JOYY Inc (YY) 2022 Q2 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the JOYY Inc's Second Quarter 2022 Earnings Call.

早上好，女士們，先生們。感謝您的支持，歡迎參加 JOYY Inc 的 2022 年第二季度財報電話會議。

(Operator Instructions) I would now like to hand the conference over to your host, Jane Xie, the company's Senior Manager of Investor Relations. Please go ahead, Jane.

（操作員說明）我現在想把會議交給你們的主持人，公司投資者關係高級經理謝簡。請繼續，簡。

Thank you, operator. Hello, everyone. Welcome to JOYY's second quarter 2022 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY; Ms. Ting Li, our COO; and Mr. Alex Liu, the General Manager of Finance.

謝謝你，接線員。大家好。歡迎來到 JOYY 2022 年第二季度財報電話會議。今天加入我們的是JOYY董事長兼CEO李學凌先生；我們的首席運營官李婷女士；和財務部總經理Alex Liu先生。

For today's call, management will first provide a review of the quarter and then we will conduct a Q&A session. The financial results and webcast of this conference call are available at ir.joyy.com. A replay of this call will also be available on our website in a few hours.

對於今天的電話會議，管理層將首先提供季度回顧，然後我們將進行問答環節。本次電話會議的財務結果和網絡廣播可在 ir.joyy.com 獲得。幾個小時後，我們的網站上也將提供此電話的重播。

Before we continue, I would like to remind you that we may make forward-looking statements, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our latest Annual Report on Form 20-F and other documents filed with the SEC. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollar.

在我們繼續之前，我想提醒您，我們可能會做出前瞻性陳述，這些陳述本身就存在風險和不確定性，可能導致實際結果與我們當前的預期不同。有關風險和不確定性的詳細討論，請參閱我們最新的 20-F 表格年度報告以及向 SEC 提交的其他文件。最後請注意，除非另有說明，本次電話會議中提到的所有數字均以美元為單位。

I will now turn the call over to our Chairman and CEO, Mr. David Xueling Li. Please go ahead, sir.

我現在將把電話轉給我們的董事長兼首席執行官李學玲先生。請繼續，先生。

Thank you. Hello, everyone. Welcome to our second quarter 2022 earnings call. Let me start with an overview of our quarterly results. Despite global macroeconomic uncertainties and the seasonality impact of the Ramadan holiday in the Middle East, we achieved [$596.1 million] (corrected by company after the call) in revenues, including $502.6 million of revenue from BIGO, approaching the higher end of our previous guidance. We grew our non-GAAP net profit to $51.5 million at the group level, realizing a non-GAAP net margin of 8.6%. Notably, the BIGO segment expanded its non-GAAP net profit to $86.3 million, and improved its non-GAAP net margin to 17.2%.

謝謝你。大家好。歡迎來到我們的 2022 年第二季度財報電話會議。讓我先概述一下我們的季度業績。儘管全球宏觀經濟存在不確定性以及中東齋月假期的季節性影響，但我們實現了 [5.961 億美元]（由公司在電話會議後進行更正），其中包括來自 BIGO 的 5.026 億美元收入，接近我們之前指導的高端.我們在集團層面將非 GAAP 淨利潤增長至 5150 萬美元，實現了 8.6% 的非 GAAP 淨利潤率。值得注意的是，BIGO 部門將其非 GAAP 淨利潤擴大至 8630 萬美元，並將其非 GAAP 淨利潤率提高至 17.2%。

Our operating cash inflow continued to be strong, reaching $61.7 million for the quarter. The steady expansion of our profitability amidst current market conditions demonstrated the improved efficiency and enhanced resilience of our business. We are in an environment of increased macro uncertainty. Rising inflation and increased cost of living continued to negatively impact consumer spending. The lifting of lockdown and travel restrictions imposed during the pandemic contributed to a resurgence in travel demand during the summer season, further diverting consumer time and spending to offline activities. The aggressive appreciation of the U.S. dollar was also an unfavorable factor, as our prices rose in local currency terms. These various headwinds have and will affect the short-term monetization efficiency for a wide variety of global companies, including JOYY.

我們的經營現金流入繼續強勁，本季度達到 6170 萬美元。在當前市場條件下，我們的盈利能力穩步擴大，證明了我們業務的效率提高和彈性增強。我們處於宏觀不確定性增加的環境中。通脹上升和生活成本上升繼續對消費者支出產生負面影響。大流行期間解除封鎖和旅行限制導致夏季旅行需求回升，進一步將消費者的時間和支出轉移到線下活動上。美元的大幅升值也是一個不利因素，因為我們的價格以當地貨幣計價上漲。這些各種不利因素已經並將影響包括 JOYY 在內的眾多全球公司的短期貨幣化效率。

Despite these macroeconomic challenges, a significant proportion of global users is still underserved for social entertainment services. In a time of increased uncertainties, users are seeking more emotional value from their products, such as a sense of belonging and meaningful connections with others. That's why we responded to this volatile macro environment first and foremost by turning inward, continuing to iterate our products and cultivate our user community while maximizing the emotional value our services can provide.

