JOYY Inc. Price & Performance (YY)

We will also discuss certain non GAAP financial measures They are included as additional clarifying items to aid investors in further understanding the company's performance and the impact that these items and events had on the financial results. The non GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. You may find a reconciliation of differences between GAAP and non GAAP financial measures in our earnings release. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U. S. Dollar. I will now turn the call over to our Chairperson, and CEO, Ms. Ting Li. Please go ahead, Ms. Li. Hello, everyone. I'm Li Ting. Welcome to our fourth quarter twenty twenty four earnings call. We recently announced, on February 25, 2025. We successfully completed the sale of our live streaming business for Mainland China YY Live. I believe the full closing of this transaction makes the beginning of a new chapter for JOYY's corporate development. As a fourth step, we are excited to announce that effective from March 31, our NASDAQ ticker symbol will be changed from YY to JOY.

This aligns with our strategic vision and our globalization strategy entering into the new era. Over the past few years, Joy's position as a global technology company has [indiscernible] thanks to our global growth strategy.

We have focused our resources and attention on markets across the world With the emphasis on developed countries that demonstrate higher monetization efficiency and ROI. This strategic approach has year dated strong results.

In 2024, our global market revenue, excluding Mainland China, accounted for 89.6% of our total revenue. Notably, developed countries saw a year over year revenue increase of 24.6% boosting their share of the group's revenue to 53.9%. Moving forward, we will continue to depend on our [indiscernible] in key markets to build on this success. Improved global infrastructure a diversified product portfolio, and localized operations will build our brand influence and reinforce our status as a global technology company. As we drive our development, operational efficiency, will remain a key forecast. We will pursue a balance between growth and efficiency driving high quality top line growth well maintaining profitability and positive cash flow.

AI remains a key component of our strategy. The rapid advancement of AI has brought both transformative changes and the new opportunities. With our accumulated proprietary data and the in house [indiscernible] [indiscernible] we are well putted positioned to capitalize on this new trend. AI will empower our business by enhancing product to development. Optimizing data analysis, and improving our customer service. These advancements will directly improve both our operational efficiency and our users' [indiscernible] Taking our global operations to new head. As AI usage rapidly increases, we also recognize that people will seek more emotion interpersonal connection providing users with meaningful connections and they can truly value will be essential to long term success for social media platform in the AI age This notion will inform our long term strategy direction. Empowered by AI we can build more comprehensive user profiles which will ultimately improve content recommendation and matching among our users. We will continue to drive product [indiscernible] Leveraging AI in combination with the personal touch of talented creatures on our platform to provide users with emotionally resonant connections and interactive experiences. As we begin this important new chapter, we also want to reaffirm that as a leading global technology company, JOYY will hold itself to higher standard of responsibility towards our users and community.

As a guardian of global community of two sixty three point one million users we remain committed to strategically adhere to our regulatory requirements while in writing social responsibility and sustainably into our global operations. We will continue to update our community guidelines and enhance our technological capabilities to create a safe platform for our users. While actively calibrating with industry partners to promote industry standard. That support sustainable responsible growth. Now, I'd to review our overall performance for the fourth quarter and the full year. In the fourth quarter, our group revenue reached 549,400,000.0 achieving a non GAAP net profit of 96,100,000.0 up 57.1% quarter over quarter. Our core business segment, BIGO, achieved revenues to $480,000,000 Bigo's non GAAP operating profit reached 81,000,000 up 11.2% quarter over quarter. For the full year 2024, our group revenue was $2,240,000,000 The bigger segment achieved revenues of $1,990,000,000 a year over year increase of 3.3%. Thanks to strong operational execution throughout 2024, We made progress across multiple core objectives We constantly enhanced our localized operations worldwide. Delivering steady growth and group [indiscernible] For the full year 2024, the group achieved a non GAAP operating profit of $136,000,000 a year over year increase of 4.2% and a non GAAP net profit of 2 and $98,500,000 a year over year increase of 2%.

