On product side, recently, we launched a beta version of our speech-to-text product for real-time engagement. Traditional speech-to-text products do not work well in RTE use cases due to the challenge such as synchronization of [course distance] and the device performance issue. Working with industry-leading partners specialized in speech-to-text technology, we developed a cloud-native transcription product that delivers reliable performance in noisy environment, with multiple individuals talking simultaneously and under poor network conditions. As a cloud-native product, no additional local processing is required and performance is consistent across a wide range of devices.

在產品方面，最近，我們推出了用於實時參與的語音轉文本產品的測試版。由於 [課程距離] 同步和設備性能問題等挑戰，傳統的語音轉文本產品在 RTE 用例中效果不佳。我們與專注於語音轉文本技術的行業領先合作夥伴合作，開發了一種雲原生轉錄產品，可在嘈雜的環境中提供可靠的性能，多人同時通話和網絡狀況不佳。作為雲原生產品，不需要額外的本地處理，並且性能在廣泛的設備上保持一致。

We believe this product can enhance end user experiences in many ways. For example, people with impaired hearing can now watch live streaming or bid in a live auction. Leveraging an auto-translation model, this product can easily overcome language barriers and empower people with different cultural backgrounds to mingle with each other naturally. In addition, speech-to-text has also laid the foundation for other complementary features such as content [moderation] and transcript recording.

我們相信該產品可以通過多種方式增強最終用戶體驗。例如，聽力受損的人現在可以觀看直播或在現場拍賣中出價。利用自動翻譯模式，該產品可以輕鬆克服語言障礙，讓不同文化背景的人能夠自然地相互交流。此外，語音轉文本還為其他補充功能奠定了基礎，例如內容 [審核] 和轉錄記錄。

This quarter, we also announced the general availability of 2 new first-party expansions, 3D spatial audio and AI-powered noise suppression, which will enable developers to create more immersive and engaging experiences for their end users. With the flexibility of Agora SDK 4.0 open and modular architecture, these expansions can be easily integrated into our core RTE products, such as voice calling, video calling and interactive live streaming.

本季度，我們還宣布了 2 個新的第一方擴展、3D 空間音頻和 AI 驅動的噪聲抑制的普遍可用性，這將使開發人員能夠為他們的最終用戶創造更加身臨其境和引人入勝的體驗。憑藉 Agora SDK 4.0 開放和模塊化架構的靈活性，這些擴展可以輕鬆集成到我們的核心 RTE 產品中，例如語音通話、視頻通話和互動直播。

During the public beta phase, these 2 expansions have been well received by developers. For example, Hello, a social and live streaming platform for language learning, found that the best way to learn a new language is by regularly speaking with native speakers. By leveraging Agora's AI noise suppression, Hello has removed unwanted background noises, ensuring users worldwide have a distraction-free learning experience regardless of their environment.

在公測階段，這兩個擴展包都受到了開發者的好評。例如，語言學習社交和直播平台 Hello 發現，學習一門新語言的最佳方式是定期與母語人士交談。通過利用 Agora 的 AI 噪音抑制，Hello 消除了不需要的背景噪音，確保全球用戶無論身處何種環境，都能獲得無干擾的學習體驗。

About our new use cases. This quarter, we continue to see new use cases emerging and gaining adoption. For example, as we mentioned previously, live video shopping is expanding rapidly in U.S. market and has attracted some well-known brands who are investing in these capabilities. For example, an important American television network that traditionally specialized in home shopping began working with Agora last quarter to provide its vast audiences with live interactive shopping.

關於我們的新用例。本季度，我們繼續看到新的用例出現並獲得採用。例如，正如我們之前提到的，直播視頻購物在美國市場正在迅速擴張，並吸引了一些知名品牌對這些功能進行投資。例如，一家傳統上專注於家庭購物的重要美國電視網絡上個季度開始與 Agora 合作，為其廣大觀眾提供現場互動購物。

Now that we have discussed our latest product and use cases, I would like to take a moment to share some of my thoughts when looking back at 2022 and looking ahead to 2023.

既然我們已經討論了我們最新的產品和用例，我想花點時間分享一下我在回顧 2022 年和展望 2023 年時的一些想法。

2022 was an extremely challenging year, which I think many of you would agree with. Our full year revenue was $161 million, a decrease of 4% or $7 million compared with 2021. However, please bear in mind that during this period, our revenue from the K12 academic tutoring sector in China alone was down by $37 million from $40 million to $3 million. Excluding this segment, our revenue in 2022 increased 24%, mainly thanks to our global expansion, new use cases such as live video shopping and new products such as broadcast streaming. This was no small feat, especially if we also consider the challenging macro environment such as stock market correction, inflation and the tightening of venture capital funding.