儘管存在這些宏觀經濟挑戰，但仍有很大一部分全球用戶無法享受社交娛樂服務。在不確定性增加的時代，用戶正在從他們的產品中尋求更多的情感價值，例如歸屬感和與他人的有意義的聯繫。這就是為什麼我們首先通過轉向內向來應對這種動蕩的宏觀環境，繼續迭代我們的產品並培養我們的用戶社區，同時最大化我們的服務可以提供的情感價值。

In recent quarters, we launched several major product feature updates, including Bigo Live's "Virtual Live" and "Community", Likee's "loop", an interest-based community feature, and Hago's "3D Hago Space". These features serve to improve the quality and efficiency of our users social experience, enabling them to better engage and foster meaningful connections with those who have similar interests. Together with our diverse and inclusive community culture, we believe these efforts will help our products deliver an important and unique emotional value to our users.

最近幾個季度，我們推出了幾大產品功能更新，包括 Bigo Live 的“虛擬直播”和“社區”、Likee 的“循環”、基於興趣的社區功能以及 Hago 的“3D Hago Space”。這些功能有助於提高我們用戶社交體驗的質量和效率，使他們能夠更好地參與並與具有相似興趣的人建立有意義的聯繫。連同我們多元化和包容的社區文化，我們相信這些努力將幫助我們的產品為我們的用戶提供重要而獨特的情感價值。

In addition to maximizing this emotional value, we continue to be fully dedicated to creating value for our creators. By providing creator-friendly video creation tools and monetization features, and cultivating a user community that is built on equality and connection, we have established a creator-centric ecosystem that enables a large number of creators to showcase their talents in front of a global audience and at the same time enjoy promising economic returns.

除了將這種情感價值最大化之外，我們還將繼續全心全意地為我們的創作者創造價值。通過提供對創作者友好的視頻創作工具和變現功能，並培育建立在平等和聯繫上的用戶社區，我們建立了以創作者為中心的生態系統，使大量創作者能夠在全球觀眾面前展示自己的才華同時享有可觀的經濟效益。

Over the past few years, we have invested a cumulative total of over US$1 billion in creator rewards. With the support of our global operations team and the implementation of a variety of activities tailored to local users' evolving needs, we empower our creators to gain exposure both locally and internationally and enable them to realize new levels of personal and professional success. Going forward, we remain committed to delivering value to our users and creators.

在過去的幾年裡，我們在創作者獎勵上累計投入了超過 10 億美元。在我們全球運營團隊的支持下，以及針對當地用戶不斷變化的需求量身定制的各種活動的實施，我們使我們的創作者能夠在本地和國際上獲得曝光，並使他們能夠實現新的個人和職業成功。展望未來，我們將繼續致力於為我們的用戶和創作者創造價值。

We will continue to cultivate diverse premium content, innovate interactive features and organize tailored local activities. We expect these efforts will further improve the user experience and ultimately facilitate the growth of our user community and global business. To mitigate risks against the current market, we proactively implemented a series of measures to further improve our efficiency and enhance the resilience of our business.

我們將繼續培育多元化的優質內容，創新互動功能，組織量身定制的本地活動。我們預計這些努力將進一步改善用戶體驗，並最終促進我們用戶社區和全球業務的發展。為化解當前市場風險，我們積極採取一系列措施，進一步提高效率，增強業務韌性。

As we continue to execute a sustainable growth strategy and emphasize our products' organic growth, we will be more adaptive in the execution of our user acquisition strategy. This means we will dynamically adjust our strategy based on ROI and closely monitor shifting market conditions. For products that are still loss-making such as Likee and Hago, we will focus on the steady improvement of their respective monetization capabilities, stick to a disciplined sales and marketing strategy and optimize their cost structure in order to steadily narrow their respective operating losses. We will also continue to enhance product synergy and optimize our business processes to drive further improvement of our operating efficiency at the group level.

隨著我們繼續執行可持續增長戰略並強調我們產品的有機增長，我們將更加適應我們的用戶獲取戰略的執行。這意味著我們將根據投資回報率動態調整我們的策略，並密切關注不斷變化的市場狀況。對於Likee、Hago等仍處於虧損狀態的產品，我們將著力穩步提升各自的變現能力，堅持嚴謹的營銷策略，優化成本結構，穩步縮小各自的經營虧損。我們還將繼續加強產品協同效應，優化業務流程，推動集團層面的運營效率進一步提升。

As we have maintained a healthy growth trajectory in our profit and cash flow since 2021, we are in a strong financial position that allows us to have greater flexibility and continued investment in core areas that build our long-term capabilities. We expect to emerge from the above recalibration as a more focused and more productive organization, better positioned to capture long-term growth opportunities.

由於自 2021 年以來我們的利潤和現金流一直保持健康的增長軌跡，我們處於強勁的財務狀況，這使我們能夠在建立長期能力的核心領域擁有更大的靈活性和持續投資。我們希望從上述調整中脫穎而出，成為一個更專注、更高效的組織，更有能力抓住長期增長機會。

Now let me dive deeper into the progress we made in each of our product lines. Let's start with Bigo Live. As a result of macroeconomic uncertainties and the seasonality due to Ramadan holiday in the Middle East, Bigo Live's livestreaming revenue and number of paying users declined during the second quarter. Yet, Bigo Live's user base and engagement level continued to grow, thanks to our innovative feature updates and localized activities which embrace regional traditions and user needs.