The bigger segment for year operating profit reached $286,300,000 exceeding our previous [indiscernible] BIGO's non GAAP net profit reached $314,600,000.0 a year over year increase of 4.2% This profit growth was achieved despite significant adjustments to our audio streaming products [indiscernible] markets in 2024.

Which had a dozen million negative impact on our bottom line. The upward change in our operating profit in spite of these adjustments indicated that our core business profitability has improved sustainably. Meanwhile, the group's non life streaming revenue [indiscernible] throughout the year. This primarily include Big O's advertising and the All Other segment SaaS revenue. For the full year twenty twenty four, the group's non life journey revenue increased 55.9% year over year to $449,800,000 according to 20.1% of total group revenue. An increase of 7.4 percentage point compared to 2023.

In 2025, we expect that the group's non life streaming revenue will mention double digit growth with its proportion of group revenue increasing in Denton. We expect this will provide momentum for the recovery of our revenue growth at the group level Meanwhile, we expect economics of our non life streaming business to be meaningfully improved, given enhanced monetization and the disciplined spending in 2025. As we set the stage, for ongoing growth, shareholders' returns remain a high priority for management In 2024, we repurchased 2,210,000.00 ADS for a total of 3 and $9,200,000 representing 15.1% of our total outstanding shares as of the end of last year. As of December 31, 2024, our net cash position stood at $3,300,000,000 We believe the current market valuation significantly on the values of the company. Especially when considering our profitable live streaming business and rapidly growing non live streaming business. We are happy to announce that our board has approved quarterly cash dividend program for the following three years, The aggregate amount of the cash dividend is expected to about 600,000,000 consisting of about $200,000,000 per year. Additionally, our Board has approved additional share repurchase program. Under which we may repurchase up to $300,000,000 of our share until December 2027.

This program replaces our previous share repurchase program, which would expire in November. We remain firmly committed to unlocking shareholder value through our consultant capital return in [indiscernible] [indiscernible] Next, let me share more specific programs across our product lines Let's begin with Big O Lite. In line with our goal of providing meaningful personal experiences to our users We continued to focus on cultivating a safe high quality, and diverse content ecosystem and bigger life. In the fourth quarter, we updated Big O Life's community guidelines and comprehensively enhanced its community safety technological capabilities. We introduced our exclusive multimodal content migration model which was fine tuned with our scenarios [indiscernible] And leveraged third party light models to further strengthen our content moderation capabilities. On the product filter front, we refined user verification processes and stratification [indiscernible] Verified user content, at the same time, When exercise is stricter measurement of user generated content to ensure our users would have safe high quality, experiences. In addition, we formed partnerships with multiple industry players and worked with relevant asset ratings to jointly prevent and punish any potential malicious use of platform We remain committed to constantly improving our safety feature to ensure secure experience for our users.

On the content front, Bigo Live continued to deliver the level of quality users have come to expect. The Annual BIGO Awards Gala was held at Marina Bay Sands Theatre in Singapore. Over 1,000 guests from around the world attended in person. And nearly 500,000 viewers [indiscernible] The event honored over 200 outstanding content creators and families for their contributions to Big O Live's vibrant user community. And filtered performances from certified global architects across various genres. The BIBO Awards Gala has become a core tradition for the platform and has helped countless talented creators expand their influence and reach the global stage. In addition, to the main global menu, [indiscernible] in Dubai, Thailand and Elwell. Elsewhere. In 2025, BigoLife will spend its community initiatives through greater partnerships [indiscernible] [indiscernible] Philosophy, education, and more. We remain dedicated to building value for the platform creature. Base and helping our global creators grow. During the quarter, we analyzed our proprietary AI model to analyze ultra long user behavior sequences. And refined our content recommendations [indiscernible] This improvement together with our containers, efforts to expand Bigo Life's high quality content offering and optimize its live streaming room viewer filter drove a 2.1% sequential increase in average viewing time.

Per user during the fourth quarter. By strategically, directing traffic to mid tier hubs [indiscernible] such as beauty and body filters. Big O Life achieved a 1.2% increase in host next day retention and a 2.9% increase in average live streaming time per host. Both quarter over quarter. Next, let's look in at IPI.