2022 年是極具挑戰性的一年，我想你們中的許多人都會同意這一點。我們的全年收入為 1.61 億美元，與 2021 年相比下降 4% 或 700 萬美元。但是，請記住，在此期間，僅中國 K12 學術輔導部門的收入就從 4000 萬美元下降了 3700 萬美元到 300 萬美元。不包括該細分市場，我們 2022 年的收入增長了 24%，這主要歸功於我們的全球擴張、實時視頻購物等新用例以及廣播流媒體等新產品。這是一項不小的壯舉，尤其是如果我們還考慮到具有挑戰性的宏觀環境，例如股市調整、通貨膨脹和風險投資資金收緊。

As mentioned in our last earnings call, considering the challenging operating environment, we reorganized our global R&D team and reduced our overall workforce in October to focus on our strategic priorities and improve efficiency. In the past few months, we further streamlined and refocused our developer experience and content marketing teams in the U.S. and international markets. We also appoint [Robin Liu] as Chief Operating Officer, China, to lead our commercialization efforts in that market. I believe these steps will help our teams become more customer-centric and more focused on local markets.

正如我們在上次財報電話會議中提到的那樣，考慮到充滿挑戰的經營環境，我們在 10 月份重組了全球研發團隊並裁減了我們的整體員工隊伍，以專注於我們的戰略重點並提高效率。在過去的幾個月裡，我們進一步精簡併重新調整了我們在美國和國際市場的開發者體驗和內容營銷團隊。我們還任命 [Robin Liu] 為中國區首席運營官，領導我們在該市場的商業化工作。我相信這些步驟將幫助我們的團隊變得更加以客戶為中心，更加專注於本地市場。

In addition, we recently completed the sale of Easemob's Customer Engagement Cloud, or CEC, business. When we acquired Easemob in early 2021, it had 2 business segments: the chat API business and the CEC business. The chat API business has been fully integrated into our platform. On the other hand, the CEC business is not a core market for us. The sale of the CEC business will help us focus our resources on core products and markets.

此外，我們最近完成了 Easemob 的 Customer Engagement Cloud (CEC) 業務的出售。我們在 2021 年初收購 Easemob 時，它有 2 個業務部門：聊天 API 業務和 CEC 業務。聊天 API 業務已完全集成到我們的平台中。另一方面，CEC業務不是我們的核心市場。出售 CEC 業務將有助於我們將資源集中在核心產品和市場上。

Now looking at 2023, I'm cautious about the macro environment, but continue to see new opportunities in the global RTE market. On the macro side, inflation and tough financing environment will likely remain, and the post-COVID reopening in more countries will reduce demand for our product for certain use cases. On the other hand, there are clear opportunities for us. For example, a large competitor recently shut down a key product and significantly reduced its investment in this market due to competitive pressure. We also start to see demand from certain previous untapped verticals.

現在展望 2023 年，我對宏觀環境持謹慎態度，但繼續看到全球 RTE 市場的新機遇。在宏觀方面，通貨膨脹和艱難的融資環境可能會持續存在，更多國家在 COVID 後重新開放將減少對我們產品在某些用例中的需求。另一方面，我們有明顯的機會。例如，一家大型競爭對手最近由於競爭壓力而關閉了一個關鍵產品，並大幅減少了對該市場的投資。我們也開始看到某些以前未開發的垂直領域的需求。

Facing these challenges and opportunities, our strategy for 2023 can be simply summarized into the following: laser focused on customer value, enhance competitive advantage and gain market share.

面對這些挑戰和機遇，我們2023年的戰略可以簡單概括為：激光聚焦客戶價值，提升競爭優勢，獲取市場份額。

First, we will strengthen our customer-centric value and leverage our latest innovation to enhance value creation for our customers. Also, acting as an innovation partner for our customers, we can create a flywheel effect, leveraging customer feedback to help refine our road map.

首先，我們將加強以客戶為中心的價值，並利用我們最新的創新來為客戶創造更高的價值。此外，作為我們客戶的創新合作夥伴，我們可以創造飛輪效應，利用客戶反饋來幫助完善我們的路線圖。

Second, we will focus on delivering the world's best-performing RTE product and services with unrivaled real-time video and voice experience for end users and best-in-class ease of use for developers.

其次，我們將專注於提供世界上性能最佳的 RTE 產品和服務，為最終用戶提供無與倫比的實時視頻和語音體驗，並為開發人員提供一流的易用性。

Supported by the above, we will continue to win over the competition and expand our market share globally. At the same time, we will continue to improve our operational efficiency and optimize our cost structure.

在上述支持下，我們將繼續贏得競爭，擴大我們在全球的市場份額。同時，我們將繼續提高運營效率，優化成本結構。

Before concluding my prepared remarks, I want to thank all Agorans for their hard work and commitment during this extraordinary year. I will always cherish the memory of us facing obstacles shoulder to shoulder and celebrating our wins, big and small. Let's stay laser focused on creating customer value, enhancing the competitive advantage of our core product and gaining market share in 2023. Thank you all.

在結束我準備好的發言之前，我要感謝所有 Agorans 在這不平凡的一年中所做的辛勤工作和承諾。我將永遠銘記我們肩並肩面對障礙並慶祝我們的勝利，無論大小。讓我們繼續專注於創造客戶價值，增強我們核心產品的競爭優勢，並在 2023 年獲得市場份額。謝謝大家。

With that, let me turn things over to Jingbo who will review our financial results.