現在讓我更深入地了解我們在每個產品線中取得的進展。讓我們從 Bigo Live 開始。由於宏觀經濟的不確定性和中東齋月假期的季節性因素，Bigo Live 的直播收入和付費用戶數量在第二季度有所下降。然而，Bigo Live 的用戶群和參與度繼續增長，這要歸功於我們創新的功能更新和符合區域傳統和用戶需求的本地化活動。

During the second quarter, Bigo Live's MAUs increased by 10.6% year-over-year to $32.6 million. Notably, users in Southeast Asia and other emerging markets increased by 18.6%, while users in Europe increased by 8.7% year-over-year. To help our users in the Middle East and certain Southeast Asian countries celebrate their Ramadan holiday, Bigo Live launched a series of live events that tailored to local traditions. These included cooking sessions, quiz shows, and singing contests, and invited local celebrities and influencers to demonstrate the unique cultural traditions of their regions.

在第二季度，Bigo Live 的 MAU 同比增長 10.6% 至 3260 萬美元。值得注意的是，東南亞和其他新興市場的用戶增長了 18.6%，而歐洲的用戶同比增長了 8.7%。為了幫助我們在中東和某些東南亞國家的用戶慶祝他們的齋月假期，Bigo Live 推出了一系列根據當地傳統量身定制的現場活動。其中包括烹飪課程、智力競賽節目和歌唱比賽，並邀請當地名人和影響者展示他們所在地區獨特的文化傳統。

Our new "Community" feature, which was launched last quarter, continued to contribute to content diversification and user engagement improvements in the BAR channel. BAR's average views per user increased by 14.1% and the volume of its video content increased by 7.3% sequentially. Bigo Live also upgraded its "Virtual Live" feature to enable trendier livestreaming experience for its users, driving up both the number of users and cumulative time spent on Virtual Live sessions substantially over the previous quarter.

我們上個季度推出的新“社區”功能繼續為 BAR 頻道的內容多樣化和用戶參與度提高做出貢獻。 BAR 的每位用戶平均觀看次數增長了 14.1%，其視頻內容量環比增長了 7.3%。 Bigo Live 還升級了其“虛擬直播”功能，為其用戶提供更時尚的直播體驗，與上一季度相比，虛擬直播會話的用戶數量和累積時間均大幅增加。

Next, let's turn to Likee. During the second quarter, for similar reasons to Bigo live, Likee's livestreaming revenue and number of paying users declined. As mentioned earlier, given the current macro environment and the fact that short video monetization is still at an early stage of development, Likee continued to exercise prudence in its sales and marketing strategy, further optimized its cost structure and actively explored new opportunities for monetization. We have made progress in executing these objectives, and we successfully narrowed Likee's operating loss by 85% year-over-year during the first half of 2022.

接下來，讓我們轉向Likee。在第二季度，由於與 Bigo live 類似的原因，Likee 的直播收入和付費用戶數量有所下降。如前所述，在當前宏觀環境下，加上短視頻變現仍處於早期發展階段，Likee繼續審慎營銷策略，進一步優化成本結構，積極探索變現新機遇。我們在執行這些目標方面取得了進展，我們在 2022 年上半年成功地將 Likee 的經營虧損同比減少了 85%。

In mid-June, Likee launched a new feature called "Loop" in Europe and the U.S. Loop is a community feature that helps users with similar interests connect with each other, and we have so far received positive feedback from our users. For example, shortly after Loop was launched, the anime community shared more than 6 million episodes of video content and over 50% of the users in the anime community are following one another. This indicates that Loop has contributed to the fostering of a high level of connection. We also observed steady improvements in user engagement and stickiness, especially in the regions where Loop was introduced, as the average time spent on Likee per user increased sequentially by 10.2% globally and 22.7% in these regions.

6 月中旬，Likee 在歐洲和美國推出了一項名為“Loop”的新功能。Loop 是一個社區功能，可以幫助具有相似興趣的用戶相互聯繫，到目前為止，我們收到了用戶的積極反饋。例如，Loop上線後不久，動漫社區分享了超過600萬集的視頻內容，動漫社區50%以上的用戶都在關注。這表明 Loop 有助於培養高水平的聯繫。我們還觀察到用戶參與度和粘性穩步提高，尤其是在引入 Loop 的地區，全球每位用戶在 Likee 上花費的平均時間依次增加了 10.2%，在這些地區增加了 22.7%。

During the second quarter, in addition to launching a variety of localized campaigns, Likee partnered with four charity organizations in the Middle East and South Asia to launch a cross-regional donation campaign. By logging into Likee and participating in the "Ramadan" campaign, users collected "energy points" every day, which could later be converted to a certain donation amount to be made by Likee's through local charity organizations. More than 200,000 users participated in this campaign, demonstrating that users today seek to make a positive impact on their communities while being entertained and engaged. We will continue to actively explore other opportunities to further empower our users to make positive differences in their local communities.

