Sound Group Inc (SOGP) 2023 Q3 法說會逐字稿

Hello, ladies and gentlemen. Thank you for standing by for LIZHI INC. third-quarter 2023 earnings conference call. Please note, all participants are in listen only mode now, and today's conference call is being recorded. I now, turn the call over to your host, Effy Kang, Head of Capital Markets for the company. Please go ahead.

女士們、先生們，大家好。感謝您出席荔枝股份 2023 年第三季財報電話會議。請注意，所有參與者現在都處於僅聽模式，並且正在錄製今天的電話會議。現在，我將電話轉給主持人，公司資本市場主管 Effy Kang。請繼續。

Thank you very much. Hello, everyone, and welcome to LIZHI INC.'s third-quarter 2023 earnings conference call. We released our financial and operating results with our newswire services earlier today, and they are available online. Participants on today's call will include our Founder and CEO, Mr. Marco Lai; and our Acting CFO, Ms. Chengfang Lu.

非常感謝。大家好，歡迎參加荔枝股份2023年第三季財報電話會議。今天早些時候，我們透過新聞專線服務發布了財務和營運業績，並且可以在線上查看。今天電話會議的參與者包括我們的創辦人兼執行長 Marco Lai 先生；以及我們的代理財務長陸成芳女士。

Management will begin with prepared remarks, introducing business development and financial performance in the third quarter. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the IR section of our website at ir.lizhi.fm.

管理階層將首先發表準備好的講話，介紹第三季的業務發展和財務表現。提醒一下，本次會議正在錄製中。此外，本次電話會議的網路直播重播將在我們網站 ir.lizhi.fm 的 IR 部分提供。

Before we continue, please note that today's discussions will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, target, estimate, intend, believe, potential, continue, or other similar expressions.

在我們繼續之前，請注意，今天的討論將包含根據1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。這些陳述通常包含諸如可能、將、期望、目標、估計、打算等字。 、相信、潛在、繼續或其他類似的表達方式。

Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, many of which factors are beyond our control. The company, its affiliates, advisors, representatives, and underwriters do not undertake any obligation to update these forward-looking information except as required under the applicable law.

前瞻性陳述涉及固有風險和不確定性。這些陳述的準確性可能會受到許多業務風險和不確定性的影響，這些風險和不確定性可能導致實際結果與預期或預期的結果有重大差異，其中許多因素超出了我們的控制範圍。除適用法律要求外，本公司、其附屬公司、顧問、代表和承銷商不承擔更新這些前瞻性資訊的任何義務。

Please also note that LIZHI's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited non-GAAP financial measures. Please refer to LIZHI's earnings press release for a reconciliation of unaudited non-GAAP measures to unaudited GAAP measures. I will now turn the call over to our Founder and CEO, Mr. Marco Lai. Please go ahead.

另請注意，荔枝的獲利新聞稿和本次電話會議包括對未經審計的 GAAP 財務指標以及未經審計的非 GAAP 財務指標的討論。請參閱荔枝的獲利新聞稿，以了解未經審計的非公認會計原則措施與未經審計的公認會計原則措施的調節表。現在我將把電話轉給我們的創辦人兼執行長賴馬可先生。請繼續。

(interpreted) Hello, everyone. Thank you for joining LIZHI INC.'s third-quarter 2023 earnings conference call. In the third quarter of 2023, we further strengthened the execution of our online audio-centric globalization strategy, leveraging our long-term technology core and assets. We consistently empower the domestic business innovation while steadily advancing our global business, fostering a vibrant and diversified ecosystem.

（譯）大家好。感謝您參加荔枝股份 2023 年第三季財報電話會議。 2023年第三季度，我們利用長期的技術核心和資產，進一步加強了以線上音訊為中心的全球化策略的執行。我們持續賦能國內業務創新，穩步推廣全球業務，打造充滿活力的多元化生態系統。

In the third quarter of 2023, our revenue reached the RMB425 million. Our total average mobile MAUs amounted to 42.1 million and our average monthly paying users totaled 402,600. Despite macro headwinds, we steadfastly pursued the course we have charted reinforcing our commitment to our long-term vision.