LIHEAP remains forecast on two core markets, The Middle East and the Europe. In the fourth quarter, like CAUs, in core European countries increased by 4.4% quarter over quarter. Driven by growth in paying users liking live streaming revenue grew 2.2% sequentially. In 2024, Likee recorded its second consecutive profitable year.

We continued to elevate Lattice content and community engagement in its core markets In January, Likee partnered with a globally popular game, Jianxin Impact, to depend its penetration among Gen Z users. The campaign featured generation themed short video and live streaming content with special prices and the co branded offline event in Europe During the campaign, an initiative generated over $5,700,000 and the offline event attracted 11,000 [indiscernible] [indiscernible] timing, several popular creatures with millions of following to join Likee. Beyond this targeted operational activities, likely increased support for quality creatures. Driving a 13% quarter over quarter increase in viewing time spent on short videos. The proportion of content creators as a percentage of daily active users grew steadily compared to the third quarter.

Indicating healthy levels of engagement. Last quarter, we mentioned that we have redirected some of latest operational resources including personnel and the traffic to a new product to unlock our monetization potential. In Likee's core market we are pleased to report that the new product has launched smoothly and is currently generating small scale revenue. We look forward to building the scale of this new product over the next few quarters at which time we will share more updates. Finally, on HAGO, in the fourth quarter, driven by its blockbuster year and operational event. HAGO's quarterly live streaming revenue achieved quarter over quarter growth In the fourth quarter, HAGO's cash flow remained positive.

Achieving its goal of positive cash flow for the second consecutive year. HAGO's user engagement further. Improved during the fourth quarter as well. Average time spent in channels increased by 8.6% quarter over quarter to one hundred and eight point two minutes. The product's next day retention rate also continued to improve.

In 2024, we made substantial progress in improving operational efficiency and diversifying our revenue stream. Looking ahead, we remain deeply committed to driving diversified growth across our global operations and the solidifying our position as a leading global technology company. Through AI driven innovation we are comprehensively enhancing our operational efficiency and cultivating meaningful experiences for our users.

We will continue to prioritize platform safety and integrate social responsibility into our global operations Based on our solid operational execution, We remain confident in driving sustainable growth in our global business and creating long term value for our shareholders. Thank you. Thank you. Next, we will now turn the call over to Mr. Alex Liu, the Vice President of Finance to provide our financial updates. Thanks, Misty.

Hello, everyone. I will now provide a recap of some key financial highlights for the fourth quarter. Our total net revenues were 549,400,000.0 in the fourth quarter, compared with 569,800,000.0 in the same period last year. Revenues from V Go segment were $418,000,000 In particular, groups non live streaming revenues were $127,000,000 up by 51.9% year over year primarily due to the increase of Bigo's advertising revenues Geographically speaking, as we prioritize to allocate our aboriginal resources towards developed countries and the acquisition of premium users. This greater monetization potential Other group revenues from developed countries and regions was up by 13.7% year over year while revenues from Middle East sustained a sequential growth, of 0.7%. Cost of revenues for the quarter decreased by 6.2% year over year to three hundred and forty five point seven million Bigo's cost of revenues was $34,900,000.0 which was down by 1.3% year over year driving by 5,500,000.0 decrease in payment handling costs Our other cost of revenues were $40,800,000 down by 34.4% year over year consistent with its revenue trend. Gross profit was $203,800,000 in the quarter. With a gross margin of 37.1% BIGO's gross profit was 175,000,000 with a gross margin of 36.5%.

Pico's gross margin was lower year over year and quarter over quarter due to a safety in our revenue mix We saw an increase contribution from our lower margin audience network advertising revenues. Our group's operating expenses for the quarter was 6 and 33,500,000.0 compared with $199,400,000 in the same period of 2023. Among the operating expenses, we recorded noncash goodwill impairment charge of $454,900,000 impairment was primarily attributable to goodwill associated with our prior acquisitions. [indiscernible] by lower managing by lower valuation amid current market conditions, [indiscernible] to 67,000,000 from $92,300,000 in the same period of 2023. Primarily due to our reduced spending on user acquisition through advertising General and administrative expenses increased to $44,000,000 from $34,600,000 in the same period of 2023 primarily due to increase in expected credit loss of receivables Bigel's total operating expenses for the quarter were 105,700,000.0 decreased from 131,300,000.0 in the same period of 2023. Primarily due to decreased insurance and marketing expenses. Our disciplined execution has driving enhanced operational efficiency at both the group and the B Go segment. Our group's non GAAP operating income for the quarter was $46,400,000 in this quarter, up by 66.2% from $27,900,000 year over year Bigo's non GAAP operating income was $81,000,000 up by 21% from $67,000,000 year over year.