第二季度，Likee除了開展各種本地化活動外，還與中東和南亞地區的四家慈善機構合作，開展了跨區域捐贈活動。用戶通過登錄Likee並參與“齋月”活動，每天收集“能量點”，之後可以轉換成Likee通過當地慈善組織捐贈的一定金額。超過 200,000 名用戶參與了這項活動，這表明如今的用戶在獲得娛樂和參與的同時尋求對他們的社區產生積極影響。我們將繼續積極探索其他機會，以進一步增強我們的用戶在當地社區中發揮積極作用的能力。

Next we can turn to Hago. During the second quarter, Hago's livestreaming revenue increased by 7.1% year-over-year, and its number of paying users grew by 12.8% over the same period. As we continued to optimize Hago's content recommendation algorithm, Hago's user engagement improved, as evidenced by an increase in its featured channel penetration rate of 1.8% sequentially. During the quarter, Hago focused on updating its newly launched "3D Hago Space" feature. Hago introduced more localized makeup, costumes and accessories, enabling users to design their 3D avatars according to their personal and cultural preferences. Additional interactive items and 3D virtual scenes were also introduced, both of which were well-received by Hago users, as demonstrated by the increase of Hago Space's next-day user retention rate by 14.9% sequentially.

接下來我們可以轉向Hago。第二季度，Hago的直播收入同比增長7.1%，付費用戶數同比增長12.8%。隨著我們繼續優化 Hago 的內容推薦算法，Hago 的用戶參與度有所提高，其特色頻道滲透率環比增長 1.8% 就是證明。本季度，Hago 專注於更新其新推出的“3D Hago Space”功能。 Hago 推出了更多本地化的妝容、服飾和配飾，讓用戶能夠根據個人和文化偏好設計自己的 3D 頭像。新增互動項目和3D虛擬場景，均受到Hago用戶的好評，Hago Space次日留存率環比提升14.9%。

In the coming quarters, Hago plans to further update users' Hago Space experience by introducing more 3D virtual scenes and items that cater to local culture and user needs. We expect to continuously increase the user penetration rate for our Hago Space feature and further enrich Hago users' social experience.

未來幾個季度，Hago 計劃通過引入更多符合當地文化和用戶需求的 3D 虛擬場景和物品，進一步更新用戶的 Hago Space 體驗。我們希望不斷提高我們的 Hago Space 功能的用戶滲透率，並進一步豐富 Hago 用戶的社交體驗。

Finally, some updates on capital return. During the second quarter we bought back an additional $12.1 million of our shares. We will continue to actively utilize our share repurchase program to enhance returns to shareholders. To conclude, we will always strive to establish stability and find opportunity amid uncertainty. The current macro environment does not change our demonstrated track-record in capturing some of the largest growth opportunities, nor our long-term outlook on the industry, and we view the current market fluctuations as opportunities to deepen our focus and plan for the future.

最後，關於資本回報的一些更新。在第二季度，我們又回購了 1210 萬美元的股票。我們將繼續積極利用我們的股票回購計劃來提高股東回報。總而言之，我們將始終努力建立穩定，在不確定中尋找機會。當前的宏觀環境不會改變我們在捕捉一些最大增長機會方面的表現記錄，也不會改變我們對該行業的長期展望，我們將當前的市場波動視為加深我們對未來的關注和規劃的機會。

We remain committed to generating value for our users and creators, while improving efficiency and enhanced resilience. As we continue to invest in building our long-term capabilities, we firmly believe that JOYY as a company will emerge from the current uncertainties as a more focused and productive organization and be well-positioned to capture long-term growth opportunities and generate sustainable shareholder value.

我們將繼續致力於為我們的用戶和創作者創造價值，同時提高效率和增強彈性。隨著我們繼續投資於建立我們的長期能力，我們堅信 JOYY 作為一家公司將擺脫當前的不確定性，成為一個更加專注和高效的組織，並有能力抓住長期增長機會並產生可持續的股東價值。

This concludes my prepared remarks. I will now turn the call to our General Manager of Finance, Alex Liu for our financial updates.

我準備的發言到此結束。我現在將致電我們的財務總經理 Alex Liu，了解我們的財務更新。

Thanks, David. Hello, everyone. Now let me go through the details of our financial results. Please note that the financial information and non-GAAP financial information disclosed in our earnings press release is presented on a continuing operations basis, unless otherwise specifically stated.

謝謝，大衛。大家好。現在讓我詳細介紹一下我們的財務業績。請注意，除非另有明確說明，否則我們在收益新聞稿中披露的財務信息和非公認會計原則財務信息是在持續經營的基礎上呈現的。

As the sale of YY Live was substantially completed on February 8, 2021, with certain customary matters to be completed in the future, we have ceased consolidation of YY Live business since February, 2021. Our total net revenues for the second quarter was US$596.1 million compared to US$661.7 million in the same period of 2021, primarily due to macroeconomic uncertainties and unfavorable exchange rates, which negatively affect paying user sentiment.

由於 YY Live 的出售已於 2021 年 2 月 8 日基本完成，某些慣例事項將在未來完成，我們自 2021 年 2 月起停止整合 YY Live 業務。我們第二季度的總淨收入為 596.1 美元2021 年同期為 6.617 億美元，這主要是由於宏觀經濟的不確定性和不利的匯率，這對付費用戶的情緒產生了負面影響。

Cost of revenues for the second quarter decreased by 17.6% year-over-year to $377.7 million. Revenue sharing fees and content costs was US$247.0 million in the second quarter, compared with US$289.1 million in the same period of 2021, primarily due to optimization of revenue sharing cost. Bandwidth costs decreased to US$20.0 million from US$27.5 million in the same period of 2021, primarily due to the company's improved efficiency in bandwidth usage.

