Good morning and good evening, ladies and gentlemen. Thank you and welcome to the DouYu International Holdings Limited second quarter 2019 earnings conference call. At this time, all participants are in listen-only mode. We will be hosting a question and answer session after management's prepared remarks. I will now turn the call over to the first speaker today, Ms. Mao Mao, IR Director of DouYu. Please go ahead, ma'am.
Hello, everyone. Welcome to our second quarter 2019 earnings call. Joining us today are Mr. Shaojie Chen, Chairman and Chief Executive Officer, Mr. Mingming Su, Chief Strategy Officer, and Mr. Hao Cao, Vice President of Finance. You can refer to our second quarter of 2019 financial results on our IR website at ir.douyu.com. You can also check a replay of this call when it becomes available in a few hours on our website. Before we start, please note that this call may contain forward-looking statements made pursuant to the safe harbor provision for the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on management's current expectations and observations that involve unknown and known risks, uncertainties, and other factors not under the company's control, which may cause actual results, performance, or achievements of the company to be materially different from the results, performance, or expectations implied by these forward-looking statements. All forward-looking statements are expressly qualified in their entirety by the cautionary statement, risk factors, and details of the company's filing with the SEC. The company undertakes no duty to revise or update any forward-looking statements for selected events or circumstances after the date of this conference call. I will now turn the call over to our Chairman and Chief Executive Officer, Mr. Shaojie Chen. Please go ahead, sir.
Hello, everyone. Welcome to our second quarter 2019 earnings conference call. Also, our very first earnings call as a public company. We are pleased with our robust growth trajectory during the quarter, as our total revenue increased by 133.2% year-over-year to CNY 1.87 billion. Our gross profit increased by 823.8% year-over-year to CNY 301 million, with gross margin expanding to 16.1%. Our adjusted net income reached CNY 52.6 million with an adjusted net margin of 2.8%. The average total MAUs in the quarter increased by 32.6% year-over-year to 162.8 million, while the average mobile MAUs increased by 42.5% year-over-year to 50.6 million. Our quarterly paying users reached 6.7 million, implying a year-over-year growth of 123.3%. In the second quarter, we were able to expand our user base substantially, driven by user growth on both mobile and PC.
The rapid mobile MAU growth in the second quarter was driven by our continuous efforts to upgrade our product functionality and user interface, such as the instant turn-on feature, which enhances user experience on our mobile app. As the user bandwidth cost of 4G networks gradually declined, we saw the number of users watching streaming content through 4G explode. The average mobile MAUs who visited our app through a 4G network increased by 39% year-over-year. With the increasing popularity of 4G and the coming launch of 5G networks, we are confident that our mobile MAUs will continue to grow at a fast pace and become one of the key drivers for user growth. At the same time, our PC user base maintained its steady growth trajectory.
During the second quarter, our average PC MAUs increased by 28.5% year-over-year to 112.2 million, mainly driven by the improving penetration and rising popularity of eSports games such as DNF, CS:GO, and TFT. These type of eSports games tend to attract hardcore gamers who are extremely loyal live streaming viewers and contribute high lifecycle user value. In addition, the gradual resumption of regulatory approval for game licenses has led to the introduction of new games onto the market and the associated user growth. As the eSports industry evolves and consolidates continuously, our market leadership has enabled us to attract an increasing number of high-quality streamers to our platform, thus further enhancing our content and accelerating our user attraction capability. As we launch more diversified product functionalities and improve the social features of our online community, our user engagement is perpetually on the rise.
In the second quarter, the total viewing time of our active users achieved 2.5 billion hours, representing a year-over-year increase of 56%. As we continue to convert esports gamers into game-centric live streaming viewers, we are confident that we will be able to attract more and more users and solidify our leadership position as the largest game-centric live streaming platform in China. During the second quarter, we further enhanced content throughout our game-centric live streaming ecosystem to improve user stickiness. Game live streaming contributed more than 80% of total viewership and approximately 50% of revenue from live streaming for this quarter. Our game-centric premium content is effectively supplemented by paying entertainment and talent shows, enabling us to build up a comprehensive content creation system while achieving better user outreach and diversified monetization.