有了這個，讓我把事情交給 Jingbo，他將審查我們的財務結果。

Thank you, Tony. Hello, everyone. Let me start by first reviewing financial results for Q4, and then I will discuss the outlook for the fiscal year of 2023.

謝謝你，托尼。大家好。首先讓我回顧一下第四季度的財務業績，然後我將討論 2023 財年的展望。

Total revenues were $40.1 million in the fourth quarter of 2022, a decrease of 0.7% compared to Q4 last year and a decrease of 2.1% quarter-over-quarter. The year-over-year decrease was due to significant decrease in usage from the K12 academic tutoring sector in certain markets following regulatory changes and a decrease in revenues from the divested Customer Engagement Cloud business which were offset in part by business expansion and usage growth in other sectors and regions. The quarter-over-quarter decrease was mainly due to a decrease in revenues from the divested Customer Engagement Cloud business and a decrease of revenue from the U.S. and international markets due to challenging macroeconomic environment.

2022年第四季度總收入為4010萬美元，比去年第四季度下降0.7%，環比下降2.1%。同比下降是由於監管變化後某些市場 K12 學術輔導部門的使用量大幅下降，以及剝離的 Customer Engagement Cloud 業務收入減少，但部分被業務擴張和使用量增長所抵消其他部門和地區。環比下降主要是由於剝離的 Customer Engagement Cloud 業務收入減少，以及由於充滿挑戰的宏觀經濟環境，美國和國際市場的收入減少。

As Tony mentioned just now, the interest rate hikes, worldwide inflationary pressure and tightening of venture capital funding have negatively impacted some of our customers' financial conditions and their ability to raise funding which led to reduced usage of our products and increased pricing sensitivity. We expect the trend to persist in the near term, which would continue to negatively impact our revenues, especially from U.S. and international markets.

正如托尼剛才提到的，加息、全球通脹壓力和風險投資資金收緊對我們一些客戶的財務狀況和他們籌集資金的能力產生了負面影響，導致我們產品的使用減少和價格敏感度增加。我們預計這種趨勢在短期內會持續下去，這將繼續對我們的收入產生負面影響，尤其是來自美國和國際市場的收入。

Total revenues for the fiscal year of 2022 were $160.7 million, which represented a 4.4% decrease from 2021. The decrease was mainly due to $37.8 million drop of revenue from the K12 academic tutoring sector in certain markets due to regulatory changes. If we exclude this segment, our revenues would have increased 24% from $127.7 million in 2021 to $158.2 million in 2022.

2022 財年的總收入為 1.607 億美元，比 2021 年下降 4.4%。下降的主要原因是由於監管變化，某些市場的 K12 學術輔導部門的收入下降了 3780 萬美元。如果我們排除這一部分，我們的收入將從 2021 年的 1.277 億美元增長 24% 到 2022 年的 1.582 億美元。

Our trailing 12-month constant currency dollar-based net expansion rate is 81%, excluding Easemob. Specifically, net expansion rate was 118% for the U.S. and international business and approximately 100% for the China business, excluding business impacted by regulatory changes in the K12 academic tutoring sector.

我們過去 12 個月的固定貨幣美元淨擴張率為 81%，不包括 Easemob。具體而言，美國和國際業務的淨擴張率為 118%，中國業務的淨擴張率為約 100%，不包括受 K12 學術輔導行業監管變化影響的業務。

Moving on to cost and expenses. For my following comments, I would focus on non-GAAP results, which exclude share-based compensation expenses, acquisition-related expenses, financing-related expenses, amortization expenses of acquired intangible assets, income tax related to acquired intangible assets and impairment of goodwill.

繼續成本和費用。對於我的以下評論，我將重點關注非 GAAP 結果，其中不包括基於股份的補償費用、收購相關費用、融資相關費用、所收購無形資產的攤銷費用、與所收購無形資產相關的所得稅和商譽減值.

Non-GAAP gross margin for the fourth quarter was 61.2%, which was 1.4% higher than last quarter, thanks to our ongoing efforts in optimizing our infrastructure and architecture. Non-GAAP gross margin in this quarter was 2.8% lower than Q4 2021, mainly due to increased revenue from our broadcast streaming product, which has lower gross margin.

第四季度的非美國通用會計準則毛利率為 61.2%，比上一季度高出 1.4%，這要歸功於我們在優化基礎設施和架構方面的持續努力。本季度的非美國通用會計準則毛利率比 2021 年第四季度低 2.8%，這主要是由於我們的廣播流媒體產品的收入增加，該產品的毛利率較低。

As we mentioned in the last earnings call, we restructured and reduced our global workforce in October. We saved $10.2 million on quarterly non-GAAP operating expenses in Q4 compared to Q3.