第二季度的收入成本同比下降 17.6% 至 3.777 億美元。第二季度收入分成費用和內容成本為 2.47 億美元，而 2021 年同期為 2.891 億美元，主要是由於收入分成成本的優化。帶寬成本從 2021 年同期的 2,750 萬美元降至 2,000 萬美元，主要是由於公司提高了帶寬使用效率。

As we continue to execute a sustainable growth strategy and proactively implemented a series of cost optimization measures, we effectively improved our efficiency and enhance the resilience of our business and maintained a healthy growth trajectory in our gross and operating profitability.

我們繼續實施可持續發展戰略，積極實施一系列成本優化措施，有效提升效率，增強業務韌性，毛利率和經營盈利能力保持健康增長軌跡。

Gross profit increased to US$218.4 million in the second quarter, with our gross margin improved to 36.6% from 30.7% in the same period of 2021. Our operating expenses for the second quarter decreased by 41.1% to US$185.0 million from US$314.0 million in the same period of 2021. Among the operating expenses, sales and marketing expenses decreased to US$98.4 million from US$112.2 million due to disciplined and efficient spending on user acquisition.

第二季度毛利潤增至 2.184 億美元，我們的毛利率從 2021 年同期的 30.7% 提高至 36.6%。我們第二季度的運營費用從 3.14 億美元下降 41.1% 至 1.85 億美元與 2021 年同期相比。在運營費用中，銷售和營銷費用從 1.122 億美元減少至 9840 萬美元，原因是在用戶獲取方面有紀律和高效的支出。

General and administrative expenses decreased to US$23.7 million for the second quarter of 2022 from $101.1 million in the corresponding period of 2021. Our general and administrative expenses was higher in the second quarter of 2021 primarily due to a one-off impairment loss arising from certain equity investments.

2022 年第二季度的一般和管理費用從 2021 年同期的 1.011 億美元減少至 2370 萬美元。我們的一般和管理費用在 2021 年第二季度較高，主要是由於某些原因造成的一次性減值損失股權投資。

Our GAAP operating income for the second quarter was US$38.7 million, compared to operating loss of US$101.1 million in the same period of 2021. Operating income margin for the second quarter was 6.5% compared to operating loss margin of 15.3% in the same period of 2021. Our non-GAAP operating income for the second quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions as well as impairment of goodwill and investments and gain on disposal of subsidiaries and business, was US$59.9 million in this quarter, compared to non-GAAP operating loss of US$13.0 million in the same period of 2021. Our non-GAAP operating income margin for the second quarter was 10.0% compared to non-GAAP operating loss margin of 2.0% in the prior year period.

我們第二季度的 GAAP 營業收入為 3870 萬美元，而 2021 年同期的營業虧損為 1.011 億美元。第二季度的營業利潤率為 6.5%，而同期的營業虧損率為 15.3% 2021 年第二季度的非公認會計準則營業收入為 5990 萬美元，其中不包括股權激勵費用、業務收購的無形資產攤銷以及商譽和投資減值以及處置子公司和業務的收益在本季度，與 2021 年同期的非 GAAP 營業虧損 1300 萬美元相比。我們第二季度的非 GAAP 營業利潤率為 10.0%，而上一季度的非 GAAP 營業虧損率為 2.0%年期間。

GAAP net income from continuing operations attributable to controlling interest of JOYY in the second quarter of 2022 was US$18.7 million compared to net loss of US$109.3 million in the same period of 2021. Net income margin was 3.1% in the second quarter of 2022 compared to net loss margin of 16.5% in the corresponding period of 2021.

GAAP 2022 年第二季度歸屬於 JOYY 控股權益的持續經營淨收入為 1870 萬美元，而 2021 年同期為淨虧損 1.093 億美元。與 2022 年第二季度相比，淨利潤率為 3.1% 2021年同期淨虧損率為16.5%。

Non-GAAP net income from continuing operations attributable to controlling interest of JOYY in the second quarter was US$51.5 million compared to non-GAAP net loss of US$0.5 million in the same period of 2021. The Group's non-GAAP net income margin was 8.6% in the second quarter of 2022 compared to non-GAAP net loss margin of 0.1% in the same period of 2021.

歸屬於JOYY控股權益的非美國通用會計準則第二季度持續經營淨收入為5150萬美元，而2021年同期非美國通用會計準則淨虧損為50萬美元。集團的非美國通用會計準則淨利潤率為8.6 2022 年第二季度的 %，而 2021 年同期的非公認會計原則淨虧損率為 0.1%。

Notably BIGO's non-GAAP net income expanded to $86.3 million in the second quarter with its non-GAAP net income margin improved to 17.2% from 3.3% in the prior year period. Together with our improving profitability, we have maintained a strong operating cash flow as well.