As we continue to invest in esports to capture its growth and monetization potential, we self-organized and live-streamed 38 esports tournaments and broadcasted 76 additional high-quality esports tournaments during the second quarter. Our Golden Grand Tournament, for example, attracted 17.7 million viewers in the first half of the year. During the 2019 DouYu Carnival in June, we broadcasted 33 esports competitions and attracted over 310 million online viewers. To complement our direct investment in esports content, we sponsored a number of top esports teams, including IG team, who won the World Championship of LOL Season 8, and eStar team, who won the KPL Spring 2019 championship. We also explored cooperative initiatives with Tencent in several esports tournaments, such as the interactive audience cheering system for KPL.
Going forward, we plan to expand and deepen our esports footprint through esports team sponsorships and esports tournament organization to ensure a consistent supply of high-quality content, grow our user base, and discover new monetization opportunities. For streamers, we continued to refine our exclusive contract model to work directly with our top streamers, which contributed significantly to premium content production and user attraction. At the same time, we utilized our talent agency model to engage and manage long-tail streamers efficiently. We believe that those two models combined are critical to streamer diversification and monetization. We view premium game content as our key competitive advantage. Looking forward, we are committed to building out our game-centric content production system, fine-tuning our operations within each segment, and improving our streamer development mechanism.
In addition, through our precise identification of new mega hit games, we should be able to enhance our user conversion and deepen our market penetration. During the second quarter, we continued to see further improvement in monetization. Our quarterly paying users increased by 123.3% year-over-year to 6.7 million, with a paying ratio of 4.1% and a quarterly ARPU increase of 14.3% year-over-year to CNY 256. We are currently deploying different monetization strategies in different segments. For game live streaming, we increased our users' willingness to pay through small amount gifting and our fans system. Once a user bought his or her first fans card, we successfully transformed that user's consumption habit and converted a casual user into a paying user. Moreover, we perpetuated his or her consumption through superior user experience by continuous product upgrades and social feature enhancements.
Looking forward, we believe that game live streaming has a huge monetization potential. In addition to game live streaming, we continued to enrich our premium membership system in the paying entertainment and talent show segments to better cater to users' needs. By strengthening our cooperation with talent agencies, we further improved our monetization efficiency. Also, we worked closely with streamers and motivated them to take the initiative of promoting their user interactions and managing their live streaming rooms as self-sustaining independent platforms. For example, we provided our streamers with back-end data support and a series of operational tools so that they could increase their user traffic by utilizing this data and tools. In this way, we were able to improve our monetization efficiency across the entire platform.
In the second quarter, we continued to develop our AI and big data capabilities to satisfy varied customer demands, increase user traffic, improve user stickiness, and enhance user monetization. For example, our AI-backed video identification system can dynamically segment streamers to produce a precise match with user preferences. Users can also filter and select their desired content based on screen display information. With the expected introduction of 5G technology, we foresee a whole new slew of business opportunities emerging for the game-centric live streaming industry. We are actively investing in technology and preparing for the new dawn of the 5G era. In overseas expansion, we have established a foothold in India as well as Southeast Asia, including, for example, Vietnam, and are actively exploring additional opportunities in Japan. While we pay close attention to overseas markets, we believe such opportunities are still at the early stage of their development.
It will take time to educate overseas users and cultivate their paying habits. Therefore, we should remain prudent in our assessment of investment opportunities in overseas markets. To conclude, we accomplished better-than-expected financial and operational results during the second quarter. To maintain our market leadership as the largest game-centric live streaming platform in China, we will continue to lay the foundation for each link in the game live streaming and esports value chain while improving our operating efficiency and financial performance to create value for our shareholders in the long run. With that, I will turn the call to our Vice President of Finance, Mr. Hao Cao, to go through the details of our financial performance in the second quarter.
Thank you, Shaojie. Hello, everyone. Please let me go through our second quarter financial results. Due to our continuous efforts in growing our user base, enriching and improving the quality of content, cultivating users' paying habits, as well as broadening our brand awareness, our total net revenues increased by 133.2% year-over-year to CNY 1.87 billion in the second quarter. Improvements to both our paying user base and ARPU drove our live streaming revenues to CNY 1.71 billion in the second quarter of 2019, representing 156.0% year-over-year growth. During the second quarter, we continued to leverage our integrated promotion activities to reach a broader group of users with our enhanced brand awareness. As a result, our advertising and other revenues increased by 21.2% to CNY 164.4 million in the second quarter of 2019 from CNY 135.6 million in the prior year period.