2023年第三季度，我們的營收達到人民幣4.25億元。我們的平均行動月活躍用戶總數為 4,210 萬，平均每月付費用戶總數為 402,600。儘管面臨宏觀阻力，我們仍堅定不移地遵循我們所製定的路線，加強我們對長期願景的承諾。

During the quarter, we continued to reduce costs and increase operating efficiency to improve organizational efficiency and agility while also reinforcing our globalization capabilities to better support the development of our diverse spectrum of businesses. Now, let me go over our business developments during the third quarter.

本季度，我們持續降低成本、提高營運效率，提高組織效率和敏捷性，同時增強全球化能力，更好地支持多元化業務的發展。以下我簡單介紹一下我們第三季的業務發展。

In terms of our audio entertainment business, we remain committed to building a healthy and sustainable product ecosystem through proactive optimization of our operating strategies and the meticulous refinement of our mechanisms for expanding and nurturing our content-creator base. We have enhanced the creator quality and increase the scale of our creator base while also solidifying our platform's competitive edges.

在音頻娛樂業務方面，我們積極優化經營策略，精心完善內容創作者群的拓展和培育機制，致力於建構健康、永續的產品生態系統。我們提升了創作者的質量，擴大了創作者群的規模，同時也鞏固了我們平台的競爭優勢。

During the quarter, in addition to the continuous optimization of our content-creator platform, we launched the [Dos Stylize] challenge. A strategic initiative designed to cultivate mid- and long-tail content creators and motivate our top-tier contributors. This program empowers content creators to showcase their distinctive local talents for the unlocking their creative potential while also activating the platform's appeal to the content creator community.

本季度，除了持續優化我們的內容創作平台外，我們還發起了 [Dos Stylize] 挑戰。這是一項策略性舉措，旨在培養中長尾內容創作者並激勵我們的頂級貢獻者。該計劃使內容創作者能夠展示他們獨特的本地才能，釋放他們的創作潛力，同時激活平台對內容創作者社群的吸引力。

In addition, we strove to improve the user experience and attract more high-quality users through enriched content offerings and product innovations. During the quarter, based on user preferences, we added a suite of carefully curated modules to reach our content genres, providing our users with more diverse and engaging content options.

此外，我們也努力透過豐富的內容提供和產品創新來改善用戶體驗，吸引更多優質用戶。在本季度，根據用戶偏好，我們添加了一套精心策劃的模組來滿足我們的內容類型，為我們的用戶提供更多樣化、更有吸引力的內容選擇。

Furthermore, we continue to iterate our product design and cultivate new product features and engagement tools, harnessing cutting-edge technologies to introduce innovative audio-based interaction experiences. We sustain active user participation through a diverse area of marketing programs and themed events, augmenting both user stickiness and engagement.

此外，我們持續迭代產品設計並培育新的產品功能和參與工具，利用尖端技術引入創新的基於音訊的互動體驗。我們透過多元化的行銷計劃和主題活動來維持用戶的積極參與，從而增強用戶黏著度和參與度。

As for our Global Innovative business, we are deeply invested in delighting our users with next-generation social networking products by integrating advanced features, including cross-device functionality, real-time capabilities, AIGC technologies, and more. We continue to refine our products' interface and functionality. We leverage advanced technologies to empower product innovation, catering to diverse user needs.