值得注意的是，BIGO 的非 GAAP 淨利潤在第二季度擴大至 8630 萬美元，其非 GAAP 淨利潤率從去年同期的 3.3% 提高至 17.2%。隨著盈利能力的提高，我們也保持了強勁的經營現金流。

For the second quarter of 2022 we booked net cash inflows from operating activities of US$61.7 million. We remain a healthy balance sheet with a strong cash position of US$4.29 billion as of June 30th of 2022. Importantly, we have continued to enhance returns to shareholders through dividends and share repurchases. In accordance with our previously announced quarterly dividend plans approved in August and November 2020, we will be distributing a dividend of $0.51 per ADS for the second quarter of 2022 to shareholders of record as of the close of business on September 22.

2022 年第二季度，我們計入了來自經營活動的淨現金流入 6170 萬美元。截至 2022 年 6 月 30 日，我們的資產負債表保持穩健，現金狀況為 42.9 億美元。重要的是，我們繼續通過股息和股票回購提高股東回報。根據我們之前在 2020 年 8 月和 2020 年 11 月批准的季度股息計劃，我們將在 2022 年第二季度向截至 9 月 22 日營業結束時登記在冊的股東派發每股 ADS 0.51 美元的股息。

Additionally, we have repurchased US$12.1 million of our shares under our previously announced share repurchase programs. As of June 30, 2022, we have in total repurchased approximately US$327.9 million of our shares repurchase programs.

此外，我們根據之前宣布的股票回購計劃回購了 1210 萬美元的股票。截至 2022 年 6 月 30 日，我們總共回購了約 3.279 億美元的股票回購計劃。

Given our current cash position, we should be able to balance between keeping sufficient cash to invest in building our long-term capabilities and enhancing return for our shareholders. We will continue to actively utilize share repurchase to create value for our shareholders under current market condition.

鑑於我們目前的現金狀況，我們應該能夠在保持足夠現金投資於建立我們的長期能力和提高股東回報之間取得平衡。在當前市場條件下，我們將繼續積極利用股份回購為股東創造價值。

Going forward, as David just mentioned, we remain committed to delivering value to our users and creators, and we will continue to prioritize investment into the cultivation of our content, product interactive features and localized activities. We will continue to enhance our operational efficiency and effectively execute our long-term growth strategies.

展望未來，正如大衛剛剛提到的，我們將繼續致力於為我們的用戶和創作者創造價值，我們將繼續優先投資於我們的內容、產品交互功能和本地化活動的培育。我們將繼續提高我們的運營效率並有效執行我們的長期增長戰略。

For our business outlook, we expect our net revenues for the third quarter of 2022 to be between US$561.5 million and US$593.5 million, without considering Shopline, we currently have limited visibility surrounding the macroeconomic uncertainties on our business and the markets in which we operate. Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.

對於我們的業務前景，我們預計 2022 年第三季度的淨收入將在 5.615 億美元至 5.935 億美元之間，在不考慮 Shopline 的情況下，我們目前對我們業務和我們經營所在市場的宏觀經濟不確定性的可見性有限.因此，該預測僅反映我們對市場和經營狀況的當前和初步看法，這些情況可能會發生變化。

That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

我們準備好的發言到此結束。接線員，我們現在想打開問題電話。謝謝。

(Operator Instructions) Our first question comes from the line of Alex Poon from Morgan Stanley.

（操作員說明）我們的第一個問題來自摩根士丹利的 Alex Poon。

(foreign language) My first question is, how should we read our third quarter revenue guidance? And how management sees our growth trajectory in this year's second half, and next year? And also for user growth trend in the second half of next year?

（外語）我的第一個問題是，我們應該如何閱讀我們的第三季度收入指引？管理層如何看待我們今年下半年和明年的增長軌跡？以及明年下半年的用戶增長趨勢？

[Interpreted] This is David. I will firstly talk about the current macro headwinds that we faced regarding our revenue. The first part mainly comes from lifting of lockdown and travel restrictions. We are seeing a resurgence in travel demand during the quarter. And also we are seeing a lot of our creators and hosts are also having increased activity in offline traveling as well. So that is going to be a negative impact on our revenue. Secondly, with the rising inflation we're seeing the cost of living putting a higher pressure on our users. And thirdly the aggressive appreciation of U.S. dollar means that we will need to adjust our price in accordance with the appreciation and that is going to create a negative impact on our revenue growth as well.

[解釋] 這是大衛。我將首先談談我們在收入方面面臨的當前宏觀逆風。第一部分主要來自解除封鎖和旅行限制。我們看到本季度的旅行需求回升。而且我們也看到我們的很多創作者和主持人在線下旅行的活動也在增加。因此，這將對我們的收入產生負面影響。其次，隨著通貨膨脹的上升，我們看到生活成本給我們的用戶帶來了更大的壓力。第三，美元的大幅升值意味著我們需要根據升值調整價格，這也會對我們的收入增長產生負面影響。

So as for our strategy under such environment, we are going to adopt to a ROI driven sales and marketing strategy, prioritize our efficiency over the scale of our business. It means that we are going to continue to iterate our products and cultivate our services and to rely more on our products and services to achieve organic and effective growth.