正如我們在上次財報電話會議中提到的那樣，我們在 10 月份重組並裁減了全球員工隊伍。與第三季度相比，我們在第四季度節省了 1020 萬美元的季度非 GAAP 運營費用。

Non-GAAP R&D expenses were $17.2 million in Q4, a decrease of 26.9% year-over-year. Non-GAAP R&D expenses was 42.8% of total revenues in the quarter compared to 58.1% in Q4 last year.

第四季度非美國通用會計準則研發費用為 1720 萬美元，同比下降 26.9%。非美國通用會計準則研發費用佔本季度總收入的 42.8%，而去年第四季度為 58.1%。

Non-GAAP sales and marketing expenses were $10.8 million in Q4, decreased 11.9% year-over-year. Sales and marketing expenses represented 26.8% of total revenues in the quarter compared to 30.2% in Q4 last year.

第四季度非美國通用會計準則銷售和營銷費用為 1080 萬美元，同比下降 11.9%。銷售和營銷費用佔本季度總收入的 26.8%，而去年第四季度為 30.2%。

Non-GAAP G&A expenses were $7.5 million in Q4, slightly increased 1.8% year-over-year. G&A expenses represented 18.6% of total revenues in the quarter compared to 18.1% in Q4 last year.

第四季度非美國通用會計準則一般及行政費用為 750 萬美元，同比小幅增長 1.8%。 G&A 費用佔本季度總收入的 18.6%，而去年第四季度為 18.1%。

Non-GAAP operating loss was $10.7 million, translating to a 26.7% non-GAAP operating loss margin fourth quarter compared to an operating loss margin of 38.2% in Q4 last year.

非美國通用會計準則營業虧損為 1070 萬美元，相當於第四季度非美國通用會計準則營業虧損率為 26.7%，而去年第四季度的營業虧損率為 38.2%。

Adjusted EBITDA was negative $8.5 million, translating to a 21.1% adjusted EBITDA loss margin fourth quarter, which is significantly lower than the adjusted EBITDA loss margin of 32.5% in Q4 last year and 40% in Q3 this year, thanks to our recent cost control efforts.

調整後的 EBITDA 為負 850 萬美元，相當於第四季度調整後的 EBITDA 虧損率為 21.1%，這大大低於去年第四季度調整後的 EBITDA 虧損率 32.5% 和今年第三季度的 40%，這要歸功於我們最近的成本控制努力。

Impairment of goodwill was $11.9 million in Q4, primarily due to the impairment related to Easemob as the financial performance of the divested Customer Engagement Cloud business fell below our original expectations. Investment loss was $7.8 million in Q4, primarily due to impairment of certain minority equity investments. The challenging macroeconomic environment and tightening of funding have caused difficulties at several companies in which we made minority equity investment back in 2021. We have taken a prudent approach, evaluating the latest situation and making the impairment decision.

第四季度的商譽減值為 1,190 萬美元，這主要是由於剝離的 Customer Engagement Cloud 業務的財務業績低於我們最初的預期而導致與 Easemob 相關的減值。第四季度的投資損失為 780 萬美元，主要是由於某些少數股權投資減值。充滿挑戰的宏觀經濟環境和資金收緊給我們在 2021 年進行少數股權投資的幾家公司造成了困難。我們採取了審慎的態度，評估了最新情況並做出了減值決定。

Now turning to cash flow. Operating cash flow was $3.4 million in Q4 compared to $5.1 million last year. Free cash flow was $1.9 million compared to $2.9 million last year.

現在轉向現金流。第四季度的運營現金流為 340 萬美元，而去年同期為 510 萬美元。自由現金流為 190 萬美元，而去年為 290 萬美元。

Moving on to balance sheet. We ended Q4 with $428 million in cash, cash equivalents and short term investments compared to $483 million at the end of Q3. Net cash outflow in the quarter was mainly due to cash paid for time deposits with maturity over 1 year of $39 million and share repurchase of $18 million.

轉到資產負債表。我們在第四季度末擁有 4.28 億美元的現金、現金等價物和短期投資，而第三季度末為 4.83 億美元。本季度現金淨流出主要是為1年期以上定期存款支付的現金3900萬美元和股份回購1800萬美元所致。

In 2022, we repurchased approximately $35.8 million of our Class A ordinary shares, equivalent to approximately 9 million ADS for approximately $41.8 million, representing 21% of our $200 million share repurchase program. Our Board of Directors has authorized an extension of existing share repurchase program to February 28, 2024, with all the other terms unchanged. Extension reflects the Board's view that our stock is currently undervalued and again demonstrates the Board's confidence in the fundamentals, strategies and long-term growth potential of Agora.

2022 年，我們以約 4180 萬美元的價格回購了約 3580 萬美元的 A 類普通股，相當於約 900 萬股美國存託憑證，占我們 2 億美元股票回購計劃的 21%。我們的董事會已授權將現有股票回購計劃延長至 2024 年 2 月 28 日，所有其他條款均保持不變。延期反映了董事會認為我們的股票目前被低估的觀點，並再次表明董事會對 Agora 的基本面、戰略和長期增長潛力的信心。

We were also informed by our Founder and CEO, Tony Zhao, that as of the end of 2022, he had used his personal funds to purchase a total of approximately 1.6 million of ADS in the open market under his $30 million management share purchase split.