Non GAAP net income attributable to controlling interest of JOYY in the quarter was 96,100,000.0 up by 49.7% from $64,200,000 in the same period of 2023. The group's non GAAP net income margin was 17.5% in the quarter compared to 11.3% in the same period of 2023. Bigo's non GAAP net income was $98,400,000 up by 55% from $63,500,000 in the same period of 2023. Bigo's non GAAP net margin was 20.5% in the quarter. Compared with 12.9% in the same period last year. For the fourth quarter of twenty twenty four, we booked net cash inflows from operating activities of 110,500,000.0 Our balance sheet remains healthy with a [indiscernible] of 3,300,000,000.0 as of 12/31/2024. Now I would like to briefly walk through the full year financial highlights. Our total net revenues for the full year [indiscernible] [indiscernible] Dollars compared to hundred and 67,900,000.0 in 2023. Bigo's revenues for the full year were 1,988,300,000.0 up from $1,924,300,000 in 2023. Our non GAAP net income attributable to controlling interest and common shareholders of JOYY for the full year of 2024. Was 298,500,000.0 up by 2% from $292,500,000 in 2023. Non GAAP net income margin for the full year of 2024 was 13.3% up from 12.9% in 2023.

Notably, Bigo's non GAAP net income expanded to $314,600,000 in 2024. Up by 4.2% from $3.00 $2,000,000 in 2023. This is non GAAP net income margin slightly slightly improved to 15.8%. Importantly, shareholder return continued to be an important component of our capital allocation strategy. In the full year of 2024, we have retained an aggregate amount of 309,200,000.0 to our shareholders through share buyback. [indiscernible] 1013.6% of our non GAAP net income. We remain confident in our company's long term growth prospects and believe that our share price has been trading substantially below its intrinsic value. Accordingly, our Board of Directors approved quarterly dividend policy for the next three years commencing immediately And short policy, the total cash dividends amount expected to be to be paid will be approximately $600,000,000 and the quarterly dividend will be set [indiscernible] at a fixed amount of approximately $50,000,000 It seems 0.93 per ADS. In each fiscal quarter. Additionally, our Board has approved an additional share repurchase program. [indiscernible] we may repurchase up to 300,000,000 of our shares until December 2027. This program replaces our previous share repurchase program which would expire in November. Going forward, we remain firmly committed to unlocking shareholder value through our capital return initiatives Turning now to our business outlook.

At the group level, we expected our net revenues for the first quarter of twenty twenty five to be between $482,000,000 and $490,000,000 Our guidance [indiscernible] [indiscernible] our preliminary views of the current market [indiscernible] and business adjustment decisions. These are subject to changes. In closing, [indiscernible] they are ready to turn to a new chapter for JOYY. Looking forward, we will remain dedicated to our strategic priorities building our influence as a global technology company exploring diverse growth and actively driving operational efficiency. At all levels We are well positioned to deliver sustainable profitable growth and create long term value for our shareholders. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

Thank you. If you wish to cancel your request, please press 2. If you're on a speakerphone, please pick up the handset ask your question. Asking a question, please state your question in Chinese first then repeat your question in English for the convenience of everyone on the call. Your first question comes from Thomas Chong with Jefferies. Please go ahead. Let me translate myself. My question is about the user and the revenue trend in 02/2025.

Thanks.

Okay.