至於我們的全球創新業務，我們大力投資透過整合先進功能（包括跨裝置功能、即時功能、AIGC 技術等）來為用戶提供下一代社交網路產品。我們不斷完善產品的介面和功能。我們利用先進技術賦能產品創新，滿足不同使用者需求。

Meanwhile, we intend to improve user engagement by enhancing the network effect of our offerings, thereby fostering organic user growth. Organizational wise, as we continue to boost our localization capabilities across product development, operations and other key areas, we have also taken our collaborative cross-team approach to product innovation to increase innovative productivity. Moving forward, we will continue developing international markets, reinforcing globalization capabilities, and ultimately, accelerating the expansion of our global footprint.

同時，我們打算透過增強產品的網路效應來提高用戶參與度，從而促進用戶的自然成長。在組織方面，隨著我們不斷提升產品開發、營運和其他關鍵領域的在地化能力，我們也採取跨團隊協作的方式進行產品創新，以提高創新生產力。下一步，我們將繼續開拓國際市場，增強全球化能力，並加速全球佈局。

With respect to technological advancement, we continue to strengthen our R&D capabilities to provide more customized product support. This in turn, empowers protein innovation and drive progress across our global business. We have also consistently deepened the integration and development of multi-model AIGC technologies into our innovative business frameworks through emotion-enhanced model training and algorithm optimization. We are fortifying our AI assets, unlocking best of opportunities for ongoing product innovation.

在技​​術進步方面，我們不斷加強研發能力，提供更多客製化的產品支援。這反過來又促進了蛋白質創新並推動我們全球業務的進步。我們也透過情感增強模型訓練與演算法優化，不斷深化多模型AIGC技術與創新業務架構的整合與發展。我們正在強化我們的人工智慧資產，為持續的產品創新釋放最佳機會。

On voice technologies, we have been constantly improving the stability and performance of automatic speech recognition and text-to-speech ASR and TTS for both Chinese and English languages, adapting them for diverse scenarios. We have also achieved breakthroughs in AI-voice-changing technology including a seamless integration to DOREME, our in-house RTC platform for real-time audio and video streaming. In the meantime, we further enhanced the quality of information transmissions on our IM platform, VoderX, empowering our business with high performance, low latency, and scalable customized instant messaging capabilities.

在語音技術方面，我們不斷提升中英文自動語音辨識、文字轉語音ASR、TTS的穩定性和效能，以適應不同的場景。我們還在人工智慧變聲技術方面取得了突破，包括與我們用於即時音訊和視訊串流的內部 RTC 平台 DOREME 的無縫整合。同時，我們進一步提升即時通訊平台VoderX資訊傳輸的質量，為業務提供高效能、低延遲、可擴展的客製化即時通訊能力。

In terms of our versatile technology platform construction, we further improved the data analytics and data management systems and applied AI technology to marketing and other fields. Collectively, these initiatives have improved overall operating efficiency. In general, we believe technological advancements are the cornerstone of business development. We remain committed to pursuing industry leading technological standards and continuing fortifying our core technological capabilities to empower the business development.

在全能技術平台建置方面，我們進一步完善資料分析與資料管理系統，將人工智慧技術應用於行銷等領域。總的來說，這些措施提高了整體營運效率。總的來說，我們相信科技進步是業務發展的基石。我們始終致力於追求業界領先的技術標準，持續強化核心技術能力，為業務發展賦能。

We are delighted to announce that last month, the company was lauded as one of China's top-100 Internet companies by the Internet Society of China. This marks the fifth consecutive year that we have received this honor, representing powerful recognition of our comprehensive capabilities by the International Society of China and the broader industry.

我們很高興地宣布，上個月，該公司被中國互聯網協會評為中國互聯網百強企業之一。這是我們連續第五年獲此殊榮，代表了中國國際協會及業界對我們綜合能力的強力認可。

Going forward, despite the macro challenges, we will spare no effort in proactively refining our business strategies and building a more competitive ecosystem. We will continue to improve our core technology capabilities while also adopting and more deeply integrating AIGC and voice-AI technologies throughout the business. Meanwhile, we will further streamline our operations and ensure the effectiveness of resource allocation, propelling the company's long-term sustainable development with fresh momentum.