我們的創始人兼首席執行官 Tony Zhao 還告知我們，截至 2022 年底，他在 3000 萬美元的管理股份購買拆分下，已使用個人資金在公開市場上購買了總計約 160 萬份美國存託憑證。

Now turning to guidance. COVID-19 is still an unprecedented variable to our business model where historical experience may not apply. Our guidance on full year revenues reflects various assumptions that are subject to change based on uncertainties related to the impact of the COVID-19 dynamic, challenging macroeconomic environment and the prevalent global capital markets.

現在轉向指導。 COVID-19 對我們的商業模式來說仍然是一個前所未有的變量，歷史經驗可能不適用。我們對全年收入的指導反映了各種假設，這些假設可能會根據與 COVID-19 動態、具有挑戰性的宏觀經濟環境和普遍的全球資本市場的影響相關的不確定性而發生變化。

With that, we currently expect total revenues for the fiscal year of 2023 to be in the range of $155 million to $157 million compared to the total revenues of $155 million, excluding divested Customer Engagement Cloud business in 2022.

因此，我們目前預計 2023 財年的總收入將在 1.55 億美元至 1.57 億美元之間，而總收入為 1.55 億美元，不包括 2022 年剝離的 Customer Engagement Cloud 業務。

In closing, I want to express my deepest appreciation to the entire Agora team for their hard work in this extremely challenging year and to our investors for trusting us.

最後，我想對整個 Agora 團隊在這極具挑戰性的一年中的辛勤工作以及對我們的信任的投資者表示最深切的感謝。

Thank you, everyone, for attending our call today. Let's open it up for questions.

謝謝大家今天參加我們的電話會議。讓我們打開它來提問。

(Operator Instructions) Our first question will come from the line of Yang Liu from Morgan Stanley.

（操作員說明）我們的第一個問題將來自摩根士丹利的楊柳。

Two questions from my side. The first one is I would like to hear management's view in terms of when could we see the inflection point in the future for domestic market and the overseas market, respectively.

我這邊的兩個問題。第一個是我想听聽管理層對國內市場和海外市場未來何時能看到拐點的看法。

And the second question is I remember management previously had predicted breakeven by fourth quarter 2023. I just want to double-check whether you're still staying with this target? And if so, what could be the assumption behind this target? Like, what would be the revenue and gross margin [threshold] to reach this breakeven target?

第二個問題是，我記得管理層之前曾預測到 2023 年第四季度將實現盈虧平衡。我只是想仔細檢查一下您是否仍堅持這個目標？如果是這樣，這個目標背後的假設是什麼？例如，達到盈虧平衡目標的收入和毛利率 [門檻] 是多少？

I'll talk about the demand side. The recent slowdown in revenue growth was mainly due to macroeconomic challenges and also post-COVID reopening in more countries. This has caused pricing pressure and temporary demand pressure. But I don't think this represents a fundamental change in demand for real-time engagement technology. We remain optimistic about demand in medium and long term driven by further adoption of existing use cases, and also there are emerging new use cases as well. For example, revenue from live video shopping increased severalfold in the last 12 months. And we continue to see new demand from new use cases, both in the U.S. and in China. Some of them will have meaningful revenue contribution this year.

我會談談需求方面。最近收入增長放緩主要是由於宏觀經濟挑戰以及更多國家在 COVID 後重新開放。這造成了價格壓力和暫時的需求壓力。但我認為這並不代表對實時參與技術的需求發生根本性變化。我們對現有用例的進一步採用以及新用例的出現所推動的中長期需求保持樂觀。例如，在過去 12 個月中，視頻直播購物的收入增長了幾倍。我們繼續看到來自美國和中國的新用例的新需求。其中一些將在今年做出可觀的收入貢獻。

So in conclusion, I also don't want to predict possibilities. I want to focus on concrete work and how to improve our internal efficiency as long as we'll provide the best products in the market. I am not worried about demand.

所以總而言之，我也不想預測可能性。我想專注於具體工作以及如何提高我們的內部效率，只要我們提供市場上最好的產品。我不擔心需求。

I'll take the second question. So as you can see from our full year revenue guidance, it's basically flat compared to last year. So we are off to a relatively slow start this year given all the macroeconomic challenges Tony just mentioned. So we expect revenue to increase quarter-by-quarter this year, and we will likely finish at a higher level than Q4 2022. In the meantime, we'll continue to drive efficiency from operations and optimize costs wherever possible, but we will adjust our cost structure dynamically taking into the actual revenue growth we see during this year. So we don't have a fixed revenue and OpEx target at this point, but we are determined to significantly improve our financial health throughout this year.