Thank you for your This is Li Ting. I will take your question. First of all, I'd like to add a few more color regarding our performance in Q4. In Q4, the group's non live streaming revenues continued to grow substantially both year over year and quarter over quarter. While our live streaming revenue experienced a decline The reason behind the decline was primarily due to two factors. First, we mentioned this in our last quarter as well, that we may certain adjustments to interactive features of Because Non Core audio live streaming product in late Q3, to enhance compliance And Q4 is the first full quarter reflecting those adjustments. And secondly, we Beagle Life experienced an unexpected temporary removal from platforms in Q4, and that has caused additional short term fluctuation in its live streaming revenue. However, despite the disruption of that temporary event, our annual gala, which we believe has has delivered stronger than expected results, that is why we're still able to deliver revenue within our previously given guidance. I think that it reflects reflects the stickiness of our core paying user group and also the resilience of our global business. Looking ahead to the first quarter of twenty twenty five, we do expect a stronger than usual negative seasonality impact due to the coinciding Lunar New Year and Ramadan.

Bagle Life fully back on both platforms in January, we also expect BigoLife to take certain time resume its normal pace of user acquisition and operational events during the quarter. And therefore, if there will be a lagging impact on its monetization, which we do not believe is going to affect the long term sustainable growth of that product. And our current revenue guidance has considered the potential impact from the above mentioned factors. In 2024, we know that we have implemented a number of adjustments on our to our operations, including our optimization over content cost, optimization of user acquisition, [indiscernible] as well as mentioned adjustment to noncore audio live streaming. And the unexpected temporary incident drove us to accelerate the update of our previously planned global community guidelines and safety capabilities enabling us to align and upgrade our community guideline and safety requirements across different global regions ahead of our schedule We believe that this altogether has provided our business with a more efficient and healthier foundation to start for the year '25.

Looking ahead, for the full year of 2025, for B2 segment, we will continue to concentrate our operational resources on developed countries and premium users with greater monetization potential we expect the paying users and ARPU of BIGO will gradually return to sequential growth in Q2. And additionally, we anticipate that the non live streaming revenue will continue to maintain the strong growth momentum, likely double digit year over year. However, our adjustment to the non core audio live streaming product was still might still exert a negative impact on V Go's overall top line growth especially when compared with the high base during the first three quarters of twenty twenty four. For all other segments, we expect its non live streaming revenue continue to flow and drive continue to grow by double digits. And drive the top line recovery of the whole segment. Regarding our MAU outlook, we understood that BigoLife experienced some fluctuation over its MAU over the past several quarters. A year over year decline was primarily due to our recurrent strategy of optimizing our advertising spend and operational resources towards developed countries and premium users, And sequentially speaking, the QoQ decline was primarily due to the short term disruption of new user acquisition during the temporary suspension period, However, we expect that with with the optimization of [indiscernible] takes effect, its MAU will likely return to sequential growth in the second half of the year.

Next question, please.

Thank you. Your next question comes from Ewen Zhang with China Renaissance. Please go ahead.

So thanks for taking my questions. My question is about our outlook on 2025 experience and profitability. Trend? Thank you. Part GAAP [indiscernible] Thank you for question. This is Alex. In the fourth quarter, our discipline execution had driven operational efficiency enhancement at both the group and the legal segment. Looking specifically at the V Go segment, in Q4, the non GAAP gross margin was 36.5%, which was down Q on Q. Due to shifts in our revenue mix, which saw increased contribution from our lower margin audience network advertising revenue. The Bigo's operating margin increased to 16.9% which is up 2.2 percentage points as compared to the last quarter and its non GAAP operating profit amount increased by 11.2% Q o Q. And the improvement was primarily due to decrease in our sales and marketing expenses particularly our user acquisition spending during the temporary suspension period. And excluding that impact, Bigo's non GAAP OP was still up 2oQ which is better than our original expectation. Looking at the All Other segment, its non GAAP gross margin also saw substantial improvement during the quarter. Rising from 40% in Q3 to 41.8% in Q4 is up by 1.8 percentage points And that was mainly benefiting from a Q o Q acceleration in its monetization.