因此，對於我們在這種環境下的戰略，我們將採用 ROI 驅動的銷售和營銷策略，將我們的效率優先於我們的業務規模。這意味著我們將繼續迭代我們的產品和培育我們的服務，並更多地依賴我們的產品和服務來實現有機和有效的增長。

So for our second question regarding the user growth trend, first of all for Bigo Live, I think we'd be able to observe that it has been continuously expand its product outreach by further diversifying its contents and innovates product features. That's why despite our sales and marketing expenses for Bigo Live decline Q-on-Q, Bigo Live's still sustained its user growth with its MAU growing by 10.6% year-over-year. And it proves the effective user acquisition strategy of Bigo Live. So as for our second year, we believe that Bigo Live will likely maintain its user growth momentum given its effective user acquisition strategy.

那麼對於我們第二個關於用戶增長趨勢的問題，首先是Bigo Live，我想我們可以觀察到它通過進一步豐富其內容和創新產品功能，不斷擴大其產品範圍。這就是為什麼儘管我們的 Bigo Live 銷售和營銷費用環比下降，但 Bigo Live 的用戶仍保持增長，其 MAU 同比增長 10.6%。並且證明了Bigo Live的有效用戶獲取策略。因此，對於我們第二年，我們認為 Bigo Live 可能會在其有效的用戶獲取策略下保持其用戶增長勢頭。

Our next question comes from the line of Thomas Chong from Jefferies.

我們的下一個問題來自 Jefferies 的 Thomas Chong。

(foreign language) My question is about our cost efficiencies measures. Given that we have seen many Internet companies implementing measures on cost control, just want to get some color from management about the trend in operating expenses such as sales and marketing, R&D, G&A in the second half. And how we should think about the margin trend going forward?

（外語）我的問題是關於我們的成本效益措施。鑑於我們看到很多互聯網公司都在實施成本控制措施，只是想從管理層對下半年的銷售和營銷、研發、G&A等運營費用的趨勢了解一下。以及我們應該如何看待未來的利潤率趨勢？

[Interpreted] Thank you Thomas, this is Alex. I will answer your question. So you can see that in the second quarter, thanks to our sustainable growth strategy and continued optimization of costs and expenses, we have managed to enhance operating efficiency and achieve better than expected profitability. Bigo segment achieved a non-GAAP net margin of 17.2%, while the Group achieved a non-GAAP net margin of 8.6%. And if we take a closer look at Bigo segment, our gross margin was improved both year-over-year and Q-on-Q in the second quarter. And that is mainly due to optimization of content costs, improved bandwidth utilization efficiency and also cost savings in the payment channel expenses.

[解釋] 謝謝托馬斯，我是亞歷克斯。我會回答你的問題。所以你可以看到，在第二季度，得益於我們的可持續增長戰略和成本和費用的持續優化，我們成功地提高了運營效率，實現了好於預期的盈利能力。 Bigo 部門實現了 17.2% 的非 GAAP 淨利潤率，而集團實現了 8.6% 的非 GAAP 淨利潤率。如果我們仔細看看 Bigo 細分市場，我們的毛利率在第二季度同比和環比都有所提高。這主要是由於內容成本的優化，帶寬利用效率的提高以及支付渠道費用的成本節省。

And for our non-GAAP operating expenses such as sales and marketing, G&A and R&D, we also saw cost savings happening across these expense items as well. And I would like to mention that the fact that we've been able to improve our efficiency despite short-term fluctuation in revenue demonstrate that we have been forward looking in our strategy planning while minimizing the potential negative impact from fixed cost. So for our second half of the year and also full year of '22, we expect Bigo segment's gross margin to remain stable. And also given that our localized sales and marketing activities would be more active in the second half of the year, the amount of sales and marketing expenses should be slightly higher. And also we expect to continue to achieve certain cost savings across other expense items given improved efficiency. We are still confident to achieve higher non-GAAP profitability for Bigo segment in the full year '22 as compared to year '21.

對於我們的非 GAAP 運營費用，例如銷售和營銷、G&A 和研發，我們還看到這些費用項目也節省了成本。我想提一下，儘管收入出現短期波動，我們仍然能夠提高效率，這表明我們在戰略規劃中具有前瞻性，同時最大限度地減少了固定成本的潛在負面影響。因此，對於我們下半年和 22 年全年，我們預計 Bigo 部門的毛利率將保持穩定。並且考慮到我們的本地化銷售和營銷活動在下半年會更加活躍，銷售和營銷費用的金額應該會略高一些。此外，鑑於效率提高，我們預計將繼續在其他費用項目中實現一定的成本節約。與 21 年相比，我們仍然有信心在 22 年全年為 Bigo 部門實現更高的非公認會計原則盈利能力。

Our next question comes from the line of Daniel Chen from JPMorgan.

我們的下一個問題來自摩根大通的 Daniel Chen。

(foreign language) I will translate myself. Can management maybe share your view on the live-streaming and the short video industry in the overseas market, in each of these segment market what are the major competitive landscape and what's the latest change in each of the market?

（外語）我會自己翻譯。管理層能否分享您對海外市場的直播和短視頻行業的看法，在這些細分市場中，主要競爭格局是什麼，每個市場的最新變化是什麼？

[Interpreted] This is David. I will answer your question. We can firstly look at the short video sector. We believe that there has been increasing competition in the short video sector, given that we have so many new products coming into the sector including these from larger companies like Google and Facebook as well as TikTok. But if we look at livestreaming, especially social livestreaming, we don't believe that the competition landscape has changed that much. I would believe that for social livestreaming, this is a product and sector that is hugely reliant on the community and the sticky connection among the users.