我來回答第二個問題。因此，正如您從我們的全年收入指引中看到的那樣，與去年相比基本持平。因此，考慮到托尼剛才提到的所有宏觀經濟挑戰，我們今年開局相對緩慢。因此，我們預計今年收入將逐季度增長，我們可能會比 2022 年第四季度的水平更高。與此同時，我們將繼續提高運營效率並儘可能優化成本，但我們會調整我們的成本結構動態地考慮了我們今年看到的實際收入增長。因此，我們目前沒有固定的收入和運營支出目標，但我們決心在今年全年顯著改善我們的財務狀況。

Our next question will come from the line of Daley Li from Bank of America.

我們的下一個問題將來自美國銀行的 Daley Li。

I have 2 questions. Maybe for the first one, could management share more color about like the number of clients and the ASP trend for both domestic and overseas market? Fourth quarter last year, we see the domestic ASPs still quite stable quarter-on-quarter, but overseas see some quarter-on-quarter decline. So how do we see the trend in the following quarters?

我有兩個問題。也許對於第一個，管理層能否分享更多關於國內外市場的客戶數量和 ASP 趨勢的顏色？去年第四季度，我們看到國內平均售價環比仍然相當穩定，但海外的環比有所下降。那麼我們如何看待接下來幾個季度的趨勢呢？

My second question is regarding the employee structure. Would we consider further optimization given the current growth outlook and our target of improving the profitabilities?

我的第二個問題是關於員工結構。鑑於目前的增長前景和我們提高盈利能力的目標，我們是否會考慮進一步優化？

Thank you. I'll take both questions. So in terms of number of customers, as you can see in the press release and also our presentation, our number of customers have been increasing quite steadily, both in the U.S. and international markets and also in China market. Again, that shows the continued adoption of our technology globally. So in terms of pricing, you are correct that we faced a more challenging pricing pressure in the U.S. and international markets, especially in the past 2 quarters, and we do expect that to persist in the near term.

謝謝。我會回答這兩個問題。因此，就客戶數量而言，正如您在新聞稿和我們的演示文稿中看到的那樣，我們的客戶數量一直在穩步增長，無論是在美國和國際市場，還是在中國市場。這再次表明我們的技術在全球範圍內得到持續採用。因此，就定價而言，您是正確的，我們在美國和國際市場面臨更具挑戰性的定價壓力，尤其是在過去兩個季度，我們確實希望這種情況在短期內持續存在。

I'll explain a little again about why that is the case. So first of all, we do have a relatively large number of start-up companies as well as the early-stage companies as our customers. So given the high inflation, the interest rate hikes, so it has become much harder for them to raise funding. And that has limited their usage of our products and also increased their pricing sensitivity. We don't see those factors to change in the near term as well. We do expect continued pricing pressure in the near term. In the China market, actually, we don't see anything different from previous years. Past experience has been that every year, our average ASP will drop 5% to 10%, which is healthy, which is how this product will gain more and more adoption and become widely used across our industries. So with that, we don't see anything different this year.

我會再解釋一下為什麼會這樣。所以首先，我們確實有比較多的初創公司和早期公司作為我們的客戶。因此，鑑於高通脹、加息，他們籌集資金變得更加困難。這限制了他們對我們產品的使用，也增加了他們對價格的敏感度。我們認為這些因素在短期內也不會改變。我們確實預計短期內價格壓力會持續存在。實際上，在中國市場，我們看不出與往年有什麼不同。過去的經驗是，我們的平均 ASP 每年都會下降 5% 到 10%，這是健康的，這就是該產品將獲得越來越多的採用並在我們的行業中廣泛使用的方式。因此，今年我們看不出有什麼不同。

So in terms of the team, for this year, we don't have any plan for expansion, and we will continue to optimize where we see redundancies. And we'll really look at this in a very detailed fashion, team by team, see where the return on investment is low, then we'll optimize. We'll also focused on improving the workflow, improving collaboration across teams and also investing in the confidence of our team. So we don't have plans for a large cut in the near future.

所以在團隊方面，今年我們沒有任何擴張的計劃，我們會在裁員的地方繼續優化。我們將以非常詳細的方式逐個團隊地審視這一點，看看投資回報率低的地方，然後我們將進行優化。我們還將專注於改進工作流程，改善團隊間的協作，並投資於我們團隊的信心。因此，我們近期沒有大幅削減的計劃。

(Operator Instructions) Our next question comes from the line of Bing Duan from Nomura.

（操作員說明）我們的下一個問題來自野村的段兵。

I have 2. The first one is a follow-up on the demand side. So what kind of application or industry verticals do we see that might accelerate or slow down in 2023, that may drive for maybe higher or lower than our current revenue outlook, which is flat, right, excluding Easemob? And then recently, there is a strong global phenomenon about ChatGPT and AIGC. Do we currently see any kind of applications, related applications or development, that is driving our volume growth? That's on the demand side.