The non GAAP operating loss for the All Other segment was narrowed by 8.9% compared to the previous quarter to 34,600,000.0 and that was mainly due to effective control over our operating expenses, and that a steady decline in R and D expenses both in terms of absolute amount and also as a percentage of revenue. Looking ahead to the first quarter of twenty twenty five, for BGO segment, due to the impact of seasonality, we expect a decline in its non GAAP operating profit when compared to Q4. For all other segments, we expect it's non GAAP operating loss to further narrow on a sequential basis during the quarter. For the full year of 2025, we'll continue to execute our ROI strategies persistently optimizing our cost and operational expenses, within the segment. Nonetheless, adjustments made to the non core audio live streaming product in the segment may still have a negative impact on its profit. And the one off user acquisition expense savings during the temporary suspension period in Q4 has made BIGO's non GAAP OP for the full year of 2024 quite a high base. Considering those factors we expect the overall non GAAP OP in terms of absolute amount [indiscernible] To remain roughly stable with certain potential for growth for the full year of 2025.

In terms of all other segments, we expect with improving monetization and disciplined spending our R and D expenses as an as a percentage of revenue will continue to decline and we foresee a meaningful reduction in its operating its non GAAP operating loss in 2025 compared to the last year. Overall speaking, at group level, we expect the group's non GAAP operating profit will continue to show an improving trend the year 2025. Next question, please.

Thank you. Your next question comes from Brian Gong with Citi.

I will translate myself. Thanks, management, for taking my question. A very quick question on shareholder return plan. We just announced the new plan including dividends and the share repurchase program. Can management elaborate a little bit more on our rationale and this new shareholder return plan? Thank you.

Thank you, Brian, your question. This is Alex. In the year 2024, we continue to be very active in shareholder return. During the year, we bought back a total number of 9,210,000.00 ADS for a total of $3.00 9,000,000 U. S. Dollars accounting for an impressive 15.1% of our total shares outstanding as of the end of last year. Between 2020 and 2024, we have in total return $1,684,000,000 to our shareholders This is a very sizable amount, especially when compared to our current market cap Looking ahead, we will continue to consider shareholder returns as an important component of our capital allocation the Board of Directors has just approved an additional 600,000,000 dividend policy and a $300,000,000 buyback program for the following three years totaling 900,000,000 and that represents approximately 35% of our current market cap which we believe represents a relatively competitive level within the industry Through our well communicated consistent quantify and sustainable shareholder commitment, we would like to demonstrate our determination in persistent sustainable shareholder returns and our confidence in the long term prospects of the company. On top of that, we also from time to time consider other shareholder options subject to ongoing operational updates and also market conditions.

In the long term, we need both growth in the company's core business and also just its stable shareholder return. In order to create a sustainable value for our shareholders We remain confident in our ability to continuously drive ongoing diversified growth especially profit growth in our global operations while maintaining a competitive and sustainable shareholder return.

Thank you.

Maybe one last question, please.

Thank you. Your next question comes from Rafael Chen with BOCI Research. Please go ahead.

I will translate myself. Thank you for taking my question.

Could management elaborate more on the strategic priority positioning for new initiatives. For example, our advertising business in the future too. [indiscernible] Thank you. This is Li Ting. In the fourth quarter, B Go's advertising revenue maintained robust growth, which significantly increased its contribution to the segment's total revenue, now reaching 16.6%, specifically revenues from our advertising platform Bigo Audience Network, continue to show a strong momentum primarily driven by North America and European markets. Looking ahead to 2025, we expect BIGO Audience Network to continue its strong growth momentum double digit year over year, driven by a number of factors including expansion of its network's DAU pool expansion of advertiser base and exploring into new verticals. We also expect its operating profit and OP margin trend to improve during the year. As compared to 2024. With regards to our cash usage for our new initiatives, we have said we'd like to clarify that we have set a consistent goal for each business unit which is to enhance monetization efficiency continuously optimizing their cost structure and aiming a positive cash flow and breakeven as soon as possible. We expect that both the BigoAudience Networks and our SaaS business under all other segments to show significant improvement in their operating cash flows in 2025.

So that was the last question. And thank you so much for joining our call. We look forward to speaking with everyone next quarter.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.