展望未來，儘管面臨宏觀挑戰，我們仍將不遺餘力，積極完善業務策略，打造更具競爭力的生態系統。我們將繼續提高核心技術能力，同時在整個業務中採用並更深入地整合 AIGC 和語音 AI 技術。同時，我們將進一步精簡運營，確保資源配置的有效性，為推動公司長期永續發展注入新動力。

Thank you all. With that, I will now turn the call over to our acting CFO, Ms. Chengfang Lu, who will discuss our financial results in more detail.

謝謝你們。現在，我將把電話轉給我們的代理財務長陸成芳女士，她將更詳細地討論我們的財務表現。

Okay. Thank you, Marco, and hello, everyone. Our revenues in the third quarter of 2023 were RMB425.1 million. Despite the complex backdrop and market uncertainties and perspective, we remain steadfast in strengthening our core competitiveness through technological innovation during the quarter. Moving forward, we remain committed to further enhancing organizational efficiency, developing globalization capability and enhance the overall agility, position us to deliver enduring value to our stakeholders.

好的。謝謝你，馬可，大家好。 2023年第三季我們的營收為人民幣4.251億元。儘管面臨複雜的背景、市場的不確定性和前景，本季我們仍然堅定不移地透過技術創新增強核心競爭力。展望未來，我們將繼續致力於進一步提高組織效率、發展全球化能力並增強整體敏捷性，為利害關係人提供持久的價值。

Now, I'd like to provide a brief overview of our financial results for the third quarter of 2023. In this quarter, our total net revenues were RMB425.1 million compared with RMB565.2 million in the same period of last year, primary due to the decline in average paying users and user spending our audio entertainment products. Cost of revenue was RMB317.3 million in this quarter compared with RMB376.2 million in the same period of last year, mainly attributable to the decreased revenue-sharing fees, share-based compensation expenses, payment handling costs, and other miscellaneous costs.

現在，我想簡要概述我們 2023 年第三季度的財務業績。本季度，我們的總淨收入為人民幣 4.251 億元，而去年同期為人民幣 5.652 億元。由於平均付費用戶和用戶支出我們的音頻娛樂產品的下降。本季收入成本為人民幣3.173億元，去年同期為人民幣3.762億元，主要是由於收入分成費用、股權激勵費用、付款處理費用和其他雜項費用減少。

Gross profit was RMB107.8 million in the third quarter of 2023, compared with RMB189.1 million in the same period of last year. Non-GAAP gross profit was RMB107.9 million in this quarter compared with RMB190.8 million in the same period of last year.

2023年第三季毛利為人民幣1.078億元，去年同期毛利為人民幣1.891億元。本季非美國通用會計準則毛利為人民幣 1.079 億元，去年同期為 1.908 億元。

Gross margin in this quarter of 2023 of was 25% compared with 33% in the same period of last year. Non-GAAP gross margin in this quarter was 25% compared with 34% in the same period of last year. Operating expenses were RMB167.9 million in the third quarter of 2023, compared with RMB176.6 million in the same period of last year.

2023年本季毛利率為25%，去年同期毛利率為33%。本季非 GAAP 毛利率為 25%，去年同期為 34%。 2023年第三季營運費用為人民幣1.679億元，去年同期營運費用為1.766億元。

Research and development expenses were RMB83.8 million in the third quarter of 2023, representing an increase of 7% year over year, primary due to the increased salary and welfare benefits expenses related to increased severance pay to optimize the R&D efficiency, partially offset by the decreased expenses related to research and development services provided by third parties.

2023年第三季研發費用為人民幣8,380萬元，年增7%，主要是由於為優化研發效率而增加遣散費而導致工資和福利費用增加，但部分被與第三方提供的研發服務相關的費用減少。

Selling and marketing expenses were RMB59.1 million in this quarter compared with RMB71.2 million in the same period of last year, primarily attributable to decreased branding and marketing expenses. The company will monitor its discretionary advertising and promotion expenses and adjust accordingly depending on market conditions.