我有2個，第一個是需求方的跟進。那麼，我們認為什麼樣的應用程序或垂直行業可能會在 2023 年加速或放緩，這可能會推動或低於我們目前的收入前景，這是持平的，對吧，不包括 Easemob？然後最近，有一個關於 ChatGPT 和 AIGC 的強烈全球現象。我們目前是否看到任何類型的應用程序、相關應用程序或開發正在推動我們的銷量增長？那是在需求方面。

So the second question is about the about the ASP or take rate. So for our new applications expected to grow this year, will there be any difference compared to our previous applications or verticals?

所以第二個問題是關於 ASP 或採用率。那麼對於我們今年預計增長的新應用，與我們之前的應用或垂直應用相比會有什麼不同嗎？

On the demand side, I think there are use cases continuing to emerge like I already mentioned on speech-to-text. It can be used on several different use cases like live shopping but also can be used in social use cases. And there are more opportunities growing in verticals like digital transformation in China. And also, there are regional opportunities that we see a bigger potential, including Europe and Latin America.

在需求方面，我認為像我在語音轉文本中提到的那樣，不斷出現用例。它可以用於多種不同的用例，例如實時購物，也可以用於社交用例。而且在中國的數字化轉型等垂直領域有更多的機會增長。此外，我們還看到了更大潛力的區域機會，包括歐洲和拉丁美洲。

Besides that, in all of the use cases or across our platform product, we see that by enhancing the quality of experience for all our video and audio sessions, it would also enhance our customers' attach rate to their end users and will, in turn, increase demand for us as well. It's a natural development for all use cases, not just us, even for television, that the resolution or clarity of [programs] is going to improve over time. So this is just a single trend that we believe that's going to also happen in our industry. Plus, we would also spend resources to continue to improve our developer experience to reduce friction for adoption, so that more developers could easily create new apps or new use cases on the platform. All those will help us to grow in terms of serving more potential demand and also help our customers to generate more demand.

除此之外，在所有用例或整個平台產品中，我們看到，通過提高我們所有視頻和音頻會話的體驗質量，它也將提高我們的客戶對其最終用戶的依戀率，並反過來，也增加了對我們的需求。這是所有用例的自然發展，不僅僅是我們，即使是電視，[節目] 的分辨率或清晰度會隨著時間的推移而提高。所以這只是一個單一的趨勢，我們相信它也會在我們的行業中發生。此外，我們還將投入資源繼續改善我們的開發人員體驗，以減少採用過程中的摩擦，以便更多開發人員可以輕鬆地在平台上創建新應用程序或新用例。所有這些都將幫助我們在服務更多潛在需求方面實現增長，並幫助我們的客戶產生更多需求。

About ChatGPT, it is an interesting and inspiring development in the industry just now, around this time, I think a lot of discussions around it. And we do see potential in our customers' apps or in our own practice. I'll maybe mention one area like the social side. ChatGPT shows potential that a real human-like conversation becomes possible. So in some of the social apps, we also see our own platform. They start to use this large language model to create specific characters with a defined background personality and even like the [star] of their talking language. And that attracts quite some interest from consumers because that gives customers freedom in sort of having a conversational relationship with someone that, by imagination, is their ideal partner. So that's an interesting invention just recently.

關於 ChatGPT，它是目前行業中一個有趣且鼓舞人心的發展，大約在這段時間，我認為圍繞它進行了很多討論。我們確實在客戶的應用程序或我們自己的實踐中看到了潛力。我可能會提到一個領域，比如社交方面。 ChatGPT 展示了真正的類人對話成為可能的潛力。所以在一些社交APP中，我們也看到了自己的平台。他們開始使用這種大型語言模型來創建具有明確背景個性的特定角色，甚至喜歡他們說話語言的[明星]。這引起了消費者的相當大的興趣，因為這讓客戶可以自由地與想像中的理想合作夥伴建立對話關係。這是最近的一項有趣的發明。

But similarly, those things could happen in customer engagement use cases. But also, people would naturally imagine that there were this smart chat sort of service, including from the past Alexa and Siri. In the past, the conversation somewhat becomes very dry, like boring. We can only do command control kind of conversation. But now with the large language model, human and machine interaction interface could be totally disruptive. On that side, we could enhance such a conversation or a human machine interface, in a way, to ensure the interaction to be real time. So those are all potentials we could see, but there will be more. We do have a close eye on those possibilities.

但類似地，這些事情可能會發生在客戶參與用例中。而且，人們自然會想到有這種智能聊天服務，包括過去的 Alexa 和 Siri。過去，談話變得有些枯燥，乏味。我們只能進行命令控制類的對話。但現在有了大型語言模型，人機交互界面可能會完全顛覆。在這方面，我們可以在某種程度上增強這樣的對話或人機界面，以確保交互是實時的。所以這些都是我們可以看到的潛力，但還會有更多。我們確實在密切關注這些可能性。

I'll quickly chime in on the take rate and pricing side. So Tony mentioned a few new use cases, like live shopping in the U.S. There, we see the pricing remains very healthy. And digital transformation in China, that's a very different market with large enterprises, financial institutions. So there, it requires a different pricing model. But we believe what we see is it's still a very profitable market for us.