Coinciding with our revenue growth and benefiting from our upgrades to technology, revenue sharing fees and content costs, as well as bandwidth costs, increased at a slower pace relative to our revenue growth in the second quarter of 2019. During the quarter, cost of revenues increased rapidly by 104.0% to CNY 1.57 billion from CNY 770.3 million in the prior year period. Revenue sharing fees and content costs increased by 121.2% to CNY 1.33 billion from CNY 599.8 million in the prior year period, primarily due to the higher revenue sharing fees caused by increased live streaming revenues and our expanded content offerings, which we continue to bolster by investing in quality content production by the platform and the content rights to broadcast esports-related content.
Bandwidth costs increased by 15.2% to CNY 153.3 million from CNY 133 million in the prior year period, which was primarily due to the growth in our user base and increase in user engagement on our platform. As we continue to introduce more high-quality products and services onto our platform, our bandwidth cost will continue to rise in absolute terms in order to ensure a smooth live streaming experience. Importantly, these increases to bandwidth costs will be partially offset by our improvements to bandwidth utilization efficiency attributable to the continued deployment of new technologies in content distribution. In the second quarter of 2019, our gross profit increased by 823.8% to CNY 301.1 million from CNY 32.6 million in the prior year period. In addition, gross margin increased to 16.1% in the second quarter of 2019 from 4.1% in the prior year period.
Such gross margin improvements were primarily attributable to our continuous improvements in monetization capabilities, bandwidth utilizations through technology upgrades, and operational efficiency. Operational efficiency improvements also contributed to the development of economies of scale on the platform, which has helped to boost gross margin in turn. Let's now take a look at operating expenses. Our sales and marketing expenses increased by 17.4% to CNY 167.8 million in the second quarter of 2019 from CNY 142.9 million in the prior year period, which was mainly attributable to the increase in greater efforts in promoting our brand awareness, esports contents, and offline events.
Research and development expenses remained relatively stable at CNY 84.4 million in the second quarter of 2019, compared with CNY 82.9 million in the prior year period. General and administrative expenses increased by 98.4% to CNY 73.3 million in the second quarter of 2019, from CNY 37 million in the prior year period, which was mainly due to the increased share-based compensation expenses related to the awarding of restricted share in connection of our acquisition for Nonolive in October 2018, as well as the increase in salaries and benefits of our management team as a result of our business expansion. During the second quarter of 2019, both our sales and marketing expenses, as well as general and administrative expenses as a percentage of our total net revenues, exhibited a year-over-year decrease. These improvements were mainly due to our initiatives to strengthen operating leverage.
Other operating income net was CNY 14.5 million in the second quarter of 2019, compared with CNY 21.2 million in the prior year period. Our adjusted operating income for the first time turned to positive from an adjusted operating loss of CNY 204.6 million in the prior year period to CNY 17.4 million in the second quarter of 2019. We achieved an adjusted net income of CNY 52.6 million in the second quarter of 2019, in comparison to an adjusted net loss of CNY 221.9 million in the same period of 2018. Please note that our adjusted net income excludes share-based compensation expenses, share of gain or loss in equity method investments, and impairment loss of investments.
For the second quarter of 2019, basic and diluted net income per ordinary share was CNY 0.86 and CNY 0.82 respectively, compared with our basic and diluted net loss per ordinary share of CNY 28.07 and CNY 28.07 respectively in the prior year period. For the second quarter of 2019, adjusted basic and diluted net income per ordinary share was CNY 4.51 and CNY 1.91 respectively for the second quarter of 2019, compared with adjusted basic and diluted net loss per ordinary share of CNY 27.25 and CNY 27.25 respectively in the prior year period. To accelerate our business organic growth, we completed our initial public offering in July 2019 and received $489.9 million in net proceeds after deducting the underwriting discounts and commissions and estimated offering expenses payable.
Our successful IPO on the NASDAQ is an important milestone for our company to date and represents another crucial step for us on the path to building a truly dynamic and sustainable growth company. Going forward, we will continue on strengthening our value proposition in the game-centric live streaming industry, as well as exploring both the upstream and downstream of esports value chain. We will continue to drive our revenue growth through user base expansion, paying ratio enhancement, and ARPU improvement. We will also further optimize our operational efficiency and operating leverage to improve our margins. We aim to create long-term value for shareholders. Taking into account our growth plan and monetization capabilities, we expect our total net revenues for the third quarter of 2019 to be in the range of CNY 1.95 billion-CNY 2 billion.
This forecast reflects our current and preliminary views on the market and operational conditions, which are subject to change. This concludes our prepared remarks for today. Operator, we are now ready to take questions.
Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Please pose your question in Chinese first and then English. Please limit yourself to one question and rejoin the queue for any additional questions. At this time, we will pause for a moment to assemble our roster. Our first question today will come from Li Zheng of Bank of America Merrill Lynch. Please go ahead.
管理层晚上好。恭喜强劲的业绩。我的问题主要是关于游戏直播行业的，想向您请教一下公司如何看待来自像快手这种短视频的竞争，对我们的业务和未来的行业的竞争格局是有什么影响？第二个是想看一下，你们怎么看游戏直播行业的天花板，未来这一块游戏直播的增速是否会放缓？还有管理层对今年整体用户和移动端用户的预期是什么呢？I will translate myself。Congrats on a strong set of results.
My question mainly regarding game streaming industry. What's management view on the competition from short video players such as 快手? Do you see an impact to our business? Will this change the competitive landscape of game streaming industry? Secondly, how do you look at the user term of game streaming industry? Do you see the user growth of game streaming to slow down in the coming years? What is our MAU expectation on both total MAU and mobile MAU for this year? Thank you.
我们刚才回答第一个问题，对于快手的看法。快手我们认为目前在整个游戏直播行业的赛道其实目前还是足够大，可以容纳多家公司一起把这个市场继续做大。可能快手会带来一些新的用户，更加跟下沉用户，对于这个行业来说。另外一个就是说，我们觉得快手的进步会对行业的格局产生一定的影响。但对于斗鱼本身，我们觉得影响是有限的。首先，斗鱼主要的用户是在一些硬核电竞游戏上面，主要是重度的游戏玩家，这批是一个比较重度，还有质量比较好的用户。另外一个就是我们从快手的用户的属性上面，比如说我们在iOS的用户的话，我们占到了40%以上的比重。另外一个，我们在一二线城市的用户大概占了50%。整体上我们认为快手的重合度并不高，我们认为快手对于斗鱼目前用户的冲击是有限的。
Okay, regarding your question on 快手, we believe the game live streaming market currently has enormous growth potential. We welcome 快手's presence in the market. We believe it will bring in the new users, mostly of which are penetrated in the lower tier cities. We believe 快手 presence in game live streaming might affect the industry competitive dynamic or landscape to some extent, but we don't take 快手 as a direct compete for the following reasons. From content and user quality perspective, we are more focusing on creating high quality game content, majority of which are hardcore esports game content. Therefore, we attract the most hardcore users in the game live streaming market with high quality and user stickiness.
Also, for example, our iOS users account for over 40% of mobile paying users, and around 50% of our users are located in 1 tier and 2 tier cities. These type of users have higher consumption capability and life cycle value. We believe the user overlap between us and 快手 is minimal.
第二个是关于行业天花板的。我们认为游戏直播的本质是一个对于游戏用户的转化过程，就是游戏用户转化率的问题，从游戏用户到直播用户这样一个过程。我们预计这是一个长尾曲线，会受到很多因素的影响。因此未来我们觉得游戏直播将是一个持续和稳定增长的趋势，当然也会受到一些爆款游戏的推出的拉升作用。我们认为这个相对是一个长期且稳定的增长，会受到一些特殊事件的影响。
Regarding your second question on the term of the game live streaming space, we believe currently the live streaming business is about conversion, which means to convert the gamers into live streaming viewers and users of our platform. It takes time for conversion to happen. We expect the user conversion to be a long-term mission for us, while the speed of this user conversion could be impacted by a number of short-term factors during the process. Therefore, we believe in the long run, the game live streaming industry would maintain a steady growth trajectory. Going forward, future launch of blockbuster games will accelerate the conversion of the new gamers, and continue to drive the strong growth trajectory of the industry.
对于未来用户的增长的预期，我们目前看到还是保持在增长的势头。那具体的数据，因为我刚才也提到了，随着一些爆款游戏会对这个事情的影响会非常大，所以我们很难去做一个量化的推断。
If you ask me about the expectation of future user growth, I believe in near to long term, it will still be a steady growth trajectory, but I can't really quantify it for now.
谢 谢 陈 总 ，thank you so much，very useful。
Our next question will come from Daniel Chen of J.P. Morgan. Please go ahead with your question.