[解釋] 這是大衛。我會回答你的問題。我們可以先看看短視頻領域。我們認為，短視頻領域的競爭越來越激烈，因為我們有很多新產品進入該領域，包括來自谷歌和 Facebook 等大公司以及 TikTok 的產品。但如果我們看直播，尤其是社交直播，我們認為競爭格局沒有發生太大變化。我相信對於社交直播來說，這是一個非常依賴社區和用戶之間粘性聯繫的產品和行業。

If we look back, and we look at YY Live, which we used to operate in Mainland China, even when the domestic or the competitive landscape increased competition in the PRC markets, we see that YY Live user scale and also revenue scale remain relatively stable. And that is because for such a social livestreaming platforms usually takes 5 years to 10 years to build up a social connection and community where everyone is actually deeply connected. So it's much more sticky and therefore having a relatively limited impact from additional competition. So, I believe that we have a strong barrier in the global social livestreaming sector.

回過頭來看，我們曾經在中國大陸運營的YY Live，即使國內或競爭格局加劇了中國市場的競爭，我們看到YY Live的用戶規模和收入規模仍然相對穩定.那是因為對於這樣一個社交直播平台，通常需要 5 年到 10 年的時間來建立一個每個人實際上都緊密相連的社交聯繫和社區。所以它更具粘性，因此受到額外競爭的影響相對有限。所以，我相信我們在全球社交直播領域有很強的障礙。

Our next question comes from the line of Yiwen Zhang from China Renaissance. Please go ahead.

我們的下一個問題來自華興資本的張一文一行。請繼續。

(foreign language) First regarding the Bigo Live. In prepared remarks, you mentioned our community function. Can you elaborate on that, including how that had helped our user engagement and also the current ecosystem. And secondly can you give us an update on the Likee and Hago business?

（外語）首先關於Bigo Live。在準備好的評論中，您提到了我們的社區功能。您能否詳細說明一下，包括這如何幫助我們的用戶參與以及當前的生態系統。其次，您能給我們介紹一下 Likee 和 Hago 業務的最新情況嗎？

[Interpreted] Thank you for question. This is David. I will answer your question. So, I've talked about Bigo Live previously, so now I will mention mostly about HAGO and Likee. HAGO launched 3D space virtual reality social interaction feature last quarter, and it introduced a variety of virtual 3D scenes and virtual costumes during the quarter, significantly improving user experience and engagement. Hago also completed the setup of the virtual costume stores for users so that they can freely shop and dress their digital avatars. And this should be a meaningful step forward to further improve Hago's monetization efficiency and diversifying its revenue stream.

[解釋] 謝謝你的提問。這是大衛。我會回答你的問題。所以，我之前已經談到過 Bigo Live，所以現在我將主要提到 HAGO 和 Likee。 HAGO上季度推出了3D空間虛擬現實社交互動功能，並在本季度推出了多種虛擬3D場景和虛擬服裝，顯著提升了用戶體驗和參與度。 Hago 還為用戶完成了虛擬服裝商店的設置，以便他們可以自由購物和打扮自己的數字化身。這應該是進一步提高 Hago 的貨幣化效率和多元化收入來源的有意義的一步。

And for Likee, it's still focusing on the cultivation of creators and facilitating the growth of interest-based communities. So after the new community function "LOOP" has launched in Europe and U.S. during the quarter, we have observed improved social interactivity on Likee. We plan to make "LOOP" available in more regions and facilitate the growth of each vertical community through more efficient interest content matching. We will also explore new monetization opportunities under the feature, more community-based social commerce for example.

而對於Likee來說，它仍然專注於創作者的培養，促進興趣社區的成長。因此，在本季度在歐洲和美國推出了新的社區功能“LOOP”後，我們觀察到 Likee 上的社交互動性有所改善。我們計劃在更多地區推出“LOOP”，通過更高效的興趣內容匹配，促進各個垂直社區的成長。我們還將在該功能下探索新的貨幣化機會，例如更多基於社區的社交商務。

And also some additional updates on Bigo Live. We've mentioned that the recent launch of Bigo Live Virtual Live and Community feature has been launched in the previous quarters and we have received positive feedbacks from our users. Both have contributed to increased activity in live-streaming sessions and also the content diversity and social activity on our BAR channel. In the second half of the year, we plan to launch some new features such as "Match", to further improve our user's social interaction experience. Thank you.

還有一些關於 Bigo Live 的額外更新。我們提到最近推出的 Bigo Live Virtual Live 和社區功能已在前幾個季度推出，我們收到了用戶的積極反饋。兩者都有助於增加直播會話的活動以及我們 BAR 頻道上的內容多樣性和社交活動。下半年，我們計劃推出“匹配”等新功能，進一步提升用戶的社交互動體驗。謝謝你。

So that's the end of our call. And we look forward to speaking with everyone next quarter.

我們的通話就這樣結束了。我們期待在下個季度與大家交談。

Thank you. That does conclude our conference for today. Thank you for your participation. You may now disconnect your lines.

謝謝你。這確實結束了我們今天的會議。感謝您的參與。您現在可以斷開線路。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此成績單中標記為 [已翻譯] 的部分由現場通話中的口譯員朗讀。]