我會很快就收費率和定價方面發表意見。所以托尼提到了一些新的用例，比如在美國的現場購物。在那裡，我們看到定價仍然非常健康。而中國的數字化轉型，是一個與大型企業、金融機構截然不同的市場。因此，它需要不同的定價模型。但我們相信，我們所看到的是，這對我們來說仍然是一個非常有利可圖的市場。

And our next question will come from the line of Allen Li from JPMorgan.

我們的下一個問題將來自摩根大通的 Allen Li。

I have 2 questions. So firstly, could you please give us some color on the revenue breakdown by key categories in 2022, such as entertainment, education and maybe other some rising categories like live video shopping?

我有兩個問題。那麼首先，您能否給我們介紹一下 2022 年按關鍵類別（例如娛樂、教育以及其他一些新興類別（例如直播視頻購物））的收入明細？

And my second question is on our business storage. We see non-China business have slowed down quite a bit in past 3 quarters, while China revenue, excluding K12, seemed to hold up well. So do you think this is more like a temporary thing? Or is there any structural reasons behind that? And how are we going to allocate resource between China and the international markets going forward?

我的第二個問題是關於我們的業務存儲。我們看到非中國業務在過去 3 個季度放緩了很多，而中國收入（不包括 K12）似乎保持良好。所以你認為這更像是暫時的事情嗎？或者這背後有什麼結構性的原因嗎？未來我們將如何在中國和國際市場之間分配資源？

Okay. I'll take both questions. So the first one in terms of the -- okay, first of all, we operate in 2 markets, the U.S. and international markets and the China market. Obviously, the vertical breakdown in those 2 markets are slightly different, so I will talk about them separately.

好的。我會回答這兩個問題。所以第一個 - 好吧，首先，我們在兩個市場運營，美國和國際市場以及中國市場。顯然，這兩個市場的垂直細分略有不同，所以我將分開討論。

So in the U.S. international markets, social is still the largest vertical, followed by what we call future in work. And that will include things like collaboration, online event and live video shopping. The second biggest is education. I think these are the main verticals. In China, obviously, social is dominant because now, after the regulation change, education is a much, much smaller part of the business now. And then digital transformation, so large traditional enterprises previously was almost zero and now has a meaningful contribution last year. And also IoT, Internet of Things, something like smart doorbells, smart TV, these will also start to contribute revenue in 2022. That's on the sector breakup.

所以在美國國際市場，社交仍然是最大的垂直領域，其次是我們所說的未來工作。這將包括協作、在線活動和實時視頻購物等內容。第二大是教育。我認為這些是主要的垂直領域。顯然，在中國，社交媒體占主導地位，因為現在，在法規發生變化後，教育在業務中所佔的比例要小得多。然後是數字化轉型，所以大型傳統企業以前幾乎是零，現在去年有了有意義的貢獻。還有物聯網、物聯網，比如智能門鈴、智能電視，這些也將在 2022 年開始貢獻收入。這就是行業細分。

In terms of like China revenue holding up in the past few quarters, I think there are a few factors. First of all, it has to do with the new product, what we call the broadcast streaming product, which had lower GP margin but has been very nice revenue pickup. So that now contributes to about 10% of revenue in China already. So that's something new in 2022. And secondly, we have been working with customers in China, not just focused on business in China but also, for example, expanding their apps in overseas markets. So that's another growing business. And lastly, as I mentioned, the digital transformation business, that almost didn't exist in 2021.

就過去幾個季度中國收入的增長而言，我認為有幾個因素。首先，它與新產品有關，我們稱之為廣播流媒體產品，它的 GP 利潤率較低，但收入增長非常好。所以現在這已經貢獻了中國約 10% 的收入。所以這是 2022 年的新事物。其次，我們一直在與中國的客戶合作，不僅專注於中國的業務，而且，例如，在海外市場擴展他們的應用程序。所以這是另一個不斷增長的業務。最後，正如我提到的，數字轉型業務在 2021 年幾乎不存在。

And I'm not showing any further questions in the queue at this moment. I'd like to turn the conference back to Fionna for any closing remarks.

我現在不會在隊列中顯示任何其他問題。我想把會議轉回 Fionna 聽取任何閉幕詞。

Thank you, operator. And thank you, everybody, for attending today's call. Again, our presentation for this call and the replay for this call is also posted on our website. Later on, we will also post the remarks of this earnings call. Again, if you have any further questions, please reach out to us at our IR website or our IR e-mail. Thank you again.

謝謝你，運營商。感謝大家參加今天的電話會議。同樣，我們對這次電話會議的介紹和這次電話會議的重播也發佈在我們的網站上。稍後，我們還將發布本次財報電話會議的評論。同樣，如果您有任何其他問題，請通過我們的 IR 網站或我們的 IR 電子郵件與我們聯繫。再次感謝你。

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。大家，祝你有美好的一天。

Thank you.

謝謝。

Thank you.

謝謝。