晚上好，管理层。恭喜这个业绩非常强劲。我这里有一个问题是关于直播平台上的竞猜类业务的。我的理解是，这种模式在很多的直播平台上也比较常见，它也是一个提高用户参与度很好的方式。但另外一方面也想请教一下管理层，这一类的业务我们觉得是不是会面临政策的风险呢？另外我们也看到有些直播平台其实开始对这类型的业务会做一些整改，就想问一下我们会不会也有这些相应的举措呢？那如果这类型的业务暂停，会对我们的收入影响会有多大呢？So I will translate myself. First of all, congratulations on a very strong quarter.
My question is related to the lucky draw feature on live broadcasting platforms. We know that this is a function that's very common on live broadcasting platforms, and I think it could actually help to increase user engagement. Just wondering, is there a potential regulatory risk related to such a lucky draw feature? Meanwhile, we also noticed that there are some other live broadcasting platforms, they have regulated the function recently. Just wondering, will DouYu follow such procedure? If so, what's the revenue implication if we just suspend such a lucky draw feature on our platform? Thank you.
首先，正如您所说，竞猜这个功能在直播行业里面是一个比较普遍的玩法。根据我们的了解，竞猜功能最早在2013年的时候就在直播行业中出现，到今天为止已经是直播行业里面普遍采用的一套玩法。过去可能有其他的直播平台或者竞猜类的产品，可能因为超过了法律法规的一些限制，或者是其他的原因进行了一些下线的整改，但是目前仍然是直播行业里面普遍采用的一套玩法。
Regarding your question on lucky draw, we believe the lucky draw or the quiz feature was firstly launched by other live streaming platforms in 2013, and has been existing in the industry for around six years. The reason why some platforms took their quiz kind of product offline previously was because it was regarded with high regulatory risks. After rectification, the product got online again. I believe so far all the major live streaming platforms have similar quiz business.
针对竞猜类的监管，或者是不仅仅竞猜类的，或者是其他类型的产品的监管，我们斗鱼一直都非常重视上线前这些产品或者功能符合法律法规的相应的要求。所以在斗鱼的很多产品或者功能上线前，我们都要求合规部门进行反复的审查，使它符合现行法律法规的这样一些要求。
Before any of our products get online, we make sure that all of our products are fully compliant with the current regulatory requirements. Our internal legal department does several rounds of checks before we get the products online.
同时我们也非常重视和监管部门的沟通，会持续保持和监管部门的密切沟通，使得我们的产品或者功能能够符合将来可能会有一些调整的这些新的政策动态。
We are also closely monitoring any regulatory updates from the government authorities. We keep a frequent communication with the Chinese regulatory bodies to make sure that we are compliant with any recent regulatory requirements.
另外我们对于竞猜功能的定位是增强互动的功能，而非变现。我们会通过互动来促进主播和粉丝之间的关系活跃。所以我们很难单独拆分出来单独的竞猜业务对收入的影响。
Moreover, the quiz products are designed to increase the user interaction instead of achieving monetization. Through participating in quiz, the connection between the fans and the streamers become more close. It's really difficult for us to break down the revenue contribution from quiz business.
Okay, thank you very much.
Thank you. Our next question today will come from Hillman Chan of Citigroup. Please go ahead.
管理层你们好，谢谢收我的提问。给予很好的业绩，还有很真实的提问。第一个关于这个，请教一下我们的内容，比方说秀场或者泛娱的内容等等，我们是有什么一个策略去推动这个观看的人群，还有付费的一些行为，ARPU值和率等等。还有想问一下针对的一些我们有些什么玩法是在研发当中，或者厂商可以跟我们分享一下吗？还有跟公会的合作，去推动这个部分的一些策略。然后第二个问题是关于我们运营还有内容的策略。想问一下我们跟虎牙或者eStar Gaming比起来，我们什么差异化的策略，可以提醒我们一下吗？我就主要这两个问题，很快地翻译一下。So I have two questions.
The first one is on the non-gaming content, including talent shows and pet entertainment content. Could management share more color on the growth strategy for the MAU, the paying ratio as well as the ARPU? Perhaps in the context of our upcoming features under development and also the cooperation with talent agencies. My second question is on our operation and content strategy. How are we differentiated from other competing platforms, including Huya and Penguin Esports and so on? Thank you very much.