本季銷售及行銷費用為人民幣 5,910 萬元，而去年同期為 7,120 萬元，主要是由於品牌和行銷費用減少。本公司將監控其酌情廣告和促銷費用，並根據市場情況進行相應調整。

General and administrative expenses were RMB25.1 million in the third quarter of 2023 compared with RMB27.1 million in the same period of last year, mainly driven by decreased professional service fees provided by third parties, provision for litigation contingencies, and other miscellaneous expenses.

2023年第三季一般及行政費用為人民幣2510萬元，而去年同期為人民幣2710萬元，主要是由於第三方提供的專業服務費、訴訟意外費用撥備和其他雜項費用減少所致。

Operating loss was RMB60.1 million in the third quarter of 2023, compared with operating income of RMB12.5 billion in the same period of last year. Non-GAAP operating loss was RMB55 million in this quarter compared with non-GAAP operating income of RMB20.2 million in the same period of last year.

2023年第三季營運虧損為人民幣6,010萬元，去年同期營運收入為125億元。本季非美國通用會計準則營業虧損為人民幣 5,500 萬元，去年同期非美國通用會計準則營業收入為 2,020 萬元。

Other expenses were RMB5.9 million in the third quarter of 2023, compared with other income of RMB1.7 million in the same period of last year, mainly attributable to the remuneration fees to the depositary bank in relation to the ratio change of ADS on September 20, 2023.

2023年第三季其他費用為人民幣590萬元，去年同期其他收入為人民幣170萬元，主要是由於美國存託憑證比例變化向存託銀行支付報酬費用2023 年 9 月 20 日。

Net loss was RMB62 million in the third quarter of 2023 compared with net income of RMB19.8 million in the same period of last year. Non-GAAP net loss was RMB56.9 million in this quarter compared with non-GAAP net income of RMB27.5 million in same period of last year.

2023年第三季淨虧損為人民幣6,200萬元，去年同期淨利為1,980萬元。本季非美國通用會計準則淨虧損為人民幣 5,690 萬元，去年同期非美國通用會計準則淨利為 2,750 萬元。

Basic and diluted net loss per ADS were both RMB11.1 third quarter of 2023, compared with basic and diluted net income of RMB3.81 and RMB3.79 per ADS in the same period of last year. Non-GAAP basic and diluted net loss per ADS were both RMB10.07 in the third quarter of 2023, compared with non-GAAP basic and diluted net income of RMB5.29 and RMB5.26 per ADS in the same period of last year. As of September 30, 2023, we had cash and cash equivalents and restricted cash of RMB615.8 million.

2023年第三季每份ADS基本及稀釋淨虧損均為11.1元，去年同期每份ADS基本及稀釋淨利分別為人民幣3.81元及人民幣3.79元。 2023年第三季度，非美國通用會計準則每美國存託股基本及稀釋淨虧損均為人民幣10.07元，而去年同期非美國通用會計準則每美國存託股基本及稀釋淨利分別為人民幣5.29元和人民幣5.26元。截至2023年9月30日，我們擁有現金及現金等價物以及限制性現金為人民幣615.8百萬元。

Okay. This concludes all of our prepared remarks. Thank you once again for joining us today. If you have further questions, please feel free to contact LIZHI's Investor Relations through the contact information provided on our website, ir.lizhi.fm, our process financial communications.

好的。我們準備好的所有發言到此結束。再次感謝您今天加入我們。如果您還有其他疑問，請隨時透過我們的流程財務通訊網站 ir.lizhi.fm 上提供的聯絡資訊聯絡荔枝的投資者關係部門。

Thank you. This concludes the conference call. You may now disconnect your line. Thank you. Have a good day.

謝謝。電話會議到此結束。現在您可以斷開線路。謝謝。祝你有美好的一天。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。