那我们在秀场和泛娱乐的这个领域里面的话，主要还是在流量分发上面来提供他们更多的流量，来进行变现。因为秀场和泛娱乐相关的变现，在整个直播平台直播的领域里面，其实已经是相当成熟的一套运作模式。然后我们现在也和公会在做，因为之前斗鱼他们的公会是相对比较狠，我们最早的才能模式是比较像Twitch的这种游戏直播的模式，但是我们现在也更多地和公会进行合作。我们也发现公会在秀场和泛娱乐这里面的变现的效率是非常高的，会持续提高和公会之间的这种合作来带来收入。
Regarding your first question on talent show and pan-entertainment business, we are currently focusing on user base expansion. For these two segments, we already have a very sophisticated business model in place. Previously, we were more following a Twitch model towards the game live streaming. Currently, we are also cooperating with talent agency to improve our monetization efficiency. [Foreign language]
我们的差异化相对来说是比较小的，大家可能在整个大家都属于游戏领域。
Regarding your second question on our differentiation with Huya, I believe both of us and our competitors are working on the game live streaming space. We don't foresee a very big gap in terms of content or positioning.
好的，谢谢陈总。谢谢 Mingming，还有曹总，还有萌萌。慢慢聊，谢谢。
谢谢。
Our next question will come from Alex Poon of Morgan Stanley. Please go ahead.
你好，管理层公司非常好的业绩。我第一个问题想问一下，为何三季度的预期隐含收入增速是比二季度有所下降？你现在怎么看四季度和全年的收入预期？第二个问题想问一下，现在游戏直播这边的收入集中度在头部游戏是挺高的，长远来说，在产品上、运营上，怎么可以把这些长尾的游戏的变现流量都可以做起来呢？谢谢。
关于第一个问题，我们的三季度预期的隐含的收入增速较二季度有所下降，那是因为在我们今年的第一季度和第二季度，我们的实际的增速高于预期。因此的话，环比看起来增速是有所下降。但是如果说我们拿到同基数口径的话，实际上还是达到了90%至95%的增速水平，说明公司三季度的业务继续保持一个高速的发展态势。
The reason for the decline in revenue growth quarter-over-quarter is because of our better than expected first and second quarter results. The implied quarter-over-quarter revenue growth is not significant, we are still implying a 90%-95% year-over-year growth, which demonstrates that we are still growing our business at a very fast pace during this quarter.
新的用户需要时间来沉淀这个消费习惯。那第一个季度的时候，我们的付费用户成功从420万提高到了600万。第二个季度的话，我们又成功把这个ARPU从第一季度的226元提高到了256元。这些数据都显示我们在变现上面的一个方法是初见成效的。但是这个付费率和ARPU的提升并不是一个直线式的提升，而是一个阶梯式的。预计是经过一段时间的用户消费习惯的沉淀，特别是小额打赏粉丝体系的一个不断优化，未来的话有望释放出更多的收入的增长潜力。
We believe it takes time for our new users to cultivate their spending habit. In the first quarter, we successfully increased our quarterly paying users from 4.2 million to 6 million, and in this quarter, we managed to increase ARPU from CNY 226 to CNY 256. Both data shows that our monetization methods are effective. That being said, both paying ratio and ARPU will have a stacked or stepwise growth trajectory instead of linear growth, given it takes around one to two quarters to cultivate user spending habits. Through the continuous optimization of our small amount gifting model through the fan system, we expect to see our monetization to generate more growth potential in the future.
谢谢。下个季度我会翻译，我忘记了。谢谢。
Again, to ask a question, please press star and then one. Our next question will come from Ken Xiong of Jefferies. Please go ahead.
I'll translate myself. The first question is about the differences between the PC and mobile-paying users. How does the monetization capabilities compare between these two channels? How would the revenue and paying user contribution be like in this quarter? My second question would be on overseas expansion. Do we have any budget in mind towards the second half, and do we have any MAU target for this? Thank you.
Okay. Regarding your first question on the user behavior difference between mobile and PC end, we are seeing more spending behavior take place on mobile, and also higher paying ratio for mobile. Regarding your second question, we are currently evaluating investment opportunities in the overseas market, including a potential collaboration with local parties. For the near term, we expect it to not have a significant impact on our profitability.
Ladies and gentlemen, this will conclude our question and answer session. At this time, I'd like to turn the conference back over to management for any closing remarks.
Thank you, operator. Thank you for joining our call today. We look forward to speaking with everyone next quarter. If you have any questions, please contact the IR team of DouYu. Thank you.
Ladies and gentlemen, the conference has now concluded. We thank you for attending today's presentation, and you may now disconnect your lines.